Knock, and The Door Will Open
I often talk about sustainable wealth versus wealth.
I am a firm believer when you start to accumulate wealth; your wealth should create more wealth.
Many folks purchase items into their financial portfolio with the dream of these items going up in value. People try an catch the tide up just as the wave is cresting.
I have mentioned in a previous blog post the three main components of wealth growth in your investment real estate portfolio are:
- Net Income from Revenue
- Principal Paydown
- Equity Growth
These three components of wealth growth can lay the foundation for all areas of your wealth accumulation.
Is Your Wealth Acquisition Passing the Test?
When you purchase items to bolster your wealth are you asking the following questions to see if your decision to acquire more wealth has a compounding effect to earn more wealth.
Your purchases of wealth can come from many different sources.
- The challenge for you is your purchase of wealth; does it begin with a return on your principal invested?
- If you purchased wealth with borrowed funds are you seeing a principal paydown immediately?
- Is your acquisition of wealth paying you a dividend or revenue on a constant monthly basis?
- Do you know how real this equity growth is?
- How do you measure your equity growth?
Beauty is in the Eye of the Beholder
If you are a collector of any memorabilia or a fan of an artist and enjoy the pleasure derived from owning these objects; ensure these items are not part of your monthly revenue source.
Enjoyment of these items awakes all or some of your senses is fantastic, and this enjoyment can give you such a high return in life.
Should these items go up in value over the years, excellent. At some point, they may no longer bring you any satisfaction; it is okay to sell. Let someone else have the sensation from these items you use to love. This increase in value should it happen; be a bonus not a monthly derivative of your financial plan.
What’s the Wealth Challenge for You?
Can you afford as part of your wealth acquisition strategy to hold wealth with no monthly revenue return in your financial portfolio?
If the answer is yes; what is the percentage of your wealth assets you should set to nonrevenue assets?
Can you afford to hold an item in your financial portfolio without putting in a current estimated value of your memorabilia?
How often do you plan to update your net worth statement factoring in revenue and principal paydown only?
If you have never reviewed your wealth into sustainable and nonrevenue assets; don’t you think it is time to take the test?