Here at the Wealth Action Plan, us ‘Wappers’ are a community of positive go-getters that ‘Do Life Differently’ and we have 5 key beliefs called the Framework Of Life (FOL). In this FOL, we believe and aspire:
1.) To live the life you’ve always wanted without limits or worries.
2.) To have limitless time, options and freedom to do whatever you want, whenever you want, wherever you want with whoever you want.
3.) To inspire and help your loved ones and the people around you for the better.
4.) To help or create a meaningful positive difference to the environment and mankind as a whole.
5.) To have no regrets, EVER!
To the outsider, this may appear all fine and fancy; but we’re also realists and we know that you can’t just dream and wish success into existence. Money is attracted to value. You have to actually get off your arse and become more valuable yourself or create something of value to others.
“The universe doesn’t give a shit about what you wish for.”
Essentially, in plain simple English, this FOL boils down to:
* Earn enough passive income so that you can hit your financial independence target. Then do whatever the hell you want to do. Then help others, help the planet and live without regret. Boom! *
So the point of this article is to illustrate to you that IF you also agree with this way of living and aspire to attain it, then pretty much everything your Parents, Schools, Elders and Advisors have ever told you is most likely incorrect, invalid or outdated advice from the 1950s. The stark reality is that you will never hit those targets by doing well in school, getting a degree and working a job until you’re 70 years old. Some of the most academically qualified people I know are poor. The world is full of smart but poor people and I hate saying that. I really do. But it’s the truth. I’m not the first person to realise this. Robert Kiyosaki author of Rich Dad Poor Dad highlighted this decades ago.
*** It’s because qualifications and a job DOES NOT EQUAL FINANCIAL INDEPENDENCE. This is the biggest myth that the current education system is propagating, and the universities are laughing all the way to the bank whilst you’re left with 5 figures of debt and a below average salary. ***
The vast majority of people that invest in Stocks and Bonds don’t actually end up making any money. It’s because most people are ‘Dabblers’ and if you ever dabble on the markets, I guarantee that the market will chew you up and spit you out. It’s like a soft cuddly looking cat, but if you rub its belly, prepare for some scratching! Also 90% of Fund Managers don’t even beat the S&P500! Only those that specialise and dedicate their lives to honing their craft in this sector succeed. Even then, some of those pros will lose. Hell, I lost £100k in the first 4 years of Trading. But I’ve since made millions after that.
Again, contrary to popular belief, most people don’t actually prosper by investing in houses. There are vast swathes of the population who are still in massive negative equity back from 2009. But this is largely ignored and overshadowed by the stories of people whose home increased from say £200k to £400k over the last 10 years. We all know one of those people. And despite how an extra £200k in this example may seem fantastic, look at the ROI! That’s only 100% ROI over 10 years; which is only 10% per year which is pretty damn substandard. Especially when you account for real inflation, the currency supply has increased at least 500% and commodity prices (which affects the stuff you buy every day) have more than doubled in that time frame. What you will find is that the people who do make money in property are not Landlord Wannabes. They are seasoned property specialists running a Property BUSINESS.
Another unrealistic, yet popular thing making its way round the internet these days by finance gurus is that “…you need to use compounding interest to your favour, invest for the long term and in 40 years, your savings will have turned into the millions“. Don’t get me wrong, I’m a big fan and utiliser of compounding interest, but not when it’s dressed up this way. I use compounding interest as one of many different arrows in my quiver.
You shouldn’t use compounding interest & time as your only 2 weapons to amass wealth!
It’s just a stupidly inefficient method because in 40 years’ time you will be too old to fully enjoy your fortune and you will have suffered a life of compromise and mediocrity to get there. You’ll have also nicely lined your Fund Manager’s pockets during that time as well! I’ll say it again, it won’t take more than 10 years to hit your financial targets if you follow the right map…
And that’s exactly what the WAP is here for. It’s simply a map to get you from where you are now to where you want to be. And hopefully you’ll soon see that there are 2 monetary phases of your life:
- The Aggressive Wealth Accumulation Phase.
- The Capital Preservation Phase.
It’s in that order and the idea is simple…
If you want to live the life the FOL lays out, you need money to do that. In order to get the required money, you need to do it in a relatively time efficient manner. Then when you have the required money, you then enter the Capital Preservation Phase so you can then continue living your desired life and more importantly protect your monetary wealth from loss and erosion.
– – – > It’s in that order and if you skip the first phase and just do the Capital Preservation phase, you’ll stay poor. < – – –
The traditional options of a job and traditional investments simply do not work. Financial advisors across the world (despite good intentions) are unknowingly directing and feeding people into the Capital Preservation Phase and thereby condemning them to hitting their goals in 40+ years!
If you ever PARK your capital anywhere and it makes under 10% per year, you are losing out so much from Opportunity Cost! Why are so many people short of Money? It’s because everyone, including very smart people, keep on falling for this crap! Even if you feel clever by having an investment that spits out 10% per year net net; whoop-de-frickin-do, on £10k, by the end of 10 years your £10k has only risen to just under £26k!
That’s an abysmal use of your capital *in my humble opinion* THIS IS WHY SO MANY PEOPLE NEVER GAIN ANY REAL WEALTH. And to cement people into (developed-world) poverty, you have celebrities and trusted brand names like Tony Robbins and Hedge Fund managers promoting the same crap of ‘save save save and plough money into your pension scheme’. It’s utter bollocks.
Therefore, you need to draw a line in the sand and set out to achieve Financial Independence within a 10-year time frame. MAX. But first you need to know a few things:
1.) What is your IDEAL LIFESTYLE MONTHLY TAKE-HOME figure? After surveying thousands of people, the range tends to be between £5k-30k per month with most people nestled around the £10k per month level. The importance of knowing this number is so that you can mentally establish what sort of Boat you need to be. If your target is the other side of the lake (£5k/m), you only need to be a Sail boat for instance. But if your target is the other side of the Atlantic (£30k/m), you’re going to need a bigger boat!
2.) When do you want to achieve this by? This is a bit of a null question because we all want things now. But in reality, whatever your target, it’s going to be a 5-10 year journey with 70% of it spinning your wheels in the mud, failing and going in circles.
3.) How do I become the necessary boat to hit my target? There we go, that’s the killer question. My answer is Business and Investing. This is what the WAP is for. After giving you a sound base knowledge of Money, Economics and Investing, we then hurl you into setting up your first part time online based business! We find that one of the simplest biz models to kick off with are:
- Low price point
- Online subscription based
- High volume
- High margin
- No-brainer value for the client
You’ll have a mix of really low priced to premium priced products but let’s assume your Average Customer Value (ACV) is £120 per year (£10 per month on Direct Debit). Well, assuming you want to take home £10k/m, a 50% margin biz turning over £250k per year biz is then all you need. So that’s just 2083 people paying £10/m. Done! When you account for client churn, let’s double that to 4166, and if you want to nail this over a 5-year time frame, all you need to do is get 70 customers a month. Done. It really is simple once you get the hang of online marketing as well.
So, time to call it an end to this rant/manifesto. At the very least I hope this has prodded a few thoughts and beliefs within you to start questioning everything. If it has helped, that’s fantastic! The best messages I get every week are from random strangers or students who email me out of the blue saying how much I’ve helped. So if this does kick you into action, please let me know how it all goes when you feel you’ve got there!
Ultimately, HAPPINESS is the key to life I guess. I’m well aware that Business and Investing isn’t for everyone, and that’s totally cool. Seriously, if you’re someone who’s happy and you’re taking home £500 per month, you’ve already won the game of life. You’re far wealthier than a grumpy sod taking home £50k per month. But from experience, I’ve been poor and rich and things are just better when you have money. I used to have this silly phrase with my friends that I’d much rather cry in my Aston than my Astra! Cheesy but it’s true. Zig Ziglar said it best:
“Money isn’t everything, but it’s right up there with oxygen!”