Wealth Management Providence RI

How to Manage a Million

How A Millionaire Will Manage One Dollar

If you don't know how manage a million dollars, I guarantee that the money will quickly disappear if I wrote you a giant check right now.

Something like 90% of lottery winners go bust within five years, because they didn't have the basic discipline or the formula to handle the money that should have created a financial foundation that would lasted for generations.

Learn how to manage a single dollar so that you can move up to the financial big-leagues on your own.

Give a millionaire a dollar and they will do something predictable: they will display the discipline not to spend it.

That dollar will be deposited into a savings account where it earns interest income. A millionaire does not spend earned income! He only spends the income from his investments.

A millionaire cycles money from a job, overtime pay, bonus, etc.,into investment accounts. But when you start out, you probably won't have any investments so how are you going to pay your bills?

Reject the saying: "Try to save some money after you pay the bills each month." This rarely happens and may be too little to add up to much. That saying is psychologically backwards.

The new saying that I you want to begin with is: "Don't invest all of your earned income each month, pay a few bills with it."

Do you see the millionaire difference?

Let's talk about financial building blocks.

Give a millionaire a dollar and he will split it up into the distinct building blocks of a solid financial foundation.

Ten-cents of that dollar will be allocated to a permanent investment account that is never spent. This account builds your wealth.

As I have said before: "Wealth can only be created and maintained by the amount of money that you receive and do not spend."

Well, this is that account, and you need to increase it by a piece of every dollar that you receive.

Another ten-cents will be allocated to a savings account. This is a delayed-spending account for expensive purchases such as vacations, home repairs,or cars.

Millionaires will save money to buy something before they purchase it; they will not use credit and pay interest.

The next ten-cents is allocated to wealth education. The economy is always changing and you are ultimately responsible for directing all of your money. The only way to do this wisely is to add to your investment knowledge.

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The three-dimes that were just allocated for different purposes is the wealth formula of millionaires; this is how wealth can be built to last for generations.

It is only after these three buckets get their share of the dollar that part of it is allocated for taxes on that dollar. Notice that a millionaire pays the taxman after the important building blocks get their share.

There is no such thing as "income before taxes". There is a tax liability on ...