Wealth is a process no a Home run over night. Wealth is about freedom no money. Did you everyone is a Traders:
Paycheck: We trade time for a paycheck. Example: 40 Hours per x 20$ Hr = 800$ Paycheck.
Happiness: We trade happiness for security. Example: Having your Photography business vs staying at your government job until retirement.
Principles: Some trade principles for politics. Example: You willing to exchange the foundation
Ethics: Some people trade ethics for cash. Example: Accepting a bribe.
The process of building Wealth is easy, if you are willing to be patient, persistent and willing to postponed “wants” for a later day.
First Principle: Spend less than what you make
Keeping your expense low is the first rule to obtain wealth or freedom. Why? Because the slave master UNCLE SAM (IRS) automatically keep normally 45-55% of your income. This number depends on the state you are located. For example, If you are an employee in New York City with an annual salary of 55k or 55,000 per year, the individual will be paying 25% Federal Income tax + 6.45 New York State tax + 7.65% FICA tax + 3.6% New York City tax + 8.875% New York Sales tax = 51.58% Your total INSANE annual tax rate.
Basically, after earning 55,000 dollar for your hard working labor, your take home pay will be 28,369 per year. If you divide 28,369 Annual Salary after taxes /2080 hour per year = 13.63$ Dollar per hour.
Now, the key is what you will do with 28,369. If your goal is to create wealth/freedom and stop being a slave to your job and to the IRS just most decide how you will use the fruit of you labor. For example, in my case i break down my salary is 4 portions: 50 % Expenses (Food, Housing, Student Loan, Car Insurance, etc), 30% Saving/Investing (Retirement Plan), 10% (Emergency Fund) and 10% Vacation. In the case above the breakdown will be :
28,369 x 50% Expense = 14,184$
28,369 x 35% Saving/Investing = 9,929$
28,369 x 7.5 % Emergency Fund = 2,128$
28,369 x 7.5 % Vacation = 2,128$
Total = 28,369$
The illustration above can you give you an idea of the importance of sending less than what you make. This is what is going to set you apart of achieving your goal to have freedom to do whatever you desire or to continue to work until your body get tire. It’s your choice.
By Francisco Ortiz (Scultpor of Success)