01 Aug Unlocking the Keys to Wealth Building (Part 3)
Are you interested in unlocking the keys to wealth building? It is my goal to help you make sense of money and wealth in order to make a difference in your life and in the lives of others. Wealth is much more than just making money, getting out debt, and investing. There is a bigger picture to wealth building, and I like to call this bigger picture, the Triple X Factor.
In previous blogs, Unlocking the Keys to Wealth Part 1 and 2, I shared the background behind the Triple X Factor, the steps to evaluate your finances and how to build your First X. I hope most of you have already begun charting your expenses and income. Continue graphing your income and expense lines so that you can monitor exactly where you are at financially. Work on paying off your debt, increasing your value, and building your First X. The First X is great place to be!
But, some of you have already mastered building your First X. So, let’s talk about unlocking the keys to wealth building by building your Second X.
As the First X forms, you will begin to notice a gap between your income line and your expense line. That gap is the excess capital that you now have available to you. It may take months or years to gain excess capital. But, when you do, the question becomes: What do you do with that excess capital?
What you choose to do with the excess determines whether or not you will build wealth. Read that sentence again. Write it down as a reminder. This is a pivotal point:
What you choose to do with the excess determines whether or not you will build wealth.
The key to wealth building is in the excess.
There is some temptation to spend the excess capital, but in order to build wealth, you need to invest that excess capital. Put it to work so that you can begin to gain assets that produce income in your life. Once you put excess capital to work, you can create Second X Income. There are many ways to invest the excess capital. You can put your money in a savings account, but the return on that will be very low. Or you can put your money into assets with a better return.
So, what is an example of an asset that pays you? A simple illustration would be rental income from a single-family property with positive cash flow. The more of these you accumulate, the more the snowball starts rolling in the right direction.
And the good news is that as you build wealth, all of a sudden your cars are paid off, your mortgage is paid off and things really start to accelerate. The real beauty is that once all those things are paid off, it doesn’t cost a lot to live. The expense line on your graph continues to come down.
The key to the Triple X Factor is that when you take the excess capital and invest it into things that pay you, then your expense line continues to go down and, all of the sudden, your cost of living is covered by your passive income! The moment that this happens, you become financially free and you are in the midst of unlocking the keys to wealth building!
Are you ready to unlock the keys to wealth by building the Second X and become financially free?