So, like the heart pumping blood to all parts of the body, these organisations act just like a heart, they pump money into circulation through investing in the economy and everyone in a better position gets more money than the ones at the end of the bloodstream, like entry level employees. Those get the least, the last drop of money, the blood of life when it comes to lifestyle and the quality of life.
The good news is that no matter how small the amount you receive, you have a chance to grow it to whatever amount you want it to be. It is important to know and understand how money circulates, so you can be in a better position to make the most money. As I’ve said before, the best position is creating your own value (service or product).
Universal rules that govern money
Not everyone needs to study economics but everyone has to know this about money: like everything in this world, money has universal rules that govern it, and this part is the most important of all things to know about money. Just like the law of gravity, there are laws that govern money. You follow the laws to have a good relationship with money, but if you go against the rules you lose control over your money.
There are consequences for all the actions we take; if you try to go against gravity you will fall hard, but if you work with gravity you learn to fly. The rules stays the same, they don’t change. We all need to know and understand the rules that govern money so we can control money and not be controlled by it.
Here we look at the universal rules that control money, and how we must treat it to achieve success through it. You must remember here that it is never about the money but what you can buy with it. We are not after millions and millions of rands but the life it can offer us. People sometimes make a lot of mistakes about this; they think it is money they are after, but what we are really after is the security that having money promises, and the comfort and financial freedom it will help us achieve.
Just like everything, money also has universal rules that need to be followed when dealing with it. There are just a few of them that are very important for you to know and apply in your financial life, to be able to achieve the life you dream of. Since I am more interested in achieving financial success and living the lives we dream of, I will only discuss seven rules: the creation rule, profit rule, exchange rule, accumulation rule, accounting rule, investment rule and the debt rule.
Creation rule: Let’s go straight into it, the creation rule. This is what this whole book is about, creating value. The rule of creation is even stipulated in the holy books. Jesus said ‘I know my father, I see what he does, I do what my father does’. As Christians believe God is the Creator, those who are made in his image are also creators. I am not trying to lead you down any religious path, I am just trying to make you understand this fact. We are all creators, and those who create shall eat the fruits of their creations, which is wealth. This is what that rule is about. You will not have any wealth if you don’t create anything. You must know this and live by it. We must all create value. Wealth is value, and by creating value you are creating wealth, your wealth. The rule that governs money says on creation, people will be pulled towards value like they are pulled towards earth by gravity. The person who creates value will enjoy all the wealth the world has to offer.
Profit rule: This is best explained as the growth rule, which states that you must be able to multiply your money through the creation of value. It is the multiplying of value; you must be able to use a small resource to create a greater value or resource. This is what causes growth, this is what causes the money supply to put more money into circulation, and this is how wealth is created, by using a small amount of energy to create a bigger resource. It is a natural ability. By nature, we are able to eat less and perform a greater workload compared to the food consumed to perform the work. It is similar to the planting of the seed; you get thousands of seeds back while you just planted one. This is a prerequisite for anyone who wants to create wealth; they must be able to take something small and creatively turn it to something big, by putting in energy, nurturing it, and by putting in ideas and skills, to make it grow, using their hands and their minds. This is what causes financial growth, the ability to take something small, add value to it, and multiply it to turn into something much bigger.
Exchange rule: At the end of the day, wealth is the combination of human values, different people sharing their values, so exchanging values is vital to having wealth. The rule here is that you must end with more than you had before the exchange. We must have a win-win situation where both parties end up with more than they had, which is being in possession of values you can’t create or don’t have time to create, which you receive from other people. It is a very important rule – you must not give out your value for anything less or for free, this will cause you poverty. You must be fair to yourself; every transaction you make must leave you a rand richer than you were before the exchange.
Accumulation rule: This is simple. It is understanding that wealth consists of a variety of values, which you receive from other people for giving them your values, or sharing your values with them. It reiterates what I’ve said above and throughout this book - that wealth is a combination of values from other people in the form of talents and skills from those people. It states that your wealth is in your ability to share your value with as many people as you can. This is how you became wealthy, by accumulating different people’s values. You might be a good writer, way better than I am, but if you only write love letters to your spouse, only your spouse will enjoy your abilities, or your value. Unfortunately though, he or she will not be able to provide you with a sufficient combination of values to make you wealthy, unless you start to share your writings with more people than just your spouse. When you can find a way to direct your skills to a platform where your value can be shared with more people, you become wealthy through the exchanging of values.
Accounting rule: This is very important. It is your budget, knowing your goals, knowing what you are doing and tracking your money. Is it used in a way that will make you wealthy or are you wasting your money? It states that you must track and be aware of your wealth, your money, to be able to live within your means. It is vital that you track your money and how you spend it. Be aware of what you do with your money on a daily basis, have an account for it, and know if your money is spent towards wealth or poverty. This will help you in the creation of wealth. You must know if your money is spent in a right way, in the way that will enable you to reach your dreams. Do you spend it on things that appreciate or depreciate in value? This is the difference in how the rich and the poor spend their money. You must spend your money on things that appreciate in value, things that will bring you more money.
Investment rule: This is about planting the seed; it states that you must be willing to put in the work, the time, and the money that it takes to achieve whatever financial goal you are after. The more you invest the more you get back your returns and the closer you will be to reaching your goals. It is about planting that first seed, and making the first motion towards wealth creation. Only you can set things in motion. If you don’t invest you don’t get anything back. You reap what you sow; if you sowed nothing, well, that’s what you will get.
The last one is the debt rule. It is simple, avoid debt. As simple as it is, it is one of the most violated rules of all of these rules. People have different views about it. Some people will say that there is just no way you can own high-cost goods, like a house and so, but people forget that before credit was such a big business, before credit cards and so on, people still bought expensive possessions. They just saved until they could afford to buy them on a cash basis. It is very cheap to buy things cash so this is a no-brainer. Especially when it comes to consumables, it is vital that you use cash. We have almost replaced saving for things that we want with buying through credit, and acquiring debt. Why save for it while you can have it now? This has made people fail to reach their financial goals more than anything else. The whole economic collapse we s
ee today is mainly caused by debt.
I will say 90 percent of people who will read this have some debt. Almost everyone owes somebody. This is what will hinder you from achieving your financial goals. Stay clear of it. The only loan I can support is a business loan. It is also too risky compared to raising money for your business through other ways like finding investors, but if done well from an informed position, you can recover well from it, but for consumables, no matter how huge, like a two million rand house, it is better to save or invest towards that goal. Debt is a no-go area. So, if you are in debt, that’s the problem you need to attend to first before you think of any other financial goal. If you can, settle it.
What exactly is the power of money?
Money is defined throughout this book in its simplest form. Here I want to look at its power. Money on its own doesn’t have any power; people give it the power it possesses. When you see something dumped on the floor, you pick it up and look at it. If you don’t know what it is you wouldn’t know what its value is. Obviously if it looks precious to you, you will have some value towards it; you will value it. It is mostly from what you know about it that you will base your actions on. Your knowledge about that particular thing determines your actions, and what you will do with it. Whether you throw it away or keep it will depend on the value you give it.
Normally in the times that we live in, since most of our values are influenced, this value mostly depends on the value other people place on that particular thing. If more people value it, if it is scarce, if there is a high demand for it, its monetary value will be high. Money becomes the measure of value. Just like a measuring tape for length, money is the measurement for value. The more people value something, the more they will be willing to spend in order to obtain it. This brings us back to the question above. What exactly is the power of money?
The power of money is in the value people place in a product or service, largely dependent on the demand and scarcity of that product or service. The scarcer or the higher the demand a product or service has, the more power it holds over people. From this, we can conclude that money has no power at all. The power is in the created value. That value can be a service or a product. That’s where the power is; that’s what wealth is.
Money adapts the power from the product because it is the tool of exchange. Its flexibility allows it to add various values, services and products, which, when combined, can be stored as an amount of money that can be used to purchase a highly valuable product. This is how money adapts power from the created value. It is vital that we focus on creating value as money will always follow after value. It needs value first to exist, and as it adapts to value, you need to create value to be able to access valuable money.
Given all this, since creating value starts from your thoughts, from your mind, you think about things before you create them. The value given to products or services also exists in your mind. It is determined by your thoughts, by what you think something’s value is depending on your knowledge and how other people value the same thing. It is true to say that money exists in your brain, and that wealth exists in your mind. The power of money exists in your thoughts, which makes it wise to look into your thoughts. Explore your ideas for wealth. That’s where your riches are; that’s where your money is.
A lot of people think that money runs the world and that you are nothing without it. They think that it is the god of this world. How true is this to you? What you think money is plays a big role in the creation of it, and on what you will do to get it. People get it wrong here when they think money holds all the power. They forget that everything starts with a thought. Money itself was created by thoughts, it is a thought. The value it represents is determined by our thoughts. It is the value we put on it that gives it any value. Once we stop valuing money it becomes worthless.
The power is in your thoughts. Your thoughts run the world, and they just have to be expressed to be seen in reality. Rather than chasing money, you must chase your dreams, which come from your thoughts, about what you think your life should be like. Don’t let money control your decisions. It must not have control over you, and you must not make it king in your life. You will fail if you treat money like that, and you will fail to make money because you choose what you do not from passion and love for it, but money, which will not inspire you enough to find success in what you do because you lack passion and love. You might sometimes end up making a lot of money but still be unhappy because you hate the work you have to do daily to get it.
To have success that makes you happy and satisfied, treat your thoughts and values as king. Make decisions based on passion and love, not money. Have control over money, but don’t let it control you; it will make you a monster to yourself. You will not like yourself anymore, and you can’t be happy if you hate what you’ve become because of money.
4.BELIEFS ABOUT MONEY
Our beliefs about money
Our financial success and our ability to reach our dreams depend largely on our beliefs. Our beliefs about money affect our financial state, so we must develop good beliefs about money to help us succeed with it. Most people have wrong perceptions and beliefs about money and as a result they are taking wrong actions to try to get it and create more lack because of their wrong beliefs.
Is money the root of all evil or is the lack of money the root of all evil? It is the belief system that plays a big role in what actions are taken or not taken. What you believe about money governs or controls the actions you would probably take involving money. I can easily predict your decisions if I know your beliefs about money or anything else.
Beliefs make up our set of values as human beings, which controls what you would do and what you wouldn’t do. Since the creation of money involves ACTION and your VALUE SYSTEM controls what actions you would probably take or not take, it is very important that we discuss our beliefs about money and be aware of the wrong beliefs which we need to change.
Here I will just discuss a few common wrong beliefs about money, the ones I think are vital to change for your success. You must read this section and go on and read the whole book, think about it, and check your beliefs and where you stand. If you agree with what I have to say, take ownership of it and apply it to your life. Develop that belief by practising it. Preach it and practise what you preach. This is how you develop a belief and make it useful to your life. A belief is useless if you don’t practise it.
Here is generally where we get it wrong. Many people fail to live their dreams and fail to create the wealth they want because they have the wrong beliefs about money. We have the wrong beliefs because what we think it is, and where we think money exists, is where we search for it. All the lack we see in the world is because people are searching in the wrong place for money. Money is not to be found where they are looking, and that’s why they are broke; they are looking in the wrong places.
Ask yourself, where do you look for money? I will wait; answer before you read on…
In the world, that’s where money is; from other people, that’s where money is. I must sell something to them to receive money from them, yes, but this answer is incomplete. It is not an intelligent answer, and it is the main cause of the wrong belief about money, which is that it exists as paper and coins. That’s wrong. Money is value. You don’t eat paper and coins, you eat food; food is value. The right answer to the question above is this – it is in your brain. Money literally exists in your brain, as ideas you use to create value, skills and abilities you use to create food, which can be exchanged with other people using the numbers saved as your bankcard balance or paper and coins.
Since it is evident in its history that money is value, we know that money is given value by people, and what we think its value is based on what it can buy. The products and services are the real money; they are the real value, whereas the paper and coins we use are just the tools for exchange. We must stop putting that much focus on paper and coins, and we must know where to look for value. Change the belie
f that value is in money. Value is in your mind, in people’s brains. Money is what you can create using the ideas in your mind.
This is a vital belief you must make sure you understand; you must make yourself believe it. Read the whole book, think about what it says about your mind and its capability to create wealth, and believe that money is really in your mind, and not in the world. This book further breaks it down by simplifying the facts on how gold exists in your brain. Keep an open mind and think about these facts.
Everything starts in your mind. Everything man ever created started as a thought. Look around you; you are surrounded by human thoughts, the book you are reading, the computer in front of you, what you are sitting on, most of your possessions, are human thoughts. Even money is a thought. When you are looking for money, look in your brain. Dig out the gold in your brain, and transform those ideas into physical existence. This is how wealth is created. Wealth already exists in your mind, you just have to bring it in to physical existence, or realise it, by putting hands or actions to your thoughts. Use physical material to shape those ideas into physical existence, for other people to be able to see them.
The great thing is you don’t have to create everything related to wealth. You just have to create one value and share it with the world by exchanging it for what other people have created. That’s how you become wealthy. Wealth is a combination of values you receive from other people in exchange for the value you have created.
So that’s the belief. It is preached all over this book – money is in your mind. Search your mind for wealth, that’s where you must be looking, within yourself, not in the world. Think, put your mind to work, search for wealth within your brain, dig that gold out and share it with the world. It is in your brain, in the ideas that flow through your brain all day. Feed your brain with knowledge to refine that gold, to develop that talent, that skill, which will result in you becoming successful.
Money- Wealth Creation Guide Page 5