The Wealth Building Formula is for you to use for simple wealth creation. The Wealth Building Formula is not complicated, in fact, there are 3 easy steps. Yes, you can learn to build wealth and have financial freedom by following a formula. I’m going to share with you the Wealth Building Formula or what I call “McT”, and this comes straight from my “You’re Already a Wealth Heiress” book. I’m so excited to bring you some of the information from my book. It’s information that I learned over my lifetime – basically not only my own wealth building, but also my formal education of wealth building. I am a Certified Financial Planner® and have a business degree, so these things were also used during my formal education. I want to take this concept of a wealth building formula and really break it down into simple steps for you and that’s what we’re going to do today.
If you’d rather listen to the podcast, go here.
We’re going to really simplify. It kind of goes to show you how you can overcome any obstacle that you think you might have to being able to build wealth, because people usually think that there’s something not quite all there that they need. Either they’re not starting with enough money or they’re starting too late in their life. They wish they were younger when they got started. They feel like they don’t know what to do. They don’t know where to invest. It’s too overwhelming. There are so many things that people think are going to be difficult for them, but it’s really pretty basic. And when you get down to the essence of the wealth building formula, it really comes down to these three factors. M, c, & T, what I call “McT.” That will show you how much wealth you’ll have in the future and what you need to change in order to make that a better number for you.
So we’ll be talking more about the Wealth Building Formula, but that’s really what we’re talking about today is how to overcome any obstacle that you have to financial freedom. And this concept fits alongside the 6 Steps to Wealth really well. You’re familiar with that. If you haven’t listened to my 6 Steps to Wealth, I started out this podcast way back in the beginning talking about my 6 Steps to Wealth that I discovered when I was younger, when I discovered how wealth was actually created after reading book after book, and getting into the investment world and trial and error. I really discovered, okay, what is step one? What is step two? What are all the pieces that you need to create wealth? And that’s how I came up with the 6 Steps to Wealth, which I really credit for the ability for me to make my first million, because once I really understood what I had to do and how it was done, then I understood where I was lacking and what I needed to change.
Step-by-Step Wealth Creation
And when I changed that, then I was able to make my first and then my second million really quickly after that. So the 6 Steps to Wealth are really the step-by-step how wealth is created. I also have included in my Wealth Heiress book, “You’re Already a Wealth Heiress, Now Think and Act Like One: 6 Practical Steps to Make It a Reality Now!” it’s a long title, so we’ll call it the “Wealth Heiress” book. Along with the Wealth Building Formula, I put a checklist in the back of it, so that you could just check off all the actions to take, all the different things that you need to do to make sure that you’re on track and doing the right things to build wealth, as well as put in a Millionaire Action Plan (MAP) that’s going to get you to your first million, or if you are already worth a million, your next million.
The Wealth Building Formula comes into play because again, if you have obstacles and you’re not sure what to do, the Wealth Building Formula is going to make that really clear. What you need to do to make up for whatever those obstacles are, and you’re going to instantly know what you need to change and where you need to focus so that you can overcome whatever those things are. Okay? So what I want you to do first is start with the end in mind. I want you to think about what you’re trying to achieve and how much you want in your investment account or your retirement account or your net worth. However you’re going to measure it doesn’t really matter, but if you are shooting for a million dollars in your retirement account, let’s say, which a lot of people are, then that needs to be your goal and you need to be thinking about how are you going to reach that goal and what are the factors that are going to get you there.
If you are already worth a million dollars or half a million or 2 million in your retirement account and you’re shooting for 5 million or 10 million or whatever that number is, the steps are exactly the same. So whether you’re going for your first million or your 10th million, what you’re going to do to get there are exactly the same things. In other words, it’s these three factors multiplied together in the Wealth Building Formula, M, c and T, that are going to figure into what your calculation is, if you will, for how much money you’re going to have in the future.
So whether you want to pay off your kid’s college or whether you have college debt yourself or whether you want to travel or buy a new home or a second home, whatever your goals are, you want to have those goals in mind and estimate how much you’re going to need to accomplish the vision that you have, whatever that vision board is that you’ve created. Remember those. So whatever’s on your vision board that you really want to create and you know, here’s the thing. Sometimes people are reluctant to set a goal because they feel like, oh, what if I don’t reach it? Or they feel like they’re going to be stressed out? Being really locked into it and that’s not the case at all. It’s actually really a good thing to make that decision of what it is you want to achieve because a big mistake that people make is that they don’t make any decision about how much money they want. It’s kind of like, “Oh well, I’ll just see how much I end up with and hope for the best.” Well, that’s not going to do it.
First, Make a Decision to Be Financially Free
I often say, if you want to become a millionaire, the most important thing you can do is make the decision to become a millionaire, because if you don’t make the decision, it’s not likely to happen, but if you make the decision, you’re likely to take the right steps and do the right things to make it happen.
Just like if you wanted to buy a house, if you made a decision, you wanted to buy a house, you have to do certain things. In order to be able to buy that house, you have to be able to qualify for the loan. You have to save for the down payment, you have to have good credit. You have to pick out the house, find a realtor to help you find the house. All of those things you have to do. Well, it’s the same kind of thing with wanting to make a million or 5 million or $10,000,000. It’s the same thing. You have to do the same activities and if you’re not engaged in that activity, it’s just not going to happen. You know you just aren’t going to, out of the blue, buy a house when you haven’t done any of those things I mentioned that you need to do.
You’re not just automatically going to own a house unless you inherit one, luckily, but other than that, it’s not just going to pop into your future. You have to take steps to make it happen and those steps are very doable. Steps are not difficult, but there are steps that you have to take. So it’s the same thing with a wealth building formula. You have to take action and do the things that you need to do. So what are those things that are going to determine your future wealth?
The Wealth Building Formula
What is this Wealth Building Formula that I’m talking about and what is McT? Well, let’s talk about McT for a minute. McT is a way that I put the formula together so that you can easily remember it because M, c, and T are the three components that you multiply times each other in order to come up with what your future wealth is and the M is capitalized.
In the Wealth Building Formula, the c is a small c and the T is capitalized, so it reads like McT, like McDonald’s would be McD, except this isn’t McDonald’s, so it’s McT, but I put it that way so that you would remember because maybe you’d remember it was similar to McDonald’s, so you’re going to remember McT, so that’s the only reason I used a capital M, small c, capital T and put it in that order was so that you would remember it, but it really doesn’t matter what order it’s in because you’re going to multiply each of those three things together. So M stands for money, c stands for compounding, and T stands for time (or years) that you have to compound. So those three things multiplied together are going to determine how much money you have in your account.
To begin learning the Wealth Building Formula, let’s start with M. That stands for money. M is how much money is saved or invested? How much do you have put aside that you can use as capital to invest? For example, how much do you have in your 401k? How much do you have in your investment account? How much equity do you have in your home? What’s your total net worth? Those are all part of your M, your money, the c is compounding. The c is what rate can you compound at? Are you earning two percent on your money in a bank account or are you earning 10 percent annually in the stock market? And the T stands for time. So time is how many years do you have to grow your money? Money, compounding and Time (McT). Those are the three things that make up the Wealth Building Formula equation. And when I take what someone has saved today and estimate if they were to earn 10 percent in the stock market and then give you the future value, I’m multiplying those three things together.
Calculating Your Future Wealth
To use the Wealth Building Formula to calculate future wealth, I’m taking the money (M) times the compounding (c) times the years (T) that they have to achieve it. And I use a calculator on MoneyChimp.com in order to calculate. You can use MoneyChimp.com and I also have calculators on my website, on my homepage. There’s a picture that you can just click on with a calculator and then it’ll take you to a couple of different ways to calculate the Wealth Building Formula McT and explain how to do it. But those are the three things that I’m going to always multiply together to figure out what your future of money that you have is going to be. Now the “aha” moment, the “aha” message, the real takeaway that I want you to get from this is that the Wealth Building Formula – money, compounding, and time – are the three things that create wealth. And here’s the thing I want you to really get.
If you have an obstacle of one or more of those, the solution to your problem is to lengthen the other one, so let’s say you don’t have a lot of money to invest and you haven’t really been a good investor, so you haven’t been compounding at a very high rate, but you’re a young person and so you have a lot of years to compound the T is going to be a big number. It’s going to be a longer time, so that is going to save you. If you’re late in life, starting out and you have those problems, you don’t have a lot of money and you haven’t been investing well, then maybe you’re going to have to retire a little bit later. You add a little bit more onto the T to make up for the “Mc” that you’ve been lacking. Okay, and then hopefully you can also improve your compounding. See how the Wealth Building Formula makes it so easy to know what to do?
Maybe you can save a little extra money to or sock away a little more money or get a higher paying job. You know that those are the three components that you have to work on, but if you’re lacking one or more than you just can increase the other one or two and that will offset the one that you’re lacking. Okay? So if you don’t have much money to start out with, but you have a lot of time on your side, you can still become a millionaire. So those are the real takeaways. That’s the “aha” takeaway that I really want you to get about the McT Wealth Building Formula is whatever you’re lacking, get more of the others in the Wealth Building Formula and that is what is going to help you overcome your obstacle. And this is all spelled out in the welfare a lot more in detail, but I’m just going to go over, you know, a few of the basic things that we can hear.
I also give a lot of specific examples of what happens when you’re lacking m, c, or t money compounding our time and specific steps to do to improve any one of those areas are all three of those areas. So my goal really is to make wealth building as simple as possible. And that’s really why I wanted to write the Wealth Building Formula, was to make it very simple and make it very doable and make it not boring. Finally, a financial book that’s not boring and has lots of success stories and stories about people who even have started with no education, you know, making a dollar an hour in China and literally go on to become a billionaire and the world’s richest woman. You know, how does that happen and why is that already within us? You don’t need a brain transplant or some different DNA – it’s already within you to build wealth, you just need knowledge and to take action.
Wealth Building is Learned, But the Potential Is Already Within You
They were born dirt poor without an education and literally went on to make the right decisions to become a multi-billionaire. These things are possible just because within us, we already have that seed for greatness. Just like a little seedling in a tree is already going to grow into a great big, huge oak tree in that little tiny seed. It’s a law of nature. I believe that we already have that greatness within us to be able to grow incredible wealth. It’s just a matter of knowledge and action. And if you don’t have the knowledge, that’s what books are for. If you know what to do and you take action, then you’re going to have success. So it’s really getting the knowledge like the Wealth Building Formula and then putting that knowledge into practice and that’s what’s going to really propel you forward. So I give lots of stories about that and just inspiration because I really believe that you already have that ability to create wealth within you and I promise you that people, when they were poor and when they were making a dollar an hour, they might not have ever thought it possible, that they would be a billionaire. Some day they might have hoped, wished, dreamed just like everybody does, but they probably didn’t believe it anymore than you might believe it right now!
And so I just want you to know that you never know what greatness you already have. I believe you have tremendous greatness already within you because if you have the knowledge, you gain the knowledge, you put it into action, I think you’re going to have tremendous wealth. It’s up to you whether you do that or not, it’s up to you whether you gain that knowledge and then do something about it or whether you do nothing. That is the whole point of my saying, “You’re already a Wealth Heiress”, because it’s already within you. It’s just a matter of your decision whether to follow it and do something about it to make it happen or just waste it. That’s up to everybody and whether you’re male or female, it doesn’t matter. It’s the same principle. You already have that ability within you and nobody starts out knowing everything about investing.
I certainly didn’t. Nobody starts out with all the knowledge that they need to create wealth. You have to pursue it and learn it. It’s something that you seek is something that if you do seek, it’s there. You know it’s knocking, the door will be opened. It’s, it’s there if you want it, but if you don’t seek it out and you don’t look for it and pursue it and get the knowledge, then it’s not usually just going to happen to you. I mean, very few people ever win the lottery. Very few people get a large inheritance and if they do over 75 percent have all the money gone within five years because again, they didn’t study how to build wealth. They didn’t study how to take that money and generate more money so that it wouldn’t run out and it wouldn’t be finite. And so these are the things, like the Wealth Building Formula, that I really want to share with you and the principles that I’m teaching and that I wrote about in my book.
It’s Easier Than Ever to Build Wealth
A lot of people feel that money is a limitation that they have. They don’t feel that they have enough money to live on, enough money to spend, enough money to invest. And I really feel that we are in a new era that people really don’t appreciate yet. A new era because the ability to make money is so much easier now. You see, we used to make money 100 years ago as farmers, and that was the reality for everyone who wanted to make money was they had a farm or they had a little shop, and people would come in to buy things from the store, or they were the barber. They were the town, you know, bartender, saloon, you know, think back to all the cowboy movies and you know, they ran a stage coach or they had the morse code office.
These are the things people did back then to make a living and everyone thought that was a normal way to make a living. Then factories came into being and the car, Henry Ford created the assembly line, and car manufacturing and other manufacturing came to be. And so then people moved into factory. So then they thought, well, to make a living, you became a factory worker. Well, and then corporations, came into being and people then had desk jobs and you know, worked at insurance companies and banks and sat at a desk and pushed paper around. You see, what we think about making a living hasn’t always been the same over time. It’s really changed a lot and really since the internet came into being, it’s changed again, but many people don’t realize it. Many people still think, oh, you have to go to college and get a job and you get a good job, and that’s how you get a good paycheck and benefits, and that’s how you make money. But there’s rapidly a whole other area growing and that is entrepreneurship.
A New Era of Wealth Building
We’re just operating with a phone and a computer. You can teach courses, you can write about things, you can create videos and these people that are creative in these endeavors aren’t necessarily the smartest people. They aren’t necessarily the most talented people. You don’t have to be perfect. They are hitting a cord of what people want to know. They’re sharing information that people have a thirst for and that is creating a lot of money for them and so they can actually work from home. It doesn’t cost much to start their business or run their business. It’s very cost effective, very low budget, and they can make a lot of money. So one of the examples that I give is kind of a crazy one that I thought was fun that I wanted to share with you, but this is an actual headline from the Daily Mail, which is a newspaper in England. And the headline says: Youtube Star, who makes slime videos, buys a six bedroom house with her earnings, revealing that she makes six figures per month creating the Goo.
So this is about a woman who actually makes videos about slime, you know, that kind of blue, green, slimy stuff that you can pull apart, kind of like a toy. And she started teaching people how to create slime on videos and then she’d put different things in the slime. She show how to make different colors. She’d show how to put sparkly glitter in it. She’d show how to do different things. And then she also got a deal for her own brand of slime that she could mark it through stores. But just on the video portion of her slime videos, she’s making six figures a month and was able to buy a new home. And you know, she’s only in her twenties. She’s not someone who’s an older person, she’s a young person who just stumbled onto something that people were really interested in and her video started going viral and so she started making a lot of money, you know, selling info classes on how to do it.
She gets paid from Youtube on her video viewership and ads on Youtube and on her website, and sponsorship deals, etc. So really you have to think outside the box because there’s all kinds of new ways to make money these days. Another one of my favorite examples is one that I heard about early on when I was looking at having an online business and it was that this young man was looking at creating a potato gun. Apparently in Idaho it’s very popular that you take PVC piping and somehow you shoot a potato through it and it’s called a potato gun. And he wanted to know how to make a potato gun and he couldn’t find how to do that. so he researched it, figured it out, created an ebook, and literally made $250,000 selling the ebook online about how to create a potato gun. So you never know what expertise you might have, whether it’s creating goo or creating a potato gun that seems so ridiculous that you don’t even think it’s serious, but yet there is the potential for great wealth to be created from some silly idea or silly thing that you might know.
Opportunity is Everywhere
This is what I’m trying to say – the rules have really changed and there’s all kinds of opportunity out there. We just have to open our minds and be open to what’s possible, because we’re so used to struggling and creating limiting beliefs and barriers about reality that has changed. Reality is really, really different these days. And just like you know, the hotel industry is changing because Airbnb came into place. There’s all kinds of new things happening all the time. or look at the taxi industry being reinvented by Uber or Lyft. There’s just all kinds of new things happening and we have to really open our mind and think about what’s possible because again, we’ve. We’ve put too many limits on so back to our McT Wealth Building Formula. Those were ideas about how to make more M, how to get more M in your McT formula, but I want to say that the Wealth Building Formula, McT is simply a function of how much money you have, what rate you can compound it at, and for how long plus having the certainty of knowing it will happen because mindset always plays into everything that we do and certainty is something that’s really important that is going to help you achieve your goals.
If you set a goal to become a millionaire and work on feeling certain that it’s going to happen, then your chances of it happening are going to increase because your brain will have that picture of certainty and it will seek it until it actually matches that picture that you hold in your mind. So having certainty is an important concept for your mindset as well. And if you haven’t listened to my podcast about mindset, I certainly suggest that you go and do that. That is step one to wealth. So I’ve mentioned that McT is part of the Wealth Building Formula – that you need all three parts and whatever you’re lacking, you need to increase the other parts. And again, I go through some specific details on how to do that in the Wealth Heiress book. And if that’s something that you want to learn, you can pick it up on Amazon.
I just wanted to start sharing with you the McT Wealth Building Formula so you get an idea of what you might need to be working on in your life, what areas you might fall short that you need to increase some of the other areas. And I wanted to give you some ideas on what that’s really all about and how that’s very doable. Because I truly believe that no matter how much or how little money you’re starting with, or how late you are starting, or what other obstacles you face, you truly can overcome those and with knowledge and action, you can achieve financial freedom.
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