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By Jack Bosch, author of Forever Cash
What if you are already making great money but are wasting it on things that will not get you ahead in life? Would you now consider cutting some expenses and rearranging your life to get there faster? I bet you would.
Here’s a test: would you rather have a large house, a second home in the mountains (or at the lake, or at the beach), and a beautiful boat now – even though it would mean living in a shack when you are old? Or would you rather live in a decent (but smaller) house now, rent a vacation place and/or a boat a couple of times a year when you need access to them, but then have the means to be able to live in the large home and buy your second home with all the toys you want a few years from now? Your answer to that question defines whether you will succeed in this process.
To master the temptation of spending that money, here is what you can do. Open two separate bank accounts.
Call the first account your “Investment Account.” Put 95 percent of your newly generated income and 95 percent of all the profits from your investments, be it One-Time Cash, Temporary Cash, or Forever Cash, into that account. Destroy the debit cards and checks the bank gives you for that account, so that you are not tempted to waste the money. Instead, just use wire transfers that still – in most U.S. banks – require you to go down to the bank to wire the money to the party you do business with and purchase an investment from. That way you won’t touch the money, and you just make deposits until you have enough cash in that account to place your next investment.
Call the second account your “Fun Account.” Put 5 percent of your newly generated income and 5 percent of your Forever and Temporary Cash profits into a rewards/fun account. Regularly use that to enjoy some of the extravagant things you love but which will not add to your wealth. Stuff like going to Vegas, or buying a new stereo for the car, or a $400 pair of shoes (for the ladies). I do stuff like that on a regular basis (okay, not the shoes), but I recognize what I’m doing. I am aware that taking money I get from my rental houses and buying a new couch, or even just an iPad, will mean that I can’t use that money to further my path to financial abundance. But I also know that these rewards keep me going and let me enjoy the journey.
Here are a few ways to generate cash flow that you don’t work for:
- Buy a rental house that is cash flow positive in an area of the United States where they are cheap. (Yes, there are areas of the United States where you can buy good houses for $50,000-$100,000 and rent them for $700-$1,100).
- Buy tax-lien certificates (Temporary Cash) that are secured by the government
- Buy land and flip it with seller financing at a high interest rate (and high profit margins) (Temporary Cash).
- Buy dividend-paying stocks that pay annually (Forever Cash).
- Buy a mobile home lot with a mobile home on it and sell the home with seller-financing (Temporary Cash) but leasing the lot underneath (Forever Cash).
- Write and publish short books on Amazon.com for passive cash flow based on royalties (Temporary Cash).
- Apply stock options strategies for cash flow (Temporary Cash).
- Build online subscription services that people pay you for monthly to be part of (Temporary Cash).
- Put up an Internet banner ad for an affiliate product and get commission when that product sells (technically One-Time Cash, but a good banner ad can produce many sales a day for a long time without having to change it and mess with it so it qualifies as Temporary Cash).
- Build a network marketing organization that is self-sustainable and provides monthly stable cash flow (Forever Cash, if built right).
- If you have more money to invest and you have some business experience, consider buying a simple cash-flow business that doesn’t require a lot of time to manage (like a coin laundry or a small car wash; they are cash cows if done right) (Forever Cash).
If you do fall for the urge to spend the money on worthless stuff, you are screwing things up. It will be just like you’ve pulled the plug out of the tub. I am sure you are no familiar with how that works and have done that a few times. So have I. You can’t put in new money fast enough to make up for what goes down the drain when you spend it crazily.
If you don’t take some off the table and invest it into something that secures you forever, you might find yourself some day in the same position as these people who come up to my live seminar saying, “Jack, I had it all, and I lost it all.” You don’t have to lose it all. Remember, even the largest money mountains can disappear, but a portfolio of Forever cash Flow streams rarely, if ever, all disappear. One rental home might burn down but not all twenty. One banner ad might stop bringing in money but not all twenty you have around the web. One Amazon special report might stop selling but not all twenty-five books you have published. Multiple streams of Temporary and Forever Cash bring stability and freedom. Money mountains bring worries.