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Linda Jones
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Linda P. Jones is America's Wealth Mentor. She is CEO of Be Wealthy & Smart, a business dedicated to teaching high income earners how to create high net worth by being prepared for the coming U.S. dollar devaluation, a result of the trillions of dollars being printed by the government. Linda... More
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Be Wealthy & Smart
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Be Wealthy & Smart
  • The 8 Best Ways to Build Wealth: Investing in Bubbles and Cycles 0 comments
    Sep 17, 2010 10:55 AM

    I've always been fascinated with how to build wealth and why some people have lots of money and others don't. So when I started a financial education business and people told me money matters were boring, I really had to think about their perspective.  I concluded they were right...I mean if I viewed money as it's taught - all columns of numbers and like an accountant, then I'd think it was boring too.  But for me, it was never about that. I'm not a number cruncher (I hated accounting in business school). I'm a visual and creative person. I experience relief letting my accountant save me from the drudge of dealing with the number crunching as much as you do!  

    In the investment industry that I was a part of for over 25 years, it involved talking in a "foreign language" that made it seem complex.  At the time I didn't think about it that way, but now that I'm free of the industry and look back on it, it was so unnecessary to speak in jargon. Now I teach about growing wealth in a way that doesn't use jargon, is not biased, and is from the perspective of what works.  

    So here's what I believe are the best ways to build wealth now:

    1.  Separate financial education from offering investments. If the pharmaceutical industry was in charge of teaching about health, then the answer would always be to take a prescription. Ergo, if the investment industry is teaching personal finance, then the answers usually involve buying an investment. The truth is, building wealth involves 7 other stepsbesides investing. 

    2.  Follow the steps to build wealth step-by-step. There are 8 steps to build wealth, I believe, and they answer the question, "How do I become rich?" The 8 steps are: create a wealthy mindset, save a nestegg, find a mentor, invest in money engines, compound at a high rate, leverage wisely, protect your wealth, give and create your legacy. You may have heard them before, but each step has many parts (beyond the obvious) and most people aren't doing them. There's an ancient Chinese proverb: "To know and not yet do, is to not yet know." If you do all 8 steps, in my opinion, you will become wealthy. It's exactly the step-by-step system I followed to become a millionaire at age 38.  It works.

    3.  Your "portfolio" isn't just your retirement plan or your IRA, it's how you spend the money that flows through your fingers. Even the most modestly paid wage earners will earn $1 million in their lifetime, but how much becomes permanent wealth? It's mainly dependent on buying the "right" assets early.  Just ask someone who bought a house in 2007 if that was the right time to buy a house or if 2000 was the right time to buy tech stocks to build wealth.  Long-term, buying the right assets while they are growing is paramount.


    4.  You don't have to be frugal, live in squalor, or forgo designer brands to build wealth.  Yes, you can have it all if you understand "value" and "building equity".  I buy my Jimmy Choos at the outlet, shop wholesale, and buy quality cars a couple of years old, in immaculate condition, that can be in style and last for a decade or longer!  

    5.  You don't need to "buy and hold" stocks and bonds over your lifetime. There have been many 20 year periods in history where major stock indexes went down in value. How can you build wealth in an asset that goes down in value for 20 years?  My wealth has come from identifying where the money is moving, getting there first before everyone else figures it out, and getting out before it peaks. I do this by identifying the next bubble, confirming with cycle forecasting it's the right trend, and using my own system to identify when a bubble will peak. Are you aware of an investment that has grown about 16% a year for the last 9 years, with a positive return every year (even 2008)? Most people don't own it in their portfolio yet, but a few years from now when it's peaking I'll bet will be clamoring for it. 

    6.  Buy assets that will go up in value. Some of my clients have incomes of $250,000+, but they have no appreciating assets.  They're mired in debt from buying multiple residences, boats, and new cars -  all depreciating assets.  You cannot build wealth if you don't have appreciating assets. 

    7.  Forget popped bubbles and buy into the next bubbles early. Bubbles that have popped don't reinflate anytime soon. For example, Nasdaq tech stocks are still 50% below where they were 10 years ago. Cycles show real estate won't be re-inflating to old prices for a long time.  Forget popped bubbles like real estate, move on to the next bubbles early to grow your wealth!

    8.  In the New Economy, you have to think differently and invest for the future, instead of looking in the rear view mirror. That's how billionaires like John Paulson, who made $4 billion in one year by investing in the anticipated future trend of a crashing subprime mortgage market, invest. Start using forward vision to build your wealth.

    In my opinion, the largest transfer of wealth in history is about to occur in the next few years.  Now is the time to learn the new ways to build wealth and own the next appreciating assets. 

    Disclosure: No positions
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