2. Index :
Chapter 1 :
Step 1 - Wealth Creation Starts With Nine Words
Chapter 2 :
Step 2 - Wealthy People Don't Own Much
Chapter 3 :
Step 3 - Setting the Ultimate Personal Goal
Chapter 4 :
Step 4 - You Need Help From Other People
Chapter 5 :
Step 5 - Develop Habits of Highly Successful People
References

3. Chapter 1 :
Step 1 - Wealth Creation Starts With Nine Words
Wealth creation is a process described by a few essential laws of money. If you live by these rules
your chance of financial success is very good. And yet the majority of people will struggle
financially as they go through life. Why is this?
You may have the desire to make more money and fulfill all your dreams, but if you don't know
how to get the process going, you cannot expect to achieve your goals.
Wealth creation has to start somewhere. Identifying where and how to begin is probably the most
difficult step. But once you get the ball rolling it becomes very easy from there onwards.
Let me try and shed some light on this:
Suppose I ask you to paint a newly built brick wall with a colour of your choosing. Will you be able
to do it? I'm sure you would if you are familiar with the process of preparing and painting a wall.
Once you know where to start, the process becomes a lot easier: Buy the plaster and paint, select
your paintbrushes and building tools, acquire a ladder if necessary, plaster the wall, apply one or
two layers of undercoat and then the final coats of paint. Whola, job well done!
The point is if you know how to go about doing a certain task, the only thing you really have to do
is get off your butt and do what you have to do. The same thing works with making money.
As a working individual caught in the rat race, building wealth is governed by a standard universal
framework. There are 9 words which describes the entire process:
Use (1) your (2) surplus (3) income (4) to (5) purchase (6) income (7) generating (8) assets (9).
Wealth creation is commonly understood to be an exercise in investing. Have a look at the figure
below.
The conventional thinking is to save part of your monthly salary in a pension fund over a long
period of time so that when you retire one day you have something to live on.
One can see that investing is planning for the future. It's a delayed wealth creation strategy. Instead
of accumulating wealth today, investors set cash aside for use during retirement, 20 or 30 years
down the line.With this approach the hope is that one's investments will increase in value over time.
Wealth creation sets off on a completely different path. Where investors save part of their salary
(before costs) in a savings vehicle like a pension fund, wealth creators focus on spending part of
their salary (after costs) on income-generating assets.
It may not make sense but spending is the name of the game not saving. The amount you spend and
what you spend it on is vitally important to achieve financial success. I cannot stress this enough.
Building wealth begins with surplus income, the spare cash in your bank account after catering for
all your necessary living expenses. These may include things like health insurance, rates and taxes,
food and housing expenses. They exclude luxuries like travelling, eating out, shopping for fancy
shoes or handbags and buying expensive motorized toys like boats and cars.
How you spend your active income will have a direct influence on the amount of surplus income
you have. Do you really need cable TV? What about those nights out? Are they really all necessary?
What monthly expense can you cut out?

4. You must have a critical look at your spending patterns because surplus income determines how
quickly you can start building wealth. The less you spend on things that you want (as opposed to
things that you need), the more income you will have to spend on assets that will make you wealthy.
It goes without saying that if you are unemployed or do not earn an income, it is impossible to build
wealth. When I first started my journey, I was employed as a full-time researcher at a university in
Johannesburg.
My surplus income fell way short of being classified as desirable, which meant that my potential to
create wealth was literally zero!
As tough as it was at that stage, I only had one option, and that was to increase my disposable
income. Over the next few weeks, I started looking for a job. Yup, a higher paying job, one that
would give me a significant amount of surplus income to help me escape the rat race. I eventually
found something in the financial industry, and I am grateful to say that formal employment was
exactly what I needed to help kick-start my journey to financial freedom.
The important question you need to ask is, 'How will I increase my surplus income?' It may mean
finding another job or changing your spending behaviour. Every dollar saved is an extra dollar you
can use to start building wealth.
But that's only possible if you spend each dollar on the right things, namely income-generating
assets.
When starting out, it won't do you any good to blow your free cash on 'assets' that don't produce
income, like holidays or expensive clothing.
After I started working for a boss, I pumped all my surplus income into real estate. I cut out all
unnecessary expenses, put a budget in place and used all my spare cash to build rental income
streams.
This did not happen overnight. It took me about four years to get into a position where I could use
the rental income from my property businesses to purchase more assets. At this stage, the income
from your assets (together with the surplus income from your salary) can be used to purchase more
income-generating assets.
This is an essential point to reach for every wealth creator. It represents a new stage, one of wealth
acceleration and essentially early retirement.
To summarize, the first law of moneyhighlights two important points:
1.Surplus income is the catalyst for building wealth.
2.Surplus income must be used to purchase income-generating assets, which in turn must be used to
purchase more assets.
The resulting income streams will help you reach financial independence and eventually freedom.

5. Chapter 2 :
Step 2 : Wealthy People Don't Own Much
'Wealthy people don't own much? Hey, come again.' This just about summed up my confusion when
I first heard this concept from my mentor. The idea that the rich are ownerless didn't make much
sense to me back then. But I soon came to realise that it's one of the most important concepts in the
game of wealth creation, important enough to form the 'Second law of money'.
Being financially free does not mean that you personally own a lot of assets. In actual fact, it means
the complete opposite. Wealthy individuals own very little (if anything) in their own names.
They use the protection of a company or cooperation.
Instead of owning income-generating assets, vehicles, bank accounts, purchasing groceries or
paying for children's school fees in your own name, you have the option of buying assets and doing
day-to-day activities in the name of a company.
By setting up one, you basically become a representative or employee of the company. Everything
you do as an individual you do on its behalf. Your credit card for example won't have your name
printed on it, but your company's name. The same goes for real estate. Buying or selling property
happens in the name of your cooperation, not your name. You merely act as a facilitator of each and
every deal.
As a result, wealth creators generally own very little in their personal names. Their corporations are
the true owners of their income-generating assets and hence wealth. So what exactly is a
cooperation or company?This is something that really confused me when I first started. It's not a
factory or retail store. It's not a big building or brand name, nor is it a group of professionals selling
a specialised service. It's merely a legal document registered with the government. Anybody can
establish a company. That's the beauty of the process. No physical thing has to be established to
start a company. All you have to do is complete the paperwork.
Okay, why even go through the 'hassle' of filing a few pages with the authorities? A company makes
playing the wealth creation game significantly easier. A person can get so much further in a
corporate setting than he or she can as an individual. It's the only real way to play the game. It's how
wealthy people have been doing it for hundreds of years.
There are two major reasons why a cooperation is used:
1. Tax advantages:
As an employee, first you pay the government, i.e. get taxed, and then you live on what is left (post-
tax dollars). And the more promotions you get or harder you work, the more the government gets.
Tax is a major expense and should be minimised legally as far as possible.
This is where company comes in.
Firstly, earnings are taxed last, which means the government only receives their share of your
income last. You benefit by living on pre-tax dollars. For example, mortgage fees, vacations, car
payments and food can be treated as company expenses. Only once these fees have been taken off
your income will tax come into play.
Individuals: Earn - Pay taxes - Live
Companies: Earn - Live - Pay taxes
Secondly, companies in South Africa are taxed at a rate of 28%. This will benefit you as an
individual if your personal tax rate is higher than 28%. Conducting business in a company at a
lower tax rate minimizes your tax expense, which means you have more resources to spend on
income-generating assets.

6. 2. Protection
The second major advantage offered by a cooperation is protection from creditors and lawsuits.
Let's face it. We live in a world where some individuals will do anything to make a quick buck at
the expense of wealthy people.
Just have a look at the recent lawsuit against Justin Bieber, who was accused of being the father of
a 20 year old woman's son. As you may well know, the charges were "quietly dropped" leaving his
accuser with a possible counter lawsuit.
Suppose you owned buy-to-let property. What if the tenant seriously banged his head on a low
hanging door frame and then sued you for damages relating to leasing of unfit property? The fact is
everybody wants a piece of the action and one of your jobs as a wealth creator is to protect your
assets against unlawful claims.
The best way to do that is within a separate legal entity or company.
In your personal name, you own and control everything. Legally, your name acts as a direct route to
your assets and wealth. Someone can simply sue you to get their hands on it, provided their
allegations can be proved in a court of law.
In a company, you own nothing, but control everything. This is the ultimate form of protection. If
somebody wants to sue you for whatever alleged indiscretion, they will have a tough time stripping
you of assets you don't own. Also, depending on how you structure your company, corporations can
be used to add multiple layers of protection around your assets.
In summary, cooperations are not only there for wealthy people to make use of, but rather for
anybody who wants to own and protect their income generating assets.

7. Chapter 3 :
Step 3 : Setting the Ultimate Personal Goal.
You recently read a book on self help, attended a course on personal development or simply have a
New Year's resolution of making the best out of 2012. You've listed all the things that you have to
do, a nice long list, one personal goal after the next. After all, that's what they say right? You need
to have goals to be successful.
With your list in place, you organise how best to start tackling things, placing all your activities into
categories, like friends, health, money, new job etc. Friends you have to see, your new gym
programme, that promotion you've eyed out or that new job your friend told you about. Ready, set,
go!
Is it as easy as this? Will simply writing a few pointers on a piece of paper motivate you to succeed?
Well, in my experience, instead of making life easier, it complicated it immensely!
Unfortunately, having many personal goals can actually confuse one. And you'll run out of time very
quickly. What should you focus on first? How much time do you dedicate to each goal, and when
do you call it quits? It can get pretty disorganised!
Here's why it was so difficult for me.
About two years ago, I wrote down 12 goals on a piece of paper and pinned it up on my notice
board. Everything from buying a new house, expanding my property business, starting a family,
making more money to getting my new online business up and running.
The idea was to complete everything in one year! Challenging? Yes! Realistic? Not quite. After
almost half a year I gave up on my list of goals. With all the things I had to do, I eventually lost
focus.But what really killed the project were my emotions, specifically that little gut-wrenching
feeling of failure. When I found myself going round in circles, I did the best thing I could've. I
tossed my list of goals into the garbage and started from scratch.
The truth is goal setting must be as simple as possible. And that means having only one personal
goal. Yup, one life goal, however it must be challenging, it must be realistic and it must be BIG.
The following three steps will help you reorganise your thinking and get you back on track to
creating your ideal lifestyle:
Step 1: Identify your big personal goal
Envision how your life will look. What will you be doing in five, ten or twenty years from today?
Are you working for a boss, do you own your own business, are you travelling the world. Be
specific.
What is most important to you: financial freedom, visiting each continent, owning a four bedroom
house and seaside apartment or having a big family?
Now for the all important question: How badly do you want your goal to become reality? This is the
perfect goal worth pursuing. Something that adds purpose or creates meaning in your life,
something that gives life to your God-given talents. Without energy, goals will remain ideas.
Once you've identified your goal, write it down and put it somewhere you can see it every day. One
great tip I picked up from Robert Shemin is to own a wealth check. There are four components.
Here's my very first wealth check:
•[Date]: When would you like to be financially free? My date: On my 37th birthday.

8. •[Amount]: How much passive income would you like to earn each month at age 37? My amount:
R100000 (~$12500).
•[Services]: What service(s) will you render to enable your goal. You have to give before you get.
My service: teaching people how to build passive income businesses.
•[Pledge]: Sign your wealth check and place it in your wallet. Your signature is your pledge. You
must make good on it. on your goal.
Step 2: Select the path you will take to reach your goal
This relates directly to the third component in your wealth check. It's your mission statement. How
will you make the world a better place? What product will you sell? What service will you render?
How will you do it, as an employee or as a business owner? Will it be as an intrapreneur, investing
in property or selling one of your own products?
This may sound like something out of 'The Secret', but your path must support your goal. It doesn't
make sense to want $10000 passive income every month if you only plan on working behind a till
in your boss's candy store. However, a sensible path may be to own a candy store franchise. You
need to be realistic.
Step 3: Plan your journey
Don't just plan. Decide what activities you have to do every day to take you to your goal. What tasks
do you need to accomplish to achieve your ideal lifestyle?
The best thing to do is write them down and assign dates to them. Timelines will keep you focused
and accountable. Ideally, your to-do list must cover work activities for the next three months.
Once a certain task has been completed, cross it out and move onto the next one. To keep you on
track, you must monitor the number of tasks you complete in each month or week.
The one thing I learnt is not to get too stressed out or discouraged when you fall behind in your
work. If you miss one, prioritise it for the next day and get it done. Also, don't forget to celebrate
your successes and progress. This will keep you motivated.
Keep at it and don't forget about what you're working towards, your ultimate personal goal.
All the best!

9. Chapter 4 :
Step 4 : You Need Help From Other People
It's a myth: Wealthy people don't become successful alone. They get help from other people. The
secret is, if you attempt to do everything yourself you'll fail. If you use other people, you'll succeed.
Let's say you want to develop an investment property. The idea is to lease it out for the rental
income. The D.I.Y'er will attempt to do everything.
They'd probably learn how to design the property by taking a course in architecture. They'd learn
how to zone land and construct buildings. They'd educate themselves on financing, tax, property
management and tenant administration. They'll try and absorb all the million and one other details
required to get the property built and leased.
How would a wealth creator tackle the job?
The goal is to get the job done correctly and on time. So this person is likely to assemble a team of
individuals who know what they are doing. You'd find a qualified architect to draw up the plans, a
builder, developer, financier, property manager and other experts as and when needed.
Successful people come up with the idea. They are the visionaries. As an initiator of a wealth
creation business, you are directly responsible for doing the research, finding a profitable market
and making sure there is a big enough opportunity to turn the idea into a viable business.
When it comes to bringing the idea to life, your task is to recruit others to help you achieve your
personal dream.
One of the most common reasons why businesses fail is that entrepreneurs try and do everything
themselves. They hoard control and retain power. Delegation doesn't happen.
This is not to say that you must steer clear of self-employment as a business model. There are some
highly successful sole-proprietors out there. However, you often find that a one-man/woman
business plateaus very quickly.
Growth is limited. A business that solicits the help of other people and builds strong teams will
usually have an edge over their competitors. As Robert Shemin said, 'The rich idiot makes the
spark; other people make the blaze'.
•This brings us to how to use other people to accelerate your success. There are three ways:
1. Use other peoples' time
These individuals give their own time to assist you in your business. They do the things that they do
best, leaving you with more time to do the things that you do best.
When it comes to my property business, I have property experts in my team that manages all my
tenant-related issues. They pay the bills, deal with maintenance issues and handle all my tenants'
gripes.
As a result, I have more time to focus on growing my portfolio, i.e. buying property. Learn to use
other peoples' time. It's powerful stuff!
2. Use other peoples' money
Pop quiz: What's the quickest way to make $1 million? Borrow it! Asking for money is not the
easiest thing to do, but it's the quickest way to buy assets and build wealth.
There are two important criteria though:
•You have to finance great deals so that you can make a profit. Your business return must be
significantly higher than the interest rate you pay on the loan.
•Don't lose other peoples' money. It's a lot costlier than losing your own. If you do, you may never
be able to borrow money from a bank again. Be careful.
When it comes to real estate, banks are willing to grant mortgages. But it has been tough of late
(due to the 2008 credit crisis) to convince financial institutions to loan their money.
This is why you have to be professional when asking for money. Always speak to the man or
woman in charge. Show them your business proposal and indicate how they will benefit financially
from your venture. It's a strategy I've used to great success.

10. In addition, keep your options open. There are other people aside from banks that will finance your
business, as long as there is benefit for them. For example, venture capitalists, successful business
owners, investors, other professionals and even your friends and family may offer finance. All you
have to do is look for them.
3. Use other peoples' experience
A personal mentor for me is by far one of the most important members to have on your team. A
mentor is someone who is accomplished in your field of interest.
They can share their personal experiences with you and in so doing increase your chances of
success. More importantly, they are there for inspiration. Entrepreneurship is daunting and can at
times be de-motivating. You need somebody to help lift your spirits when the time calls for it.
So don't be shy. Find a mentor in your field. Speak to them. Ask them for help. Show them that you
are committed to making a change. Successful people are willing to help others along their journey
to financial freedom.
Getting help from other people is about building relationships. It's not about exploiting people. By
building a team of competent people around you, you can benefit from a wealth of experience,
money and time.

11. Chapter 5:
Step 5 : Develop Habits of Highly Successful People
Wealth creation is a process. Forget about buying that 'How to get rich overnight' book. It just
doesn't happen, unless you strike it big in the casino. The process starts with an idea. Once it has
been moulded into a workable business concept, an 'action cycle' follows, one of doing, learning
and doing things better.
All successful people had to start from somewhere, right? And I can bet you now most of them had
no assurance of success. The point is you have to get your hands dirty, starting today.
Once you get going, change is inevitable. You will begin to approach life with a different hat on.
Old thinking habits will be replaced by a new age mindset.
Do you have what it takes to redefine yourself? Are you ready to turn your world upside down?
Well that's what's required if you want to be financially free. If you're not committed to change
there's no way you can achieve your life's goals.
Broadly speaking, there are four actions required to achieve financial success:
1.Acquire income generating assets
2.Protect assets using corporate structures
3.Grow your wealth by reusing the income generated by your assets
4.Distribute wealth through philanthropic efforts
To entrench these actions into your way of life, you need to develop habits of highly successful
people. There are five habits that I live by:
A. Keep things simple.
There's the easy way and the hard way. In business the easy way is to ask and deliver. Customers
have needs. You need to find out what they are. Once you know, make them happy.
People often tend to overanalyse problems. As a result, they get caught up in a state of inaction. I
love the analogy given by Robert Shemin:
'How do you put a giraffe into a refrigerator? Answer: You open the door, put the giraffe in, and
close the door.'
Don't overcomplicate things. Sometimes the direct route to wealth is the quickest.
B. Take responsibility for your actions.
The most common excuse for failure is someone else. Do you blame other people or circumstances
for your misfortunes? If your investments tank, who do you hold accountable, your advisor or the
market?'
I love this quote by John Stuart Mill:
'A person may cause evil to others not only by his actions but by his inaction, and in either case he
is justly accountable to them for the injury.'
Irresponsible thinking (or inaction) is a wealth-destroying habit to harbour. It's similar to an anvil
hanging from your neck. The weight will pull you down and keep you there.
C. Find out what you don't know.
This is another important habit of highly successful people. Wealth creation may be completely new
to you. Realise that if you stick to what you know, it becomes very difficult to live up to your goals.
What you need to do is start a new chapter. First find out what you don't know about money, stock
investing, business building or real estate (or whatever the subject), and then explore each topic
further.

12. Change doesn't happen if you stay within your comfort zone. Always try and push the boundaries.
D. Appreciate life.
Money is not the real source of wealth. It's a tool that people use to build and enjoy riches. True
wealth comes from gratitude; appreciation for your friends and family, good health, love and other
pleasures that life has to offer.
Don't misunderstand me. Money is important. But if you make it your sole purpose in life, you may
end up unhappy and alone. Be grateful for what you have.
Treat wealth creation as an opportunity for the universe to reward you for making the lives of
people around you better. Say thank you more often.
E. First get and then give.
The idea that 'giving is always better than getting' was drummed into my head ever since I started
attending Sunday school in my early teens. However, this is backward thinking. You cannot give
what you don't have, which is why you must first get.
That's not to say you shouldn't give some of your time to charitable causes or a 100 bucks to a
person in need. With wealth creation, the more you receive, the more you can give and the bigger
difference you can make in other peoples' lives.
Have a look at rich people today, the charities they support or foundations they start. These things
would not have been possible if wealth wasn't sought in the first place.
After receiving, I believe whole heartedly in giving. Giving results in receiving!
It's the universe's way of thanking you for your humanity, so to speak. What contribution could you
make to better the lives of others? Have you ever received an unexpected gift or surprise for doing
something good, or giving up your free time to help someone?
For me, Karma is a way of saying that there is more to receive beyond what we can physically see.
It's the 'unseen' reward for supporting causes bigger than oneself.
These are only five habits. There are many other habits of highly successful people. What habits do
you live by?

13. References :
Roberto Lanzillotti http://EzineArticles.com/7133552
Roberto Lanzillotti http://EzineArticles.com/7193557
Roberto Lanzillotti http://EzineArticles.com/781901
Roberto Lanzillotti http://EzineArticles.com/7208497
Roberto Lanzillotti http://EzineArticles.com/7260663