The Mindset of a Multimillionaire.

For me, it's never been a race to create wealth.

It was never in the forefront of my mind to create a multimillion dollar net worth.

To be honest, I just went through the motions of running my business, making the sales, making the profits and investing those profits in income producing assets.... and I did this for over two decades.

Sure, there were many days, weeks, months and years that were challenging - especially the first 5 years where we earned just about nothing from the business. However, once I got the formula right, it then started to create good income and profits.

However, even through the toughest of times, I never considered quitting.

I also never considered making a fortune or becoming a multimillionaire, I just focussed on the next sale and making the current year more profitable than the pervious year so I would have the profits to continue investing.

When a profit was made, it was invested. We did not want to have to dwell on our investments, we went down the path of chosing "set and forget" investments such as property, which appreciated in value and generated passive (rental) income. This allowed me to continue working on my business and I let our investments look after themselves.

I saw my job as income generation, so the income could be invested to create even more income. The result of that mindset was that while I was working to produce investment income, our investments were just continually growing in the background. Slowly at first, then as time passed, the investments began to grow faster in an exponential manner due to compounding effects.

By the time I retired in my 50's, I was making more passive income than I could spend.

A multimillionaire constantly thinks about:

• Cash flow

• Asset accumilation

• Asset protection

• Passive income generation

• Capital growth

• Investing

• Financial education

• Tax effective strategies

• Business and finance

• Inflation and the economy

• Market trends and opportunities

With regard to wealth creation, my advice to you, or anyone else, would be:

1. Stay focussed on what generates the income. Initially it will be your work/business and eventually it will be your investments.

2. Make sure you can produce as much excess income as you can in order to have the maximum available to invest.

3. Invest in good passive income generating assets that also grow in value. Do NOT touch the income, but rather invest it to pay down loans you have on your assets (such as mortgages) OR save the income to then reinvest into other investments, whatever you choose is fine as long as it generates passive income and capital growth.

4. Continue doing the above over and over again, year after year. Keep an eye on the investments and make sure you maximise the profits on them, but do not get too obssessed about performance of the investments - remember that the assets are NOT your primary income generator (at least not at the start).

5. Keep your eyes and ears open to new opportunities and trends.

6. Keep up your financial education including tax effective wealth strategies.

7. Stay focussed on what generates the income! Yes, I know this was my first point, but it is so important that I need to make sure you get that into your head !!!

Once you get to the point you are generating good passive income, then you need to look at what sort of capital growth your assets are achieving. Remember, you cannot spend capital growth unless you sell the asset. The issues with selling assets are:

• You create a taxable event which means you pay capital gains tax.

• You no longer have the asset to produce passive income, so your income reduces.

You need to get your investments to the point where they are generating not only an income that beats inflation, but capital growth that also beats inflation.

You need to generate more passive income than you can spend, so you never need to sell any assets.

At the time of writing, inflation has taken off (realistically currently around 6%), commodity prices (wheat corn, coal, energy, food) have increased substantially, with fuel having risen 50% in the last 3 months. People who based their retirement numbers on a 2.5% inflation rate and low commodity prices are now having to consider how they will make their retirement funds last, OR they may have to consider going back to work. This is sad.

If you have the right wealth creation mindset, you will take into account possible changing times and economic factors into your calculations. Where people are struggling to get 0.5% interest rate returns on their savings, I am getting around a 18% rate of return (combination of both capital growth and dividend yeilds).

If you have the right wealth creation mindset, your superannuation (retirement account) should be increasing in value even though you are drawing funds from it. Unfortunately the average, financially uneducated person will not only be drawing down on their retirement fund's cash but also on the fund's assets (capital) - eventually depleting the thing that actually generates the income they need!

My Super Fund is self managed. My investment portfolios will never deplete - in fact, they should be worth more in value, and generate increasing passive income as I get older!

Lesson:

Think ahead. Plan for tomorrow but live for today as well. Keep investing. Trust in your plan. Trust in the process. Be sure to create excess income - even when you retire. Be sure to keep your investments growing - even in retirement!

Final Note: There was a recent study by someone who studied 177 self-made multi-millionaires over a 5 year period. He listed the 6 habits that made them ultra wealthy and successful. The findings were as follows:

1. Self-made millionaires are constantly learning. It turns out that learning and self improvement were top priorities.

2. Self-made millionaires listen more than they talk.

3. Self-made millionaires build great teams.

4. Self-made millionaires dream big.

5. Self-made millionaires prioritise their health

6. Self-made millionaires create their own luck. They shared an ability to see what is invisible to others, and come up with creative solutions and alternate routes to success. Ultimately, persistence creates opportunities, and luck eventually comes to those who refuse to quit on their dreams and goals.

Click HERE if you want to read the article in full.