with author Grant Cardone
from middle class to millionaire?
The American dream can still be a reality for the average person, but the rules on how to achieve it have changed. It is clearly more difficult and more challenging but it is still possible. Just know that the things that your parents did may no longer be solutions for you.
I'm an average American, and I came from the lower middle class. My father died when I was ten, leaving my mother to raise three boys. We only had enough money for food, transportation, and school - we weren't poor but we had just enough money to be scared all the time. I could see it in my mothers eyes, her actions and the way she talked that she was scared of not having enough to provide in the future. Uncertainty was abundant in my household. The idea of creating wealth was not even a possibility for my mother, getting by was enough of a challenge.
This reminds me of what most Americans are experiencing today. Millions of households have seen their retirement plans cut in half and the equity in their homes disappear. When this happens, families move into survival mode, rather than thinking about how to create prosperity. Millions of Americans are now giving up on the American dream of creating wealth for themselves when they should not be. It is possible for every day people to attain the dream of wealth and security, but you have to play by a different set of rules.
How do you achieve it? First, believe the American Dream is still attainable. Then decide you are going to attain it.
A majority of Americans have been made to believe that creating wealth is either almost impossible or not important. It only takes a bit of observation to see that the only group of people that are not at risk today are the very rich. Blame them, hate them, resent them but the reality is they are safe and everyone else is at risk. They will be able to survive inflation, a housing bust, tight credit, unemployment and whatever else is thrown at them. The idea of just being comfortable is a risky venture with inflation threatening and the value of your dollars plunging.
Here is a short list of pitfalls to avoid and actions to take that will ensure you are on the right path to attaining the financial success you desire.
Pitfalls to avoid
• Spending on "stuff"
• Not saving "years" of cash
Over the last few years, the most punished are those who borrowed the most. Even sophisticated investors got caught in the insanity of using too much debt to expand in the hopes of getting rich. Avoid borrowing money, unless the debt (interest cost) is paid by others, such as in the case of securing a mortgage on a rental property where the rents received cover the mortgage payment.
Financial planners suggest three months of cash in savings. My newest book, The 10X Rule, explains how even "the professionals" incorrectly estimate what it takes to create financial freedom. Consider the millions of people that have been out of work so long that the government extended unemployment benefits to 99 weeks! Three months? You need three years of savings for emergencies and investments! (Click here for a sample from the program)
Shortlist of actions to take:
• Increase income immediately. Increasing your income doesn't mean you have to change jobs, look for new things to do at the company you work, help out a neighbor with childcare or chores, etc., (be creative) to create additional income.
• Start saving $1 for every $1 you spend. Most people think it is impossible but it's not. For every dollar spent, save (after withholding taxes) the same amount. If you spend $2000 a month, save $2000! This will force you to focus on both parts of the wealth creation formula -- spending and creating.
• Put your free money into multiple "sacred" accounts. Never leave your money in checking accounts, get rid of it by assigning it to "future-use" accounts. Put all savings into accounts that will not even be used for emergencies. Warren Buffett is famous for hoarding cash so that when a great opportunity presents itself he is loaded up and can pull the trigger.
• Creating financial wealth, even getting rich, is still available to the average American if you just avoid the pitfalls and take the right actions. Only three percent of all millionaires inherited their wealth; 41 percent of all millionaires didn't go to college (those who did had an average GPA of only 2.9). Only one-third of all millionaires work for themselves, 67 percent work for someone else.
The only secret about getting rich is to decide to that you can. Don't be suckered in by "get rich quick" schemes or think that getting rich is as simple as just thinking you will. You have to take action. The American dream is not dead and creating wealth for the average American only requires a decision that you can do it, accompanied by discipline, saving, good investing, a simple plan and agreement from everyone in your family to follow the plan!
What's the biggest obstacle keeping you from financial freedom? Share in the comments and you could get help from an expert on The Ricki Lake Show!