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Quit Your Job and Keep Your Income
What would you say if I told you could quit your job today without losing any of your monthly income? You’d probably laugh in my face, right? I know it’s a claim that seemingly defies all logic. However, when you learn how to use your money differently, what used to seem impossible starts becoming reality.
No, I’m not talking about a get rich quick scheme, or an MLM or the kind of home-based businesses you’ve seen flooding the Internet. I’m talking about a legitimate way of using what you already have in a way that produces more cash. It’s not an instant process, but with the proper training and the help of a good team, anyone can learn how to do it.
Your assets are things you own that are worth money. In financial terms, this includes your home’s equity, IRAs, current stock portfolios, mutual funds and savings, and more.
Asset allocation is basically using the assets you already have – ones that aren’t bringing in any real cash flow - and redirecting them to another type of asset to create a greater return to you. For instance, it could mean taking some of the equity from your home and putting it into more aggressive, less conventional investments that will produce more cash flow. This cash can ultimately be invested into another venture that will bring in even more cash.
Asset allocation is exactly what Loral Langemeier, author of The Millionaire Maker, suggests that you do. If you want to be a millionaire, that is. She should know. Loral, a multi-millionaire herself, has helped hundreds of people move from dead broke to millionaire, sometimes in as little as nine months.
“There are generally two types of investments,” begins Langemeier, “income investments that create cash flow and growth investments that build equity.” Cash-flow producing assets – these are assets that bring in cash in the form of income - include oil and gas investments, real estate, investing in a business, promissory notes, mobile home parks, storage units, and the like. Equity-building assets – those that don’t bring in cash but build the value of your wealth - include real estate, businesses you own, buildings, mobile home parks, etc.
Loral believes you need to be involved with both cash flow and growth investments to create true, lasting wealth. In fact, she doesn’t think that putting all your money in one place, like the stock market, is the best one in the long run, although conventionally considered a safe move. Yes, it’s what we’ve been taught to do, but with the changing economical environment today, Loral actually thinks it a bad idea all around to put all your eggs in one basket. The typical “diversified portfolio” really isn’t very diverse because it’s all in the stock market.
“I call this the park and pray method and I can think of nothing riskier,” says Loral. “In this day and age, taking your hard earned money, parking it with a financial institution, and praying that it increases is, frankly, pathetic. I believe any plan that requires you to cross your fingers is not a good plan. That’s like dropping your kids off with someone when they’re infants, taking them back when they’re 18, and hoping they turned out alright.”
The type of investing she’s suggesting, however, does require accumulating a lot of knowledge. “This means engaging mentors who’ve done it all before, because reinventing the wheel is just ridiculous. It means finding field partners who can connect you with the right people in the right assets, because getting inside the community of investors rather than peering over the wall is a much more realistic course of action.”
Loral refers to the accumulation of true wealth as the Wealth CycleTM. It’s an active process in which you are the leader of your financial destiny. “The Wealth Cycle TM. demands direct investment in a diverse number of assets. The difference between direct and indirect investing is the difference between driving a car and holding onto the back bumper for dear life.”
Pulling back from the brink
So now that you’ve been introduced to the idea of asset allocation, let’s give you an example of how powerfully it can change lives. The Leonards were a family of four from Oakland, California. Mary and Mike Leonard owned their home but they had two sons in high school nearing college, a relatively modest savings, credit card debt, and no financial plan for the future. To top it all off, they were being threatened with the loss of Mary’s job.
After consulting with the Leonards to get a solid picture of their current financial situation, which Langemeier refers to as one’s Financial Baseline, she and her team came up with a plan for wealth for the Leonards. Although this plan included building what she calls a Cash Machine (a vehicle, usually a business venture, that creates more income) and Loral’s Five Step Plan for Debt Management, a large part of what ultimately turned around the Leonard’s financial situation was the reallocation of their existing assets.
Loral suggested that the Leonards use some of the equity in their home and their IRAs, and money from their savings, stocks, and their mutual funds to invest in more aggressive, cash flow producing assets. This would then create more cash with which they could reinvest into even bigger cash-producing assets down the line.
Of course the Leonard’s first reaction was one of great resistance. The kind of advice Loral was giving them flew against everything they’d ever learned, and even against that of many financial advisors. And with the two Leonard boys approaching college, they had a lot at stake. But they were also on the brink of ruin, so they decided to trust Loral, who is a tried and true expert in seeking out and identifying investment opportunities.
At Loral’s recommendation, the Leonards reallocated their assets into a variety of real estate investments as well as a high-yielding promissory note. And it paid off. Big time. “By simply reallocating a little more than half of the family’s assets, we’d more than replaced Mary’s monthly income of $2,080 a month with a passive income of $2,620 a month. Additionally, by buying assets with depreciation and expenses that, once the family’s entities were structured could be written off as expenditures against the revenue, Mike and Mary would retain much more of their savings.”
In other words, with some well guided asset allocation, even if Mary lost her job the Leonard’s would still come out ahead. It’s a classic example of the power of passive income. And asset allocation is often one of the best ways to start generating passive income. “Although there are many financial advisors who may scream that there is risk involved in taking money out of one’s home, I believe it is much less risky to actively manage your investments than to park and pray.”
And what about you?
Would you like to leave your day job and make the same amount of money or more than you’re making now? When you become educated about investment opportunities and learn to reallocate what you have into new investments that will – when the process continues over time – continue to bring you more and more income, you’ll finally be able to tell that boss of yours so long.
“The secret to building wealth is investing in assets that create more assets,” says Loral. “The Wealth Cycle TM requires wealth acceleration that goes beyond traditional investment options, such as stocks and bonds and mutual funds. It requires direct asset allocation into a broader spectrum of opportunities to build an active and continuous escalation of cash flow and appreciation. Investing is a lifelong process that you should begin as early as possible and manage throughout your life. It’s the process of continually building your asset pool. As you become more sophisticated, you will reallocate those assets to get higher and higher returns.”
It’s a cycle that just keeps feeding itself. But you have to put in the fuel to keep it going. That means getting educated and continuously putting energy into creating wealth. “And of course this goes hand in hand with building a team of knowledgeable professionals and field partners,’ adds Langemeier.
Creating the Wealth Cycle TM doesn’t happen over night. But when your seeds start to bear fruit, it’s truly the “making more by working less” thing that so many people think is out of their reach. But anyone can do it. You simply need to be committed. Get educated about your investment options, and attain the proper guidance. Because becoming a millionaire never happens in a vacuum.
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