Count your money to grow your wealth

Automatic Wealth: The Six Steps to Financial Independence
by Michael Masterson
288 Pages

I was going through a few books and chanced upon Michael Masterson's book, Automatic Wealth: The Six Steps to Financial Independence. The extract below was a great reminder again to me on what to watch out for while accumulating my own wealth and managing my own personal finances.

Put his ideas to work for you too.

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Wealthy people count their money. I have no statistical evidence that this habit is a widespread trait among self-made rich people, but I suspect that it is. I believe most successful money-mak­ers regularly count their money. I believe this is true especially in the early stages, when they are just beginning to grow their wealth.

As their net income grows and they feel more comfortable with their wealth and more confident of their income, they count less. When they get superwealthy - Warren Buffett wealthy - Fortune magazine and countless other entities do it for them. But on their way up, they count.

And that's what I recommend you do. Specifically, I suggest that you do a per­sonal balance sheet every month.

Create a spreadsheet that lists all your as­sets and all your debts. Include valuable pos­sessions, stocks, bonds, mutual funds, gold, real estate (aside from your home), and so forth. Accurately estimate the value of every­thing. If there is a question about how much something is worth, pick the lower number.

List all your indebtedness, too. And be completely candid.

Just going through the process will train your mind and heart to understand financial wealth as financial net worth.

After you've done this six or seven months in a row, it will become automatic. And while you are doing that monthly spreadsheet, remind yourself of the savings goal - that you will save more money, in both absolute and relative terms, with each passing year.

You can make this exercise a bit more ex­citing by promising yourself this: That you will be richer each time you check.

That you'll do everything necessary to en­sure that when you add up your assets every month, the bottom line will be larger than. it was the month before.

You'll be amazed at how much this simple commitment can affect the way you think and even the way you act.

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Excerpted from Michael Masterson's book, Automatic Wealth:Automatic Wealth: The Six Steps to Financial Independence, published by John Wiley & Sons

Article Source: http://www.wealthmountains.com/articles

About the Author
Keith Choy runs the WealthMountains portal which offers tips, tools and news on path to multiple streams of income. To get the latest news, do signup for his WealthMountains eZine at www.wealthmountains.com/news.htm. Also visit his Personal Finance tips

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