TODAY, we continue with the summary of the 18 laws and cover the remaining 10.
8. The law of Capital
Your greatest assets in terms of cash flow are your physical and mental capital. Your most precious resource is your time. Time and money can be either wasted or invested. Learn to budget your time like money. Use a diary and a planner.
Wherever you invest your time most is where you get the greatest return. The best investment is always to increase your earning abilities by investing in yourself (three per cent of your income).
Always look for ways to increase your Return on Equity or Energy (ROE). This is done by improving your mental and emotional capital.
9. The law of Time Perspective
The most successful people learn that the greatest achievements come from day-to-day activities aimed for the future – not for the immediate. Sacrifice today and be rewarded tomorrow. Be willing to accept that some actions today will only begin to bear fruit 10, 15 or even 20 years in the future.
Others set in motion actions that they may not even see the results in their lifetimes. Poor people are plagued by the spirit of instant gratification.
The quality of your life will always be greatly increased when one begins to apply seriously the law of time perspective – especially for the long term. Delayed gratification is the #1 key to financial success.
Self-discipline is the most important quality for assuring long term success and is also the ability to make yourself do what you should do, when you should do it, whether you feel like it or not. By sacrificing in the short term, you will get dividends in terms of financial security in the long term.
10. The law of Saving
Only by saving regularly will you have set up the foundation that leads you to financial prosperity. Never spend this money on anything other than investing it – period. Pay yourself first – secure your future. Invest where your money is safe and guarantees good returns.
Increase your financial education in order to know how best to invest your money (Increase your financial intelligence).
Remember that money (cash) is a representation of value (fiat money), thus always convert it whenever you can into tangible assets in the long term.
11. The law of Conservation
It is never how much you make but rather how much you get to keep that determines your financial future. In order to determine our accumulated wealth we need to do the following. Firstly – Work out your net worth (Assets vs Liabilities – If positive or negative then that is your current value). Secondly – Divide that value by number of years worked. This is how much you have accumulated. Happy with the result? If not, then change what you are doing right now.
The average Zambian civil servant retires having accumulated about $1,000 (K5,000) net worth plus a monthly pension which is round $400 (K2,000) per year or $35 (K160) per month!
12. Parkinson’s law
Expenses always rise to meet increased income! Financial independence and financial freedom come when we violate Parkinson’s law. Your expenses should never rise at the same level as your income, this is a sure fire way to secure your financial future within your working life-time. Always invest 50 per cent of the difference in extra income to maximize returns. Live on the remaining 50 per cent.
13. The law of Three
There are three legs of financial security, these being savings, insurance and investment. To be safe from financial volatility, always have between 2 – 6 months of normal expenses in liquid form – easily cashed out savings.
Insure yourself adequately to cover yourself against any eventuality that you cannot pay for out of your normal account – these being contents, medicals, car. Invest by accumulate assets until the passive income from them far exceed your regular reciprocal income.
14. The law of investing
Investigate before you invest. Always learn about what you plan to invest in before you do so – develop the habit of putting off financial decisions for 3 – 7 days before committing. The only thing that is easy about money is losing it. Don’t lose money! If you think you can afford to lose a little, you are probably going to end up losing a lot instead. Only invest with experts who have a proven track record of success with their own money.
15. The law of Compound Interest
Investing and compounding that investment over time will eventually make you rich.
THE RULE OF 72
If interest earned in a given venture is 8% p.a., divide that into 72 to determine how long it will take you to double your money – in this case 9 years.
The strength in compounding is to NEVER EVER touch it – ever.
16.The law of Accumulation
Financial freedom is the result of years of accumulating small but vital actions/efforts over time which few ever see. As savings accumulate, your momentum will increase rapidly over time. (The start seems insignificant but with time the results are massive.)
THE MOMENTUM PRINCIPLE
It usually takes three to five times the effort to get started and overcome inertia than to keep moving once in motion! By the yard it is hard, but inch by inch and it’s a synch!
17. The law of Magnetism
The more money you save and accumulate, the more money you attract into your life. Money always goes where it is appreciated and properly utilised. A prosperity consciousness attracts money like iron filings to a magnet.
It will always take money (value) to make money. What is money to you? A means to solve problems? A source of comfort? It is the means to and a remuneration for the giving of value through goods/services to others – the better, the more you accumulate
18. The law of Accelerated Acceleration
The faster you accelerate toward financial freedom, the faster it comes toward you. 80% of your success will tend to come to you in the last 20 per cent of your time invested – meaning only 20% of the results will be seen in the first 80 per cent of the time invested!
This is the reason why many quit early and fail to achieve success. Most people are always three feet from their proverbial gold when they throw in the towel.
Master these laws and use them to leverage your money growth curve, and you are guaranteed wealth and financial freedom in your life.
Disobey or disregard these laws and they will put your to task and keep destroying all the wealth you create.
Next week we will examine the first law of money, the Law of Reciprocity, better known as the Law of Sowing and Reaping.
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