Unfreeze the Financial Power inside yourself

 

In the past few days a friend of mine (whom I would define as “definitely wealthy”), expressed some worries over his financial assets which underwent a major erosion lately.

 

Because of increasing financial losses together with the real estate crisis, his incomes are not the same they used to be. And his spent is growing bigger day by day.

In practice he’s in that peculiar stage where the spent is higher than the incomes. 

 

What really stunned me was considering the fact the man is smart, he’s not a rookie, he’s a man who knows what he does and he’s economically and financially literate. 

 

Why he’s so worried then?

 

First factor. The worry. 

 

As you may have read in my latest post, at the end of the day having a bad feeling might be helpful only for one thing: to realize that what you think does not match your desiderata.

 

The Law of Attraction tells us that what you think is what you get, even if it’s actually what you don’t want to happen. Because our mind does not distinguish between what we want and what we don’t want. 

 

Whatever we think on an emotional level, that thing will get closer to us. 

 

I know it might sound strange or even weird to most of you, but this is exactly what happens. 

 

In this particular case, the worry is like a red alarm lighting up in our cockpit. 

 

It tells us that something is not aligned with our will, but because we keep thinking about it, it’s going to get closer to us. This is the case in which you have to be awake, simply to realize that something’s wrong. 

 

That’s what can happen to a wealthy man with a brilliant mind, someone who is financially literate and skilled enough to forecast a loss in the long term. 

 

The second factor is our friend’s financial intelligence. Indeed he’s got all the skills to know if he’s getting richer or not. So his list of priorities (that helps him to filter the world’s events) is already well set upon the Retire Rich scale.

 

The sum of the first and the second factors together made me wonder: “Someone who knows how to make money with Rental Properties gets so worried…there should be something wrong here.”

 

That’s when I said to myself: “Luigi you absolutely have to know what’s wrong with this situation and let it know through the blog to all of your friends!”

 

As you just read, his worry is like an inner voice that says : ”hey, watch out! The spent is out of control and you have fewer incomes. Let’s get busy and do something to change this course…Meanwhile I am sending you a worrying message to let you know what’s going on”.

 

If you manage to understand this kind of signals you’ll be able to undergo a process of self-criticism and make the necessary changes to feel better. 

 

The financial distress is very hard. It creates many worries and some of its consequences might be dramatic. But there’s a positive side, what goes around comes around if you take the right path. 

 

The thing is, sometimes, even if you realize what’s the right thing to do, contingency is there to make things harder and you can screw up. 

 

In these cases, it might be helpful to have a friend like a business saviour. That would make it easier for you to find a way out. 

 

It’s not always said that you can break through but I have seen it working… for many.

 

One thing I want to say is I am not willing to tell here what’s the formula to become Rich or to become Richer, because mine is just life experience or better business experience. 

 

That said, after we scrutinized our friend’s worry, which is motivated by facts and strengthened by the experience, I said to myself: “Luigi try to go deeper into this thing and make yourself an idea on what’s really going on”.

 

That’s when I started analyzing his portfolio.

 

His are properties in non-exclusive areas, which are hardly rentable. It became obvious that in a time of crisis like the one we are living now, fewer people would like to buy your property and even fewer would be interested in renting yours. 

 

Properties in non-exclusive areas that are non-profitable. Plus you have to consider the expensive mortgages.

 

Eventually I analyzed his financial needs. A property rental that is certain and safe. 

 

The worry finds its roots in the fact that it would be aimed at high profits but his assets don’t allow him to do so while he’s leading an expensive lifestyle. 

 

This formula leads to impoverishment and you need to take drastic measures to stop it. 

 

1. Drastic cuts to your lifestyle .What you can spend for current expenses has to be reduced to the essential. Cut! 

 

2. Determine your Operating Cash Flow (OCF)- You have to calculate the incomes from every estate, decrease Condo fees, interest rate where applicable, amortization where applicable, a fixed amount for maintenance fees, property taxes and income taxes. If the result is negative, your property is a moneypit.

 

3. Do a nice mortgage analysis. At this point, I am revealing you the power of the financial lever and I make you an example. The lever is like electrical energy you can light up your bed room with it or you can give it to someone on the electrical chair or you can also get shocked with it.  

 

Mortgages are very similar to electrical energy. A mortgage is useful only and solely if it helps you to produce cash flows. My advice is to make it with actual cash flow and not future. So that if the mortgage rates have interests that are too high, or the amortization are too fast, you should negotiate new conditions. 

 

Simple to say, hard to do it. By yourself. Just in case I advise you to find a financial planner who can help you in finding the right financial product that better suits your needs. 

 

4. At this very moment, by using the elements of the preceding points you can determine your Cash Flow by following the information already in your possess. The cash flow will be the result of the sum of all incomes, the business outcomes and your living expenses. Through the Cash Flow you can make simulations to understand if the properties you have possess all the requirements to be profitable and/or if some of them or others could be more suitable for your specific case.  

 

5. After you know what you have to do, you can give the sales mandate to your real estate Agent. I always suggest to rely on trustable and expert Estate Agents because they know the market better than anyone. Although they have to be reliable, honest and work on your own interest. I am kind of lucky because I can rely on really skilled professionals.

 

I do work on these things very often on a weekly basis. It’s my training to enter the Retire Rich stage.

 

If you are reading this, you understand this can be very valuable, but then any situation is different and you can only rely on yourself and the expertise you were able to develop while working on the field as I do every single day. 

 

I warmly invite you to read my other posts on financial wealth that you can find in the blog index. 

 

You should also remember you can always contact us at luigiemanuelefoscale@gmail.com I will personally take care of every email and I would provide you with valuable advice on every issue you may submit to my attention. 

 

I would like to thank my worried friend for telling me about his situation and for providing me a chance of reflecting about this situation. 

 

Obviously, I will never reveal his identity.

Luigi Foscale

 

 

 

 

The Physics of Money

There are tons of books that tell stories of big challenges, taken by the richest billionaires. I have read many of them, and I can tell some of them are really inspirational. The majority of these stories, explain how these people were able to create their own fortune. 

 

I am here to provide you with the unique opportunity of learning how did they manage to keep their fortune. You have to know not only how to accumulate but most important how to maintain your wealth.

 

What if you make $1 million, and you lose it after a few months?

 

Do you know that this kind of “loss”, usually happens to the many who happen to win the lottery for the first time? Inform yourself… In order to build and to keep your wealth you need a plan on how not to waste your money.

 

 

First point. Wealth is Accumulating (and not spending…)

Your first fortune is learning how to maintain your money. 

 

In my latest post, "the Survival Handbook" , I introduced the Cash Flow, and the Tracking Ob. If you do not have a plan, you have less opportunities to become rich. Planning, budgeting and controlling expenses are key elements. Accumulating money means knowing your daily inflow and outflow. Build a plan of action, study your Cash Flow and Tracking Ob.

 

 

Second point. Money is a form of Energy

 

Let me introduce you a metaphor: consider a weir on a lake. The water is your wealth. If the inflow is less than your outflow, you are generating wealth. If not, you are wasting money. You need to close the plug or at least to open it carefully. If you pull out the plug, the water creates a giant whirl of energy. Same thing is for the money. 

 

Money, is a form of energy. And what you need to know, is how does energy works. I don’t understand why at school they taught me about physics (and that’s an important subject) but they didn’t teach me about the Physics of Money …

 

Money is energy!!

 

The more money you have, the more energy you are able to provide. 

 

Do not trust those who go like: “do you prefer money or love?” I prefer both. I couldn't live without my son’s smile, my wife’s cuddles and my dogs… but I cant live without money too. In these few lines I am ready to challenge every Scientist on earth to prove that Money is not a form of Energy. Money is Energy.

 

 

Third point: Net worth and Cash Flow are the measure of economic success

 

You need to control your levels of net worth and your cash flow, in a systematic way. Check your wealth status. 

 

 

Fourth point. High consumption lifestyle and High Maintenance are not forbidden

 

The important thing, is that your spending must always be under the line of your income budget. 

 

For example, if you buy a car with a lease, that’s not the best way to generate money, because you work to pay the lease rates and its interest rates. You work to have something you cannot afford! It’s like if you keep running without moving a step forward and if you stop you "probably" default. Ask yourself: if you stop working now, how long would you be able to keep up with the same living standards?

 

Advice of the day: Live below your means. 

 

 

Fifth point. Work to “Retire Rich”

 

Even if you have a job, my advice is to start creating your own Automatic Cash Flow. And later you will check your finances. When you are in the “Retire Rich” level, your money will work for you. 

 

Your time will be dedicated to generate money, counting the inflow and checking your financial status.

The Question....

 

Now, after these 5 points, I ask you a question: “Why aren’t you in the “Retire Rich” level yet?” 

 

The answer is easy: Nobody taught you how to do it. Nobody told you anything about the opportunity to “Retire Rich”. 

 

Sixth point. “Teach by Examples”

 

Thus, don’t let your children do the same mistake you did! The most important thing you can do for your children is teaching them about the money physics. Teach them financial discipline and how to be financially independent. 

 

If you don’t, they will always struggle to make ends meet. It is proven that a random donating system always generate financial dependence, in the end, It’s like any other addiction. Teach your kids how to fish and not simply provide them with the fish every day. They will become financial independent and productive adults. Eventually one day they will thank you.

 

You will find out you are able to learn the art of making money sooner than what you thought. Life is a long run.

 

Luigi Foscale

Are you ready to get out from the crisis? If yes, keep reading

 

All the world’s governments are in deep crisis.

 

How can I get out of the crisis?

 

If you expect anything from them, you are going to be deeply disappointed. You better think about yourself.

 

Wake up! Just ask yourself a simple question: how can I quickly get out of the crisis?

Answer: I have to become rich and when I say rich, I do not mean living a wealthy lifestyle. My concept of being rich, is when somebody has enough cash flow, to prop up his desired lifestyle. The concept of “wealthy” is extremely subjective, so is everyone’s lifestyle.

 

Winning the crisis, could be easy indeed: everyone of us should have as a life goal to become rich. If we give up by passively undergoing this crisis, we stay poor and we will always be in a permanent state of crisis If, on the other hand, we are to immediately get busy to create our own wealth, we would be able to save ourselves from the abyss.

 

My statement for today is: You have to build your own wealth.

 

Obviously, it would be desirable that together with our efforts, those in charge in the government should adopt some common sense while on duty. Here, I wish to recall the debt crisis, the government waste, and the crisis of values. All these things do not depend on us but unfortunately these are situations we are forced to undergo.

 

So we have to do something about it: first we have to fight. Because our own government doesn’t provide us with the certainty that the crisis will be over soon, so we have to get busy ourselves.  It’s us who have to win the crisis. Not in the macroeconomics scale, but in the domestic field and within the business microeconomics. It’s all on ourselves. Actually it’s on YOURSELF!

 

That’s why controlling the cash flow is key. In my latest post "The Survival Handbook" you did read that cash-flow has to be useful and not just academic theory.

Today I say: “you have to have your Cash Flow under control, otherwise it will control you.”

 

And, if you check my blog regularly, you’ll become rich.

 

First: we have to create an Automatic Cash-flow.

 

What’s an Automatic Cash Flow? An Automatic Cash Flow (ACF) is a continuous flow of income on a permanent basis. The flow is generated autonomously, without your work being necessary to make it happen. The only thing you have to do is to check with your bank if the cash is there.

What about the ACF?

 

Property Rent, income from fixed securities, income from an insurance plan, royalties from copyright, or from participating to a Multi-level marketing (MLM).

 

How can I set up an ACF? My advice is to immediately take your first step. Right away, right now! I suggest you to invest in something that provides you with an immediate income. Even if it’s something small, you have to start right away. When you re finished reading this. Take your first step....especially in a moment like this, opportunities are endless and all over the places.

 

Go visit any real estate website, and fill in the budget search box with the minimum price accepted. You’ll be amazed at the values appearing in the slot! Eventually you can sell your investment with a profit, so you will be able to grow your wealth.

 

How can I maximize my investment’s income? In the early stage, my advice is you don’t have to focus on investments which can only provide you with a capital gain, without any cash-flow (like Gold for example). Even if gold could be an excellent investment in times like these, in the early stage of your strategy, your number one priority is to invest in something that is able to immediately establish a Cash Flow.

 

I am talking about an apartment, a garage or a basement, which are more appropriate because from those investments you can quickly get an ACF.

How do you feel with an active cash flow?

 

Believe me: You’ll feel damn good!

Also the non-specialists can understand the Cash Flow mechanism?

 

Many self-made men did not go to College while there are many graduate people who succeeded....so it’s not a matter of what school you attended or what did you graduate in or how old you are, it’s only about your MOTIVATION to succeed. It’s your will to become wealthy that really matter and mostly it’s about knowing how to manage money. YOUR MONEY!

Knowing how to manage your money, means you have to make the right investment choices down the road, so you have to know how to spend without wasting and make sure your income other than being higher than your spending it has to increase in value in a continuous/exponential way.

 

So knowing how to manage your cash flow is absolutely crucial.

 

Remember: creating wealth means building wealth. You have to build your own wealth.

 

And if you start to build up assets that provide you with an ACF, you will be able to create wealth for yourself and for your community as well. And if apart from us, other people would like to join our effort, we will forget about this crisis in a nanosecond.

 

Today the crisis stays up because everybody only talk about the crisis and not about the way to overcome it. 

Since today you should try to watch the news with a critical eye and while watching your favourite business show on TV you may hear the word “crisis” then you should think to what you read today on this blog.

 

If you want to get out of the crisis you have to get busy right now!

 

How can we win the crisis?

 

Plain and simple: Learn how to create and manage the money.

 

The sooner you learn what Cash Flow is and how to turn it to your own advantage, the faster you ll have Automatic and Continuous Cash Flow.

Luigi Foscale

Is running into debts a dangerous practice today?

It only depends on what you do with your debts.

 

Debts may lead you to bankruptcy but they can also make you rich.

 

Only through a decent Financial Literacy you may be able to decide (as the ball is always in your hands) what to do.

 

First of all it is absolutely crucial to know how debt may help yourself. If you buy a car, a tv set or you are refinancing to buy new furniture, you run into debts to buy goods that will lower their value with time. This is a road that will certainly drain your resources..

 

On the other hand you can decide to purchase goods that are going to increase their value and that will eventually provide you with a stable income. If this is the case, debts could make you richer.

 

I use the conditional mood because you have to weigh the pros and cons: interest rate, Return on Investment and the tax regulation. Indeed if you overborrow that’s a risk too. In order to know if you are on the right track, my advice is to check your cash flow.

 

Indeed it’s a steady cash flow that ensures your debt repayment.

 

When you think about refinancing, like through a home equity line, think first to the possible cash flow eventually coming from that debt. 

 

Luigi Foscale