4 specific stages in the wealth-building trajectory

/Creating Wealth by Robert G Allen/

/I think any successful project has the same 4 stages./

Stage 1: The Prelaunch Stage
This is the time to set goals and write them down.it's the time to prepare yourself mentally for the liftoff.

The will to prepare to win is more important than the will to win.

Stage 2: The Liftoff, or the Struggling Stage
RA: "... a minimum goal: you should be prepared to buy at least one single-family house per year for the next ten years..."

"If you will spend two years working as most people refuse to work, you will be able to spend the rest of your life in a manner which most people will never be able to afford."
/Wade Cook, "How to Build a Real Estate Money Machine"/

Stage 3: The Powerful Pre-Orbit Stage


Stage 4: The Automatic-Pilot Stage


Wealth-Building Principles during the first three Stages of Wealth:
1. Always think in terms of profit after taxes and inflation.
2. Sacrifice to invest in things that go up in value. Avoid consumer items.
3. Don't diversify; concentrate your eggs in the right basket.
4. Be on the offencive, not the defencive.
5. Have your assets growing steady at wealth-producing rates. That means debt and leverage.
6. Choose investments that are both powerful and stable.
7. Maintain maximum control over your investments.

During the forth stage, the above principles will be reversed for a time.

Wealth-Perpetuating Principles during the Forth Stages of Wealth:
1.Jettison the debt!
2. Lower your compound rates of return from wealth-producing rates (above 25%) to wealth-perpetuating rates (below 25%).
3. With lower growth rates, you will need to do more careful tax and inflation planning.
4. For a time, you will think defensively, not offensively.
5. You will be more prone to diversify your assets than to concentrate them.
6. Pay less attention to need for sacrifice. If you want something nice, buy it. You've earned it. You can afford it. Who cares if it goes down in value?
7. Less control over your investment...
8. During the first three wealth-building stages, you will probably want to keep your present job and do your investing on the side. Once you put your investments on automatic pilot, this may change. If you don't enjoy your job, quit. Your investments can now carry you.