Weekly Wealth Tactic 3 – Turn Your Money Faster to Significantly Increase Your Net Worth
by Ed Barriskill (co-founder, 37th Parallel Properties)
“Velocity of Money” is one of the key concepts that many wealthy people utilize in building their net worth. Yet many investors don’t know about, and therefore don’t follow, this proven wealth building technique. Read below to change that…
Once you learn and understand the magnitude of how this investment concept can influence your financial future, you can capitalize on it to increase your net worth rapidly and safely.
How fast you can invest your money in your financial portfolio is a very important element of managing your wealth. The faster you can turn over your assets from one investment to another is a key to building wealth. By managing your portfolio with the “Velocity of Money” mindset, you can create hundreds of thousands of dollars more over time. When you are in this mindset, you will look at every dollar you have as a soldier and every soldier’s job is to make you more and more wealth as fast as possible. Using all of your soldiers to maximize your resources (money) at a rapid rate equates to “Velocity of Money” – the speed of money.
When we talk about your initial investment capital, we are really saying there are four kinds of available funds that you need to know about and understand to maximize and accelerate your investing strategy.
Four kinds of funds professional investors use to maximize their wealth:
1) Your own money – You likely have funds you are not even aware of…be sure to see if you have untapped “Lazy Assets“.
2) The bank’s money
3) The tax man’s money (IRS/government)
4) Other people’s money (OPM)
A professional investor knows how to maximize their financial position through leveraging their available funds. The main objective is to use other sources of capital(#2 – #4), not your own money (#1). Concentrate on using the bank’s or the tax man’s capital through entities, depreciation and OPM (other people’s money). When you start using these sources of money together (synergy), you will be amazed how fast your own true wealth (#1) will grow!
Using different funds to simultaneously grow your own wealth and having the ability to rapidly move those funds from investment to investment is what we call the “Velocity of Money”. Professional investors rely heavily on OPM and rapid turnaround to accelerate their wealth. In fact, the most successful investors will tell you the objective is to use OPM whenever possible.
Summary, The theory of “Velocity of Money”:
- Invest your available funds into an investment you are familiar with.
- Stabilize and keep control of the investment through good management .
- Get your funds out of the investment as soon as possible by refinancing your property (tax free).
- Put your funds into another investment as soon as possible.
- Repeat the process.
By implementing the “Velocity of Money” concept, you will be fully leveraging your available funds and rapidly realizing profits. Why not mimic what the rich and wealthy do to accelerate your wealth? As years pass you will be amazed to see how fast your own money will grow. Financial freedom is just around the corner!