The Real American Problem

The Real American Problem

The Government Shutdown Exposed The Real American Problem

No matter what side you are on in the government shutdown, a problem was exposed that is far deeper than most will admit or discuss. In fact I haven’t seen a single article about the real problem.

Oh sure, there are other problems, like congress getting paid when other government employees are not. But that was not the major problem that the shutdown exposed.

The massive problem that could sink many families of the shutdown and I haven’t heard so much as a peep on any news channel.

Have you figured out what it is yet?

The real problem is dependency.

Dependency has exposed it’s head across hundreds of thousands of people. Over 800,000 people were not getting paid during the shutdown and most of them had severe financial hardship over a month of not getting paid.

This is not a problem, it’s an indictment of the way most American’s manage their finances.

How can people have income, any income and not have the ability to ride through a 30 day layoff? How can people not have enough money put aside for a rainy day?

News flash, it’s rained and you weren’t prepared.

It’s not like these were low paid workers either, the majority of government workers are skilled college grads and paid a substantially higher income than most.

Except for the TSA, who are anything but skilled and frankly a massive waste of money which would be far better spent by paying the airports to perform the same service on a private level.

I promise the pay and quality of service would far exceed that of the US government. Perhaps they would even treat us like humans.

But that is for another discussion another day.

The late Benjamin Franklin is quoted as saying "it is the eyes of others and not our own eyes which ruin us. If all the world were blind except myself I should not care for fine clothes or furniture."

Look, Americans as a whole are broke not because we don’t make enough money but because we borrow for everything, jewelry, clothing, purses, furniture, cars, housing and everything in between.

We have been trained to say that somehow it’s ok to put it on a charge card and pay it off when the next big thing happens, like a tax return or some other substantial influx of cash.

But that doesn’t happen does it? We get that tax return and take a vacation or buy that big screen and the downward spiral continues.

If I’m hitting a nerve it’s because we are all guilty. I started a company in 1998 that went on to have retail sales over an 18 year period that exceeded 100 million dollars but yet it ran out of money in 2016 and filed bankruptcy.

So I don’t care if you are broke on fifty thousand a year or fifty million. If you are not saving 10 to 20% of your income for a rainy day you are headed for disaster.

I am going to give you the secret to accumulating wealth. This is the most valuable thing you can learn in all of my writings yet 99% will never take action on it but I’ll give it to you anyway.

Here’s the steps to accumulating wealth. 

  1. Get a consistent income. Learn to like what you do. Consider yourself as working for the company instead of working for a paycheck. Do your best to make your employer successful they will notice it and perhaps they will reward you for it. Even if they don’t, do it any way.
  2. Stop borrowing money for anything that does not bring income. If you drive for Uber and your only way to make a living is in your car then it is acceptable to have debt for the car but you don’t need an Audi to drive for Uber.
  3. Isolate a portion of your income (10-20%) and keep half saved and use half to eliminate all debt. Pay down debt once per quarter.
  4. Once ALL debt is eliminated build a 6 to 12 month reserve of cash. The reserve is equal to that many months without an income. Up your saving percentage to 20-30%.
  5. Invest all of the reserves above the 6 month mark in cash flowing assets. The higher the income the higher the risk but usually the higher the return. Take some risks and learn from others. Real estate is one of the best areas to build wealth and one of the safest and can be done in your spare time. There is more than enough knowledge about it so anyone can become a real estate investor. Isolate 10-30% of this income for investment.
  6. Once your investment income is two times your regular income become a full time investor. Some prefer to wait until it is 3 times their regular income this would be preferred but some start to really hating their job when they don’t need the money.

The above formula works whether you work for the government, private business or own your own business.

It’s not complex but it’s not easy because most people will not discipline themselves to do what is necessary to implement such a simple plan that works 100% of the time.

Why wouldn’t everyone implement something that works 100% of the time?

The answer lies in the one trait that most Americans have lost, discipline.

Without discipline it becomes impossible to carry through on anything you start.

The entire 6 steps of the above formula to build wealth can be accomplished in 10 to 15 years, far less if you own your own business.

How does that measure up against your 401K?

Start small but by all means start.

To your lifelong prosperity,

David Mulvaney

P.S. When would have been the best time to start implementing this plan? When is the next best time? Start now.

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