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How to Get Rich Investing in Stocks by Riding the Electron Wave

An Easy Way to Eliminate Financial Uncertainty

Stock-Markets / Stock Markets 2015 Aug 23, 2015 - 07:51 PM GMT

By: ...

Stock-Markets

MoneyMorning.com Andrew Snyder writes: Your personal definition of wealth is what will truly liberate you. It’s a complex idea... so let me explain.

A couple weeks ago, I wrote about my “broken bowl” theory. The idea is simple: Ensure your outgo is always much less than your income.

Do it right, and the following quote could come from your mouth...


“I don't have that pressure, you know what I mean. My wife has no worries. My child has no worries.”

That line comes to us from a rare professional athlete who has his financial head on straight.

Ryan Broyles signed a $3.6 million contract with the Detroit Lions (yes, they’re still playing). Nearly half of it is guaranteed. No matter what happens, he has a huge chunk of money coming his way.

When so many folks in his shoes would leverage the multimillion-dollar contract into an extravagant “look at me” lifestyle, Broyles went another direction. He’s not buying fancy cars, expensive clothes and a big, new house.

Just the opposite.

Broyles broke his bowl in half... and then some.

The business-minded wide receiver is sticking with his “comfortable” lifestyle. The millionaire and his wife are living on $60,000 per year - the same income they’ve lived on throughout his career.

The rest of his money is going toward investments, retirement... and the life that will come after football. He’s bucking the trend that causes 80% of his pro football colleagues to go broke within five years of leaving the game.

Because of this smart financial outlook - because his income is much larger than his outgo - Broyles knows what liberty through wealth feels like.

“When I come to work, I don't think about the money," Broyles recently told ESPN. "I can tell you that, without a doubt. There might be some guys that do but I put myself in a position where I come out here and have fun.”

Broyles understands that there are no guarantees in the business world. A big income today could be an unemployment check tomorrow.

Instead of succumbing to “lifestyle inflation,” he broke his bowl in half and is preparing for the uncertainties ahead.

If he does it well... he’ll eliminate those uncertainties (the ultimate definition of liberty through wealth).

Granted, few folks are lucky enough to sign a $3.6 million contract. Even so, there are simple ways to break your bowl and ensure your income outpaces your expenses.

A friend and former business partner made millions after starting an airline. He taught me a valuable lesson. “If it flies or floats, rent it.”

It’s the perfect use of the broken bowl theory.

If you’ve been in the aviation or boating world, you know the value of his statement. But you also know the vanity that comes with owning your own plane or boat. I’ve been there... and I spent a lot of money to have that fancy, impressive boat.

I’ll never do it again.

There are much smarter ways to enjoy luxury - and it goes far beyond boats and planes. If it’s a depreciating asset that you are not going to use on a frequent basis (in most cases, that means more than once a month), it’s cheaper to rent or find a trusted co-ownership program.

Thanks to businesses like zipcar, the traditional idea of car ownership is in question - especially for city dwellers with infrequent needs to drive. And for my fellow boaters, here’s an increasingly popular plan that lets you have access to a variety of boats... for about a third of the actual cost of ownership.

It’s a similar idea with vacation homes. My wife and I are in the process of investing in a “mountain” property. But we have a strict caveat - it must generate income. After all, we’ll likely only be at the property for a fraction of the year. Without rental income or significant appreciation, it would be far smarter for us to simply rent somebody else’s headache.

Thanks to popular new businesses like VRBO and Airbnb, we’ll have no problem finding a source of folks willing to help us make the endeavor profitable.

Finally, the ultimate key to avoiding lifestyle inflation... save your raises. Got a raise at work or your favorite stock just boosted its dividend? Follow Broyles’ lead. Don’t spend it. Save it and keep your current lifestyle.

Bottom line, start by defining your definition of wealth.

I’m willing to bet a fancy car and a set of shiny diamond earnings are not how you measure true wealth. Instead, you’ll want to utter words similar to those above. “My wife has no worries. My child has no worries.”

That’s the true definition of liberty through wealth.

The only way to get there is to save more than you spend.

Good investing,

Andrew

Source: http://www.investmentu.com/article/detail/47223/ryan-broyles-easy-way-eliminate-financial-uncertainty#.VdoHhk3bK0k

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