Coach Yourself to Wealth: Live the Life You Want

223 Pages·2006·0.65 MB·English

by  Martin Hawes

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Coach Yourself
to Wealth
Live the Life You Want
Martin Hawes and Joan Baker
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First published in 2005
Copyright © Martin Hawes and Joan Baker 2005
All rights reserved. No part of this book may be reproduced or
transmitted in anyform or by any means, electronic or mechanical,
including photocopying, recording or by any information storage
and retrieval system, without prior permission in writing from the
publisher. The Australian Copyright Act 1968 (the Act) allows a
maximum of one chapter or 10% of this book, whichever is the
greater, to be photocopied by any educational institution for its
educational purposes provided that the educational institution (or
body that administers it) has given a remuneration notice to
Copyright Agency Limited (CAL) under the Act.
Allen & Unwin
83 Alexander Street
Crows Nest NSW 2065
Australia
Phone: [phone]
Fax: [phone]
Email: [email protected]
Web: www.allenandunwin.com
National Library of Australia
Cataloguing-in-Publication entry:
Hawes, Martin, 1952–.
Coach yourself to wealth.
ISBN 1 74114 365 9.
1. Finance, Personal. 2. savings and investment. I. Baker,
Joan, 1956– . II. Title.
332.02401
Typeset in 12/14 pt Adobe Garamond by Midland Typesetters, Maryborough
Printed by Griffin Press, South Australia
10 9 8 7 6 5 4 3 2 1
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Contents
Preface: A better life v
Part I Setting the stage 1
1 How this book works 3
2 KASH your way to wealth 6
3 What is ‘wealth and freedom’? 9
4 WealthCoaches Model for wealth and freedom 15
Part II Current position: Where are you starting from? 31
5 Facing reality 33
6 What is stopping you? 36
7 Net worth 39
8 Where are your assets? Getting the balance right 46
9 What is coming in: Income 51
10 What is going out: Expenditure flows 55
Part III Your desired position: What do you want? 65
11 What’s the dream? 67
12 Who will share the dream? 72
13 What do you really value? 75
Part IV Your Freedom Figure: How much will you need? 79
14 What’s enough? 81
15 SMART goals 91
16 Now, what do you really want? 97
iii
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COACH YOURSELF TO WEALTH
Part V Strategies for wealth: How will you create wealth? 101
17 How wealth is created 103
18 How income makes you wealthy 106
19 How wealth is destroyed 110
20 How to protect wealth 114
21 You have to own Wealth-Creating Assets 118
22 Choose only one Wealth-Creating Asset 122
23 How to choose a Wealth-Creating Asset 124
24 Getting asset allocation right 126
25 What if you have a job? 137
26 You must create a surplus 141
27 You should maximise income 149
28 You have to learn to borrow 156
29 How to maximise your returns 161
Part VI Action plans: What will you do? 165
30 Bridging the gap 167
31 Do a one-page plan 171
32 Turning strategies into actions 176
Part VII Where can you find help? 183
33 Who’s on your side? 185
34 Networking: Winners work with winners! 188
35 Assembling a ‘dream team’ 192
36 Are you getting the best? 196
37 Making your team work for you 199
38 Tips for choosing professionals 204
39 Learning from the masters 207
40 The last menu item: Frogs! 215
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Preface: A better life
The principles we set out in this book work. For several years
now we have been working as WealthCoaches helping people to
arrange their money to live a better life. We have applied the
principles set out here to many people’s finances over that time,
proving that they work in many different situations. Using this
book, you too can understand the principles of wealth creation
and apply them to your own circumstances.
Everyone is different. We all have unique circumstances—no
two people, or families, have the same financial situation. Our
incomes are all different; our expenditures are all different; what
we own is unique, as is what we owe. Even more importantly and
interestingly, we all have different dreams, visions and aspirations
for our futures, different goals for what we want and what we
want to be.
It is these differences that keep the two of us doing what we
do—coaching people to improve their finances to have a better
life. The differences are the challenge—there is no one template
that can possibly fit all people with all their different situations.
The differences provide us with the challenge of working with
people in all sorts of circumstances as they arrange their money
for the life that they want.
The differences mean that we as WealthCoaches can never
relax and become detached as we work with clients. The fact
that everyone has a unique position and unique goals demands
that in the planning phase we listen hard and think even harder.
We have to understand where our clients want to be in the
future and have a clear picture of where they are now. We all
have strengths and weaknesses, strong parts of our personalities
and finances that can be used for the good, and weak parts that
have to be accommodated. It is our job as planners and
WealthCoaches to work out what is strong, what is weak, and
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COACH YOURSELF TO WEALTH
to fit the pieces together to make the best whole.
How do we make the pieces fit so that our clients get the lives
that they want? The answer is that it is like starting a fresh jigsaw
puzzle each time we take on a new client. There is a puzzle that
has to be solved each and every time.
Having said that there’s no template which can fit and match
everyone, there is a process that we follow with our clients, a pro-
cess that we have developed and refined over the years and which
we will never stop trying to improve. It is presented so that you
can use it yourself to create the wealth and the life that you want.
Our experience in dealing with people is that despite their
differences, everyone wants one thing: a better life. Clients look
to us to help with the money side of that, whether they have a
lot of money or not much, whether they are getting to the end
of their working lives or just starting out. Money is important—
it makes the difference as to whether you can have the life that
you want or not. Money gives choices—with good finances you
have options that other people simply do not have.
Having a lot of money is not a panacea—it will not solve all
the problems in you life—but for most of us it is a prerequisite
to having the freedom to live our lives as we want. Without
money (or with our money arranged and invested badly), our
lives are more restricted, our choices more limited.
We are committed to helping people achieve the financial
position they need to be in to allow them to live the lives they
want to be able to live. That is the purpose of our work and the
theme of this book. Practically anyone can become wealthy and
free. We have dealt with all sorts of people, from those who
already have plenty of wealth but need help to arrange it to be
free, to those with very little, who are just starting out to develop
wealth, and much of what we have learned is here for you to read.
Joan Baker, Martin Hawes;
[email protected]
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I
Part
Setting the stage
Chapter 1 How this book works 3
Chapter 2 KASH your way to wealth 6
Chapter 3 What is ‘wealth and freedom’ 9
Chapter 4 WealthCoaches Model for wealth
and freedom 15
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r1 How this
e
t
p
a book works
h
C
So, you have decided that you want to be wealthy and free.
Congratulations! That is the hardest step by far. Most people
never progress beyond the stage of wishing to be rich. You are
reading this book because you want your life to be different.
We are going to take you through the steps you need to take
in order to become wealthy and free to live the life you want.
The process we work through with clients has five main
building blocks or steps. We look at:
1. Your current position.
2. Your desired position.
3. Your freedom figure.
And then we move on to:
4. Strategies for wealth.
5. Action plans.
As you read on you will find out exactly what you need to do in
each of these areas. Here we outline the sorts of things you will
be working through under each heading.
1 Your current position
The most important thing here is to get a very clear sense of
where you are starting from. Many of you may have only a vague
idea of the current position of your finances—after all, most of
us are too busy to do much more with our finances than get
through each month. In this section we will be helping you
work through exactly where your finances are now—how much
3
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COACH YOURSELF TO WEALTH
wealth you have, how your assets are allocated, what your
current income is, how much money is being spent and where,
and what is happening to the surplus—if there is a surplus.
2 Your desired position
In many ways this is the most exciting part of creating wealth.
This is where you get to decide what your dream life will look
like. In this section we help you work through your dreams so
that you can describe in some detail the life of wealth and
freedom that you want to achieve.
3 Your freedom figure
Using your dream lifestyle as a guide, we then focus on helping
you to work out how much wealth you will need to live the life
of your dreams. We call this amount of wealth your Freedom
Figure, the amount of money that will allow you to be wealthy
and free to live the life that you want. Freedom Figures differ
because everybody has a different dream of their ideal life. You
will need a certain amount of passive income to live the life of
your dreams. To get that amount of income you will need to
have a certain level of capital to provide it. This section shows
you how to calculate what your Freedom Figure should be, so
that you can set that number as your main goal.
4 Strategies for wealth
Your strategy for creating wealth needs to be a good fit with who
and what you are. Many people try to become wealthy by
copying other people’s strategies without doing the work they
4