The AC Phoenix
May 2006
Page 19
By: Michael Shinn, CFP
“Wealth is not about what
you can acquire, but about what
you can accomplish, and
accomplishments take disci-
piine, seif-deniai and, yes, time.
To buiid wealth, to experience
true abundance in our iives, we
must go beyond meeting short
term needs and wants—a roof
over our heads, clothes on our
backs, the ‘bling’ of things
quickiy acquired and just as
easiiy discarded—to focus on
long-term goals,” wrote Earl G.
graves, Sr., publisher of Biack
Enterprise magazine in recogni
tion of the magazine’s 35
anniversary. “True weaith buiid-
ing is about an investment of
time as weli as money.”
If you took a poll of
American aduits, I am quite
confident that more than 95
percent wouid raise their hands
and say that they want to be
weaithy. However, the facts
wouid indicate that oniy 20 per
cent of the U.S. population
controis over 80 percent of the
wealth. Creating weaith is more
than just wanting to be weaithy
or acquiring the outwardiy visibie
trappings of weaith. Creating
famiiy weaith begins with a state
of mind.
The first step to achieving
any serious goai is to write it
down and then visuaiize having
achieved that goal. The subcon
scious mind then begins to
direct your thoughts and actions
toward your goal. Most people
do not achieve their goai,
because they never fuiiy mentai-
iy commit themselves. They will
make half-hearted attempts and
then give up at the first sign of
adversity.
Taking financial responsibili
ty is more than earning a pay-
check and dutifuliy paying your
biiis. Being financiaiiy responsi-
bie invoives knowing how much
money you have, where it is
coming from, where it is going
HATS OFF TO
THE CLASS OF
2006
May your education
provide a solid foundation
on which to mild your
hopes and dreams.
Good luck to all of you!
WILLIE GUESS
Phone (336) 760-7000 • Fax (336) 760-7021
and what it’s doing in the mean
time. This includes keeping a
monthly income and expense
report and an annual net worth
statement. Most people will say
that keeping track of their money
is too much work, but when you
consider how many hours a
week you work to earn it, would
n’t spending a few hours a week
managing your money be worth
the effort?
“Pay yourself first” and “it’s
not what you earn, but what you
keep that makes you rich” are
both weii-worn phrases. You
have probably heard both phras
es hundreds of times, but how
many peopie actuaily live by
these rules? Wealth accumula
tors save 20 percent or more of
their gross incomes. Achieving a
saving rate at that levei is not
easy. Taking controi of your
finances and efficientiy aiiocat-
ing your money wiil aiiow you to
keep a fair portion for yourself.
Most wealthy people own
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businesses. It is difficult to
accumulate wealth by strictly
relying on a paycheck. A job
creates an income, which in
most cases just satisfies the
wage earner’s basic iiving
expenses. Additionally,
employment wages are not
given favorable tax treatment.
In most cases, you earn a cer
tain income, subtract a few
deductions and then calcuiate
a percentage of tax to be paid
to the federal, state and local
governments. On the other
hand, business ownership
affords the owner the opportu
nities to iegitimateiy expense
items used in the business,
such as equipment, supplies
and home-office space and
write them off against the busi
nesses income. The business
owner has more flexibility to
iegitimateiy manage their tax
burden. Additionaiiy, if the
business is successfui and
increases in value, the
increased vaiue is not taxed
untii the business is sold and
then at favorable capital gains
rates.
I am not advocating that
everyone quit their job and go
out and start a business.
However, I am recommending
that you consider ways that you
can create a part-time business
or other streams of income, so
that you can supplement your
income and take advantage of
the favorabie tax treatment
afforded business owners.
If you continue to manage
your financial affairs in the
same manner that you are right
now, wili you achieve famiiy
wealth? Some will answer yes,
but for most people, the answer
will be no. Unfortunately, most
people will spend a lifetime
working and then retire from
their J.O.B—Just Over Broke!
It doesn’t have to be that way
and it doesn’t have to happen
to you. Start today on a pro
gram that wiil create wealth for
you and your family.
(Michael Shinn is a
registered representative of
the Financiai Network
Investment Corporation. Visit
www.shinnfinancial.com for
more information. Questions
and comments may be sent
via e-maii to shinnm@finan-
ciainetwork.com.)