Hans Johnson

How The Wealthy Manage Money

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One of the many misconceptions about wealth is that it’s only achieved by being born into the right family, taking advantage of others or by sheer luck.

But nothing could be further from the truth.

Growing up poor, I didn’t have the right contacts, a good education or a path to success. All I had was a dream to someday be financially free and hopefully, somehow by the grace of God, not raise my kids the way I was. Statistically, I should have been like most of my friends growing up, a stoned out beach bum loser unable to hold down a job.

I got started young in business as an entrepreneur, but I had a lot to learn about wealth.

I had to learn many lessons the hard way. Lessons that you just can't learn from a book or at a seminar. There was a lot of painful trial and error. And a lot of introspective thinking, journaling and searching.

What I can tell you emphatically is this.

There are common denominators and patterns of wealth. There is literally a formula, that if you just follow, it 100% produces results.

Once you know this formula, the whole world changes.

It opens up a whole new level of perception, like finally being able to read the code behind the matrix. Things that never made sense before all of a sudden become so obvious. A veil is lifted and you feel very empowered.

One of the big secrets is this: the wealthy do not manage their money by dollars and cents, they manage money by ratios.

This is counter to what we were taught in school. And it's in direct conflict to most modern financial advice.

We’re taught to come up with budgets, to focus on absolute values instead of relative values or ratios, and to ask questions about the ever changing nuances of personal finance and investing instead of mastering a core wealth building strategy.

The wealthy do not do this.

They focus on the big picture strategies and processes that create and compound wealth. They use rules based systems to automate decision making and remove emotion. They focus on trends and risk management.

Most people think if they were rich or wealthy all their money problems would be solved.

But it just doesn’t work that way.
  • If you can’t manage $100 you won’t know how to manage $1000.
  • If you can’t manage $1000 you will not know how to manage $100,000.
  • And if you can’t manage $100,000 then you will never handle millions.
So in a sense, the poorer you are right now, the easier it is to learn these skills.

And if you have significant money, capital or resources that you want to be a good manager and steward of, then the urgency to master these skills is even greater because statistically most wealth is consumed, mismanaged, stolen or lost in a bad deal, mistake, market downturn or decision.