THE MONETARY LIFE CYCLE

OWNING THE LABOR TREE is just a way of saying you can't make money in the back yard with a printer or mint coins. It's illegal, and in most towns, morally unacceptable. The thought process you want to develop, is how you look at wealth. People with wealth have a completely different "MINDSET" than other people. With that being said, there is also a huge difference between people of "WEALTH" and people of "HIGH INCOME". People of  "WEALTH" look at "assets" and "liabilities" in what is referred to as a "LIFE CYCLE", as opposed to normal people that look at "up front costs". You can read more about this in the book "The Millionaire Mind" written by Thomas J. Stanley. This is a must read if you ever want to become 

wealthy.   

An example of Life cycle cost and up front cost is as simple as buying silverware, a wealthy person might by silverware for a setting of 12 for $1949.00. Expensive right, but this set of silverware was bought by someones great grandparents, for $79 way back when,  That set has fed family members thousands of times, has been in every holiday and family "get together" for decades. So today, to use that silverware costs little to nothing per use. Most people would have went to a big box store and spent $39.95 on a set and about every 4 years replace it with "new". Also never getting the use of a quality flatware set in the mean time. You know about bending spoons back and crooked prongs on a fork, and my favorite, breaking a knife while trying to cut something. This cheaper set was easier to acquire, but it costs 5 cents per use, before it is discarded, the more expensive set cost less than a penny per use. So now, which one is really more expensive? I know, who cares about a nickel, well if you apply this "mindset" to 75 other purchases in your life, year after year, you will begin to grow wealth. Of course that doesn't mean go buy a $2000.00 SILVERWARE SET on a credit card and pretend to be wealthy. Start apply this "mindset" to things your actually going to purchase this year. For example, when you go to buy that next shovel for your tool collection, look at the one for $35 dollars instead of the one for $7.95, consider that the more expensive shovel will last considerably longer and replaced less often. the other, less expensive shovel might not make it through the first hole to dig. if you have to replace the $8 shovel every other time you dig a hole and the $35 shovel digs 200 holes, the cost per hole is cheaper.  When you begin to apply this mindset to multiple issues, problems or purchases in your life, step by step, you begin to build WELLTH.            

THE LABOR TREE

The labor tree is owned at the point that you've managed your money and have made certain investments and now your money is making money. Maybe you have a 401K or a ROTH IRA,  or real estate investments, you get the idea, you are making money when your asleep or at the beach. Most people think that they don't have enough money for these types of  investments, but if you were to start, 1.Budgeting your money. 2. Stop using credit cards as loans instead of the tools that they are suppose to be, 3.Live within your means, 4. Learn how to control the Instant Gratification Syndrome. 5. Understand the difference between "need" and "wants". 6. Figure out your "WHY". 

All of these are important, but if you understand your "WHY", the what to do's, how to's, and sacrifices will all be easier to come up with and endure. How will you know if your "WHY" is the right reason and goal? These changes in your life will begin to be easy and bring self pride, you will feel good when you don't buy that bigger T.V. or the nicer furniture, because now you will realize you have now started to purchase your own LABOR TREE.   

THE PURSUIT OF WEALTH..... (WELLTH)

 So you've been doing this "life" thing for a while, and you're still broke. You don't quite understand how you got to this point, I mean you're a smart person,You did all the "right" things. Yet you find yourself, treading water in a pool you can't afford. You know there's got to be a light at the end of the tunnel, you just can't see the light...ok...you can't even see the tunnel...let's be honest. How do we fix it from this point? Let's start taking bits of advice you've heard over the years and condense them into a shorter time line. 

For instance; you know you should save 15% of your paycheck last month, but the big screen TV died and "of course" you HAD to replace it. How do you know that was the right thing to do at that moment?, because that's what your broke neighbor did and now he has a great TV. He just put it on the credit card of his choice. You used the cash you had to buy the new surround sound, because, if your going to have a big TV, you might as well spring for the great sound, Besides it was only a few hundred more dollars.

WHAT'S THE PROBLEM WITH THIS "INSTANCE"

1. You didn't save any money last month

2.You bought the first big screen TV on a credit card and before you actually paid for the first one....you have now purchased a second.

3.You bought a surround sound system to make sure your media center is better than your neighbors, why...cuz you have to beat the "jones"....even though no one in the neighborhood even has that last name.

4. You did all this, because you didn't make a budget this month or the last month or, really anytime since 1991 or so, because budgets are scary and keep you from buying things you "NEED"

5.Your definition of "NEED" is wrong, you "need"..FOOD....SHELTER...ELECTRIC...and TRANSPORTATION...and no...not the used $40,000 Mercedes you bought cuz your wife's friend just bought a nice LEXUS...come to think of it...her name isn't "jones" either.

6. You used a credit card for the "means to acquire" rather than "the tool" it should represent to you, Like the cordless screwdriver you have, it's a tool you use it for specific purposes. Like the hammer you have also, but like all of us...you use the screwdriver as a hammer sometimes because "IT'S EASIER"

This is your normal thought process, this is what you've always done, it doesn't feel like any harsh consequences , and you enjoy all the fruits of your labor. The problem is you don't own the "LABOR TREE"