To achieve financial abundance you must:

• Save money – spend less than you earn
• Re-invest the returns on your savings
• Get compound growth on all your savings and investment
• Keep reinvesting until you reach financial independence

This is when your investment income exceeds your spending and you don’t need to work any more.

The great thing about being in this position is that you can then choose the ‘work’ you want to do. You can be completely fulfilled by continuing to add value to the lives of the people around you – and have a great time doing so.

At the other extreme are unbridled acquisitiveness and materialism. Which end of the scale are you? Here are the four levels of abundance that we learned about at the seminar:

Level 1: Egocentricity – You are totally focused on what you don’t have and you go all out to get it, just for the sake of having it

Level 2: Ethnocentric – You feel wealthy when the rewards you receive are in line with your efforts (a fair day’s work for a fair day’s pay)

Level 3: Worldcentric – You feel wealthy regardless of the return on your efforts

Level 4: Spiritcentric – You feel wealthy regardless of your circumstances, e.g. even in the face of pain or loss of liberty (think of Nelson Mandela and Ghandi). Here, money doesn’t matter at all.

Where would you grade yourself on this scale?

The secret to success on the stock market is quite simply:

Learn a good system and apply it with absolute discipline

Don’t let ego and greed get in the way! These are the main reasons why people lose money on the stock market – they refuse to accept small losses (ie to accept their own failure) and instead end up losing a lot more.

It is a statistical fact that women are better at making money on trading shares than men are. The reason is ego!

The systems that make all the difference are in themselves quite simple. The main ones we learned about were “channelling” where you track trends by looking at graphs for various shares to pick up on patterns, and then do some basic due diligence on the company concerned (easy with the internet now of course).

Also you must always, always using “stop losses” (selling stocks after they drop by a certain %age from the purchase price or the subsequent increased value – usually 10% to 20% maximum).

Another small but important tip that we picked up from the seminar was to do with US stock rather than UK or elsewhere. The main reasons are that the US stock market:

• is the most liquid, most freely traded market in the world
• their trading hours end at 9pm our time, so you have time after office hours to check on your stocks
• it is the world’s largest stock market, so there is so much choice
• there is no stamp duty

At the time of writing this, I have not yet traded actively (my US brokerage account is still being opened), so I hope by the time you read this I will have some success stories to pass on!   Please let me know if you would like to hear them.

This is another great example of a “system” taking away so much of the risk usually associated with investment and speculation.

The system is that you allocate your assets into categories that give you the right balance of security and growth, and allow a pre-defined amount for spending and enjoyment.

Depending on your age (years to retirement) and whether you are aggressive or conservative in your approach, a set percentage of your assets are earmarked for:

1.  Security bucket - say 40%.  This is “rainy day” cash – aim to have enough to cover 6 to 12 months living expenses.

2.  Growth bucket - say 40%, broken down into:

a.  Buy and Hold investments – 20% (property, long-term shareholdings etc)

b.  Momentum trading – 20% (trading shares, options etc)

3.  Dream bucket - say 20%. Spending money to reward yourself for your successes in the first two buckets.  For most people this is cars, homes, boats, holidays etc.

At K&H I am hoping to develop a service or perhaps run training sessions for clients to pass on some of this (and other knowledge).  Please let me know if you are interested in finding out more to help you on the path to greater wealth and financial independence.

The ways of building wealth were categorised into:

1. Paper - This includes stocks, shares, options etc- anything intangible and tradable. In other blogs I will be revealing the secret of success in trading stocks!
2. Property - eg using the power of Other People’s Money (OPM -pronounce it “opium” to get people’s attention) – borrow money on your equity growth and deposit on more properties. I will be passing on the 5 Golden Rules of property investment for 2009 in another blog posting.
3. Business - This goes without saying for us and our clients of course. I always believed, and still do after attending the Wealth Mastery course, that this is the number one way to add value to the lives of others and so it is the most socially and responsibly valuable way in which to build wealth.

There are various other way of categorising investments (eg assets allocation in “buckets”) and I will be looking at these in more detail in later blog posts.

As you might expect from anything with the Anthony Robbins name attached, the seminar was about much more than just creating wealth. The overarching message was that psychological factors play a key role. In fact, 80% of our financial success is determined by this.

Of course, once you start recognising that so much of success is determined by what is in your mind, you also discover that “wealth” is actually more of a state of mind than about material or monetary gain. The paradox of the seminar was that we then went on to find ways to make material or monetary gains!

To me, the most valuable part of the 4 days was:

• getting clarity about my number of years to “financial independence”
• discovering how this can be brought forward by using paper investments in particular

Over the next few weeks I will be posting a series of blogs with all of the key things that I learned on the Wealth Mastery course. These include:

1. Why aren’t more people wealthy?
2. The three pillars of wealth creation: Paper (stocks, shares etc), Property, Business
3. Asset allocation “buckets” – a system to spread risk
4. The secret to successfully playing the stock market
5. Which “level of abundance” are you at?
6. The key to financial abundance
7. The four things you need to achieve financial wealth
8. The 5 Golden Rules of property investment for 2009