Commit to creating wealth, not making money. Here are for steps for creating wealth.

1. Commit

You will never become wealthy if you don’t commit to becoming wealthy. There are people that become rich by accident, but no one becomes wealthy by accident. Wealth is intentional. Before you can achieve wealth, you have to know that it’s attainable.

2. Job/Income

You have to have a job that pays you income. Get a job that pays you income on a regular basis then make sure you are valuable in your role. Don’t just sit around waiting to collect a paycheck.

3. Increase

You have to increase your income. You want to get it as high as possible. People always ask me what was the most important money that I’ve ever made — my first increase from $3K to $4K was. Why? Because I learned that I was in control of my income. I started to believe in myself and my ability to increase my income in short bursts and in surges. When you prove to yourself that you can make moves, then moving up gets easier.

The same thing happened to a guy that I mentored from India. A year ago, I showed him how he could go from making $30K to $1,000,000 a year. A year later, he did that and came back to sit down with me again. Now I gave him a plan to go from the $1 million to $10 million. Now he knows it’s possible. The same thing will happen for you — the first income increase will prove to your that you are in control of your financial situation.

4. Investment Income

What’s the difference between earned income and investment income? Earned income comes from your job and the small increases and surges. It’s tied directly to your ability to produce. What’s the problem with it? If you stop working, there’s no paycheck. It ends when you don’t go to work. It’s also the most heavily taxed form of income. In most states, it’s approximately 40%.

Investment income, on the other hand, is a multiplier, is taxed differently, and keeps coming whether you work or not. This is how people become wealthy. You want to avoid the things that don’t make you wealthy.

The thing to avoid is keeping the money you earn and not moving in into the investment column that will pay you. Why do you think real estate is the most common asset class with all the wealthy? Because it has numerous advantages and is passive income. Moving your income over to income producing properties like offices, apartments, or storage facilities is what creates wealth.

Why the wealthy invest in real estate:

• Income – monthly checks
• Appreciation – this is tied to the job marketplace in the area
• Depreciation – write down the value of the property to save
• Leverage – spent $1 get $3 – Use debt, but be extremely disciplined
• Tax Advantages

When you purchase real estate, don’t go looking for a discount. It you can’t make sense of overpaying for it, then it doesn’t make sense to purchase it. If you are willing to pay more, that’s a good indication that someone else will pay more too. In real estate, the bigger you go the better off you’ll be. That’s what we do at Cardone Capital. We go after big deals that pay every month and appreciate over time.

Want more information on investing? Explore Cardone Capital’s website for programs, courses and funding opportunities.

Your chances of being the next Facebook inventor are minimal, but the chance of you buying real estate is possible. I’ll show you exactly how you can get a fifteen percent or higher internal rate of return on your money. All it takes is cash flow, appreciation and an exit strategy.

When I was sixteen I wanted to help my mother and I couldn’t. That became the driving force for me to want to create wealth so I could help her and others.

My goal wasn’t money, it was charity. I wanted to take care of people. People like my family, parents, etc. If I was broke, I couldn’t afford to fund other’s lives. I wanted to take care of me, my family and have reserves to help others.

I spent twenty-five years working my tail off, taking my extra money and investing it into real estate. I missed many things so I could earn extra money so I could invest in real estate and create a passive income stream. The goal was that my passive income would overtake and make more than my earned income.

My number-one rule in investing was to invest in something or someone where I wouldn’t lose my money.  Stocks don’t do that. They’re speculative and I can’t control them. Studying wealth and how the super-wealthy created and grew their wealth led me to real estate. And not any real estate, but multifamily real estate.

Buy a real asset that produces cash flow is very different than buying stocks. For example, buying four million of stocks costs me four-million dollars. But buying four-million dollars of real estate only costs me one-million dollars. Why? Because I only have to put an initial payment down to obtain the property.

Understanding the math of real estate and how to get your investment to multiply is fundamental. One of the many factors to look at is what your IRR is.

An IRR is a metric used to estimate the profitability of a potential investment. This is then used to evaluate the attractiveness of a project or investment.

In real estate, specifically multi-family real estate that I invest in, I’m always looking for a huge IRR. In fact, an IRR of fifteen percent and higher (much higher sometimes) is absolutely possible.

To show you an example, here is the IRR on a deal with below average to average returns:

$4,000,000 property with an initial investment of a $1,000,000 as down payment and $3,000,000 financed. Over the course of ten years, my cash flow each year is five percent and a ten percent appreciation on the equity (not the total investment) totals fifteen percent IRR right there. If you factor in the debt pay down (DPD) of ten years at one-point-five percent, the IRR total is thirty percent.

Real estate investing the correct way (so you don’t lose money!) can be complicated. In the most basic sense, you have to pick great assets in great locations that cash flow and wait as long as it takes and then sell at the perfect moment to maximize your investment.

Want to understand the math behind real estate better? Pick up my book, “How To Create Wealth Investing In Real Estate.”

GC, Cardone Capital.