How to Get in the Top 1% Part II
In Part I of this series, I wrote about 3 statistics that will get you into the top 1% of wealth. These numbers were savings rate, passive income rate, and personal rate of return. If you’d like to read that article, click here. Today I want to bring up 3 more statistics that are of utmost importance if you want to be in the top 1%. Why are we talking about being in the top 1%? Because I believe you should be free to live life they way you want to without being impeded by outside force. Economic scarcity is the main thing that restricts you from being truly free. The answer is to have such an abundance that you cannot possibly be restricted by money. These 3 top 1% statistics will provide clarity on where you should focus your wealth building efforts.
1. Net effective tax rate. This is not a “tax bracket”. A little known fact is that your tax bracket has little to do with the dollar amount you pay in income tax. That number would actually be called your “net effective track rate”. This is the overall percentage of dollars paid to the IRS in ratio to the dollar amount of your overall gross income. The wealthy focus on increasing their income, saving large amounts, and once they’ve achieve these goals then focus on tax reduction. How can you do this? Many do it through a business, MLM, or self employment venture which allows for tax deductions that wouldn’t be ordinarily possible. Things like deducting marketing expenses, deducting portions of ones apartment, deducting lease payments on vehicles, etc. The next phase, which is longer down the road, is to begin earning investment income. You can reduce your taxes substantially by investing in real estate and small businesses. This should be a focus of yours once you’ve broken the $150,000 per year mark.
2. Primary residence to asset ratio. A home is not an asset. Name one person who got wealthy from buying a home. This is a surefire mistake that will lock you into the middle class and prevent you from building real wealth. When we survey the top 1% of wealth, we see that only 10% of their assets are in primary residences. We can argue, balk, and justify why home ownership is a wise idea, or we can look at the wealthy, realize they don’t do it, and act in accordance. Do not buy a house until you have 10X the home value in cash flowing assets. If you own a home and it makes up more than 10% of your assets, sell it. You can use any capital gains to invest in yourself. If you lose money, you were going to anyways. Better sooner than later. Go rent, outsource all of your “chores” so that you can focus on production. Divide your home value by your assets to know if you’re in the danger zone with this ratio.
3. Top 1% income bracket. To be in the top 1%, at a minimum you need to be earning more than $37k per month. What do you earn now? When you divide this number by $37,000/mo you will see how close you are to being in this bracket. Fully expect to make it here. You must. If your income doesn’t, then your net worth and assets won’t. Both of those things require income. You will never get wealthy making $7,000/mo. You will also need to add income streams to achieve this number. Once you’ve mastered your primary income stream, begin adding more streams that are symbiotic. The average millionaire has at least 7 income streams. Use this as your minimum benchmark. An income stream is a source of income that pays you.
These are the true behaviors of the top 1%. If you measure, track, and achieve these numbers, you are well on your way. The problem is, most of society doesn’t understand or focus on these numbers. Your friends, family, and local community aren’t looking at these numbers and when they find out you are, the are more than likely not going to support you. This can cause you to lose focus. That’s why I’ve created a plan for you to follow. I want to give you the plan, the coaching, the education, and the community you will need to begin this journey and stick with it until you’ve made it. Click here to begin your journey into the top 1%.
Own Your Potential,
Grant Cardone Certified Coach
Jerry Fetta helps his clients make money, keep it, and multiply it.
He believes everyone should own their potential. He believes you were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.
However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.
Jerry helps his clients create wealth that exchanges time and money on their behalf.
His clients see a 30% increase in income, a guaranteed increase in savings rate, and 8-12% fixed annual returns on their assets in the 1st 90 days of working with him.
To get started, go to www.WealthDynamX.com/potential