Wealth Tip: Annually fine-tune your Wealth Map™.

Each of us, whether we realize it or not, has a Wealth Map™ -- our individualized action plan to create wealth. For most people this plan is simply the default plan that is given to them by our society.

For the poor this default plan is to be dependent, upon the government, or active income from a job, or relying on family or other people to cover their basic needs.

For the middle income, this default plan is to work, earn, save, and invest via “retirement accounts” and pension plans so that when they retire, this “nest egg”, combined with their Social Security income will be enough to take care of their living expenses.

And for the wealthy, this default plan is to buy and build assets that generate passive, residual income so that they are financially free as soon as possible.

I think each of us at a minimum needs to sit down and assess our own Wealth Map™ at least annually (personally I do this quarterly and have found this to be a powerful catalyst to building wealth.)

The reason this is so present on my mind is that two days ago I sat down with a very close friend and doing him a favor—looked over his personal financial situation and Wealth Map™ and gave him my perspective and feedback.

He shared with me the “individual” wealth plan that his “wealth manager” had created for him and the latest statement from his Merrill Lynch portfolio.

We went through and created a quick list of his balance sheet (everything he owns less everything he owes), his “S-Factor™” (his annual cost of living), and finally his passive and passive, residual income sources.

After going through all of these with him I gave him five suggestions for him to fine tune his wealth building portfolio. Now while these suggestions are specific to him and his personal situation, there are several suggestions that I will share with you in next week's Wealth Tip.