Percentages to live by

Posted on Feb 1, 2007 in Real Estate | 0 comments

Striving for wealth often inspires people to label you as “greedy” or “money-grubbing.” Unfortunately, such accusations are often justified. But it doesn’t have to be that way. Wanting (and working to achieve) financial freedom doesn’t mean you have to sell out morally or lose sight of what’s truly important: compassion, empathy, family, fairness, etc. That’s what is meant by “enlightened” wealth.

A set of percentages puts this into understandable terms. Being an enlightened investor means, among other things, committing to bettering the community with every investment return. Here’s how:

Imagine you buy a piece of property and later sell it a year later for an after-tax windfall of $30,000 (hey, it’s just an example!). Of that money,

• 5% ($1,500) goes to reward yourself (new iPod or TV, a cruise, etc.).
• 10% ($3,000) is invested in your continuing education (conferences, etc.).
• 10% ($3,000) goes to a charity of your choice (I’m partial towards ending hunger).
• 75% ($22,500) is re-invested into vehicles that earn money/reduce debt (paying off borrowed money, investing in UEF or a high-yield mutual fund, etc.)

Some people adjust the percentages a 10% reward and 70% reinvestment. Whether it’s the orderliness of three tens or a just stronger desire to pamper oneself, it doesn’t matter; find a formula that works for you and stick to it.

I’ve only sold a property once, but it was an amazing feeling to write a hefty check to my favorite charity. Let me tell you: anyone who says striving for wealth isn’t good hasn’t had that feeling. Yes, greed can consume you; no, it doesn’t have to. Trust me on that.

Related: If you liked this, check out:

1. "Multiple Streams of Income" Today is the beginning of the three-day Enlightened Wealth Institute...