Think about it. There are thousands of millionaires. Some of them fell into it; some of them worked hard to earn it. Those who worked hard, probably still have it. The most powerful wealth building tool that you have is your income.

When you fill a bathtub, you plug the drain. If you don’t, all the hard work of pumping that water from the well is wasted as the water simply slips away through the plumbing.

There are two ways to change this situation. Increase your income, or decrease your expenses. You have far more control over a decrease in expenses than you do an increase in income, so don’t hope for a raise to get you on track.

So what does the cash flow of a wealthy person look like? That all depends on how you define wealth. Before you can be “rich” you need to adjust your lifestyle so your expenses are less than your income, and you need a clear, written plan.

This isn’t rocket science. In fact, here’s a little chart that I created that outlines a pretty good plan that will place you on the highway to wealth.

Assumptions

• You give to your church.
• You give as little as possible to the IRS every paycheck and save your annual taxes in your own interest bearing market rate account.
• You have ZERO debt, except for your mortgage.
• You have 3 to 6 months total expenses saved up for emergencies.
• Your salary is around the national average of $50,000.00
• Your mortgage payment is no more than 25% of your take home pay and is a 15-year fixed mortgage.

Based on the assumed $50,000 annual income, your monthly gross income is $4166.66.  You make enough to land you in the 25% tax bracket.  Your tax bill for the year at $50,000 will be about $8,688 or $724.00/month.

So, after taxes, you’re left with $3442.66 every month.  What are you going to do with it?

The key to following this model is applying it to whatever income situation you are in.  Whether you make $25,000 or $90,000.  Granted, your tax bracket will change the calculations, but the model should remain the same.  If you are unable to do this, then you may have an income crisis, or you’re spending WAY too much money on things you don’t need to be spending money on.

This model is obviously a guideline, and can be modified to suit your particular situation.  I’d love to hear your thoughts on this and why you may agree or disagree with the structure.  Spending in this country is out of control, and there’s a serious lack of financial discipline being exercised in our lives.  Writing out a plan for your money, such as this, will help open your eyes to what you really can and cannot afford.