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  • Writer's pictureSujata Shyam

High-Level Concepts To Fuel Your Wealth-Building Strategy

I know I’m not alone when I share that I came from a hard-working middle-class family with parents who taught me to focus primarily on getting an education, finding a steady salaried job, and saving money in a savings account or 401K.  

School was no help in the personal finance realm. In all my education, not once was there a class that taught about savings options beyond a typical savings account or investment strategies beyond your employer-offered retirement plan.

If you’re like me, everything you’ve learned about personal finances and how to get ahead in this world came from your own hard work and dedication toward thinking outside the box.

This article provides an introduction to four high-level concepts that can positively alter your ability to generate wealth quickly and efficiently if implemented with timeliness and dedication.

These may seem simple, but each one requires attention to detail for (possibly) years at a time before mastery. Are you getting excited yet? 

Let’s dive in!

Money Management in Four Steps

A fantastic view of the high-level cash flow journey is to break it down into “four pillars,” as M.C. Laubscher from Cashflow Ninja calls it.

  1. Cash creation,

  2. Cash capture,

  3. Cashflow creation, and

  4. Cash control

These are the four pillars he’s taught to his faithful followers for years. 

Cash Creation

In the first stage, Cash Creation, your role is to create money.  You venture out on your own, obtain a degree, land a salaried position at a stable company, develop connections with industry peers and seniority, start your own business, find a mentor, and hustle toward bonuses and raises. The cash creation stage is the foundation of all the other steps. The key is not to get stuck here for 40 years, like most of the US's population!

Cash Capture

Next, we have Cash Capture, and in this stage, you create a buffer between how much you bring home and how much you spend. You will likely succeed at this by budgeting and saving as much take-home income as possible. The difference between your income and your spending is where you capture cash and use it to fund your investments, purchases of appreciating assets, and your private banking strategy (I’ll explain this in a little bit.). 

Cashflow Creation

Once you have emergency funds and other savings in place, have a grip on your budget, and are consistently capturing cash, you move on to the cashflow creation stage. 

Take notice of the name: Cashflow Creation – There’s a big difference from the first stage of working for cash. In this third stage, you learn how to use the money you’ve saved and the relationships you’ve nurtured to invest, generate additional cash flow, earn interest, and create income independent from your day job. 

Typically, people in this third stage actively seek investment opportunities, including insurance policies, stocks, REITs, bonds, residential real estate, and commercial real estate syndication opportunities. 

Cash Control

The next stage isn’t the final resting point, but an ongoing focus to protect and tweak your financial strategy for the best. Cash Control involves creating a will, pursuing estate planning, maintaining life and disability insurance policies, and ensuring your finances are set up for longevity.

You didn’t learn this stuff in school, so it’s up to you to intentionally learn and refine your financial plan toward protecting your assets from creditors, taxes, and lawsuits and providing a legacy for your loved ones. 

I’m sure you’ve heard the phrase “making your money work as hard as possible” thrown around – moving through each of these stages will allow you to do precisely that.  Keep in mind that you don’t necessarily leave one stage behind never to return to it again.  While I am currently focused on Cashflow Creation, I still go back to Cash Creation and Cash Capture to maximize the amount of Cashflow Creation I can build. 

Private Banking Strategy

The next high-level concept I’d like to share also called “becoming your own bank” and “infinite banking strategy,” is where you use a carefully drafted whole life insurance policy to become your own lender, borrower, and beneficiary all at the same time. 

Think about the big-bank business model: Banks accept people’s deposits in exchange for a “safe” place to store the cash promising minimal interest earnings. The bank loans that money out to others multiple times and earns a much steeper amount of interest off the loan.

All along, if someone defaults, it is the BANKS that are the beneficiaries via collateral, collections, etc. Why save your hard-earned cash for minimal interest and then borrow other money at a higher interest rate? It just doesn’t make sense! 

I invite you to explore flipping this widely-accepted business model and create your own private banking system. If you are working through the four stages above, you may have captured cash and perhaps have significant savings ready to invest in creating passive cashflow.

With this cash, you can buy a dividend whole life insurance policy from a mutual insurance company. When written correctly, your policy will allow you to fully fund it quickly and borrow a large portion of that money from inside the policy within the first year. 

Now before your head spins, let me explain. When you fund the policy quickly, you become eligible for dividends and earnings inside the policy itself. When you borrow against your policy at a low rate, you’re still earning interest on the full value, AND you get to reinvest that borrowed money into a real estate syndication. 

Boom! You’ve taken your hard-earned money and invested it into two places at the same time, AND now you have an insurance policy too! There are many other details to this, which I’ll save you from right now, but just know this is one tax-advantaged option for creating a wealth-building machine.’

Value Your Time Most of All

Your time is your most precious resource, and when you start out, you don’t have much choice but to trade your time for money. You likely spend 40-60 hours a week contributing your expertise and energy in exchange for a paycheck. 

That’s not a sustainable life/happiness model, though, right? Even if you love your job, there may be a time in life when you want to take a break, switch careers, work part-time, take care of ailing family members, etc.

In order to prepare for a potentially unexpected moment like this, you will want to have captured enough cash to invest that cash in lucrative deals so that you can decouple your time from your income. 

This is where you reclaim your time. Maybe this means taking time off of work. Maybe that means hiring an assistant to keep you organized and run little errands for you, or perhaps that means hiring household services like laundry, a maid, and a landscaper. In all areas of life, I encourage you to explore the activities you do, their worth, whether you like doing them, and how much of your time and energy they take.

If you find specific actions are not worth your time or energy, hire them out and, in exchange, use your time to learn about and pursue the next level of wealth-generation. 

Another way you can fast-track your wealth-building machine is to intentionally surround yourself with people who inspire you. Find connections ten steps ahead of you, who are doing things you wish you could be doing, and then find ways to infuse their lives with value. Use your knowledge and expertise to support them and further develop a positive rapport with them. 

You’ve probably heard the quote by Jim Rohn, “You are the average of the five people you spend the most time with.” Well, recent research shows that who you are is even affected by your friends’ friends and those friends’ friends! This emphasizes how imperative it is to seek masterminds, mentors, and relationships with those you admire. 

As you surround yourself with valuable connections, nurture the relationships created, and allocate time and energy-sucking tasks, you create more space in which you can explore higher-level concepts and accelerate your wealth-building journey with fewer mistakes.

Continuously Break Parkinson’s Law

Finally, the most valuable high-level advice I can provide is that you have to break Parkinson’s Law repeatedly. Parkinson’s Law is the high-level idea that the more income you make, the more you spend. 

Most people find that with each raise or bonus achieved, they can afford something they’ve wanted.  Then they buy – it which is exciting!  …  Until years pass by, and they find they are stuck with no savings to show for all their hard work. 

But you – you’re different. With the four pillars, buying your time back, and private banking knowledge, you are destined to thrive in that Cash Capture stage and ensure your expenses are much less than your income. 

With each raise, cashflow check, and bonus, strive to remain conscious of the temptation to spend more.  Break the cycle.  In the beginning, frugality is especially important – you’ll likely have to be committed to it for longer than you wish.  But it does pay off!

While you focus on the high-level strategies outlined above, we at Luxe Capital are focused on nurturing relationships with investors (like you) and presenting the best real estate syndication opportunities available. That is – we focus on providing Cashflow Creation opportunities, so you can focus elsewhere.

For access to our private community of like-minded investors focused on wealth-building, you’re invited to Join Luxe Capital Investor Club today, thereby taking a huge step toward Cashflow Creation.

Ready to get started on your Real Estate Investing Journey? Join our Investor Club - it’s free. Become a member here!


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