As mentioned in my previous review of the book, the full name of Getting Rich is “The Complete Idiot’s Guild to Getting Rich“.  But also as I mentioned before, don’t be fooled by the title!  It’s a good book!!!

Today, I’m going to talk about a portion of the book that I identified with and which influenced the way I approached my financial habits with respect to wealth creation!  The most powerful portion of the book for me was “The Five Levels of Wealth”  (also called Waschka’s Wealth Levels).

Before reading these levels, let me explain the book’s definition of TSG.

Target Savings Goal (TSG) is simply the amount invested yearly, so that after so many number of years of continual contributions, your investment nest egg will last (an hopefully outlast) you when you retire (or for some other goal).

The Five Levels of Wealth

• Wealth Level 1
  You are able to maintain your standard of living and at the same time, save enough money to achieve your Target Savings Goal (TSG), the annual amount you need to save to meet your needs at retirement.

• Wealth Level 2
  Your portfolio is large enough to produce, on its own, a total return each year equal to your TSG, as well as keep up with the inflation.

• Wealth Level 3
  Your portfolio produces a total return large enough to cover your desired lifestyle and inflation.

• Wealth Level 4
  You have accumulated enough assets to produce a total return sufficient enough to substantially increase your current and future lifestyle while at the same time keeping up with inflation.

• Wealth Level 5
  You have accumulated enough assets to produce a total return well beyond what you would ever spend.  You now have the option not to work, raise your standard of living, and bestow large charitable gifts.

Some level (especially Level 2) has sub levels within them.  Currently I am withing Level 2, my got is Level 3!  Anything above Level 3 is just gravy 🙂

Wealth level 2 is special because it has sublevels until you get to Wealth Level 3!

Thanks for listening to me take a small trip down memory lane…

-MR

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The real book title is “The Complete Idiot’s Guide to Getting Rich”, and it was the 2nd book that I read on finances.

Don’t let the full title, fool you… its a great book, written by Larry Waschka (who was a registered investment advisor and once owner of Waschka Capital Investments, a fee-only investment advisory firm).

Unfortunately, the author died by drowning in Mexico while on vacation.  However, the book continues to be a great work and is on its 3rd edition.  It’s new co-author is Stewart H. Welch III, and while the core from Larry is the heart of the book, Stewart has kept it modern and has done an overall great job!

Much like Evan at “My Journey to Millions“, Larry also worked with very rich people and over time he was able to learn much about them.  This was one of the reason Larry wrote the book, to share what he had learned!

This book introduced me to some of the advance investing strategies that I still use today!

Unlike most financial books, this book actually lays out the formula step by step on how to get rich, not to mention the TSG (Target Saving Goal) calculation!  Most financial books are hype, inspirational, but mostly hype…, but this book’s author actually took it a step beyond by designing a wealth building strategy for his readers!

While this book might not get the credit and acknowledgment that it deserves because of its orange cover and silly title, it was instrumental in setting me on my financial path!

Tomorrow, I’ll dig a bit deeper into the book contents and explain what influenced me that most!

If you get a chance, check it out at the library or purchase it (it’s one of the few financial books that I have purchased in my life…), I think you’ll find value in reading it.

-MR

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