The Financial Dojo Green Wealth Belt™ is the next level up from the Yellow Wealth Belt. It’s just about in the middle of the wealth belt pack. As a Green Wealth Belt™ holder, you’re like the plant seed that has just broken through the earth with the intent to reach the sun. You know the basic components and techniques of building wealth. Now is the time to strengthen, refine, and expand that knowledge.
Green Wealth Belt™ (GWB)
While the primary emphasis of the White and Yellow Wealth Belt mini-courses was on debt and spending, in this course saving and investing take center stage.
You know, when it comes to dealing with any major issue, decision, or problem I always like to start with understanding the big picture first. And I also like to know the top 2, 3 or 4 options available to me. This way I can balance one option against the others and come to a solution that puts me in a comfort zone. Other people may have their own approach, but this works for me.
I use this same approach when it comes to investing and choosing investments. I decide on my overall goal and then consider the various investment vehicles that could best help me reach my destination.
If you’ve done the wise thing and gone through our dojo orientation and then completed the action steps highlighted in the White and/or Yellow Wealth Belt mini-courses, you should know your “big picture” financial goals.
So now you’re going to gain deeper insight into your investment options, which can be divided into two major categories. The first category consists of areas where you will directly invest your own hard-earned money. This would include things such as stocks, mutual funds, bonds, etc.
The second category consists of areas where you get other people’s money (OPM) to work for you. Examples of this would be borrowing money from a bank to grow your business or investing in stocks through brokerage firm margin accounts. Many of these arrangements can get pretty involved, complicated, and risky.
Since you’re at the beginning to intermediate phase of expanding your investment portfolio, the focus of this mini-course will only be on the first (less complex) category.
However, before diving into the details you should first take the Green Wealth Belt Test to ensure that you’re at the appropriate level.
After that’s out of the way, you’ll learn about various types of investments and investment accounts, determine your risk tolerance level, design an investment portfolio, and get an introduction on how to accelerate your wealth. Let’s roll.
Take the Green Wealth Belt™ Test
Answer the 9 questions below regarding your current financial situation and knowledge. If you answer “yes” to ALL questions, you’re in the right place. Feel free to continue. On the other hand, if you answer “no” to any one question, at most you’re a Yellow Wealth Belt. You should go and review that course.
Spending Mastery Questions:
- Is your FICO Credit Score 710 or higher?
- Are your total monthly debt payments less than 40% of your total monthly gross income (pre-tax)? (See Note 1)
Note 1: Your total monthly debt payment/commitment is comprised of the amounts you pay on all the loans, contracts, leases, and agreements you’ve locked into. Examples of this would be your mortgage (principal, interest, taxes, and insurance), credit cards, student loans, car loans, apartment lease, homeowner’s association fees, furniture financing, remodeling loan, legal judgments, child support, alimony, etc. So, it does not include basic living expenses such as utilities, groceries, car fuel and maintenance, etc.
Saving & Investing (S&I) Mastery Questions:
Calculate the grand total of all your outstanding debt obligations, excluding your home mortgage or rent. Of this total, determine how much of it will be paid off over the next 5 years. Now answer these questions:
- If you were to pay off that 5 years debt amount today, all at once, would you still have a cushion of at least $15,000 in your S&I accounts?
- Is it safe to say that at least 50% of the money you have available to pay off the 5 year sum is held in saving and investment (S&I) accounts that would not be subject to early-withdrawal penalties by the IRS if you had to use those funds?
Congrats! You’ve completed the first two parts of the test with one part to go. You are now considered to be a Green Wealth Belt (In Waiting) holder. You can get get rid of the In-Waiting crap and claim your rightful place among the full Green Wealth Belt ninjas by completing the Knowledge Mastery Questions below.
Knowledge Mastery Questions:
- Did you peruse the Orientation & Overview guide?
- Can you name the four components of the CALM Approach?
- Did you review the Puzzle Box Paradigm and complete all the Action Steps for the 4 guiding principles?
- Did you complete the exercise for determining your retirement money goal?
- Have you read the mini-courses for the Yellow and White Wealth Belts?
If you answered yes to ALL test questions, congratulations, you are now an official Green Wealth Belt™ holder. The remainder of this mini-course contains the information and action steps you need to know and implement to reach your next wealth belt level, which is Red.
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