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The four wheels of Financial Auto: Income, Savings, Investment, Simplicity

Updated on August 21, 2011

About your Wealth Factor: Assets.

I want to present you interesting knowledge today. Knowledge which is not very known in people's generality. It is simple but this is not casual. What is it?

I am thinking about knowledge considering your personal assets.

Personal Assets is amount of everything you own (things, estates, cars, market shares) reduced by your financial commitment like a debts or loans. I will give you example. If Mr. X has 100 000$ in cash and credit on 20 000 $, the assets of Mr. X is 80 000$ (because 100 000$ - 20 000$ is 80 000$). It is simple, isn't it? Yeah, it is simple – but this is not easy.

The Four wheels of Financial Auto

T Harv Eker, wonderful coach from United States of America, said that on four factors affects on your assets.

  • Income
  • Savings
  • Investment
  • Simplicity

Don’t worry, I will present you every one of them :- )



This is amount of money, you are earning after taxation. There is four way of getting income: working on job position, self-employment, investing money and leading a business. Getting income from working and self employing has this fault that they constantly require your attention, just like little baby. Investment and business – if they are well projected – require attention, but no constantly watching. Another important skill of investing and businesses is building your passive income.


There was funny day in my life, when I met man, who was earning a dozen or so times bigger than „normal” man. Wow, it’s so much money! Was he rich?

No he was not. Why? Because he need 10% of income for eating, 5% for entertainment and other 90% gone on rents and paying debts. This sad story was repeated every month.

Moral isn’t hidden quite well: saving skill is foundation of building assets. Why? Because your assets shall be feed by coming capital. If your assets will not be build every month, they will not rise too high.

Monthly earning of Mr. X is 1000 $. Mr. X saves 150$ every month. His assets will grow faster than assets of mentioned man, because Mr. X SAVES MONEY!

Just look, we got interesting conclusion: You can be richer than well-earning ones when you saves more money than they.

My first employer was millionaire. How he looks? Poor. Very poor. He used to drive old car, using old clothes. He just doesn't look like rich one. But he was – because he saves.



Investment is next factor which has affect on our assets. What investment means? For formality I’ll explain this term. Investment is using money to earn more money by using financial tools like market shares etc.

Basic financial tool is bank deposit which gives you interests. Everyone (I’m no overdoing) shall know minimum 2-3 financial tools, because it gives us possibility to be flexible in the face of the market.

I will not explain in this capsule what investing is, because it is not topic of this hub. I can invite you to another hubs concerning investment.



As T Harv Eker said, fourth factor building assets is Simplicity. I don’t mind about Simplicity of somebody’s character, but about Simplicity in financial. Financial Simplicity is an order in your wallet.

What does it mean?

It mean that, You shall lower Your outgoings to logical level. I’m not thinking about hopeless life without entertainment etc. Just look on your Financial Summary (your incomes and outgoings). If You see them, think what can be cancelled in ‘outgoings” table.

99% of people thinks now ‘hey, idiot! I don’t want to be zombie who cannot spend some money during weekend’ or ‘I cannot life without 435 TV stations and big car”.

For the first one’s I want to show that you do not have to abnegation all entertainment. Of course, this is important but You can qualify it a little.

For the second ones I want to say „Ok., choice is Yours”.

Do you really MUST smoke? No. You WANT to smoke tasty cigarettes, but you do not MUST smoke. This is your personal choice. You can continue it or drop off.

By the way, I will give you a link to interesting hub about addictions.

Need Evidence? Ok. I know ex-smoker who quitted addition after 30 years of smoking. He just do it. One day, he throw cigarettes pack through the window and said „I will never smoke again”. He do just as he said. If one person did it, you can do it to – and save money for example.


Life isn’t comfortable too and you are still alive.

Cigarettes are only one example of unnecessary outgoings. No one command you to buying unnecessary things, taking consumption loans. Short word from my side: limited outgoings gives you bigger assets. If you cannot agree on this limiting – okay, it is still your choice.

My personal conclusions

T Harv Eker described presented factors (Income, Savings, Investment and Simplicity) as four wheels of financial car. People, who get rising assets, are riding on all four wheels. You cannot ride on three or two wheels. Just think about it: how rides car with two wheels.

I’ll let myself to add another position on this factor list. I’m thinking about factor which is equal important as those presented by T Harv Eker. If T Hark Ever gave you four wheels of financial car, I’m giving to you a spare wheel.


There is so called Law of Attraction, which says us, we attract things, states and people which is similar to our thinking.

I will present you Law of Attraction in short sentence: You are attracting to your life things which mostly absorb you during the day.

In this conclusion, this is good idea to monitoring your assets in for example excel or special note. If you will do it, you can get many profits: you know how much is your assets, you are using law of attraction and also feel better seeing REGULAR progress.

Monitoring is turning the Law of Attraction on.

If you cannot see your progress, that mean some of financial tires broke down.

What about frequency of monitoring? It is your individual business, as usually. Personally, I’m doing it every Sunday, but choice is yours.

Practice exercise:

Check your personal assets. Add worth of your cash to worth of other things (like estates). Reduce it by debts and loans. Is it positive or negative?


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    • jtrader profile image

      jtrader 5 years ago

      You have made some valid points. Investment is key.

    • froch profile image

      froch 5 years ago from Tychy

      Thank you for nice comment ;-)

    • profile image

      rorshak sobchak 6 years ago

      This was a great write up froch. You are an excellent writer. Voted up. :O