I want to share with you a few secrets to wealth that I have learned in the last seven years of studying it. But first a brief backstory:

In 2011 I lost my full time job at CBS Interactive. When my six-figure paycheck dried up, I suffered a painful loss of ego and self worth so one day while waiting for a call from my agent that would never come, I resolved this:

“Okay Natali. If you do not have a regular paycheck to contribute to your family, you are going to make it your mission to do the very best that you can with the money you have now.” 

I decided that I would be so good with money that it didn’t matter that I wasn’t the one making it. I would somehow make my husband’s paycheck worth two with my efforts. I made that my job.

I started by making a family balance sheet so that I knew what I had to work with. We started with a net worth of a negative number. As in less than 0! Seven years later, our net worth is approximately $5 million so I think I can safely say that my efforts have paid off. Which leads me to:

Wealth Secret #1: Start building wealth with what you have! 

There is not one way to build wealth. There is only your way. Once I was armed with our balance sheet, I knew what we Owned and what we Owed and I decided to try to do better, one line at a time. This means you either maximize what you Own or you minimize what you Owe. Either one of these actions will increase your net worth.

I started with a Fidelity stock trading account and a library card. I checked out a book called Exchange-Traded Funds for Dummies. It taught me that most stock and retirement accounts are filled with expensive funds with all manner of hidden fees. It taught me to better evaluate my stock-based accounts.

Next I went to our children’s college savings funds. I learned that all 529 plans are not created equal and I found cheaper, more growth-forward funds out of Utah.

Each book I read pointed me towards a new thing that I could learn. I followed the trail like Hansel and Gretel, reading these books as if they’d been assigned by a teacher. As I saw our portfolio grow, I knew I was going in the right direction.

Next I started to hack away at our liabilities. My husband Clayton taught me his trick on paying down your primary mortgage with a Home Equity Line of Credit and we whacked away an entire mortgage doing so. We paid off cars. We eliminated credit card debt.

Around this time, my husband became insistent that we invest in real estate. We identified a chunk of cash we could use to get started without a loan and we bought two single family homes in a suburb of Detroit, Michigan. Once those properties started to cashflow and we were convinced that real estate was an awesome way to supplement our family’s cashflow, we went to the balance sheet and figured out how to acquire more based on what we had. More on that here.

We made all of our decisions based on the balance sheet. We wanted to turn our assets into Performing Assets and implode the liabilities list. Which brings me to my next point.

Wealth Secret #2: If your paycheck is being funneled into liabilities, you are not building wealth. 

Most people’s paychecks are spoken for by all of their liabilities. Think about what you are making: is it all being channeled into the debts that you have agreed to? House payment, car payment, student loan, etc. This leaves little to no money to buy assets, much less Performing Assets.

Oh sure you may automate some contribution to a savings account. That is never going to make you wealthy. If you think you can save your way to wealth, you are misguided.

Here is what you want in your asset column: PERFORMING Assets. That means that an asset makes money every month no matter what you do. It Performs!

You must learn to evaluate your assets for how well they perform. Most of your stock accounts are going to be pretty pathetic in this regard. Same with your car and your primary home. Wealthy people do not let their assets tread water like this.

This lesson from Robert Kiyosaki’s Rich Dad, Poor Dad really sticks with me: The rich buy assets. The poor buy liabilities.

If you are working for the weekend only to be a slave to your liabilities, you are not rich, no matter how big your paycheck or how big those liabilities. You must shift your mindset to keep this in mind!

Wealth Secret #3: Wealth building takes creativity. 

So how did we explode our net worth? We took the assets we had and decided to turn them into Performing Assets. We borrowed from our 401k to purchase a cash flowing property. We took our Roth IRAs out of stock-based accounts, self directed them, and bought cash flowing properties. We used cash from a Home Equity Line of Credit to take cash out of our primary home to buy cash flowing properties.

We did not use any one trick. We used ALL the tricks. We learned them one by one and found a way to turn our duds into Performing Assets that now generate approximately $40,000 per month in rental income.

But you have to start with what YOU have. My way is not your way and Suze Orman’s way is not your way and Dave Ramsey’s way is not your way. Just like your soul journey is uniquely yours, so too with your finances! You can learn lots of tricks with each line item in a balance sheet but you have to choose which line item to start with and what tactic you are comfortable with. But wealth building is not always comfortable. Which brings me to…

Wealth Secret #4: A fixed mindset holds you back. 

I see this a lot in my Twitter responses.

“Suze Orman says not to touch the 401K!!!!”

“Dave Ramsay says that mutual funds are the best!!!”

Okay. You go ahead and think that. See where it gets you.

These are fear-based mindsets. People who say this have decided that wealth building is too scary to go rogue. I get that, believe me but if I know anything from wealth building I know that the saying “Fortune favors the bold” is 110% true!

Do not find financial experts who tell you what to do. Find financial experts that inspire you to do and then make informed and inspired choices. Don’t tell me you can’t. You can!

Maybe real estate is not your thing. Fair enough. My way is not your way. There are many ways to turn your assets into Performing Assets and most of them I cannot show you because I only know my way. What I hope to accomplish is to shift your mindset away from what you have been told by bank commercials and inspire you to find your own way to wealth.