“Principle: A basic truth, law, or assumption.
A fixed or predetermined policy or mode of action.”

American Heritage Dictionary
The 7 Principles of Prosperity™ in Action!

In our Prosperity Economics philosophy, we use our 7 Principles of Prosperity™ to guide our strategies and actions. These are truths about wealth-building that have stood the test of time!

We didn’t “invent” Prosperity Economics so much as we coined the phrase to describe what already existed. The wealthy have practiced Prosperity Economics for generations. We simply observed and described the timeless principles and practices of wealth-building.

Knowing and understanding the 7 Principles can help people make confident financial decisions. So today, we review the 7 Principles of Prosperity™ along with specific action steps for managing your assets to accelerate wealth-building.

Below, you’ll find a summary of each principle, along with the problem it solves, and some action steps you can take to put it into practice. (To find out more about any of the seven principles, click on the capitalized word in each principle and you will find more detail!)

Principle #1: THINK from a Prosperous Mindset!

Principle #1: THINK from a Prosperous Mindset!

The Principle: Our ultimate results will come from our thoughts, our beliefs, and our consciousness about money. THINKING from a place of possibility and abundance creates new possibilities in our lives and our wealth!

The Problem: When we see “scarcity” as the basic truth of our world, we operate from a poverty mindset that leads us to poor financial habits and decisions.

What to do:

  • Work on your personal development and mindset. YOU really are your most valuable asset, and your thoughts determine your results!
  • Instead of hoarding money, use it! Hoarding comes from a scarcity mentality, not a prosperity mindset.
  • Consider how you can operate in the world through cooperation, collaboration, and contribution, rather than through a lens of competition and scarcity.
  • See prosperity as more than just money. Thinking holistically and living in gratitude is important at all times, but it’s critical when cash flow or assets are impacted by job loss or crisis. Your finances will recover more quickly as you continue to think from prosperity and abundance.
  • Study how wealthy people think! You can do this through listening to interviews, reading biographies, or perhaps books such as The Richest Man in Babylon or the classic, Think and Grow Rich. Books by Peter Diamandis such as Abundance: The Future is Better Than You Think are also highly recommended.

Principle #2: SEE the Big Picture of Your Finances.

Principle #2: SEE the Big Picture of Your Finances.

The Principle:  Since all of our expenses come from the same wallet, we want to take a macro-economic view. We must see and consider our WHOLE economic picture and how the pieces work together. The goal is to optimize our dollars by getting more of our money working for us!

The Problem: Sometimes we make poor decisions when we’re not looking at the whole picture! For instance, we compare interest rates on mortgages or savings rates at banks without first asking how that mortgage or bank CD impacts the rest of our personal economy.

What to do:

  • Understand that everything is related and connected in your personal financial “ecology.”
  • Before you look at the rates of any particular debt or investment or make a major purchase with cash, consider how the pieces of your financial puzzle fit together.
  • For instance, how does your decision to pay for a child’s private college tuition affect your future finances? How does pre-paying a mortgage impact your ability to invest? How do your insurance deductibles and your savings relate to each other?
  • Run the numbers on how a financial decision will impact your overall prosperity. (Truth Concepts software or your advisor may be able to help.)
  • See the big picture of how the principles can work together to create “out-of the-box” solutions. For instance: instead of paying college dorm room expenses, it could make sense to purchase a property your child could live in while renting rooms to other students!

Principle #3: MEASURE Your Opportunity Costs.

Principle #3: MEASURE Your Opportunity Costs.

The Principle: The principle is to measure the cost of paying with cash–or the cost of using one strategy versus another. Opportunity costs are commonly looked at in the business and investment world, but not often considered in our personal finances.

The Problem: Most of us have never been trained to consider the cost of cash in financial equations. Nelson Nash said it well in Becoming Your Own Banker: “You finance everything you buy. You either pay interest to someone else or you give up the interest you could have earned otherwise.”

What to do:

  • Measure and consider opportunity costs in all financial decisions. In other words, what else could you be doing with the money, and how would that compare?
  • Ask a Prosperity Economics Advisor to help you understand the hidden costs of saving to buy cars and similar purchases with cash.
  • Measure the real costs of paying down your mortgage early to “save on interest.” (What if you invested the money… could you earn more than you would “save”?)
  • Consider the opportunity cost of decades of term insurance payments. Utilize permanent life insurance as much as possible to build equity and ensure your premiums are not wasted.
  • Consider the “opportunity cost” of a private college education to yourself and the student. Many savvy families are finding ways to spend less on education.

Principle #4: Focus on Cash FLOW, Not Net Worth.

Principle #4: Focus on Cash FLOW, Not Net Worth.

The Principle: You want to be able to USE your money. Accumulation is not enough; cash flow is what pays your bills and takes you on vacation!

The Problem: Most financial advice focuses on growing net worth (often in places it can’t be accessed) but does little to create a usable stream of income.

What to do:

  • Don’t put all of your money in qualified plans such as 401(k)s and other retirement plans where the money is “locked up” for many years to come.
  • Choose investments that generate income, or investments in which the returns are realized in months or years, not decades.
  • Rather than reinvesting dividends, putting the money to use in other ways allows you to take back control of it!
  • Aim to generate multiple streams of income from your assets. This can be done through investments or even intellectual property (such as licensing and royalties).
  • Rather than try to earn income from the stock market, consider utilizing real estate, investments such as mineral rights leases, and—later in life (age 80-ish) possibilities such as a single-premium immediate annuity or a reverse mortgage.
Principle #5: Keep Money under your CONTROL.

Principle #5: Keep Money under your CONTROL.

The Principle: You want to keep the decision-making power over your dollars whenever possible! Wealth isn’t just a measure of how much money you have… but of how much control you have over your money!

The Problem: Control is lost when money is put under institutional or governmental control or subjected to excessive risk and taxation.

What to do:

  • Don’t lose your profits to never-ending account and management fees that reduce the growth of your money.
  • Build a robust all-purpose emergency/opportunity fund so that you don’t have to disrupt your investments should you have a need or desire for cash.
  • Keep your money out of qualified plans such as 401(k)s, 403(b)s, traditional IRAs, and 529 plans, except when there is an employer that makes sense. (The fees and loss of control are rarely worth the tax deferral.)
  • Don’t escalate mortgage payments to pay down extra principle. That actually traps dollars in the walls of your home! Rather, save and invest elsewhere where you maintain some control.
  • Be an active investor who understands what you’re investing in and does not delegate your money and decisions to others.

Principle #6: MOVE Money Through—Not Just “To”—Assets

Principle #6: MOVE Money Through—Not Just “To”—Assets


The Principle: Just as consumer spending increases wealth by circulates money through the economy, you want to circulate dollars through your personal economy. The movement of dollars increases the velocity of money.

The Problem: Money stagnates when it is “locked up” and cannot move. Money should flow like water in a river—not sit like water in a pond.

What to do:

  • Move your money through assets such as real estate or whole life insurance by using equity or cash flow for other investments.
  • Example: use whole life insurance to create a real estate down payment—or use real estate cash flow to fund a life insurance policy!
  • Build equity in assets that can be used as collateral if desired. You can move money through assets such as whole life or utilize a HELOC (home equity line of credit) when needed, then return money to the asset.
  • Use cash flow from business or investments to make major purchases. For example, one business owner used income from a cash-flowing website to make payments on a new car. Another used rental real estate income to purchase a boat!

Principle #7: MULTIPLY Your Money by getting it to Multitask!

MULTIPLY Your Money by getting it to Multitask!

The Principle: We can multiply the potential uses and jobs of each dollar. Furthermore, we can literally “multiply” dollars themselves through leverage or collateralization.

The Problem: Typical financial advice teaches us to compartmentalize money into different accounts for different purposes—one for retirement, another for emergency funds, another still for education. That approach is inflexible, unrealistic, and ultimately stunts the growth of wealth.

What to do:

  • Focus on building an all-purpose fund instead of putting your dollars where they only do one job.
  • Build assets that can act like a Swiss Army Knife or smartphone, using dollars in flexible ways.
  • See how many jobs one dollar can do! For instance, with whole life insurance a dollar can:
  • Pay a life insurance premium
  • Build an emergency/opportunity fund
  • Create collateral that can be borrowed against in the future
  • Produce dividends (historically reliable but not guaranteed)
  • Fund riders for additional insurance or long-term care benefits
  • Or create a college fund or a legacy gift.

Benefitting from The 7 Principles of Prosperity™

Learn more about the 7 Principles with our complimentary Prosperity Accelerator Pack.

In summary, by looking at our dollars and financial decisions through the lens of the 7 Principles of Prosperity™ we can use dollars efficiently and effectively. We can have more stability and less drama in our finances. We can also “practice” creating cash flow sooner—and benefit from it—rather than waiting for retirement!

Learn more about the 7 Principles with our complimentary Prosperity Accelerator Pack.

These complimentary resources are the best way to learn more and apply the 7 Principles of Prosperity™ to YOUR finances!

You’ll receive a Summary Sheet of Partners for Prosperity’s 7 Principles of Prosperity™, a short video and an audio recording on the principles.

You’ll also receive a 62-page ebook that shows you even more ways to apply the 7 Principles. Financial Planning Has Failed details the problems with typical financial advice and planning—and demonstrates why Prosperity Economics is the solution you’ve been looking for!

Lastly, we’ll deliver a few of our best wealth-building articles from the Prosperity Blog archives directly to your inbox. You’ll see a new perspective that will enable to make more confident financial decisions.

If you have a question or us or would like our personal help with your finances, contact Partners for Prosperity today!

—By Kim Butler and Kate Phillips