I'm about to find out if you can make money online …. Part III

Note: In the original version of this post, I included links to the actual sites; WordPress has posted what looks like an ‘automatic warning’ … on the assumption that this content was the cause, I am removing the actual names/links … a pretty good ‘early warning sign’ that the site that I subscribed to is a bit dubious, huh? 

I have a confession, I am already working on two separate on-line ventures that are currently in stealth mode but, these are fairly high-risk / high-reward ventures … they take a lot of preparation, programming, and money.

Which is why I am busy trolling the Internet for a more ‘off the shelf’ business that I can try, so that I can prove to YOU that it is possible to make money on-line. Why?

Because I want you to start a part time business to increase your income. Why?

So that you can invest at least 50% of that extra income to accelerate your savings plan. Why?

So that you may eventually become rich!

So, I’ve found a ‘promising’ candidate … if this doesn’t work, then I’ll just have to come up with my own idea, I guess …

It’s a glossy-looking, well put together web-in-a-box diet program. I guess that it’s designed to pull people into an affiliate program for a so-called “World-Famous TV Lady Doctor“.

Is this as scam? Probably

Do I expect to make any money out of this? No.

Then why? Because I’m hoping (in the unlikely event that it’s not a scam) to at least make a ‘little money’ to show that it is POSSIBLE to make money on-line … to prove that it’s at least possible.

If this doesn’t work (which, I’m fully expecting!) then we’ll go to Plan B …

OK, so here goes; the site says to take the following steps BEFORE signing up (well, putting up some roadblocks before asking me to hand over money is a good sign!):

A) You will need a domain!

We recommend http://GoDaddy.com Once you’ve secured a domain (or if you already have one) you will point it to your webspace!  

B) You will need webspace (i.e., hosting).

 We recommend http://HostGator.com They have 24hr Support — so if you need assistance at anytime, they’re there to help you PRONTO!  

C) You will need a ClickBank account — don’t worry, it’s Free!

 Just go here to grab it N0W! … http://tinyurl.com/   

D) You will need an Autoresponder — Here’s the BEST one on the Net with 98% successful “deliverability!” …


And once you have all those things (which altogether probably will cost you less than $50 bucks!) you just need to click here to order now for JUST $397 (1-time payment ONLY!): 

…. that’s it …. wish me luck! I’ll keep you posted …

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When is it best for you to invest?

One of the better on-line resources for investing in stocks is the Tycoon Report … I enjoy seeing it in my In-Box daily (BTW: also check out Tickerhound!).

I was interested to see an article that talked about the three best times to invest; here’s what they said:

To outperform the market, you have to master all the factors that determine when a company’s shares are most likely to rise, not just some of them. It is the combination of indicators, each reinforcing the other, that gives us the most accurate barometer of when and where to invest our money.

One of the topics I cover in detail in the CRISS course is timing or seasonality — the best months and years to make investments in specific markets. Many investors are unaware of facts like these:

  • In the 4-year presidential election cycle, market strength is greatest in the pre-election year: the NASDAQ has posted an average 32% gain since 1971 in pre-election years — and the Dow hasn’t had a losing pre-election year since 1939.
  • Since 1991, October has been the strongest month for the Dow and the S&P 500.
  • For the NASDAQ, the best months are October through January, during which the NASDAQ has averaged 12% four-month returns for over a decade.

 Now, I don’t usually try and time the market according to these (or any other) ‘best time to be in the market’ strategies, because the one time that I do will be THE TIME that the strategy doesn’t work 😉

You know, the papers will say “Market Shock – Dow Jones Plummets in Election Year … first time in over 100 Years … Investor Loses Shirt”.

But, if I am planning to invest AND I have found a stock at a great price in a company that I believe in …

… then it is sure nice to know that the stars are (supposedly) aligned in my favor; but, I’ll probably invest eben if they aren’t.

What are your favorite times to be in the market?

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Devolving the Myth of Income … Part I

What’s your definition of ‘rich’ … would being a highly-paid professional (such as a doctor) or a high-flying executive (such as a high-tech sales rep) earning megabucks-per-year do it for you?

If so, strap in, because I am about to devolve the myth of income by looking at two case studies, both from Networth IQ a web-site for people to track (and discuss) their own Net Worth.

To start, here is an excerpt from an e-mail that I received from docsd  (you may need to register and log-in to see his Networth IQ Profile):

I have been awaiting approval on a home that I am purchasing and just received word today that I was approved for the loan and that the closing process will proceed. My wife and I plan on staying in the home for many years to come, as it is an older historic horse farm on several acres outside of Louisville, KY and this home fulfills my wife’s dreams of being able to have horses. I actually came to a compromise with her regarding this house because my goal has always been to live as far below my means as possible while accumulating wealth and her goal was to have a considerable and high-end horse estate on several acres (obviously not inexpensive living, especially if this is a 500k-million dollar home that you plan on staying in). The compromise we made was to wait as long as we could to find the best deal possible so that we can fulfill both of our desires between the property and the low personal overhead to help with wealth accumulation. That time has come and we found the property, basically stole it for tens of thousands below its most recent appraisal and we qualified to purchase it while still holding on to our current home. We are purchasing the new home for 325k and our current home is valued at between 307k and 314k.

I feel I am in a unique position as the owner of 2 homes this early in starting my career and have a feeling I can make a much better situation out of my current home by holding on to it instead of selling it quickly in this market….however, I am worried that it is too pricey to be able use as a rental property investment at this time. Provided I refinance it to the going rate, around 6%, which is considerably better than the 8% we qualified for when we bought it just over 2 years ago, the total monthly liability for us would be just over 2k per month and I’m just not confident we can get that much monthly for rent here at the moment. This house is a very nice and large house in one of the more exclusive parts of town (in an area that has been averaging nearly 10% appreciation for homes per year across several years and not impacted near

What would you do if you were the ‘Doc’?

Obviously, we don’t know nearly enough about his situation … and, we can’t give specific financial advice, anyway … but, we can make some general observations:

Firstly, we can see a hard working professional (we presume) earning over $150k per year … easy street!

Then we see the problems that go along with it: too much house, too much lifestyle, too much debt … even though our ‘Doc’ says that he is focused on saving and wealth creation.

But, Doc has some bigger issues to deal with:

Assets   $ Diff % Diff
Cash $3,400 $400 13.33 %
Stocks $0 $0
Bonds $0 $0
Annuities $0 $0
Retirement $0 $0
Home $313,500 $6,000 1.95 %
Other Real Estate $0 $0
Cars $8,220 ($280) -3.29 %
Personal Property $25,000 $0 0.00 %
Other $0 ($1,500)
Total Assets $350,120 $4,620 1.34 %
Debts   $ Diff % Diff
Home Mortgage(s) $279,510 $0 0.00 %
Other Mortgage(s) $0 $0
Student Loans $142,725 ($125) -0.09 %
Credit Card $0 $0
Car Loans $0 $0
Other $15,440 ($780) -4.81 %
Total Debts $437,675 ($905) -0.21 %
Net Worth ($87,555) $5,525 5.94 %

1. Student debt and other debt (plus his mortgage) of nearly $160k that must be paid off!

The ONLY reason not to concentrate solely on paying it off now is if (a) the interest rates on these loans are lower than mortgage rates, and (b) the money that should be used for paying off these loans will instead go into long-term, buy-and-hold, income producing rental property.

2. The ‘doc’ has a negative Net Worth!

Now, that’s always understandable for a professional with large student loans to pay off early in their career; I don’t know how long ‘our doc’ has been working, but to be looking to compound this Net Worth deficit by upgrading lifestyle is not something that I would usually recommend.

But, there is also an emotional/lifestyle decision to be made here: 

For example, we need a wife who is onside, so it would be tempting to simply swap one home for the other (keeping in mind it’s probably ‘only’ a $50k – $100k ‘swap’ … new house is slightly more expensive than the existing, but there will also be closing costs and selling costs, etc.).

But, I have a question around the horses … this house comes with a new lifestyle: are the horses just an expense (i.e. buy, feed, maintain) or also an income (e.g. agisting other people’s horses, selling horses, giving riding lessons, etc.)?

If the latter, I would consider upgrading just to keep the ‘little missus’ happy, but only if I was committed to earning more and using that extra income to accelerate debt repayment … if the former … hmmmm.

Given that we are not really assessing the Doc’s situation, because we don’t know enough, we need to realize that high income = high wealth only when that income is put to:

a. Debt reduction, then

b. Passive Investments

Lifestyle comes from the perpetually sustainable income that good passive investments should spin off … at least, that’s how I live.

In Part II, we’ll look at the super-high-flying-sales-rep …

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The WHY leads to the WHEREFORE leads to the MONEY …

… and that’s what makes it all worthwhile!

I’ve been rabbiting on about getting your arms around your Life’s Dream (or Life’s Goal) as a way to understand what your Magic Number is …

… for me, these two concepts made all the difference!

 I just came across this blog post which seems to summarize it nicely …

In it Ian Ybarra says:

I’ve noticed that the more specific goals I have, the wilder the dreams I come up with, the more conscious I am of what I spend my money on. Because committing to doing what I love gives me reason for my money. Every time I’m about to waste money, I can’t help but think “I shouldn’t do this. I could use this money for something I want more.”

I agree with Ian. But, when we talk about Personal Finance, I’ve also noticed that we tend to just talk about money-related goals.

I have a different view – and it’s a view that ultimately made me rich – that money is to support your life, not the other way around!

Buckminster Fuller is generally regarded as one of the twentieth century’s greatest inventors, architects, poets, and visionaries. His theory was that your job/purpose was not to make money. It was to fulfil your life’s purpose … and the money will come (if it’s truly required)!

Precession You

This neat diagram comes from a site that explains some of  Buckminster Fuller’s theories.

I guess, what BF was saying is that our life’s purpose is not necessarily the same as chasing the goal (e.g. to get a promotion or a pay-rise; or to have a $1,000,000 nest egg by age 45; or whatever).

But, the way I look at it is just the opposite …. concentrate all of your efforts on finding then chasing your Life’s True Purpose, and your financial goal – if it is directly related to your life’s purpose – will come!

Precession You 2

So, here is my simple three-step plan for totally turning the traditional way of looking at Personal Finance on it’s head:

1. Find your Life’s Purpose – or at least find what the destination is that you are aiming at and by when (retiring on a beach by 55; quitting the rat race to help the poor in Africa;  reading every book in the library; whatever turns you ON).

2. Work out how much Passive Income you think that you will need to support that lifestyle in today’s dollars … then double that amount for every 25 years (prorate for shorter periods) until the date that you really have planned. If you intend to keep working, just subtract the income that you expect to be able to earn.

3. Multiply by 20: that is the amount that  you will need to have in passive income-producing investments to support your’ Life’s True Purpose Lifestyle by the date that you expect. This becomes your Magic Number.

4. Where will that money come from? it’s probably a larger number (maybe, much larger) than you expected. Right? If so, it will need to come from Making Money 201 strategies … if not, Making Money 101 strategies on their own should achieve your goals.

Please let me know what you think your Magic Number is (and why you need that much/little) …

Making Money 101, 201 and 301 principles applied to your business!

Writing this blog sometimes puts me on mailing lists that I don’t recall subscribing to …

But, I am usually pleasantly surprised by what I see (if not, the <delete> key is a quick’n’easy solution) … so, I am usually quite happy to see some ‘surprises’ in my in-box (please don’t send me Viagra ads or other spam!).

An example of a ‘pleasant surprise’ was an article from Leigh Ann Rodgers of Creative Business Workshops called “Where does your business stand financially?” In it she said:

 In February when I pulled together all my financial information for taxes, I had an “ah ha” moment. I spent too much on my business last year! My profits would have been much higher if I had been more conscientious about my spending.


Here is how you should look at your business …

… exactly as you would yourself!

That means that your business also goes through three stages:

Making Money 101 where your business is struggling to get ahead; not making as much as it should.

You need to apply exactly the same money-saving and budgeting techniques as you would for yourself. Here is what Leigh Ann recommends:

It hit me like a ton of bricks, that I need to apply these same [Making Money 101] principles to my business. I need to budget each month and only make purchases that I can pay cash for. I must admit that I have sometimes been a little loose when making purchases for my business, rationalizing that I could “write it off.” Now, I am thinking about every penny I spend.

 I agree … 99%.

But, you should NOT be stingy about any expense that DIRECTLY helps you grow your business (that means that you can track the $1 that you spend today to at least $2 to $3 earned within your current financial period, say, no more than a few months to a year).

Because it is this thinking that will take you into:

Making Money 201 – where your business is doing better than breaking even … now it’s full steam ahead!

You are saving money and watching costs, sure. But, you have realized that there is something that you can – and should – be doing that produces a far better result than mere cost-cutting …

… that is, accelerating your income!


Cost-cutting is limited in scope … you can’t cut more than 100% of an expense.

Income-earning is unlimited in scope … the sky – nay, the stars – are the limit!

But, when the income is the greatest, you need to watch your costs even closer because bad habits – leading to hidden gotcha’s – creep in.

It is the Making Money 101 habits that will help you survive the increasing drain on your cash-flow that uncapped growth can bring.

If you do, may be one of the lucky ones who ends up in:

Making Money 301 – that idyllic stage where the business is floating in orbit, spinning off cash, controlling costs and just being … well… damn profitable!

Watch out for stagnation, though, because this is where product life-cycles wind their course, competitors come in, commodity pricing appears.

The secret to Making Money 301 is NOT to sit there for long … either:

1. Put yourself back into Making Money 201 – new ideas, new products, new markets, go off shore, become a franchisor … OR

2. Sell! 

But, it all starts with a business that survives the Making Money 101 stage … unfortunately, the odds are against you.

But, Leigh Ann has a great Making Money 101 tool to help you out:

Here is her Where do I $tand Worksheet

Why don’t you try it out?


Ferrari in Paris 

When I worked in the corporate world, we sometimes used to show little ‘coffee break’ videos just before going on break between training sessions …

… usually inspiring and entertaining. That’s what has inspired this ‘video on Sundays’ series of posts; think of it as a little ‘coffee break’ between weekly blogging sessions.

 And, thanks to YouTube I found my favorite such video:



PS The only ‘loose’ connection that I can find with finance, though, is the Ferrari that this guy was (really) banging around the streets of Paris … this was filmed on open roads and the guy, a racing car driver, lost his licence for life … apparently, red lights mean nothing to the French!

Want to see more personal finance blogs?

Here, we cover basic as well as advanced topics designed to help you make serious amounts of money over time … no scams or ‘get rich schemes’ … you have to WORK for it, Bud!

But, do you also want to see what other Personal Finance bloggers are writing about? You should …

I got an e-mail from Guy Kawasaki today telling me that he has listed this blog on his new site: Alltop.com … a nifty ‘dashboard’ that aggregates stories from all the top personal finance sites on the web and displays them on a single page!

It’s not just all about personal finance, though … Alltop has a series of pages on all topics from celebrity gossip to autos to news to ‘geekery’ (gadgets, computers, technology), and many, many more.

Check out Alltop Personal Finance, or head over to Alltop’s main page and pick your area of interest.

Let me know what you think?

What is your most valuable asset?

I just came across an old, but still very relevant post on Free Money Finance called Your Most Valuable Asset.

FMF says:

I’ve written before that your career is your most valuable financial asset. It turns out that Money magazine agrees with me. Cool!

In the May issue, Money says:

Your most valuable asset is your earning power. Invest in it.

I couldn’t agree more. Money continues:

Anything you do to increase your salary early in your career can keep paying dividends as long as you work. Take a class, pick up a certification, improve your computer skills.

Yep, I agree. A small increase in your salary over decades can really add up. Even if you have “only” 10 years or so left in your working career, it’s still worth the investment of time and money to improve yourself in your chosen field. Doing so can have a big impact on your earnings over a decade.

Now, this is great advice … but, it’s missing a little-something …

If you truly subscribe to the ‘max your career and life will be sweet’ way of thinking [I prefer the ‘ start a business or three on the side so that you can eventually ditch your career then life might be VERY sweet’ way of thinking] then I think you at least need a ‘rule’ to tell you how much of that extra income you need to save and how much you should spend.

For example, you’re probably already ‘paying yourself first’ by automatically putting aside 10% of your salary into your 401k and/or another savings vehicle, right?

Well, if you really want to accelerate to your savings goal, then here’s the secret:

 Put aside 50% of any future pay increases towards (a) debt repayment then (b) savings as well!

Now, this sounds like a lot … and, it is (which is why it ACCELERATES your savings), but you were surviving WITHOUT the pay increase, right?

Surely, you can live off 50% of a pay increase? Think of it as a slightly disappointing pay increase, but an increase nonetheless …

If you can think like this, here’s what it can do for you:

Imagine two people each currently earning $30,000 a year who put their savings into a 401k returning 8% a year and who expect a 2.5% salary increase every year; after 20 years:

The Pay-Yourself-First-Just-10% Guy saves: $165,000

The 10% + 50%-Of-Any-Pay-Increase Guy saves:  $275,000

Once you ‘get’ the idea of going into 50/50 partnership with your future self – your current self still gets to spend it’s part of the 50% ‘pay increase’ anyway it likes (!) – you will start to actively look for ways to fuel this exciting new partnership.

Here’s how:

– CREATE MORE INCOME e.g. get a second job; send your partner back to work; start a part-time business; get creative with this!

– FIND MORE MONEY: e.g. your tax refund check; spare change; Aunt May’s inheritance; lottery winnings; any ‘one off’ or unexpected few bucks that happen to come your way; try and keep your hand out of OTHER PEOPLE’s wallets, though 😉 

This is a guaranteed get richer slow’ish formula … and, should underpin ALL of your thinking from now on, otherwise you’ll just spend the profits that come from the more advanced strategies that we’ll cover in upcoming posts …

… and, over-spending will never make you rich!

Measuring my performance against the Edelman 'secrets' …

Ric Edelman book 

I’m going to do TWO things today that I don’t normally do …

1. I’m going to review a book, and

2. I’m going to do it by using a review of that book on another blog (The Simple Dollar, a Personal Finance blog that I happen to like … a lot)!


The book review outlines some of the ‘secrets’ suggested in the book … and I would like to give you some insight into how I think …

… so, here goes (everything in italics is from the blog post): 

Ordinary People, Extraordinary Wealth pledges to contain “the eight secrets of how 5,000 ordinary Americans became successful investors – and how you can too.” Intriguing subtitle. I can’t wait to dig in, so let’s get started. Looking Into Ordinary People, Extraordinary Wealth:

Secret #1
They carry a mortgage on their homes even though they can afford to pay it off.

Edelman basically argues that the concept of a mortgage being a bad thing is a relic of the 1930s, where banks would foreclose on a house on a whim, and the negativity associated with mortgages has hung around this long even though there are a lot of protections for the borrower today.

I bought my most recent house without a mortgage … I had plenty of cash, but I simply plonked it down. But, I have two rules around this:

1. The 20% Rule – never have more than 20% of your net worth invested into your house at any one time; for MOST people this means that you will HAVE to take out some sort of mortgage, and

2. Even if you meet # 1. (I do … most people don’t) don’t be afraid to use up to 50% of your home’s equity to support other buy-and-hold investments.

So, recently I took a $1 mill. line of credit on my home (about 50%) to plonk into my Scottrade account (I use margin lending in there, as well, so I am really taking some additional risk with my home equity that I shouldn’t be taking).

Secret #2
They don’t diversify the money they put into their employer retirement plans.

The subtitle struck me as quite odd at first, as it seems to fly in the face of common sense. Edelman’s advice, though, is actually pretty common – put your retirement money into a diversity of stocks. In other words, select an index fund or two of stocks in your retirement plan and just dump all of your savings into it.

Firstly, 401K’s are a tool of the poor: if you are young, you want to invest as much as you can outside of your 401k so that you can exert some control (a self-directed fund is another matter entirely – PROVIDED that you borrow money against your invested equity to leverage into investments).

And, if you are old, you should have so much money in outside investments that your 401k is just icing on the cake (I confess that I have NO IDEA how much is currently in my 401k-equivalent).

Secondly, diversification is also a tool of the poor and uneducated; even Warren Buffet recommends low-cost Index Funds over other forms of investing for the uneducated … but Warren doesn’t diversify. Neither do I.

Secret #3
Most of their wealth came from investments that were purchased for less than $1,000.

Basically, Edelman states that people who became wealthy did it not by having a ton of money right off the bat. Instead, they just invested a little bit at a time – less than $1,000 a pop. They just did it regularly.

Hmmm … this is a hit-or-miss one for me; a LOT of my money came from businesses that I started with No Money Down. But, a lot came from other investments, as well … most recently an office building that I bought for $1.4 million (25% down) that sold for $2.4 million less than 5 years later.

Secret #4
They rarely move from one investment to another.

The question then becomes what should one invest in? Edelman doesn’t offer a direct answer here, but does suggest that the only clear way to lose is by rapidly shuffling your money around from investment to investment.
The route to success is to buy and hold, not to move like a jackrabbit from investment to investment, losing most of your gains to brokerage fees and taxes.

Another strange one …. you see, to me the VERY DEFINITION of INVESTMENT is something that you buy-and-hold … that’s the strategy that I use in two different ways:

1. To Get Rich Slowly (but surely), and

2. To KEEP my money, once I’ve made it.

But, you can’t just save your way to the sorts of investments that will make you rich; you need to find the money to make those Buy-and-Hold investments by INCREASING YOUR INCOME.

Other than getting a pay rise, working overtime, or holding down 2 or 3 jobs (all of which suck, if you ask me … especially the pay rise if it requires grovelling for 18 months to get it), ONE WAY that I can think of to increase your income is to TRADE …

… that means rapidly moving in/out of ‘investments’ such as stocks (trading stocks or options) or real-estate (flipping). It’s not really INVESTMENT … if it’s RISKY, it’s BUSINESS … but you have to take some chances along the way IF you want to get rich.

Secret #5
They don’t measure their success against the Dow or the S&P 500

Instead of using various metrics like the NASDAQ to judge their investment success, they look instead at whether or not their investments are actually achieving the results they need in their life. So what if the S&P 500 has an up or a down day? What’s actually important is that your investments are giving you the returns you need

Couldn’t agree more; I have more than $1 million invested (or trading in/out) in the market at any point in time and I don’t track the indexes other than to assess the MOVEMENT of money in/out of the market AFTER the fundamentals tell me that I am ready to buy (or sell).

Secret #6
They devote less than three hours per month to their personal finances.

I think this concept relates very well to the
“training wheel” conceptI talked about a while back. Basically, Edelman is correct in stating that the people he’s talking about do spend three hours or less a month on their personal finances, but these are people who already have a firm grip on their financial state.

I’m a terrible budgeter …. I’m probably the only multi-millionaire who ever had their American Express card taken away from them for forgetting to pay the bills (really!) … not highly recommended, but if you increase your income and invest well, personal finances actually take a back seat (and, my wife now controls the houshold accounts!).

Even when I was starting out, I only ever did one budget … actually, I tracked EVERY SINGLE EXPENSE for just one month … that was enough to tell me where I was and I already knew where  I needed to go

Secret #7
Money management is a family affair involving their kids as well as their parents.

If there’s one point that Edelman really hits out of the park in this book, it’s this one. You’re doing nothing but hindering your children’s financial education by keeping them oblivious to money

 My wife and I started teaching our children about money very early and I’m happy to say that they both understand the basics, saving 50% of their pocket-money and only spending what they need to.

My 13 y.o. son seems to have an entrepreneurial-flair having his own successful eBay business (he earns more from this than his pocket-money brings in) and even runs his own books and accounts (using Quickbooks). He researched this and set it all up himself … other than gentle encouragement, I can lay no claim to his success 🙂

Both our children know that they will need to find their own way in the world … we will nurture and educate, and that’s about it (financially).

Secret #8
They differ from other investors in the attention they pay to the media.

In other words, they ignore the talking heads on CNBC or the thousands of stock tips floating around out there for the most part. Why? Because it’s information overload and it’s not particularly useful to most of the people Edelman interviewed for this book

I don’t read the financial press … too boring.

Anyway, to make money, you need to be contrarian (BUY when stuff is cheap … ) … you can only do that if you have the guts to buy when everybody else is lining the windows to jump off the ledge.

How do you match up against the Edelman ‘secrets’?

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Brip Blap beat me to the punch … and, what an important punch it is!

I came to Brip Blap’s blog because of a trackback somewhere else (I can’t remember exactly where now) but I was attracted to some of his ideas because he seems to ‘get it’.

Firstly, who or what is Brip Blap?

Brip Blap is a blogger who writes about personal finance … unlike most PF bloggers, who mostly talk about ways to save yourself to a fortune [hint: it can’t be done] he also talks about how to make money, perhaps through improving your career prospects 

I am at the other end of Brip Blap’s journey … having made it … and, I also have this desire to teach/write, that’s why I started this blog a month or so ago … as my way of ‘giving back’.

I have made a lot of money, using most of the ‘traditional’ ways (business, consulting, real-estate, investing, etc.) and I am loosely planning a book about the lessons that I have learned … this blog is a way to air some of those ideas and get feedback …

The particular idea that got me to look at Brip Brap’s blog (and, I have added him to my blogroll so that you can easily find him, and others that I like) was the one where he asked people to think about increasing their income  not (just) cutting costs …

The wrong way to think: “spend less than you earn.” If you have been reading about personal finance for any length of time, I’m sure you’ve come across this advice before. It is the wrong way to think, and it will not make you rich.The right way to think is this: earn more than you spend.

He hit that nail on the head!

There was a small book that I came across a few years ago written about this idea for business owners – I wish I could remember the name of that little book – but, Brip Blap beat me to the punch of writing about applying this simple-yet-powerful idea for EVERYBODY.

Let me summarize the concept for you:

You can’t cut your expenses and expect to get rich … you can only cut a maximum of 100% of any cost.

You can’t just save on your current income and expect to get rich … you can only save a maximum of 100% of what you earn.

But, you can increase your income even in just some small way to start … keep going, and you can earn 110%, 200%, 500%, even a virtually unlimited amount more than you currently earn …

… then, invest just a small proportion of that and you can easily be rich.

For 15 years, I saved diligently, I cut costs diligently, I delayed gratification diligently with a very poor outcome … I guess I was laying the groundwork and building some great lifetime financial habits … 

… but, it was only when I also started to concentrate on increasing my income that I made it to $7 million … and, that whole process only took 7 years!

If this strikes a chord with you, go read his post then come back here for ideas on how to apply that thinking and what to expect when you do …