Category Archives: Rich

I’m quite happy in my mansion, thankyou!

Posted on by
16

This is the view from my tennis court (taken just as the house was almost ready to move into). Which neatly brings me to Budgets are Sexy, who asks: “do you you still want to live in a mansion?”

D’uh, yeah!

The problem is that the example that he cites is so far away from being a mansion, that it barely qualifies as my second house which, BTW, I am still trying to get rid of!

On the other hand, this guy is carrying a monthly mortgage payment of $2,200 which, at 4.75%, means roughly a $450k loan, plus his equity of $500k (now) to $1.2million (pre bubble) means that his idea of a ‘mansion’ is a house b/w $1 million and $2 million. About the same value as my house in the USA.

Oh, and I paid cash for both of my houses.

The point here is not to brag, that would be unseemly and [AJC: I know it’s hard to believe from what you read here] is a little out of character. The point is to set your expectations, particularly if your Number points you to a similar $7 Million 7 Year lifestyle.

Look, a $1 – $2 million house is nice, and in a poor area, where land and building costs are cheap, it may very well qualify as a ‘mansion’ …

… but, in a reasonable area, I don’t even think that my new house qualifies as a ‘mansion’ – well, IMHO, barely – yet it cost $5million+ and has a tennis court, heated swimming pool, home theater, sauna room, and each bedroom has it’s own study and en-suite!

Having said that, I agree that the running costs are huge: you can’t wash this many windows and glass balcony panels yourself (we spent $50k+ to install the glass panels plus another $70k on glass windows and doors, alone); you can’t clean a house this big yourself (we have a cleaning lady almost 2 full days a week); you can’t garden a place this big yourself (well, you probably could, but I hate gardening); and, imagine the cost of heating, cooling, and lighting the damn house.

But, if you have the money to live your Life’s Purpose (without ever needing to work again), you give back in more ways than one, and you still have enough money left over to buy the house of your dreams … then I can highly recommend getting the mansion …

… so far, it’s everything it’s cracked up to be 🙂

If you’re well-heeled, you shouldn’t care!

Posted on by
4

If you’re not ‘twittering’, you’re missing out …

I always thought that Twitter was about “just got back from the dentist and he said “no cavities” … whoohoo!” or just about advertising your latest post. Well, it is both of those things … but, not anywhere near as much as it used to be. At least when it comes to ‘following’ (a Twitter term) personal finance writers.

Now, it seems to be more about genuine subject-matter-related info in small bites, as well as saying “hey, I saw this cool article on …”.

Now, that’s useful – even to me – and it will be very useful to you.

If you like, you can start by following me at http://twitter.com/7million7years … I promise that it will never (OK, hardly ever) be mundane 😉

______________________________

Which brings me to a recent tweet from WellHeeledBlog, whom I’ve just started following:

According to Meriam Webster’s online dictionary, ‘well-heeled’ means: having plenty of money.

My question is: if you are well-heeled why do you even care that Vanguard Group lowered the minimum entry level for Admiral Shares? Of course, WellHeeledBlog may not care, but thinks that some of their readers may and is, therefore, providing a useful reader service.

My point – because I like and follow WellHeeledBlog and will continue to do so – is that I don’t care and neither should my readers … long-term. Many of you may care – today (perhaps, because you are only starting on your path to wealth) – but, long-term you should not care, simply because these sorts of money tips will not make you rich.

My blogging – and, twittering – niche is to take my readers to $7 million in 7 years (or some other Large Number / Soon Date).

On the other hand, I started $30k in debt and so will many of my readers. So, this type of money-saving info is useful in the beginning of your financial journey … but, not for long – and, not for the important parts of your financial journey.

Fortunately, that’s where I step in …

You see, this sort of ‘beginner’ financial info is available everywhere, and I don’t see the point of simply rehashing stuff that you can find elsewhere.

If you do need this kind of entry-level personal financial advice, go elsewhere, find the info you need, save money, and get yourself (partially) out of debt, then come back here to find the reality of how to get rich.

That’s my niche, and I hope you are finding it as enjoyable/useful to read as I am in writing it? 🙂

Millionaires aren’t rich!

Posted on by
16

I was snooping around Watson Inc’s blog … you know, just stopping by for a friendly chat (whilst really checking out the competition) and, thought that I should just add my 2,000,000,000 cents worth to his surprising ‘facts’ about millionaires [my quotation marks]:

– I didn’t inherit my money – I might, but one of the reasons that I’m self-made ‘rich’ is because I always expected (still expect) this little family nest-egg to be squandered well before it hits me.

– I don’t feel rich – I did for about one nano-second after receiving my second big payout, but the current financial crisis hit pretty soon thereafter, and reality set in.

– I don’t have a high-paying job – in fact, the only time I was paid more than $60,000 a year was about 8 years BEFORE I started my $7 million 7 year journey, and again AFTER, when I formed my US joint venture and realized somebody else was actually picking up 49% of my ‘tab’.

– I drive fancy cars – D’uh yeah! What’s the point of being rich if you don’t get the vroom and the bling?!

– I don’t hang around the golf course all day – I struggle to find time to: play golf; spend more than 1/2 to 1 mid-week day with my wife; a 1/2 day playing poker (yes, it’s true that I’m a degenerate); and, so on. I’m too busy with my blogs and projects … and, travel!

– I am not an elitist – if I was, would I be ‘talking’ to you? 😛

…. most importantly, I am definitely NOT a millionaire.

Millionaires can’t afford to do/be any of the things that Shawn suggests … I think he’s actually referring to us multi-millionaires 😉

By the way, I encourage you to pop over and read the comments on this particular post; Shawn and I had a very interesting discussion about the practical nature of wealth … check it out here.

He’s not THAT JD Roth

Posted on by
2

The ‘well known’ JD Roth was a game show host (and, now producer of the hit “The Biggest Loser”), but our JD Roth is a different guy, and the name behind the über-successful personal finance blog: Get Rich Slowly.

It’s a great Making Money 101 blog, and better than mine for that stage of your own personal financial journey …

Because of the name confusion, ‘our’ JD sometimes gets invited to audition for movie parts (you can read his latest such exploit here … it’s really quite funny):

Here’s the thing: I’m not that J.D. Roth. If I were that J.D. Roth, I’d be rich! I wouldn’t have to write about building wealth.

But, that’s what gets me … the TV-famous JD actually IS qualified to write about wealth because he presumably is … well … ‘wealthy’.

Whilst blogging-JD Roth DID pay off copious quantities of debt, and did make himself financially-free of a boss (maybe, not yet free of his blog, which probably generates a decent chunk of his income), I’m not really sure that qualifies JD to actually “write about building wealth”. Reducing debt … yes. Building income … yes. Building wealth … hmmmm.

On the other hand, Ramit Sethi is either already rich, or well on the path with his entrepreneurial side-ventures (eg PBwiki.com), so he just may be able to say – hand on heart – “I will teach you to be rich” …

… I know I can. And, will! 🙂

What are your financial flashpoints?

Posted on by
7

OK, I was all set to tell JD Roth (at Get Rich Slowly) that wealth comes from your actions, not from some ‘magical millionaire mind-set’ when I clicked PLAY on this video by the author of a book that JD was reviewing on his site …

… the video actually hit home!

I remember some distinct financial flashpoints that helped to set me on my financial path … for better or worse:

1. My dad waking me up in the middle of the night to go and watch our shop burning down

2. My dad telling me our (bad) financial situation

… not one event, but a series with the common theme: we were living beyond our means.

This hit home, and I resolved never to be a financial burden on anybody …. never to hold my hand out … and, so on. From a young age, I held down after school jobs, bought my own clothes, saved up for my own cars, paid for my own trips, and so on.

This is not unusual; many – most – of you probably had to do the same. And, we were not totally ‘poor’ … my dad could eventually solve most of his financial problems by going to other, wealthier relatives for hand-outs.

But, what made it a little different for me was that my dad hid all of this from my mother and my sisters … THEY believed that we lived a ‘normal’ upper-middle-class lifestyle. I actually lived in a different ‘financial house’ to the one in which they lived, even though we shared the same 4 walls!

No doubt, these experiences go a long way to explain why I am independently / self-made wealthy today, and to this day, the females in my family still live off hand-outs.

Yes, there are financial flashpoints that help to explain my ‘wealth motivation’, maybe you would like to share yours?

A couple of reader e-mails …

Posted on by
10

I like receiving questions / comments, etc. via e-mail, even if it’s not always flattering, like this one from ‘hardtop’:

Been reading your website for a while and your posts. What you share is nothing new.  Just the same recycled material that all the “guru” financial “experts” share with their flock. None it it will make you rich, nevermind 7in7. Becoming rich is more about being in the right place at the right time (luck) with the right product and enough capital. One could follow yours and similar advice for years and never get rich. Keep up the good work.  🙂

Of course, since ‘hardtop’ has been reading my website for a while and my posts, he should know – as my regular readers already know – that I hold totally opposing views to many gurus such as Suze Orman, Dave Ramsey, and Ric Edelman.

But, I do admit with great shame that I have ‘recycled’ material from Robert Kiyosaki, Michael Masterson, and Phil Town 🙁

Of course, it was very specific information, with the source, hopefully, credited 🙂

And, while I do agree that it helps to be “in the right place at the right time (luck) with the right product and enough capital”, I had to create the ‘right’ products for the businesses that helped to propel me to $7 million in 7 years,  as well as creating a market for them – without ANY outside capital – and, I had to commit to moving countries … and, putting EVERYTHING that I had on the line to get there!

[AJC: Insert favorite inspirational quote about making your own luck, here]

Oh, and before then, instead of spending my meager profits, I invested them in real-estate.

I guess we can put my success down to luck, after all 😉

Panning for gold …

Posted on by
Reply

[BEGIN Message from our Sponsor]

Some minor changes to the 7million7years format:

Previously, I had been trying to post to a Monday/Wed/Thur schedule PLUS a video on Sunday. Unless I really find a video that knocks my socks off, I’m going to drop my Sunday video (for now) and shift my posting schedule to Mon/Wed/Fri each week.

I should also point out some key differences between this free blog and my paid membership site (7m7y.com): my blog (i.e. the site you are on right now) is much more ‘chatty’ and random than my membership site; my blog simply reflects my thoughts, feelings, and experiences gleaned from my own journey from $30k in debt to $7 million the bank in 7 years.

My journey – hence, what I share on this blog – is absolutely authentic and I believe that there is real gold to be gleaned simply by reading this blog 3 times a week.

IMHO, it’s the best 6 minutes that you’ll spend each week, besides your love life 😉

I liken reading this blog regularly to wading in a shallow stream and panning for gold: stand there long enough and you get what you need and, hopefully, enjoy yourself in the process. But, don’t expect instant results …

On the other hand, my NEW membership site (The $7 Million 7 Year Wealth System) is a complete course on wealth; if you’re a regular reader of this blog you’ll immediately recognize the main modules (Finding Your Number, Making Money 101, Making Money 201, and Making Money 301) but it’s covered to a depth that this blog simply doesn’t – and, can’t – go.

And, I’m building it to be a true step-by-step course to fulfiling YOUR financial destiny.

BUT, I don’t advertise on this blog, so the only way you’ll hear more about the course, is by subscribing to my free MONTHLY newsletter – using the form in the right-hand side-bar [see right ====>].

[END Message from our Sponsor] 😛

Speaking of Billionaires …

Posted on by
2

Where I fear to tread, Bargaineering boldly ventures; proudly proclaiming The Billionaire Secret: Avoid Ordinary Income, Acquire Capital Gains.

I won’t presume to tell you anything about being a bil-yun-air until I are one, but that doesn’t stop others from trying; Bargaineering says:

The key to building wealth is to build or buy an asset that can appreciate in value and/or generates passive income. The key to building or buying an asset that can do that is to convert your labor into capital (money). This is why saving for retirement, saving for a home, and saving in general is such an important piece of your personal finance plan. This is the billionaire secret because this idea is well understood by people who are wealthy. They see that capital gains taxes are much lower than ordinary income, that’s why Warren Buffet pays lower tax rates than his secretary. Capital gains are taxed at 15% for 2010 while the 15% tax bracket is the second lowest federal tax bracket (for those earning up to $34,000). It’s a no brainer, you want to transition, as quickly as possible, from ordinary income to long term capital gains and dividend income.

Have you ever seen those magic shows where the magician pulls some random guy out of the audience and gets him to try and copy what the magician is doing?

Presto!

The magician accomplishes some amazing feat and the other guy (gal?) ends up looking like a shmuck …

Well, that’s kind’a like what’s happening here – in fact, with most PF authors who write ‘get rich’ stuff. They are working by what they THINK they see other (real millionaires and billionaires) doing.

And, they see Warren Buffett playing with capital and saving on taxes and … presto!

“Convert your labor into capital (money)” and “capital gains taxes are much lower than ordinary income”, so “it’s a no brainer, you want to transition, as quickly as possible, from ordinary income to long term capital gains and dividend income”.

So, it’s a no brainer that you do all this (because the Billionaires DO do all of this, I think) and you’ll be standing there in 5 to 10 years as a poor shmuck.

Why?

You’ve missed the point entirely: how the trick is done, because it’s done behind the scenes … Bargaineering can’t really see it and neither can you.

Not because these billionaires are hiding anything (well, they probably are hiding at least a little) – unlike the magician who can’t afford to tell, not even once – but, because they have much more important things to do than write books and blogs.

So, from a multimillionaire’s perspective rather than a billionaire’s, let me share what I think is going on:

1. While you are trading hours for $$$ you lose

This is why I chose NOT to become a highly paid consultant, way back when I was a world expert (speaking tours and all) in my little niche. Don’t trade a limited commodity (time) for an unlimited one (money); you only have 40 to 60 hours a week to trade, no matter how much per hour you think you can pull, yet money is just bits of paper that Uncle Sam prints by the trillions.

Fortunately this one is simple: start a business; start investing … make your little bit of time and money work as hard as possible, until the money – on its own – starts to make more money for you. I think you can extrapolate?

2. Capital is better than income

But, it’s not for the tax-advantages … I don’t do anything BECAUSE of the tax advantages (for one, Uncle Sam loves to change those rules at the drop of a policy change); I simply take ’em when they come.

But capital is a tool for creating income; it’s a little like that time/money thing. The best you can do is create your perpetual money machine: use your income to buy a little capital (real-estate is nice) which generates more income (from rents, after mortgage and other costs) which you pump back into buying more ‘capital’; repeat until rich!

Finally, Bargaineering says:

While the 2% you can get at a high interest savings account isn’t going to set you for retirement, that income represents your money working for you. The problem with this approach, at least for the long term, is that interest income is considered ordinary income. It’s taxed at the higher rate, which makes it a bad idea.

Do I really need to explain why the problem here is the 2%, not the taxation rate?

None of this get rich(er) quick(er) stuff works, if you don’t get your annual compound growth rate to infinity and beyond … well, at least to 15%+++ 😉

What it takes to be a Billionaire ….

Posted on by
9

I feel so privileged to be in the blogging company of a billionaire …

Guerrilla Billionaire [AJC: who, presumably is so humble that he doesn’t even pay $12 at GoDaddy for a real domain name, prefering to use: the free one provided by Typepad … so humble, it brings tears to my eyes] offers a course on How to Become A Billionaire.

Thankfully, he also provided a link to an article written by a guy who interviewed a REAL Chinese billionaire 5 or 6 times:

It seems that this Chinese Billionaire’s ‘secrets’ are along the lines of being humble (he started as a peasant boy), being nice to everybody (you never know when the next peasant will become your competitor, financier, or business partner), being scrupulously honest (apparently, there’s a way to be unscrupulously honest that, so far, I am blissfully unaware of), and to leave plenty of meat on the bone for others.

Of these, perhaps the last is the only ‘real’ secret that I can see in all of this (5 interviews and no secret business or money management techniques?!) … or, at least the only one (other than being honest) that I can relate to:

In my latest property development deal, I am sharing 25% of the project profit (plus a $200k fee) to my partner who is essentially doing nothing other than project management … he’s not putting a penny into these deals (I’m paying him $200k + 25% on each): I’m funding 100%.

I could hire an experienced building project manager for less than the $200k fee alone, yet I am potentially giving away millions to this guy.

Why?

Well, part’s the ‘honesty/ethics’ bit: he did find me one of the pieces of land that I aquired and pointed me towards the real multi-story condo development potential of the other (I had a much less lucrative project in mind); not to mention, he helped me with the rehab of my house.

But, that’s not quite the full story: while I don’t normally like partners – in fact, have never had one before – this is a whole new thing for me … I know nothing – nada – about property development, having always been a buy-and-hold guy. Again, I could have bought in the expertise, but that may not be the same as having somebody that I can (hopefully) trust who now has skin in the game.

We shall see if this strategy works; and – given how much I have already learned (property development is EASY) – whether I will go it alone on any future projects.

But, there’s a LOT to be said for not looking at how many beans are on the other guy’s plate: if you’re hungry, and you’re also eating beans, who cares?

Oh, as to the billionaire course, I won’t be taking it – even though I probably need an instructor for Making Money 401.

Fortunately for you, you already have a bona fide multimillionaire to guide you through MM101, 201 and 301 …

… even if I’m not very humble – at least as far as this blog, using my semi-anonymous AJC identity, goes,  😉

The much maligned Robert Kiyosaki

Posted on by
13

Robert Kiyosaki is famous (or infamous, depending on your viewpoint) for his break-out book: Rich Dad, Poor Dad.

Whichever way you happen to lean on this subject (and, please feel free to share!), I think that he deserves to be congratulated for thrusting personal finance back into the spotlight, and he equally deserves to be admired for his ability to parlay that first success into a personal finance publishing empire that includes 10 to 20 books, a few games, and so on.

In fact, RDPD is one of the very first books on personal finance that I ever read, and is certainly the book that inspired me to look into the field very deeply.

It’s unfortunate, then, that Robert Kiyosaki has managed to build up both a cult following and a cult anti-following (?!), neither of which I ascribe to.

Jake says, somewhat, tongue in cheek:

Ahh, so you will now renounce your belief that Kiyosaki is not a quack? :)

Abandon the dark side…

Actually, Jake, I’ve never commented on RK’s quackiness of lack thereof 😛

All I’ve said is:

1.  His book – at the time – inspired me to look into the field of personal finance a LOT further.

2. I like RK’s definition of liability v asset (albeit, not technically correct, he says an ‘asset puts money in your pocket, and a liability takes money out’. Neat!).

3. I think that RK became rich because of his book, and was worth ‘only’ circa $1.5 mill. (give or take $500k) before.

I base this last assessment purely on a statement he made in RDPD (or one of his later books, perhaps Cashflow Quadrant? … I’m working from memory, here, as I have filed his book away somewhere) that he ‘retired’ to write that first book (or was it to create his board game?) on passive income of $100k p.a., driven primarily by real-estate.

That’s pretty much it!

But, and this is important, realizing that a lot of these personal finance gurus – whether well-meaning and genuine in their belief or out-and-out scammers, scoundrels, and liars – actually made their real wealth, if at all, AFTER (or because) they wrote their books …

… I firmly resolved that I would study the field of personal finance, apply what I learned, and (hopefully!) become rich in the process, THEN write about it from the standpoint of a REAL self-made, multi-millionaire entrepreneur and investor.

This blog is the result 🙂