A little philosophy for you from The Champ himself, for my Video-on-Sundays series … it’s only a few seconds long, and sound quality isn’t the best ….
… so listen carefully … and enjoy!
http://youtube.com/watch?v=ebu0OBa1pus
AJC.
When talking about money, and how to make lots of it, I always start by asking you to imagine your DESTINATION.
Where is your life going? What will your life have been about when it’s done?
Most people fail not because their financial goals are too big, but because they are too small …
… that’s not a misprint. Let me explain.
In 1998, I had a business that was losing $5,000 a month (after 5 years of operation … sometimes it’s a good thing not knowing when to quit!) … I was struggling to take home $30,000 a year (having given up a lucrative career paying a LOT more) … and, my wife had to work full-time to help support us.
My vision was too small …
But, in 1998 that all changed; I read a book that I highly recommend to anybody in business that showed me how to envision my life when it was DONE, and how to envision a business to support that life.
Overnight, my vision changed …
… it became big … very, very BIG.
And, that vision rang true to my subconscious and buried itself deep in my psyche … it’s still there today, constantly egging me on to my ‘new life’ … a life that has nothing to do with multi-million dollar homes and very fast cars (not that I don’t have them, and not that they aren’t VERY NICE to have) …
… but, a life that has more to do with how I USE that wealth to enrich the life of others, thereby enriching my own life in ways that I just couldn’t even imagine when I was Just Over Broke.
With that new life blueprint firmly entrenched in my little mind, almost immediately, I started taking bold (ok … scary) new steps with my business, my investments, and my life to move towards that new, big vision.
I became absolutely resolute and driven to that single-minded goal …
The result … $7million in 7 years … ethically and safely (really), and for me, in multiple streams of income all in areas that I was passionate about.
Why did this work for me? In truth, I don’t know and don’t care … it just worked!
Also, I am not a great believer in The Secret and other ‘visualize and ye shall receive’ New Age beliefs – if you could ‘dream yourself’ to $2 million, why not just imagine $2 billion and be done with it? Better yet, dream $20 billion and help Bill and Melinda Gates save the world …
If pressed, I will say that by going through this process, you find then fire up your true passion … hot passion drives massive action … massive action drives incredible results.
Simple!
So, what’s your big life vision? Your whole future depends upon being crystal clear on this …
If you are a student, you have one of the greatest assets available to you … time!
It means that you can succeed with a ‘get rich slow’ program (whereas, most of the rest of us can’t … not enough ‘runway’ left).
Just how important is ‘time’? Just take a look at this example taken straight from the Investment Company Institute‘s web-site:
The following graph shows three investors, each of whom invests $1,000 a year until age 65. However, one begins at age 25, investing a total of $40,000; one at age 35, investing a total of $30,000; and one at age 45, investing a total of $20,000. Each earns 7 percent per year and, for purposes of this illustration, the effects of taxes and inflation are ignored.
The Power of Compounding
Source: Investment Company Institute
So, if you are happy to ‘get richer than most people but slow’, here’s a super-quick 4-step program for you just because you have time on your side:
1. Get debt free … pay of those credit cards and student loans (if interest rates are super-low on these AND you like a bit of risk, keep the loan and buy and investment property instead) … look at the debt snowball for a neat debt-reduction strategy?
2. If you are hell-bent on investing in stocks stick your money in a low-cost Index Fund (it’s what Warren Buffet suggests) … if you prefer owning direct stocks, then read a book called Rule # 1 Investing by Phil Town.
3. Try and save for a deposit on a rental property (or your own home … but, it’s better to rent/own than own/own) – both real-estate and finance is cheap right now; buy and lock in for 30 years.
4. If you want to accelerate your results (i.e. ‘get rich quicker’), you need to focus on accelerating your income … start a part-time business (for you, Internet-based might be ideal!?). IF you make money, put at least 50% of it towards 1., 2. and 3.
If you do this early enough … then you just may be able to kick-back and enjoy the ride!
If making money is a journey, then it is one best broken up into three stages. The first stage is all about ‘getting your financial house in order’ …
… kind’a like packing your bags and getting everything ready for a long-journey before you even leave your house.
This (first) stage happens to also be the one that is well covered by many books (Rich Dad Poor Dad, The Richest Man In Babylon, The Automatic Millionaire, and many more) and many blogs (I Will Teach You To Be Rich, Accumulating Wealth, The Simple Dollar, and many, many more).
I have read them all and I am sad to say that not one of these will actually teach you to be ‘rich’ … but, some will set the stage …
… and, this stage is really just about paying off debt and starting a sensible savings strategy. It’s also about learning the rules about what you should buy and when and how much you should spend and save.
It’s really about ‘clearing the decks’ to lay a solid foundation for future wealth; the earlier in your life that you start this stage the more ‘runway’ you will have for letting your financial wealth really take off later.
This stage is not fun!
The tools of this stage are debt repayment strategies, tricks to save a little extra money or earn a little extra income, paying yourself first, savings accounts, index funds, and dollar cost averaging … there ain’t no ‘rich’ going on here but, it’s a start …
Keep reading this blog as I will be sharing many of these rules and strategies for breezing through Making Money 101 in upcoming posts.
And, keep coming back to this post – I will be creating a special tab for it (and it’s future ‘sister’ posts, Making Money 201 and 301) on the home page.
Believe it or not, this man went from being a total unknown to selling 1,000,000 CD’s last year …
… who is he and how did he do it?
If you want to win big in the game of life, you need to find out what it is that you are passionate about, and then go for it …
… no if’s, but’s, or maybe’s.
You can turn that hobby, talent, or passion into $1,000,000 in a year and $7 million in 7 years if you have the passion, this blog will show you how …
If the humble, ordinary, unconfident (really … he says so himself!) man in the picture can do it, then we all can! So, who is he?
Even if you already know his name, watch this YouTube Video … I can guarantee that it will change your perception of who you need to be to win in life:
http://youtube.com/watch?v=1k08yxu57NA
BTW: he went from being a complete unknown to win over $200,000 in this competition and then went on to sell a million CD’s last year …
Now, why don’t you go back and expand your Life Vision?
In my first post I briefly alluded to the 3 stages of money: I call them Making Money 101, 201, and 301.
Starting next week, I’m going to write one post a week on each of these stages …
First, though, let me tee up how I think about making money … serious money … say, $7 million in 7 years.
Making that sort of money – for most of us who don’t inherit, win, steal, speculate, gamble our way to that much moolah – is a long journey …
It’s not so bad when you consider that 99% of people can’t SAVE their way to $1,000,000 in 20 years … but, my point is that it’s still a journey that takes quite some time.
So, if you were to go on a long journey (besides taking a change of shorts) what would you need?
Three things …
1. A destination
You would need to know where you’re going … for a short, local journey, you probably need an address … for a long, global-scale journey, a country and city would be a nice start.
2. A map and compass
If it’s a local journey, you will probably need a street map … although, very simple instructions from somebody who knows the way will probably do.
But, if it’s a global-scale journey, the trip will most likely be broken down into stages for you by your travel agent, and you will need a series of ‘planes, trains, automobiles’ maps, telling you how to get from HERE to THERE.
Also, it would be a good idea to have a compass to tell which way is UP when you read the maps!
3. The Rules of the Road
Now, it would be nice to get to where you’re going without being arrested. If it’s a local journey, you can probably use common sense (although, it’s still best not to jaywalk).
But, if it’s a global scale journey, the rules may be totally different at different stages of the journey (you DO know that the Brits drive on the other side of the road, don’t you?).
Well, making money is a journey as well … therefore, you need …
… three things:
1. A destination
When it comes to money, your destination is in two parts (a) HOW MUCH you need, and (b) WHEN you need it. The when is usually in terms of WHEN you stop working, but it need not be; and the HOW MUCH is determined by how well you want to live when you get there (1 star? 5 star? In between?).
2. A map and compass
Your map will be the three stages of your financial journey (getting debt free and starting a savings plan; ramping up both your income and your investments; keeping your money once you get wherever ‘there’ is for you) and we will cover all of that over the coming weeks.
Your compass will be your Investment Net Worth (we’ll discuss the difference between this and your ordinary, old ‘net worth’ later this week).
3. The Rules of the Road
Like every good ‘rule book’ the Rules of the Finance ‘road’ is a thick one! I’ll be giving you many of these rules over the coming weeks and months in the cyber-pages of this blog; an example of a Financial Rule is the 20% rule of investing in your own home …
… there are many, many more. By learning these Financial Rules, you can shave YEARS off the time it takes you to get rich.
This blog is here to show you how!
If it is simply ‘transport’ then by hanging on to your old ‘rust bucket’ (within reason), you have made a GREAT choice!
Why?
A car is NOT an asset, it’s clearly a liability … as Robert Kiyosaki says in Rich Dad, Poor Dad, the definition of an:
ASSET is simply something that puts money INTO your pocket, and a
LIABILITY is something that takes money OUT of your pocket.
The ‘rule of thumb’ is that you should INVEST (into real long-term ASSETS) 75% of your Net Worth: a max. of 20% into your house, and the remaining 5% into your ‘stuff’ …
Should you own or rent? I have seen a lot of rubbish written on this subject … stuff like “renting is just dead money” or “a house is a liability” … so let me set you straight:
If you are just starting out, up to your eyeballs in debt, unemployed, or you just can’t afford a house right now, it’s simple: you just rent.
If you already own a house, don’t sweat it, keep owning.
And, if you are ready, willing and able to buy your first house, or you are thinking of trading up (or, down) …. here’s my advice:
Put aside the emotional decisions and just consider the financial impact, and that is: your house is the ONLY way that most people will ever get off the launching pad to financial success …
Why? Because, you are building up equity over time (even a flat or falling real estate market eventually climbs back up again) …
… but – and here is the key – ONLY if you are prepared to put the equity in your house to work for you … that means, borrowing against the equity in your house to INVEST.
Now, if you are buying a house with 10% – 20% down, this won’t be until you pay it down a little and the market picks up a little.
But, when you do build up enough equity in your house to borrow against, you’d better be prepared to do it! If not, then you are FAR better off just renting and investing the money you save on mortgage payments every month …
… if you’re not prepared to even do that, stop reading this blog … you will never be much better off than broke.
I mentioned the Spectrum research into how the Rich got rich (and, stay rich) in a recent post ( http://7million7years.com/2008/01/25/how-much-does-it-take-to-be-rich/ ).
I found some interesting data from their web-site that may encourage you to keep doing what you are doing right now (look/learn/do/win!).
First, take a look at this chart lifted right from their site ( http://www.millionairecorner.com/ ):
While you expect that Rich people know a lot about finance and investing, isn’t it interesting that at least HALF still say that they have a lot to learn. This is called having a Beginner’s Mind … the most successful people in every avenue of life (especially those who have become Rich) have it.
Now take a look at Spectrum’s next chart:
… it seems that the Rich do look at blogs! Even better, the Richer they are the more they read (or, is it the more they read, the Richer they get?).
Now, take a look at this chart from the same site:
It seems that as well as looking at Blogs (and, other sources of financial advice) they are willing to keep learn‘ing … you would think that once you get to $1M – $100M you would feel like you know it all … apparently, not so.
I’ve always had a fascination for learning (I read a LOT more ‘how to’ books than I do fiction), and it seems that I am not alone amongst the Rich. But, I had this habit BEFORE I became Rich … I am sure that this was a major factor in my financial success. What about yours?
In the end, though, it’s the hard work … the do‘ing … that you put in that counts (see the chart above). Doing means taking risks … and, accepting a measure of good/bad luck along the way …
But, in the end, if you look/learn/do, you just have to Win!
If you read my little bio, you will see that I have made a lot of money (really!), but I made it BECAUSE of my passion to learn about money and teach others. I read a lot, experimented a lot, tried lots of conventional (and unconventional) wisdom.
The result: I made 7 million in 7 years™ … and, I started out broke (actually, worse, with a failed business and owing $30,000!).
It’s unfortunate, but I have to brag a little in order to get my message across:
Which is, I made 7 million in 7 years following a system – a roadmap is an even better term – that you can follow, too. If you do, you have every bit as good a chance to beat my record … and, I will give you all of the rules that I found that will help speed you along the way …
I had to find these rules by research, then trial and (lots of $$$ and time-wasting) error; you won’t have to … you will have a true Roadmap to Riches™
… even if you don’t become rich, you will become FAR better off than those around you, because you will have the rules and they won’t. And, even if they did, they won’t follow them, but you will, won’t you ???
So, my passion is money. Making it, but more importantly, helping other people to make it as well. I made a ton, and this is blog (and, then my book) will be my way of giving back (of course, I donate to charities, as well).
There will be no ‘get rich’ quick schemes …. but, no ‘get rich slow’ schemes, either. Hell, who wants to save their way to $1,000,000 if it’s going to take them 30 or 40 years?! [Hint: I will teach you what and how to save as well … but, that’s only the first step, like taking off in a plane …. there’s still a loooot of blue skies ahead …).
So I’lll just be sharing the lessons that took me from broke to 7 million dollars (in the bank!) in just 7 years.
If I am the real deal (I am) why would I bother writing this blog?
It’s a good question that actually has an easy answer: in 1998, I was broke running a struggling business (it was losing $5k – $10k a month; luckily I had another business making $5k – $10k a month to keep me Just On Broke) and my wife was the breadwinner for me and our two babies.
Then I read some books … and, the ideas I picked up helped me to get back on my feet. I started making money, but had no idea how to hang on to it and make it grow even faster.
I found that there were no books that would LAY OUT THE ROADMAP to take me to the next level … getting rich, and more importantly, staying rich!
So, I started to do my own research and experiment on myself, and I got lucky (I made money … lots of it) …
… what kept me going through the hard times was the the idea that I would then help others do the same.
By writing this blog now, I’m giving back … and, if I don’t have a blast doing it, then I’ll stop … because I can.
What next?
Well, books like Rich Dad, Poor Dad and The Richest Man in Babylon were breakthroughs in their time, but very basic … they are like Making Money 101™.
So, I am taking all the lessons that I have learned, together with the lessons from others to write a better book – you can call it Making Money 202™ (I’ll let you know the real title later) – and, sharing them with you through this blog, as I research and write it.
The book will be about how to get ready to make money, how to make money (and, lot’s of it!), then how to keep it (something that many lottery winners, celebrities, and atheletes, don’t seem to know how to do) …
… it will be the first book to lay out a real Roadmap to Riches … not just my way, but in any way that feeds your passion.
Let me know what you think as we go along … not only the good, but the bad as well … who knows, you might just come up with something that should be included in the book …
… but, what I’m really banking on [pun intended] is that you will also make 7 million in 7 years … for real!
Stick with me … OK?
