By Jennifer Lancaster
It’s a long lesson, but to see our money grow rapidly, we must first mentally prepare, learn, and realise the power of the gap. Of course, there are a lot of gaps that you’re probably thinking of: the gap between rich and poor, the gap in our bank accounts, the gap in our financial knowledge.
The importance of this gap first dawned on me as I read all the personal financial media I could find around two years ago. What Gap? The gap between what you earn and what you spend.
Have you tried sticking to a budget? “I tried that and it’s no fun”, you say? Would you consider saving 12 years (and over $100,000 in interest) off a 25-year home loan worth it? (Example assumes $4,000 per month net salary in account, $1,600 spending). A line of credit, or equity loan, is one reason to budget, but it really comes down to how you manage your gap. Without being mindful of your expenses, you will never be able to get ahead on a line of credit loan.
The difference between a wealth mindset and a struggling mindset is one of priority. Take our family’s unique circumstance: our income is about to nearly double thanks to my husband’s business success. Faced with this exciting prospect, many people would be planning purchases they had put off, holidays, car upgrades or second car, and have a distant goal to save the rest. Our challenge is to save the entire amount we do not usually get. Not only save, but to make it work harder in an accelerated growth plan. Our goal is to save close to $60,000 for a house deposit in only 12 months.
How does an ordinary housewife set up such a deal? I decided we would do well to invest in Property Securities (unlisted) and picked the best-performing Australian fund over the past 3 years. I know all the pundits tell you not to pick on past performance, but in this instance it was a good choice as these types of funds have only about one negative year in 20, and this one had steady growth.
Investing $3,500 per month combined with a regular monthly margin loan of $1,000 through an online discount broker, we will be able to set aside $39,500. The broker also refunds the 4% entry fee. After compounding, paying back loan and interest (not counting tax deduction), we will have around $62,000 (at 37% growth). So there we have our house deposit.
I am not saying that this is the only path to wealth, and I know we are fortunate not to really need the second wage, and even more fortunate that this fund did even better than projected. It is a calculated risk. But I am saying that putting some time into this sort of planning really could set you up for life.
You want to know something really wild? You can almost be a millionaire inside 10 years, without headaches or lottery tickets. Say you decide that you’re going to delay gratification for 10 years: no credit cards, no personal loans, no car loans, no flash new gadgets unless it’s budgeted for. You contribute $1,000 per month to a proven property or other fund, you borrow another $1,000 per month, (50% gearing ratio) and returns are kept at 23% after fees, over 10 years. To keep up this return, research, monitoring and switching occasionally may be necessary. After 10 years, starting with $1,000, you’ll have $857,700 (after paying back your loan). This is more value than the investor who carefully saved $2,000 per month for the same length of time and borrowed nothing. It represents a 514% return on equity. Ah, the miracle of compound interest.
If you want to know how I worked this all out, it’s a margin lending calculator at infochoice.com.au (Calculators> borrowing to invest > savings gearing calculator).
Some of my friends think saving and investing is beyond them. Well, living off a pension when I’m 65 would be beyond me; I like my luxuries and I intend on having them. Later.
Friday, February 23, 2007
Friday, February 16, 2007
Why the Rich Keep Getting Richer
By Aaron Kater
Rich people: fortunate, lucky, selfish, and arrogant? Or highly educated, caring, brilliant individuals? Becoming rich isn’t hard, but it does require a bit of time and knowledge. Having time to get rich, educating oneself, and buying assets are the three key factors in attaining untold wealth.
Rich people usually either have or make time to get rich. Most people that now own huge mansions, have wonderful riches, and drive the nicest cars usually begin taking the road to riches in their spare time. One plan, the most common, is to work at a low-risk, steady job until one has enough money to invest in something that will feed one for the rest of their life. But before one can invest in anything, one first has to educate oneself.
Although the best way to educate oneself in a particular investment is to have a mentor, and thereby gaining valuable hands-on experience, another excellent way to do this is to listen to tapes and CDs and to read books on the subject. I have done both, mainly pertaining to real estate, but also I have read a wonderful book about making money on the Internet, called Multiple Streams of Internet Income, by Robert Allen.
Lastly, after creating time to get rich, and educating oneself, one simply MUST buy assets that will create money for one, and not liabilities and toys such as a new car every other year, and boats. These come only after one can prove that he is capable of handling and keeping money. Simply put, according to multi-millionaire Robert Kiyosaki: “Assets will feed you, and liabilities will eat you.” An example of an asset is a rent-house, or stocks and bonds in a certain company. Only, that is, if the company is good and the stocks are ultimately going up in value.
In conclusion, we see that the three most important ways the rich keep getting richer are: having or making time, subject education, and buying assets. These are the key factors influencing wealth. I personally plan on educating myself in real estate, as it seems the simplest and safest way of getting rich.**
**Note: If you’d like to use this article, feel free to do so, but please remember to include this message, and my resource box in every copy. Thank you!
Rich people: fortunate, lucky, selfish, and arrogant? Or highly educated, caring, brilliant individuals? Becoming rich isn’t hard, but it does require a bit of time and knowledge. Having time to get rich, educating oneself, and buying assets are the three key factors in attaining untold wealth.
Rich people usually either have or make time to get rich. Most people that now own huge mansions, have wonderful riches, and drive the nicest cars usually begin taking the road to riches in their spare time. One plan, the most common, is to work at a low-risk, steady job until one has enough money to invest in something that will feed one for the rest of their life. But before one can invest in anything, one first has to educate oneself.
Although the best way to educate oneself in a particular investment is to have a mentor, and thereby gaining valuable hands-on experience, another excellent way to do this is to listen to tapes and CDs and to read books on the subject. I have done both, mainly pertaining to real estate, but also I have read a wonderful book about making money on the Internet, called Multiple Streams of Internet Income, by Robert Allen.
Lastly, after creating time to get rich, and educating oneself, one simply MUST buy assets that will create money for one, and not liabilities and toys such as a new car every other year, and boats. These come only after one can prove that he is capable of handling and keeping money. Simply put, according to multi-millionaire Robert Kiyosaki: “Assets will feed you, and liabilities will eat you.” An example of an asset is a rent-house, or stocks and bonds in a certain company. Only, that is, if the company is good and the stocks are ultimately going up in value.
In conclusion, we see that the three most important ways the rich keep getting richer are: having or making time, subject education, and buying assets. These are the key factors influencing wealth. I personally plan on educating myself in real estate, as it seems the simplest and safest way of getting rich.**
**Note: If you’d like to use this article, feel free to do so, but please remember to include this message, and my resource box in every copy. Thank you!
Friday, February 09, 2007
The Second Golden Key to Building a Multimillion Dollar Empire
by: Matt Bacak
Are you an entrepreneur that has started a business? Do you want your business to not only make a profit, but become a multimillion dollar empire? Do you have the drive and passion to push your business to the number one spot and make millions? If so, then you need to understand and implement the seven golden keys to building a multimillion dollar empire.
This article describes the second golden key to building a multimillion dollar empire and why you should apply it to your business. This information is the nuts and bolts you need to focus on. Take a hard look at your business to make absolutely certain that you are implementing this golden key.
Golden Key #2: “Have a System.”
Thriving, multimillion dollar empires are the result of a systematic business model. These systems are not merely good, but are exceptional and top of the line. You need to create a system for your business to ensure that you are earning as much profit as possible.
Creating a business system means that you build and implement systems for every single part of your business. You need to create a system to leverage your time, money, and assets. For example, you need a system for your client list so that you can leverage it when necessary. You need a system for your manpower. You need a system for your marketing. It is vital to have a system for every niche element of your business.
What is a business system? The most effective and profitable business system is one that has a residual component. For example, perhaps you currently are a public speaker. You make money each time you speak. Therefore, on the days you don’t speak you don’t make money. What happens if you become sick and are unable to give a seminar or speech? In this case you would not earn any money. Therefore, you need a residual component to your business system that enables you to earn money automatically.
Residual components for earning include auto responders and lead generation systems. These systems work automatically and bring the profit to you instead of you having to always find the profit. This type of system works for you. So you will be making money even when you are sleeping or home sick in bed.
Find systems in your business area that have proven results. Take these successful systems and tweak them so they fit your business needs. Make sure that you follow systems that are currently being used by entrepreneurs that have actually made money with these systems. Make sure not to listen to someone who just read a book about a system, but hasn’t actually implemented the system.
Spend time creating your business system and watch your multimillion dollar empire grow in no time.
Are you an entrepreneur that has started a business? Do you want your business to not only make a profit, but become a multimillion dollar empire? Do you have the drive and passion to push your business to the number one spot and make millions? If so, then you need to understand and implement the seven golden keys to building a multimillion dollar empire.
This article describes the second golden key to building a multimillion dollar empire and why you should apply it to your business. This information is the nuts and bolts you need to focus on. Take a hard look at your business to make absolutely certain that you are implementing this golden key.
Golden Key #2: “Have a System.”
Thriving, multimillion dollar empires are the result of a systematic business model. These systems are not merely good, but are exceptional and top of the line. You need to create a system for your business to ensure that you are earning as much profit as possible.
Creating a business system means that you build and implement systems for every single part of your business. You need to create a system to leverage your time, money, and assets. For example, you need a system for your client list so that you can leverage it when necessary. You need a system for your manpower. You need a system for your marketing. It is vital to have a system for every niche element of your business.
What is a business system? The most effective and profitable business system is one that has a residual component. For example, perhaps you currently are a public speaker. You make money each time you speak. Therefore, on the days you don’t speak you don’t make money. What happens if you become sick and are unable to give a seminar or speech? In this case you would not earn any money. Therefore, you need a residual component to your business system that enables you to earn money automatically.
Residual components for earning include auto responders and lead generation systems. These systems work automatically and bring the profit to you instead of you having to always find the profit. This type of system works for you. So you will be making money even when you are sleeping or home sick in bed.
Find systems in your business area that have proven results. Take these successful systems and tweak them so they fit your business needs. Make sure that you follow systems that are currently being used by entrepreneurs that have actually made money with these systems. Make sure not to listen to someone who just read a book about a system, but hasn’t actually implemented the system.
Spend time creating your business system and watch your multimillion dollar empire grow in no time.
Friday, February 02, 2007
Life Is A Test?
by: John Perry
I rarely ever remember a dream. Even when I can remember what I was dreaming about when I have to get up for a drink or bathroom break in the middle of the night, I have forgotten all about it by morning.
However, last night I had a dream that made me analyze my life and my thought processes on a day to day basis.
I was dreaming about taking a test. I am not sure the subject of the test. I do remember feeling under pressure and I was struggling a bit with the content of the test.
Now, I have taken my share of tests in the past and can recall having these types of dreams while in college; but, why now?
I jotted down a few notes before going back to bed and did my best to decipher this brain spark this morning.
I am into several projects right now in which I am under the microscope, so to speak. But, am I? Is this all in my head? Do I bring all this pressure on myself?
Probably.
I try to be the best I can be; mentally, physically, and financially. I try to learn as much as possible to improve my abilities in these areas. This is great as long as I don't spend so much time trying to improve me that it harms my life in these same areas; i.e. stress, family, friends, health, etc.
We all see the "burn-out" in the self-improvement entrepreneur; the sacrifices made in the "important things" in life such as relationships and peace of mind.
Peace of mind should be a top priority for mental, physical, and financial success. Living life as some sort of constant test will hamper this process.
Realizing that progress is a "you vs. you" phenomenon and that you don't have to please someone else on a day to day basis is a great start.
Bryan Tracy, in his audio series from Nightingale Conant entitled "Action Secrets for Personal Achievement," talks about the need for certain people to get the approval of others. He calls this a symptom of Type "A" behavior.
Here are some of the other type "A" symptoms:
Having a sense of urgency to do more and more in less and less time.
Volunteering for more and more work at the office.
Feeling under pressure to get activities accomplished.
Being obsessed with your performance and having high standards for such performance.
The type "A" personality can't relax and enjoy an accomplishment, they feel like they have never done enough.
Compare self with others.
More concerned with things than with people.
Brings home work.
Talks about the boss, what the boss said, what the boss did… wants to please the boss at all times.
Has a sense of hostility towards those he or she feels to be competing against.
Type "A's" cannot admit that they are not in control.
If you fall into any of the above categories, making a decision to change may be a great first step. This decision involves trying to relax and still be productive and effective without the added stress we type "A's" like to impart.
There are two things that have worked in the past for me (and my clients) that I am going to focus on after this "wake–up call."
One is a daily exercise plan. Even when I am on the road, I usually do some exercise daily, but, there are times I get in a rut and don't focus on my planning and execution of a said workout. A daily routine helps relieve stress and will bring out creativity and problem solving abilities like no other activity!
It is a "reality check" for me as well. Things are brought into a better perspective after a good workout, no matter how long the workout is.
This is Stephen Covey's take on exercise (from his book The 8th Habit): "I am convinced that exercise increases our own sense of self-control and self-mastery, which enhances the totality of our lives and truly enlarges the space between stimulus and response."
The second concept is practicing daily solitude. This could be a twenty minute walk, a power relaxation/almost nap, hanging out on a park bench, etc. This is a time to let your mind "go" and let your subconscious work on goals, problems, and/or ideas that are filling your head - a "mind-cleansing" if you will.
I try to do two, one-hour solitude sessions per week to let my subconscious mind take over and do its thing for me. This is a time when I just sit back and take in the world, usually outside in a fairly secluded place without interruptions. I sometimes think about a couple of goals or issues in my life ahead of time, then sit back and let my brain work on things.
I tend to find some answers to problems as well as some pretty great ideas to take back to work with me. They not only help me achieve goals, but relieve stress at the same time. These two activities alone have probably added years to my life and helped me through some potentially stressful times.
Thus, the reason for my dream. I have been in situations recently in which I feel the need to "prove" myself. I am living my life as a series of tests… daily. I have felt out of sorts, not myself, lacking confidence.
All brought on by myself.
Life is not a test. To me, it is a series of learning experiences.
My goal is to strengthen the area between stimulus and response (see quote above and The 8th Habit by Stephen Covey) on a daily basis; mentally, physically, and financially. As that space continues to grow with experience and knowledge, my life and dreams will put a smile on my face.
Thanks for letting me think out loud today.
Sweet dreams.
I rarely ever remember a dream. Even when I can remember what I was dreaming about when I have to get up for a drink or bathroom break in the middle of the night, I have forgotten all about it by morning.
However, last night I had a dream that made me analyze my life and my thought processes on a day to day basis.
I was dreaming about taking a test. I am not sure the subject of the test. I do remember feeling under pressure and I was struggling a bit with the content of the test.
Now, I have taken my share of tests in the past and can recall having these types of dreams while in college; but, why now?
I jotted down a few notes before going back to bed and did my best to decipher this brain spark this morning.
I am into several projects right now in which I am under the microscope, so to speak. But, am I? Is this all in my head? Do I bring all this pressure on myself?
Probably.
I try to be the best I can be; mentally, physically, and financially. I try to learn as much as possible to improve my abilities in these areas. This is great as long as I don't spend so much time trying to improve me that it harms my life in these same areas; i.e. stress, family, friends, health, etc.
We all see the "burn-out" in the self-improvement entrepreneur; the sacrifices made in the "important things" in life such as relationships and peace of mind.
Peace of mind should be a top priority for mental, physical, and financial success. Living life as some sort of constant test will hamper this process.
Realizing that progress is a "you vs. you" phenomenon and that you don't have to please someone else on a day to day basis is a great start.
Bryan Tracy, in his audio series from Nightingale Conant entitled "Action Secrets for Personal Achievement," talks about the need for certain people to get the approval of others. He calls this a symptom of Type "A" behavior.
Here are some of the other type "A" symptoms:
Having a sense of urgency to do more and more in less and less time.
Volunteering for more and more work at the office.
Feeling under pressure to get activities accomplished.
Being obsessed with your performance and having high standards for such performance.
The type "A" personality can't relax and enjoy an accomplishment, they feel like they have never done enough.
Compare self with others.
More concerned with things than with people.
Brings home work.
Talks about the boss, what the boss said, what the boss did… wants to please the boss at all times.
Has a sense of hostility towards those he or she feels to be competing against.
Type "A's" cannot admit that they are not in control.
If you fall into any of the above categories, making a decision to change may be a great first step. This decision involves trying to relax and still be productive and effective without the added stress we type "A's" like to impart.
There are two things that have worked in the past for me (and my clients) that I am going to focus on after this "wake–up call."
One is a daily exercise plan. Even when I am on the road, I usually do some exercise daily, but, there are times I get in a rut and don't focus on my planning and execution of a said workout. A daily routine helps relieve stress and will bring out creativity and problem solving abilities like no other activity!
It is a "reality check" for me as well. Things are brought into a better perspective after a good workout, no matter how long the workout is.
This is Stephen Covey's take on exercise (from his book The 8th Habit): "I am convinced that exercise increases our own sense of self-control and self-mastery, which enhances the totality of our lives and truly enlarges the space between stimulus and response."
The second concept is practicing daily solitude. This could be a twenty minute walk, a power relaxation/almost nap, hanging out on a park bench, etc. This is a time to let your mind "go" and let your subconscious work on goals, problems, and/or ideas that are filling your head - a "mind-cleansing" if you will.
I try to do two, one-hour solitude sessions per week to let my subconscious mind take over and do its thing for me. This is a time when I just sit back and take in the world, usually outside in a fairly secluded place without interruptions. I sometimes think about a couple of goals or issues in my life ahead of time, then sit back and let my brain work on things.
I tend to find some answers to problems as well as some pretty great ideas to take back to work with me. They not only help me achieve goals, but relieve stress at the same time. These two activities alone have probably added years to my life and helped me through some potentially stressful times.
Thus, the reason for my dream. I have been in situations recently in which I feel the need to "prove" myself. I am living my life as a series of tests… daily. I have felt out of sorts, not myself, lacking confidence.
All brought on by myself.
Life is not a test. To me, it is a series of learning experiences.
My goal is to strengthen the area between stimulus and response (see quote above and The 8th Habit by Stephen Covey) on a daily basis; mentally, physically, and financially. As that space continues to grow with experience and knowledge, my life and dreams will put a smile on my face.
Thanks for letting me think out loud today.
Sweet dreams.
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