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The Simple Wealth Formula

July 25, 2014 by  
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As promised, here is the simple formula for building Great Wealth!

When I was 27 years old I was lucky to meet a guy who knew and had applied this “Simple Wealth Formula” (SWF).  My mentor was Larry Rosenberg of Denver, Colorado.  He practiced SWF which made him a multi-multi-multi-millionaire. The best part is, at least for me, he was so very generous with his time and taught me just how I could do what he had done.  And yes, this SWF still works wonders today, especially with our super low interest rates.

The first thing a person needs to do to begin their own road to a fortune is to save, save, save!  It’s sad that Americans save so much less than they did in even just the 1980s when the average American saved over 11% of their after tax earnings. Now it is down around 2%.  The key to savings is simple–pay yourself first!  Take a certain amount of your earnings right off the top–let’s say just 10%–and put it away every time you get paid and then force yourself to live on what’s left over. You won’t be sorry because what you can do with that money is nothing short of a financial miracle.

That financial miracle can and will happen by using a lever, a financial lever.  Using a lever on the right assets will make millions of dollars for you.  We all know what a lever is and how a person can lift many times their weight by using a lever—it’s a very simple but very powerful tool that multiplies the strength you have, or in terms of the SWF, the power of your investment.  Here’s a simple example of how “financial leverage” works:

Let’s say that you bought a $500,000 asset putting up $100,000 of your own money and borrowing $400,000 from a bank or the seller.  6 months later you sell that asset for $550,000 dollars. (I’ll talk about how that happens in next week’s blog.) If you did that, you would have just turned that 10% increase in the value of that asset into a whopping 50% return to you on your $100,000 dollars. If we are talking about your return on an annualized basis it would be 100%–but more on that later.

I remember when my mentor showed me this on paper. My eyes just about popped out of my head.  I was even more shocked when he showed me the next key to the SWF method–compounding.  Just $1,000 dollars compounded at 100% per year turns into over a MILLION DOLLARS in just 10 years. And yes, that means $10,000 dollars compounded at 100% annually is more than ten million dollars in 10 years!

Amazing, isn’t it? But like you and most people the next big question is how in the world can you find an asset that will move up in value by 50% in 6 months or even in one year?  The answer is where the real work comes into play.  It can be done by just about anyone and you don’t have to be a genius to do it.  I’ve done it over and over and over again over the span of many years.  In the next few weeks I will talk about what the best assets are to buy, how to find them, how to purchase them and how to push their value up by 10% and even more.

 

The Difference Between Being Wealthy or Not

July 18, 2014 by  
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Last week I said basically that having a ton of money does not make for a perfect life and I’m pretty sure that most of my readers would agree with that. However there are lots of great things and big benefits that large amounts of money can do for you and those around you.  If that’s the case why don’t more people have more money and why are so few people super wealthy?

I’m pretty darn sure I know the answer to that question and it’s not the answer most people think. It’s not …

1. Having a very high IQ.

2. A college degree from a top school

3. Winning the lottery

4. A stunning new invention

5. Working 100 times harder and longer.

6. A big inheritance

Okay, if it’s not any of those things what the heck is it, you ask? It’s actually several things, but the biggest factor is following or using a proven formula or plan.  And believe it or not, it’s pretty darn simple.  I didn’t say easy–you really have to work hard and it does take time.  Yes, there are a lucky few that make fortunes almost overnight–with an inheritance, new invention or winning the lottery but those cases are very, very rare indeed.  Most fortunes are made over many, many years by following a solid and time tested and proven financial formula.

It’s rather sad that so many people still think and dream of the day they are going to suddenly “strike it rich” and of course that myth is constantly fed by the rare occasions when someone does strike it rich and it’s all over the news.  Those very exceptional cases are magnified and perpetuated by the media and it keeps people keep holding on to “the dream”.

Many years ago after hitting my first million dollar net worth goal, I wrote a book about it. The sub headline that I used in my advertisements was possibly that best and most accurate part of the ad–an actual fact that I’ve proved over and over again: “Millionaires are NOT 10, 50 or 100 smarter than you.” Nor, I might add, do they work 10, 50, or 100 times harder than you but they do know and follow a simple and proven financial formula.

Stop and think about the 10, 50 and 100 times smarter and harder statement. You know that it’s impossible for anyone to be that much smarter or work that much harder than you! And yet, they do have 10, 50 or 100 times more money. That doesn’t seem right, does it?

So exactly what is that “financial formula” and how does it work?

Next week I am going to lay out exactly what that formula is and how you can follow it, step by step, to make millions.  You can use this wealth for yourself and those you love, and for those deserving worthy causes you may want to support.

For many of my readers this formula is already known and is being used. For others, it’s known and it will be a good review and or act as a motivator to begin or continue.  For still others it’s a formula that they’ll want to pass on to their kids and grandkids so they can build their own fortunes in the years to come. It’s an example of that old wise saying, “Give a man a fish and feed him for a day; teach a man to fish and feed him for a lifetime”. Let’s get you feed for life.

Be Sure To Have Joy In The Journey to Being Rich & Famous

July 11, 2014 by  
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Would you agree with me that most of us at one time or another, especially when we were young, had thoughts that of being rich and or famous? And maybe those thoughts were followed by “If I was rich and famous, my life would be perfect or darn near perfect.”

If you were at all like me, you certainly had those thoughts. Most people I’ve talked with over the years had those thoughts run through their minds at some point.  But I’m here to tell you that “a near perfect” life does not necessarily follow fame or wealth.   Yes, wealth can make a lot of things in your life a lot easier, but if you think that tons of money and fame will automatically bring you happiness and contentment, you’re dead wrong.  (In fact, speaking of “dead”, I think you will find a higher early death rate and more addictions in the rich and famous than the middle class. That is saying something about how imperfect a life with wealth and fame can be.)

Riches and fame can give you a lot more choices but you do need to be extremely careful of what choices you make. For example, gifting your wealth to charitable causes can bring far greater and longer lasting satisfaction than feeding a cocaine or alcohol addiction with all that money.

Please don’t misunderstand me; I’m not dissing money and fame or going after great and lofty financial and glory goals. Those are energizing, lots of fun and can be very satisfying but be sure you enjoy each hour and day of your pursuit and be aware that whatever the end results of your journey, it won’t make your life perfect. Nobody’s life is perfect and when you realize that and accept that fact, your satisfaction and contentment can begin to really soar. Trust me on that; I’ve been there and done that and learned it.  I have to remind myself of that on almost a daily basis and concentrate on the big multi-year goals but at the same time “live in the now” and have tons of “joy in the journey”.

After saying all that about what money is not, it doesn’t mean that money is not important. It is and it can do good things for you and your life. So I think next week I am going to talk about how I see the market right now and what you can do about it to make some pretty big financial gains.

No One’s Life is Perfect

July 4, 2014 by  
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I ran into a friend a few days ago and greeted him with the old familiar “Hey, how’s it going?”  He gave the usual response of “I’m doing fine”, but he added two words to the beginning of his greeting: “I guess …”!  Wow. That totally changed the meaning of his greeting and his facial expression matched those two added words. Obviously, he wasn’t doing “fine”. So I dug a little deeper and found out he really was struggling with some big issues.

In today’s world of fast and quickly expanding social media we are given the impression that people out there have near perfect lives.  I mean take a look at virtually anyone’s Facebook and you’ll see all these fun pictures and comments. Much of what we see is the good stuff, and of course there is really nothing wrong with that, but it sure can make a lot of people feel and believe that their own lives, filled with challenges, big ups and downs, and problems are really “messed up”, causing self-pity, depression and, in the worst cases, even suicide.

The fact is, nobody’s life is perfect or even close, but when you’re looking from the outside you might be tricked into thinking that other people are doing tons better than you. If you take time to look and probe on a deeper level you will see that the surface view can be very misleading since most of us don’t announce or display our problems but prefer to show and advertise our successes.

So, if you really want to know the truth and gain insight into a person’s real and complete life,you need to dig deeper.  One easy way to do this is by simply asking the right questions.  For example, pick a friend or relative that seems to be doing well as you see on their Facebook postings or hear them talk about their world travel, huge income or impressive home and lifestyle, and ask questions like these:

1.  What are the biggest challenges you are having in life right now?

2.  In the past, what do you think has been the worst or hardest part of your life?

3.  Who or what makes you sad?

4.  Do you ever get down or depressed? (If they say yes, ask how often and what causes it.)

5.  What’s the worst thing that’s ever happened to you?

6.  Do you think much about your own mortality?

7.  What in your life scares you the most?

8.  Have you experienced any great tragedy in your life? If so, what happened and when?

9.  Do you worry and think about tragedy striking you in the future?

If you take a little time, you certainly can add your own probing questions to this list.

I’m pretty sure if you question those who you think have “the perfect life” you will find, as I have, that no matter how rich and famous or perfect their lives look from the outside, they too have their problems and challenges and many times much larger problems that you would have ever guessed.

You might ask at this point, “Why go through all of this questioning?”

I personally believe it’s a very good thing to do for at least 2 reasons.  First, it can help you see and understand yourself better and remove any self-pity or feelings of “not as good as other people”. It can even lift you out of a state of depression, so you come up with the thought of “Hey I’m not doing so badly after all.” Because of this, you may see yourself in a much different light and find you have higher self-esteem”.

Second, and most importantly, knowing the challenges and problems of your relatives and friends can put you in the perfect position to step up and help them overcome some of their problems, challenges and obstacles.  This makes it a real Win-Win. And all for just asking a few questions!