Beware of the Con

March 28, 2014 by  
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So what would you do if you had a pretty good nest egg saved up but your bank was paying you a lousy 1/2% a year and a good friend just told you about how he is getting an 18% annual return, is getting paid out monthly and was on money invested with a guy he knew and trusted? Your first reaction might be, “Wow! That’s a great return.”  But then you might ask “Tell me more about this friend and the investment, cause it sounds too good to be true.”

What if he gives you an answer like this? “I’ve known this guy for several years and he’s a good guy that I have great confidence in and trust.  I invested some of my cash with him a year ago and since then he hasn’t ever missed a monthly interest payment. I just recently put all the rest of my savings into his deal a couple months ago and I even helped my poor mother out and talked her into putting most of her savings with him. She was getting screwed by the bank’s low interest rate and she desperately needed more income to supplement her social security check just to scrape by.

So, the bottom line of what you would be hearing from this friend is that he’s put virtually all his cash and savings into this “safe investment” and the return is guaranteed because he has so much trust in the deal. For all you know he may even have put a second mortgage on his house at a low interest rate so he could make the difference in the spread. I don’t know what you’d do but I know I would hold onto my wallet and run like hell.

Sadly, this kind of scenario happens almost every day. It has been particularly bad during our recent recession and now in our very slow economic recovery. I personally know 4 people that have lost almost every penny to their name because they bought into situations very similar to the one described above and these people are really quite smart and educated. You wouldn’t think they would be susceptible.

There is a very old saying that goes back to the 16th century: “Tis the part of wise men to keep himself today for tomorrow and not venture all his eggs in one basket.”  The other saying that we’ve all heard that we need to drum into our heads is “If it seems too good to be true it probably is.” One of my policies that has driven my investment life is “If I do choose to put all of my eggs or a substantial part of my eggs in one basket I must have total control over that basket and I must watch that basket very, very closely”.

One last thought.  In the example above and with the four people I know, they all had “confidence and trust” in their friend.  Guess where the origin of the term “con man” comes from?  You see these “con men” always take time to build up your confidence and trust in them before they strike.

This is not to say that there are not very good investments out there but always check them out thoroughly and make sure your investment is backed by solid, verifiable assets. Remember, don’t put all your financial eggs in one basket unless you control those eggs and watch that basket very closely!


The Missing 777 and Overcoming Fear

March 21, 2014 by  
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Have you heard anyone say recently that they are not going to take any trips by airplane, because of fear since the 777 Jet went missing?  I’ve only heard one person allude to that, but I’ll be watching to see if airline ticket sales drop because of the fear factor since the Malaysian jet disappeared.

Fear is a very interesting human reaction hooked to so many things in our lives.  Much of the time it has little or no basis to reality or logic.  As you may know the fear of flying is one of the more common human fears although it is statistically extremely safe.  If you were to choose, at random, a commercial flight every single day for the rest of your life, guess how long it would be (statistically) before you got on an airplane that crashed? And, drum roll …would you believe it would take 19,000 years? Yes, that’s right, nearly 7 million flights/days until your statistical chance would be up!  I’ve talked to many people and gave them these numbers and they are STILL afraid of flying.  They know the numbers but their fear trumps the facts.

Fear holds so many people back from fulfilling their big dreams and goals for what are often illogical reasons. Many years ago I wrote a book titled The Courage to be Rich. In my book I talk a great deal about using “courage” to overcome fear.  Building up your courage to be rich, to give a speech to 1000 people, to write a book, to travel to a distant and strange new country or to be super successful in anything  requires you to identify what fears are holding you back and replacing those fears with positive thoughts and actions.

One of my favorite tricks or ways I overcome fear is to use the IGDS philosophy.  Quoting from my Courage to be Rich book, “What is IGDS?  It is accepting the truth that “I’m Going to Die Someday”……so why not really live life now?  Why not really go for it? What have you got to lose?”   I am not saying you should take wild crazy, life threatening risks but I am saying to face your fears and go after what you want with all you energy, zest and strength. Take some calculated risks realizing that you’re going to die some day and you don’t want  to have to say to yourself what Henry David Thoreau said many years ago, “Oh God, to have reached the point of death, only to find that you have never lived at all.”


Revisiting the Super Brain

March 15, 2014 by  
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The last couple days I followed my own advice and re-read a great book that I hadn’t picked up for about a year. The book is by the brilliant Deepak Chopra and Rudolph E. Tanzi and is titled Super Brain. I saw the book on my bedside shelf and it grabbed my attention–probably because my experience the night before.

Kimberly and I attended a gala fund raiser for the National Ability Center and listened to a short speech by Anna Beninati where she talked about her experience as a skier. She’s very talented and has Olympic gold medal dreams. But what makes her story so special and unusual is the stupid decision she made as a teenager. She was running alongside a moving train trying to jump on it only she didn’t quite make it. She fell beneath the train cutting off both her legs. However, she considers herself very lucky. Wow!

Why does she consider herself lucky? Well, first of all she is grateful to be alive but it doesn’t stop there. She’s lucky because that terrible accident changed her brain. Accepting that she had no legs, she decided she would make her life count for something and I don’t think if she wins gold at the winter Para Olympics in Korea in a few years that she will stop at that point. That will probably just be the beginning of using her “Super Brain”. I think she already deserves a gold medal for using her brain to push it to that level.

Our brains, as Chopra’s book explains can make us or break us. It all depends on how we use them. We have a choice to either control and program our brains to serve us or we can sit back, do nothing and let our brains control us.

On that note, let me share some of my “margin notes” from Super Brain.

P. 40 Whatever you pay attention to grows.

P. 42 Expect past memories, as well as the things we’ve learned, to come to us and they almost always do.

P. 16 You train your brain to do what you want it to and it will do it.

P. 31 You can choose to follow the upward learning curve no matter how old you are! (Creates new dendrites, synapses and neural pathways.)

P. 63 If you actively act as the leader of your brain you can reprogram your own neurochemistry.

P. 70 Inertia is depression’s best friend.

P. 71 Depression creates an illusion that all my power is stripped away.

P. 72 The brain is transformed by meditation.

P. 40 Don’t ever say to yourself or others “my memory is going”. If you say that your inner brain will prove you right.

P. 230 You need to motivate self –especially as you age.

And as an overall summary of this great book –the theme could simply be….Use Your Brain–Don’t Let It Use You!!

A Great Evening with Richard Paul Evans

March 7, 2014 by  
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My good friend and fellow author Richard Paul Evans (who, having sold over 17 million of his 31 great books, is a bit more successful as an author than I am) invited me to join him as he made a great presentation to about 150 people last week.  His subject was based on his book The 5 Lessons a Millionaire Taught Me.  My wife Kimberly and I very much enjoyed both Rick’s motivating and informative remarks and the wonderful people we met afterwards.  I totally agreed with Rick’s view on money, on what it is and what it is not.

Among other things he said, “Life isn’t about money.”  He explained that life is about love and family but without money “life is thrown out of balance. To the financially enslaved, life becomes all about money; too many are missing the opportunities and abundance life has to offer”.

Of Ricks’ 5 Lessons, the first two I find to be so very important: that you must decide that you are going to become wealthy and that wealth is about saving money through either earning more or spending less.   I certainly agreed with those two first lessons, in part because that’s exactly what I’ve been preaching for many years and it certainly has served me well. It transformed a poor, struggling guy into a multi-millionaire. And my path didn’t come from being brilliant, as my C- grade average can attest.

Many years ago I noticed that most people’s spending rises at the same rate as their income when it increases. Too often it rises even faster, creating a debt loaded and stressed out person.  So if that sounds familiar and you want to be wealthy, or at least be way ahead in the money game, set a goal right now to start spending less than you are earning. Without any savings it will obviously be hard to proceed with the next step of investing wisely.

It really is up to you to either allow yourself to be controlled by money or be the one in control of it.  But always remember, life isn’t about money but with enough of it your life can be filled with abundance and opportunity.

Spending the winters in Kauai and being able to do things like take my kids and grand-kids to Europe for a Disney cruise to celebrate my 70th birthday certainly doesn’t make my life perfect. However, giving others those types of grand experiences that stick with them for life certainly does incredible and wondrous things to my brain and my level of satisfaction, and without money I couldn’t do these things.  So I encourage you to set the goals, follow the formulas for wealth and use that wealth wisely to enhance your life and those around you. You won’t be sorry that you did it.

If you need more information on a good financial formula go to my book, The Next Step of Waking the Financial Genius Inside You. I also strongly urge you to go to Rick’s website and sign up for his notices, giveaways and special offers