Turning a Liability into an Asset

October 10, 2014 by  
Filed under blog

Have you ever been in a room when someone walked in that totally dominated everyone’s attention?  Someone who stood out so much that you could only stop and direct all your attention to that person? That is exactly what you get when Mark Eaton walks into any room. Why would you take immediate notice of him? Well, for one, he’s hard to miss standing 7 foot 4 inches tall! But that’s not all. If you are fortunate enough to hear one of his lectures, he’s even more of a standout as a speaker with a great message.

If you followed basketball a few years ago you know Mark Eaton played for the Utah Jazz, ending up as an all American and breaking the all-time NBA record for the most blocked shots. You might assume he had an easy trip to the top, but that’s very far from the truth.

Recently I was privileged to hear him speak–his wonderful wife Teri talked me into it–and from the lecture he so eloquently delivered to the audience I learned some great lessons and concepts. His spoke primarily about corporate team building but the thing that hit me so very hard was his words about how a person can turn a liability in life into an asset.

You see, for all of his younger life his height was a huge liability–he was teased constantly and called names. Yes he was on his high school basketball team but he sat on the bench virtually the entire season as he watched the little speedster guys rip up and down the court. He actually really hated basketball.

So what did he do? He studied to be an auto mechanic. But thanks to a great mentor he met when he was in his 20’s he was directed, coached and shown how he could turn what he perceived and thought of as a huge liability into a gigantic asset. His mentor showed him what he needed to do to play great basketball and Mark worked hard and long before he got to where his mentor wanted him to be. He went on to set records in the NBA and helped the Utah Jazz move from the very bottom of the league to the top. Now he’s doing it again as an all-star lecturer, speaking from coast to coast.

After hearing his story, I couldn’t help but think of a very dear high school friend, Richard Harvey, who played with me on our basketball team in the faraway country of Turkey. About 12 years ago I got a phone call from Rich telling me his son Kyle who was just 14 years old had bone cancer. Wow, what a shocker.

Kyle had a very tough battle. He fought it with all he had and eventually defeated cancer. However, the cancer had left its mark, stunting Kyle’s growth. Today, at age 26, he’s just barely over 5 feet tall and he looks like a little kid. Big time liability, right? For most people it would be and it was for Kyle for a while as well. But Kyle eventually turned that perceived liability into a huge asset.

He made a move from the mid-west to Los Angeles and got a job as an intern at Paramount Studios. But that only lasted a short time. He floundered around the city, trying to find an affordable place to live and another job. He finally caught a break, auditioning at a comedy club with jokes about his short body and very young looks. They loved him and he’s gone on to do very well there. He even got big kudo’s and congratulations from big time comic and actor Sinbad. He bravely turned what had seemed to be a liability into a huge asset.

And that, my friends, is really the long and short of it all. I think we should all take a look at ourselves and those around us who we may be able to help and see if we can take what we think is a weakness or liability and come up with a way that we might be able to turn it into a big asset.

The Simple Wealth Formula

July 25, 2014 by  
Filed under blog

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.