Wants are not Needs

Ok, let’s talk about money.

A few days ago I was thumbing through a book I wrote back in 1983, The Courage to be Rich, when, in Chapter 4–The Fallacy of Working for a Living, I found a quote from a guy by the name of Joe Karbo (who, sadly, passed away from a heart attack at the young age of 55). The quote was: “Most people are so busy earning a living they never make any money.” What Joe was saying is that most people are ‘wage slaves’ and never figure out that the key to wealth is really not your earnings or wages. Yes, wages have a part to play but only if you do the right things with a portion of your wages. Your wage doesn’t have to be huge but the key, of course, is saving some of it and setting it aside then letting it build up enough for you to make the right investments.

Of course, the problem with most people is they don’t use enough discipline to control their spending. They think there are things that they just have to have now such as a new dress or car, a fancy night out on the town, an extravagant vacation, etc. I find it very interesting that people choose words like ‘need’ rather than the more accurate word ‘want’ when talking about the things they spend their money on. There is a huge difference between our needs and our wants. Most of the things we think we need are really just things we desire. We all need water, food, shelter, clothing and a certain amount of security to survive and have the chance to thrive. If you take time to think it through, you will be able to see the difference and if you really see the difference, you can then choose to set aside those wants that you previously thought were needs. That will get you the money you’ll need to save up in order to invest and get ahead.

What I used to do when I was depriving myself of a lot of extras that I really wanted right then and there was to concentrate on the huge benefits that I would be receiving later on. I would focus on two wonderful words: ‘passive income’. That concept of having income that would come in automatically each month, whether I got out of bed or was vacationing in Europe, would really motivate me to not spend on things that were wants and to keep saving more and more of my wages. And it paid off big time. Now I spend a lot of time traveling the world and doing super fun things without worrying about the money. It comes in every month no matter where I am or what I’m doing.

It’s so funny how often I hear, “Oh Mark, you are so very lucky to have such a great life style.” They probably don’t mean that literally, but I always respond with the same thing, saying, “Believe me, it’s not luck. It was good planning and discipline over a long period of time.”

Friends, pretty much anyone can do what I did. It does take time but it’s so very worth it. If you think you are too old and don’t have enough time to do it at least pass the message on to your kids and grandkids. They will thank you and greatly benefit for many generations to come!

Turning a Liability into an Asset

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.

Lessons from Arthur Ashe

Many years ago when I first started to play tennis I was so gung-ho about the sport that I traveled to all four of the major grand slams–Wimbledon, the French Open, the Australian Open and the U.S. Open in New York City.  I was so very impressed with the great champion Arthur Ashe and so admired him, not only as the number one tennis player in the world for a time but just as much for how dedicated he was to improving the lives of everyone, especially the unfortunate of the world.  To me he was an incredible double champion!

I will never forget, as long as I live, that night when the last match at the U.S. Open in New York finished so very late.  As I walked out of the stadium (the very stadium that has now been named “The Arthur Ashe Stadium) to catch a cab, I was surprised to see there were only a few cabs left and tons of people heading toward them.  So being quite young I sprinted to try to catch one.  I barely made it to the last taxi, but as I opened the back door and jumped in, someone else was doing the same thing on the other side.   As both doors slammed shut I look over to see none other than Arthur Ashe as my seat mate! Man, oh man, was I ever surprised, startled and yes, quite frankly, “star struck”. We quickly agreed to share the ride since we were both heading for mid-town Manhattan.  On the ride there I picked his brain to get all the tennis and life coaching I could possible pull out of him in that 45 minute ride.

What a great experience that had been and what a great man he was.  He was so much more than a world champion tennis player.  From a young age growing up in a segregated society, he set about to help change the world by helping people and thus making the world a better place for all of us.

Earlier yesterday, I was struggling to come up with a topic for this week’s blog and as I was thinking about possible subjects I flipped on the TV. Yes of course, the tennis channel was on and there was a biography being shown on Arthur Ashe including his many victories in his tennis life as well as off the court and his sad and somewhat sudden death at the young age of 49.   So it was an easy decision for my blog subject.  What great lessons I began to learn from his life as I watch the commentary.  He did a lot more in those short 49 years than I ever realized.  So much more than I can put in this one blog, so I am going to tell you more about his life and the impact that it had on the world in the next blog.

For now, the take away I want to leave you with is this–if you are looking for a big life time goal that will energize your life, I suggest you first take a look at yourself and see what your talents are and what you like to do and then spend time figuring out how you can direct those talents to make a difference in the world.

When we are young most of us are pretty self-centered and most everything we do is directed at just helping ourselves, but as we grow older and a little wiser we see that helping others is not only very satisfying but it can make the world a better place for everyone for many, many years to come.

 

144 Years … or Close to it!

“Multi-Millionaire dies at Age 144!”

That was the audacious headline of a full page article in Denver’s Rocky Mountain News that ran many years ago. It was not exactly an article but it looked like one. It actually was an advertisement of mine. The very first response I received was from the Federal Trade Commission giving me a “cease and desist” order. They said it was false advertising. I responded back to them that they needed to read the entire ad. Yes, the headline was a bit misleading but in the body copy that followed I made it very clear that the 144 year age thing had not been achieved yet, but was my goal. Although I lost the argument and never ran the ad again, the point I was making was, and still is, valid.

What was the ad all about? It was about goal setting and more importantly setting goals for great health and a very long life. And think about it–you can’t prove that I won’t reach this lofty goal as long as I am still alive so as far as we’re all concerned, it’s still a possibility. I agree that hitting age 144 is not very likely, especially since no one in earth’s history has come anywhere close to that. The oldest verified person on record was Jeanne Calment of France, who made it to 122.But whether I get there or not is not the point. The point is I have a goal that is going to drive me to do the best I can.

So, you see, this goal is not about feeding some delusion but rather it is about setting a goal that acts as a constant reminder to choose paths that will move one towards that goal or at least get one close to it. The 144 year goal, for me, is a constant reminder and pointer to eat the best foods, stay physically active, read the best books on health and longevity, and hang around people that have good health goals as well.

So, that’s my message for this week. It’s a short message but I think you get it. So, regardless of how lofty they may be, why not set health and longevity goals for yourself right now!

 

The Six Wealthiest Letters

I just got back from Las Vegas where I gave a speech on financial matters; this was mainly what formulas and so-called secrets I’ve learned over the years on how to make a fortune in today’s world. I gave this presentation to a great new little company that I am pretty sure will not stay small for long–it’s called LyfeStart. I think it will grow at a very rapid pace, for two main reasons: The super sharp and experienced founders and the great product they’ve developed that helps people’s health and longevity as well as putting money in their pockets.

In my speech, I presented the financial lessons I’ve learned from a few millionaires and a couple of billionaires. Specifically, guys like Paul J. Meyer, Larry Rosenberg, Curt Carlson and Aristotle Onassis. There are two formulas that most super financially successful people have discovered and used. They can be summed up with 6 letters: OPM and OPE. OPM is “Other People’s Money” in the form of loans from banks or individuals used to purchase the right assets. OPE is “Other Peoples Efforts” which we talked about in recent posts. How do either or both of these help insure that you will make a fortune? They help you leverage yourself. As all of know with a long enough lever we can lift almost any heavy object that we want to. And believe me the same is true if you use the right lever to lift the financial part of your life. Just about every wealthy person I’ve ever met or read about has used either OPM or OPE or a combination of both.

You see what you are doing is multiplying yourself since there is not enough time in your life to do really big things financially by yourself. Believe me, billionaires know what they’re talking about. They’ve done it. Salary, commission and other income just doesn’t cut it; you don’t make a billion dollars that way and, in most cases, not even a million. There are just not enough hours in your life to make those huge numbers happen. The average person lives only about 700,000 hours. So, if you made $200,000 dollars a year and didn’t spend one penny of that, do you know how long it would take you to be a billionaire? The answer: a whopping 5,000 years!

To make it big financially you just have to use OPM or OPE or both. When it comes to OPE, what I hear the most is that “there’s just not many good people out there anymore” to which I say that’s a bunch of bunk! There are many super people out there that can and will assist you. You just need to go out there and find them. Then give them enough incentive, sell them on your dream and provide them with good direction. I’ve associated and hired so many great people that many times do a much, much better job at certain tasks, than I do. This has greatly enhanced my life and my net worth.

One of the secrets that my wealthy mentors also taught me is to be sure to study what talents and natural abilities people have and then put them in the positions that best use those very talents. That makes them happy and fulfilled while moving you faster and closer to your goals.

 

Big Money in Cosmetic Fixes

As discussed last week, you can turn a 10% gain into a 100% gain using your sweat equity on the right real estate asset. Grabbing up run=down properties worked miracles for me, eventually adding millions of dollars to my net worth. You can do the same thing. But, you ask, exactly how do I direct my efforts? What do I fix up to make the property worth more? The simple short answer is paint, carpet, cleaning and basic accessories such as attractive plants and pictures on the walls and a nice green lawn and shrubbery in the yard. This is because you would be buying property that doesn’t needs more than a face lift but which you can buy cheap simply because it looks bad.

Now if you are like me and not particularly good as a handyman then you’ll probably want to use what I call OPE–other people’s efforts. I hired high school kids for just a few bucks an hour. I found from experience that paying people hourly, if you can keep an eye on them, is far less expensive than getting bids on the work needed. I should also say that most fortunes are made through the use of OPM (other people’s money) as we mentioned in earlier posts. So OPM combined with OPE is your formula for great wealth with this approach.

I should also add that I am not very good with any kind of design or decoration decisions, inside or outside. So what did I do about that? Basically two things–I picked other people’s brains as well as copying success, both without cheating. Picking people’s brains is pretty easy since people like to talk about themselves and what they do for a living. I would simply take designers, architects and other professionals to lunch and pick their brains for the cost of a meal.

Copying success is not that hard either, it’s mainly a matter of paying attention to what works then doing the same thing. I will never forget the beat up little house that I bought that was in desperate need of a major design update on the front of this very sad structure. I was trying hard to figure out exactly what to do with the face of this house when the obvious solution suddenly hit me. The basic house structure and layout was almost identical to the house next door–even though you really had to look hard to notice that with my house being such a disaster. The house next door was absolutely beautiful and a delight to look at. It looked like “the little cottage in the woods” that we read about and picture when we were kids.

So what I did was essentially take the lazy man’s option and I had my people do an exact copy of that nice house in every detail– the exact same color of paint, the exact same window coverings and shutters and all the cutesy stuff around the yard and on the lawn. Bottom line, the house looked fantastic and I sold it in short order. There is one postscript to the story–the neighbor was irrate! So much so that he repainted and redesigned the front of his house as he didn’t want to live next door to an identical twin! I didn’t really blame him but it was a bit of compliment to him too. Not sure he saw that.

One big thing to keep in mind as you are using your own sweat equity or using OPE to do this fix up work, keep yourself totally motivated and firmly place in your head that this “grunt work” can and will turn a potential 10% gain into 100% gain. With those kinds of numbers and with enough time, it will turn thousands of dollars into millions!

The Simple Wealth Formula

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

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.

The Final Step to Wealth

We’ve spent the last few weeks building up to this last step in building your wealth—getting on the fast track using leverage.  Yes, I’m talking about leveraging properties including using bank loans but to really supercharge and speed up the process even faster, you will want to use financial partners.

To do this, you just need a few people looking to invest in a safe, reliable project that will give them a regular and consistent return. Get them to collectively fund a down payment of 20% or more on the property you want to purchase and promise a reasonable return–say a 10% APR, an amount that is definitely higher than the best CD can offer. You should also put in some of your own money to makes the investors feel more secure seeing your confidence in the investment’s potential by also putting your money at risk.

Then when you sell or rent those properties, get the best return possible and get the money back to your investors with a higher than expected rate of return. When they see that you not only lived up to but exceeded their return expectations, you will have created an enthusiastic group of investors for future projects as well as getting wonderful word of mouth that could bring even more money flocking to you.

If you have read the revised edition of my first book, now named The Next Step in Waking up the Financial Genius Inside You, then you probably read Dell Loy Hansen’s letter in the Pre-Foreword thanking me for writing the book which he read when he was flat broke and in college. Dell gives me and my book great credit for giving him the financial formula and path to his great fortune. He followed pretty much everything I suggested in the book and his success was supercharged and sped up big time. He simply brought on some very well healed partners and took really great care of them with good, consistent returns on their money.

He now owns more than a billion dollars’ worth of properties and recently paid around 85 million cash for the Salt Lake professional soccer team “Real Salt Lake” RSL.  I love his P.S. of his letter where he says “Thank you a million, or more appropriately “Thanks a Billion”.  So if you or if my young man seeking advice and a formula want to jump on the super-fast track, go find some wealthy partners and be sure to take good care of them–under promise their rate of return on their investment and then over deliver.

 

Write Your Way to Credibility

We’re building up to the final step in building your wealth as I had advised a very motivated young man not too long ago. The key to this is leveraging your success by bringing financial partners into your plan. This will be the fourth and last step which we will get to next week. But right now, let’s talk about what you need in order to put Step #4 into practice.

A real key item to have in order to bring people in who can help you leverage your efforts is to have a great calling card. You need something so you will be remembered and more importantly that you gives you some instant credibility.  Putting things into print is a sure way to show you are serious and this automatically gives credibility.  It could be a magazine or newspaper article or, even better, a book on the subject or a closely related subject.

I’ve found that the best calling card I’ve ever has been in the form of my books.  Anyone really can write a book, even if you can’t seem to find an agent or publisher or even if you don’t feel that you are much of a writer. There are individuals, businesses and plenty of books and websites to get you started in self-publishing. You don’t even have to do it all—you can hire on people to do any of the work you don’t feel you can do well or don’t have time to learn.

I self-published my first book, printing only 1,000 copies in the beginning, but wow … selling or even just giving the book away gave me a giant boost in credibility and even a little fame. It got me on the front page of the Wall Street Journal and even on NBC’s Today Show. That made it terrifically easy to get potential investors interested in my projects.

In today’s computerized world you can write a book of any length and print just a few dozen copies or a few thousand for a rather small investment. Then you can hand these out like calling cards, use them to start a conversation and list the publication as a credit on anything you post or print up, for anything. Everyone will take you seriously with your name on a good publication.

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