The poor and the middle class work for money. The rich have money work for them.
Poor - Uneducated, work for money
Middle - Educated, work for money
Rich - Money, poor and middle class work for them.
Don’t let life (others) push you around, push back - but not against people / jobs. Push back by changing your perspective, changing yourSELF and changing your behaviors and beliefs.
Don’t let fear guide your financial future - TAKE RISKS!
Don’t let money control your emotions or your soul.
Do not become a complacent liberal, take care of yourself and your own problems. Nobody will come to your rescue. TAKE OWNERSHIP
“Some say I exploit people because I don’t pay them enough - but they keep working - some say these people exploit themselves.”
A job is a short-term solution to a long-term problem.
Use imagination to look for new business opportunities, take off with them, then hire staff to do the work while you collect.
Don’t get too close to a business or idea - as Jocko says, decentralize command.
Know the difference between an asset and a liability. A house is not an asset, unless you rent it out.
If you want a bigger house, buy assets that will generate enough cash flow to cover the expenses of the bigger house.
Invest with risk, generally higher risk = higher reward. Be BOLD.
Find tax loopholes and use them to your advantage, such as:
Starting a corporation - lower taxes for whatever you do - pay yourself first.
1031 exchanges - upgrade real estate acquisitions to avoid capital gains taxes.
Four Ingredients to Financial IQ:
1. Accounting - Ability to read / diagnose numbers.
2. Investing - Science of making money work for you.
3. Understanding Markets - Supply and Demand trends.
4. The Law - Using tax loopholes to your advantage.
Corporations: Employee:
1. Earn 1. Earn
2. Spend 2. Pay Taxes
3. Pay Taxes 3. Spend
Flipping houses is a great way to quickly build up your asset column.
Invest in stocks and real estate in a down market.
Buy low, sell high.
Learn to manage risk, instead of avoiding it. Hedging. (use stop losses with stocks)
The best investors create their own investments (put pieces of opportunities together)
Find an opportunity everyone else missed.
Raise money (hardest part) - learn to buy houses without a bank.
Organize / hire smart people.
Work to learn - don’t work for money.
Build as many skills as you can, don’t specialize in only one skill.
Skip form company to company and expand your skill set.
J.O.B. - “Just Over Broke”
Three Important Management Skills
1. Cash Flow
2. Systems
3. People
Five Reasons People Don’t Add to Their Asset Column:
1. Fear
2. Cynicism
3. Laziness
4. Bad Habits
5. Arrogance
Start investing as early as possible.
People are so afraid of losing that they lose.
If you are going to go broke, go big.
Winning generally follows losing.
Failure inspires winners to keep trying.
Failure defeats losers.
Don’t play life safe, or you not win and be JOB your whole life.
The middle class aims for a “balanced portfolio”
The rich aim for a focused portfolio - have a goal and direct all resources in that direction.
Don’t listen to cynics or critics, they are afraid.
Analyze, don’t criticize.
The most common form of laziness / fear is “being too busy.”
Focus on what you want out of life instead of guarding against what you don’t want.
Don’t say “I can’t afford it”... instead ask “How can I afford it?”
10 Steps to Develop Financial IQ:
1. Find a reason greater than reality (being in the moment).
Spirit, purpose. Work toward the goal of freedom from the rat race, then empire building.
2. Do NOT make excuses, Make Choices.
Choose to become rich.
Must believe this deep down.
Don’t think you know everything
Keep learning and reading
Listen to experts
3. Choose friends carefully.
Power of association
Do not listen to poor or frightened people
Buy an investment when it’s not popular
Hit the wave before it rises, invest like a surfer.
4. Master a formula for making money, then make a new one.
Don’t work hard for money.
Create a formula for the fastest way to make money.
Buy real estate foreclosures.
5. Practice Self-Discipline
Must have self-discipline with money, know how to manage your personal finances.
Must have 3 skills of management:
1. Cash Flow
2. People
3. Personal Time
Pay yourself first, taxes later.
If you minimize taxable income and move money into corporate asset columns, you expand your wealth.
Make other people (assets) pay for your liabilities.
Limit your debt / bills / liability.
Keep expenses low, be a minimalist and work to get out of the rat race.
Never dip into savings or investments for quick cash… only use savings to create more money.
6. Pay Brokers well for good advice. (Good lawyers and accountants)
You get what you pay for.
You need a top professional. Hire experts to work for you.
Manage and reward people smarter than you in some technical area.
7. Be an Indian Giver.
Get your money back first.
Must get something for free with each investments (free property, investing in property for cash flow).
8. Use Assets to Buy Luxuries.
Do NOT borrow money, use assets to buy luxuries.
9. Choose Heroes.
Copying heroes is a true power of learning.
Pretend you are your heroes.
10. Teach and You Shall Receive the Power of Giving.
Help other people and it comes back to you - KARMA.
Other Hints:
Take a break to assess what is working and what is not working.
Stop doing what doesn’t work and try something new.
Always look for new investing ideas.
Always keep learning.
Talk to people about money, do not let it become taboo.
Look into “the 16% solution” by Joel Moskowitz - 16% tax lien certificates.
Attend seminars about iinvesting.
Real Estate:
Don’t wait for the perfect property at the perfect price.
Submit a lot of low offers (50%), one will eventually accept.
Money is a game, have fun with it.
Always write vague escape clauses into offers, then if it’s accepted you can always back out.
Business partner must agree (but business partner is actually your cat).
“Purchase subject to acceptance of business partner.”
Jog in neighborhoods you might invest in.
Talk to people and look for change in neighborhoods.
Profits are mad in buying, not selling. Buy foreclosed during a real estate crash.
If you want to get rich, think big!
Always buy in bulk at a discount, then sell what you don’t need.
Three Types of Incomes:
Ordinary - Working hard for salary.
Portfolio - Stocks / Bonds
Passive - Real Estate Investments
Key to becoming rich - Convert ordinary income into portfolio and passive income as quickly as possible.
Rule #1: TAKE ACTION!!!