Jobs That Will Help You Celebrate Your Accomplishments
(04703) Michael LeBoeuf says:
1. Stay financially independent
There will always be a myriad of other forces, which will try to decide for you how you should live. Ignore them all. Instead, choose the life you want first and then select all the other components on the basis they will be compatible with your chosen lifestyle.
Surprisingly, some people who reach the goal of being financially independent don’t manage to maintain that status and fall back into the time/money trap. What’s needed is a financial strategy to make it last.
This isn’t difficult. All that’s required are the answers to two key questions:
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1. How should I allocate my investment portfolio?
One strategy is:
Have two money buckets — one for growth and one for safety.
In the safety bucket, put the amount of money you plan on drawing over the next seven years. Your income for the next year should go into a money-market fund and the other six years’ income intoa short-term bond index fund.
Everything else goes into your growth bucket. These funds should be invested in stock index mutual funds.
Arrange to have all dividends and interest from your funds transfered into your money-market account.
This strategy means you won’t have to sell any stocks for seven years, allowing you to ride out any bear markets, which historically have lasted an average of 9 months each. By avoiding having to sell your stocks at depressed prices, you’ll do fine over the longer term.
2. How much money can I safely withdraw from my investment portfolio each year without diluting future earning power?
You should plan, at most, to withdraw no more than 5% of your portfolio’s value in any one year. That level of withdrawal, combined with the fact you have a seven-year cushion, will allow you to ride out the downturns.
At the end of every year, you can rebalance your investments:
If stocks are up and bonds are up, reduce the amount in bonds from seven years expenses to six and sell stocks to top up your money-market funds.
If stocks are up and bonds are down, sell stocks equal to the amount of profits you made in the past year, and then draw down from your bond fund.
If stocks are down and bonds are down, top up your money-market account from your bond fund on the understanding you will top up the bond fund once stocks go back into an up cycle.
If stocks are down and bonds are up, draw down from your bond fund to your money-market account.
2. Keep physically and mentally active
Most people don’t have enough time to do everything they want. When you become financially independent, this is no longer an issue, but don’t just sit there and vegetate. Find new and interesting things to do.
Actuaries have found that people who find something they like to do and who keep doing that have a greater life expectancy than those who retire and reach for their rocking chair. Accordingly, treat financial independence as an opportunity to learn more about all those sports, hobbies and activities, which attract you.
To fill your days with productive activities:
1. Keep working, perhaps on a part-time basis or as a consultant taking on whatever projects capture your interest.
2. Take a lesson from the ancient Greeks who believed we should all do four things each and every day:
Exercise vigorously to cleanse the body.
Learn something new to cleanse the mnind.
Listen to music to cleanse the soul.
Laugh to have fun.
3. Banishy the word “retirement” from your vocabulary and do things that you find interesting, productive and useful.
4. Learn from the centenarians and do all the things they do:
Have a positive and resilient attitude.
Celebrate life and remain an active participant.
Stay connected to other people.
Explore the spiritual side of your life.
3. Give something back to the community
Many people have found giving some of their time and money to make the world a better place is extremely rewarding. This may be your greatest source of personal satisfaction in the future.
The key to success in this area is not to give money blindly to every cause in the phonebook but to find a cause you care deeply about and focus on doing something meaningful for that specific cause. In other words, you have to do your homework.
For every cause you plan on helping in any way, ask:
1. Are the mission and values of this organization aligned with and similar to mine?
You only want to support an organization that is striving to make a difference in the world in a manner you feel comfortable with.
2. Is this organization established and fiscally responsible?
You don’t want to become involved in an organization that’s here today and gone tomorrow. Also, watch out for bogus charities.
3. Do the management of this organization have the know-how needed to fulfill the vision?
That is, are they well meaning but ineffective or do they know about all the logistics involved.
4. Are these people you would enjoy spending time with?
If not, working alongside them would be a pain rather than something you enjoy.
5. Is there financial transparency? Will you be able to see precisely where your money gets used?
To generate pleasure, you have to be able to see the tangible results of where your money goes and what it does.
Of course, if you can’t find an organization that meets these criteria, you can always consider starting your own foundation. It’s important that you plan ahead for how to handle your donation from a tax viewpoint. Talk with a tax attorney or CPA to get some advice on this.
Probably your best approach will be to attach some strings to your donation. Specify that you will donate a set amount if others make a matching donation and stipulate where the money should be used. Get it in writing from the organization, and follow up to see what actually happened. If it’s really something you’re passionate about, this will be fun.
4. Always remember the journey is the joy
Life is not a goal. It’s a process that’s meant to be savored and enjoyed while it occurs rather than at some arbitrary point in the distant future. Therefore, celbrate each day for what it is: a gift.[/private]
Choices For Creating Your Personal Fortune
(04702) Michael LeBoeuf says:
Live the Life You Want, Not What Others Expect
There will always be a myriad of other forces that will try to decide for you how you should live. Ignore them all. Instead, choose the life you want first and then select all the other components on the basis they will be compatible with your chosen lifestyle.
Everyone has a voice inside themselves that can provide the answers to two important questions:
1. What do I want out of life?
2. How will I know when I have everything I want?
The more detailed the description you develop of your answers to these two questions, the better. Never leave these questions for others to decide — that will only generate confusion and frustration for you. This is something you have to do for yourself if it is to have any staying power.
The process for translating your dreams into goals is simple:
1. First, make certain the goals you’re working on are genuinely yours, and yours alone.
2. Next, set goals using the BEST formula:
B — your goals need to be high but believable.
E — set goals that energize and enthuse you.
S — be specific about how you define the word “success”.
T — set deadlines, a time when each needs to be achieved.
3. Write down your goals and read them frequently. This increases commitment and forces you to think clearly.
4. Live a balanced life — set goals in all the major areas of life:
Career — something you passionately enjoy doing.
Family — improving your key relationships.
Recreational — the fun stuff you’d like to do.
Health and wellness — preventative maintenance.
Community — how you can contribute to society.
Personal relationship — improving and enjoying these.
Self-esteem — making you feel great about yourself.
Religious / spiritual — strengthening your inner peace.
5. Now, check your goals for compatibility and set your own personal priorities. Make certain that in aggressively pursuing one of your goals, you’re not in fact making it more difficult to achieve another goal.
6. Translate your goals into action plans — the intermediate goals that form a bridge between your daily “To Do” list and your lifetime goals. Most often, action plans are projects that take more than a day and less than a year to complete.
7. Always remember your lifetime goals are not carved in stone. They need to be updated regularly. If circumstances change, drop old goals and add new ones. Remember, the most important thing is to have goals that enthuse you, not the precise goals that you choose.
Make Choices that Stack the Odds in Your Favor
Be aware of the financial consequences of all your life choices — education, career, health, marriage, family size, etc. — and make choices that stack the odds in your favor rather than against you.
Your personal journey to financial independence will be easier if you make smart lifestyle decisions.
1. Get a good education — but don’t go to the more exclusive private universities. They’re just too expensive. Get a sound educational grounding at a reasonable cost.
2. Choose the right career — something, which interests you, makes the most of your talents and gives you a feeling of personal. accomplishment. Make certain your career will fund the lifestyle you want and provide money for investing.
3. Protect your health — by living moderately, exercising regularly and avoiding habits that are bad for you. Without good health, money is pointless.
4. Live in an area with a low cost of living — because it will be much easier to save if you don’t have to pay huge property taxes, home heating costs or enormous mortgage payments.
5. Marry once to a spouse who shares your vision of financial freedom — and who will be prepared to live frugally while you work towards your financial goals.
6. Buy a moderately priced home — one that you can afford to stay in for long enough for property values to rise. Even better, look at buying a fixer-upper and improve it yourself in your spare time.
7. Have a moderate number of children — since each one will have a $175,000 or more drain on your wealth-building program.
In other words, all of these decisions have financial consequences. Be aware of those flow-on effects and manage your financial risks astutely.
Be a Super-Saver Rather Than a Big Spender
The single biggest differentiator between millionaires and others is their ability to save. If you aspire to be financially independent, become a good saver. If you don’t, you simply will not get there.
If you’re in the habit of spending everything you earn, you’ll end up spending your life working for money rather than making money work for you. Actually, saving is better than earning because it’s tax-free. To build wealth, you must have the ability to save.
To become a good saver:
1. Always pay yourself first — by putting at least 10% of every paycheck into your savings program.
2. Start early — because the earlier you start saving, the more time there is available for compound interest to work its magic.
3. Whenever you get a pay raise or a bonus, save more — rather than spending that money on new luxuries.
4. Defer tax as far as possible — through the use of 401(k) accounts and all other legal tax-deferral accounts your employer may sponsor.
5. Harness a Roth IRA — because it allows your money to compound tax-free.
6. Buy 2- to 5-year old cars for cash — and keep them until their maintenance and repair bills start getting too high. Avoid buying new cars because they are terrible financial investments.
7. Pay off all your credit card debts — because they charge 18% or more every year when you carry a balance. Pay your entire credit card bill every month from now on.
8. Document your spending — to highlight areas of unnecessary expenditure. Redirect those resources towards your wealth-building program.
9. Regularly calculate the cost of your lost wealth — what the expensive car, jewelry or lifestyle elements are costing you. Be aware of what that amount of money invested each month in a savings program would generate.
10. Realize that some debt is an excellent investment — that going into debt for a home, a business or an education. Not all debt is created equal.
Increase the Value of Your TIme Consistently
Don’t keep trying to earn more by working longer hours. Instead, make the time you have available worth more. Enhance your personal market value by doing more of what you do well int he time available.
The way to get rich is not to wear you out working hard and longer. Instead, try working smarter.
1. Focus on your employability rather than job security — so you’ll be free to pursue new opportunities as they arise.
2. Learn more about your profession — since earning power in any field is always directly related to how much you know.
3. Create a second income — by doing some part-time consulting or starting your own small business.
4. Make it a habit to always deliver more than you promise — your boss or customer will love it and your reputation and market value will skyrocket in their eyes.
5. Build your own personal brand — so people know and appreciate what you have to offer.
6. Be loyal — to the projects you work on, your partners, your business and the community.
7. Be on the lookout for great new ideas — and take advantage of your brain’s most valuable creative abilities.
8. Use feedback from others intelligently — as a basis for improvement rather than to become offended or defensive. Enthusiastically seek feedback from the people you respect.
9. Know your true market value — and don’t hesitate to leave your current job if they’re unprepared to pay that. Put yourself in a position where you feel good about doing your very best work and your career will move forwards and upwards.
Don’t Try and Do it All; Do Less Better
The paradox of self-management is: The way to get more done is to try and do less better. In other words, don’t keep trying to do more each day. Instead, concentrate your efforts. Do less but to a higher standard.
Becoming an effective time manager is essential, because you can manage your time well, you will lack the ability to be able to ever manage anything else. Making good use of your time always comes down to a few basics:
To become financially independent, you don’t have to work harder than the next guy, just more intelligently. To make more effective use of your time:
1. Schedule a daily time for reflection and planning — since every hour spent planning enhances the quality of the work you do for the rest of the day.
2. Carve out large blocks of time where you work on the most important activities — rather than letting your day fill up with all the marginal value tasks.
3. Make the most of your personal prime time — schedule that time for your most important work.
4. Say no readily and frequently — to everything that is nonessential, distracting or counterproductive. If necessary, suggest someone else who might be able to do that task.
5. Keep your schedule loose — so when things take longer than expected (like they usually will), it doesn’t leave you feeling frustrated. Always have a Plan B in mind and have the materials you need close at hand.
6. Attack your high priority tasks with single-mindedness — and focus on doing that one thing until it is completed. If you’ve correctly identified your highest priority task, this will be the best possible use of your time.
7. Automate as many repetitive tasks as possible — by setting up automatic deduction from your checking account.
8. Delegate everything you possibly can — except for the creative elements of a project you need to contribute personally.
9. Conquer clutter — by making decisions immediately rather than later. Also, look at every item and ask: “What’s the worst that could happen if I throw this away?”
10. Take action to block any and all interruptions during your creative time.
11. Master your telecommunication tools — so you can use them to save time rather than trying to figure out how the gadgets work. And realize there are times when it’s better to be unplugged.
12. Ask yourself frequently: “What’s the best use of my time and energy right now?”
13. Never take time for granted — treat time as your most valuable, most irreplaceable asset. Remember, all the money in the world cannot buy you an extra moment each day. Therefore, make the most of this, the ultimate asset. Stay focused.
Now get off this site and go do something!
Work Hard to Capitalize on the Unexpected
Most things rarely go to plan. Good wealth builders realize that, and stay on the lookout for ways to turn lemons into lemonade. They have the mind-set every setback contains the seeds of greater success.
Life is always full of second chances disguised as unexpected and often unwelcomed events. Those with a success attitude are persistent, have genuine staying power and continually look for new pathways when their original plans have not played out as planned.
To become good at facing the unexpected:
1. Keep your eyes on your goal — and realize there are always a number of ways to do anything. Therefore, if one road turns out to be a dead end, have confidence you’ll be able to find another equally rewarding path.
2. Overcome any fears of success — and move forward confidently. Ask yourself: “What’s the worst that can happen if this is wrong, and could I live with that if it eventuated?” or “If I didn’t feel a little fear of the unknown, would I seize the opportunity?”
3. Use disappointments as a spur to accomplishment — rather than the permanent and definitive word on whether your idea was good or not.
4. Never let the opinions of others limit your success — because history is full of critics who said even superstars would never get anywhere. Don’t listen to anyone else’s opinion. Get out and do what you aspire to.
5. Always remember anytime one door closes, another opens — and therefore it’s not worth dwelling on setbacks. Pick yourself up and get moving again. Have the attitude if one door is closed, you’ll find another open door or, if necessary, build one yourself.
6. Relax and take your goals seriously but not yourself. Remind yourself often the goal in life is to enjoy you. If you try and take everything too seriously, that simply defeats the purpose. You’ll be more successful if you treat life like a game with wins and losses along the way.
7. Have tenacity and stick-to-it — because if you never quit, you must ultimately achieve your dreams. If you persist long enough at anything, you’ll win.
Don’t Try and Beat the Market; Own the Market
There actually are no experts who can help you invest your money. Instead, ride the long term up-trend of the stock market by owning shares in an index fund which tracks the progress of the market as a whole.
Despite what any investment advisor tells you, all they’re doing is making educated guesses about what may happen in the future. You can do that as well as they can. As already mentioned in Insight #2, passive investing through a no-load index fund is the smart approach to building wealth.
No-load index investing works well because:
Again, as mentioned earlier, your investment strategy is disarmingly simple:
1. Decide your preferred allocation of stocks, bonds and cash.
2. Find a good no-load, low-cost index fund.
3. Invest regularly and consistently.
4. Check your portfolio once a year and rebalance.
5. Have a small amount of money (say 5%) in an account where you can try trading and beating the market.
6. Keep working your program forever and ignore everyone who tries to tell you they can do better with your money. Say, “Thanks, but no thanks.”
Always Limit Losses; Don’t Fall Victim to Bad Luck
You need sensible insurance because life isn’t always fair. Bad breaks happen, even to good people, but they don’t have to financially ruin you. Be prepared for storms ahead by doing some damage control in advance.
An essential element of building wealth is to cover your downside risks by being properly insured against contingencies that may arise. In other words, sensible insurance is required.
The key principles in being properly insured are:
1. Insure only against the big calamities and life events that you can’t afford to pay if they eventuate — like your death, disability or serious illness. Put together a realistic level of:
2. Always take insurance that has the largest possible deductible you can afford — because it lowers the premiums significantly and reminds you insurance should be used only in the event of a major bad break.
3. Don’t buy insurance based on the odds of something bad happening to you — but only to protect yourself and your family from something you couldn’t afford to have happen.
4. Buy coverage only from the best-rated insurance companies — because this is your backup plan.
5. Insure yourself against potential lawsuits — with a cheap personal liability policy.
6. Take reasonable steps to prevent a disaster happening — by doing the sensible things like giving up smoking, getting regular exercise, eating the right foods, getting enough rest, driving sensibly, wearing your seat belt, etc.
Listen to Those Who Know, Not Those Who Sell
Never buy an investment from the person who is giving you financial advice. Regardless of what they say, there will always be a hidden agenda involved. These people are always interested in their wealth first, not yours.
In this modern era, everyone gets bombarded constantly with a multitude of “irresistible” offers. The way to stack the odds of success in your favor are simple:
Of course, an intelligent person attempts to learn from the mistakes of others rather than making them all himself. Part of this is learning how to protect you from being taken. Again, this concept is straightforward.
To avoid bad investments:
1. Be a critical thinker — taking time to reflect and look at the evidence rather than acting immediately on everything.
2. Do your homework — before investing rather than after the fact.
3. Ask specific questions and get the answers in writing — and if they won’t respond to your questions adequately, walk away.
4. Interview the references provided by the promoter — but be aware most of these people will be paid to make extravagant claims. Be skeptical — if it sounds too good to be true, be very suspicious.
5. Resist pressure tactics to sign up immediately — because good deals very rarely require immediate action.
6. Don’t invest in anything you don’t understand — and unless you can explain what you’re doing to the average twelve-year-old, walk away.
7. If an investment clears all these hurdles, consider paying for a professional’s opinion — and let them go through all the fine print you naturally gloss over.
Do It Now Rather Than Regret It Later
Success takes more than knowledge — it requires action. Execution is everything. Winners know financial freedom isn’t won by what you know but by what you do. Therefore, begin today.
Once you have the right financial know-how, there are only two things that can stop you form being successful:
In other words, you can literally create the life of your dreams if you properly invest your time and money, but you have to make it happen. The magic lies in the doing rather than knowing what needs to be done.
Therefore, to get under way and to keep moving onwards and upwards, you need to:
1. Get out of your comfort zone — and replace contentment with passionate commitment. We’re all creatures of habit more than we care to admit. To make progress, you need to cultivate new habits that will be more productive, even if this produces a little initial discomfort. All great achievements are difficult in the short run but easier over the long haul.
2. Be decisive and actually take action — rather than getting bogged down in continually analyzing ideas from every conceivable angle and viewpoint. Act thoughtfully but by all means remember to act.
3. Keep rating yourself progressively — on how well you’re making choices that will increase your personal and financial freedom in the future. Set goals and start working on them.
4. Track, celebrate and then reward your progress — because the journey is a long one and you need to enjoy it to stay motivated. To make the journey more pleasant:
5. Remind yourself frequently the key is to strive for excellence, not perfection — and expect not to be able to do everything perfectly right out of the box. Keep doing your best and keep moving forwards and ultimately you’ll get to where you want to be.
Key Insights That Will Help You See More Possibilities
(04701) Michael LeBoeuf says:
Position Yourself on the Time and Wealth Grid
Being wealthy doesn’t happen by accident. It’s a conscious choice you need to make. A person who is financially independent does not work for money. Instead, they organize their finances so their money works for them, generating more income than they spend.
The scourge of modern-day life is many people work so hard to pay for their lifestyle they then have no time to enjoy what they have.
The wage “slaves” are those who work at minimum wage jobs — they have little wealth and must work long hours just to make ends meet. They may even have several jobs.
The unemployed have loads of discretionary time, but little or no assets.
Employees trade their time for money. They work hard to earn a decent wage and do so their entire lives.
Business owners have plenty of wealth but usually no discretionary time with which to enjoy their assets. They are consumed by their work and keep on acquiring more lifesteyle assets, even though they will never use them.
A person who is financially independent has money and the time to enjoy it. He or she works, not because they need to, but because they enjoy what they do. They then use their wealth as a means to an end to live a fulfilling life rather than getting caught up in owning more and more.
It’s important, every once in a while, to pause and think about where you currently are on the wealth/time grid. In terms of leading a happy, balanced life, financial independence is clearly the optimum goal to have.
Invest Your Time Actively and Your Money Passively
In a nutshell, this is how you become financially independent. The real accumulation of wealth begins whenever you start realizing the true value of your time and learns how to invest it effectively for long-term returns.
Strangely, the overwhelming majority of people do the opposite — they invest their time passively and their money actively. That is, they fail to maintain rigorous control over how their time gets used and then hire brokers to manage their investments for a hefty cut of any profits.
To actively invest your time means to decide where your time will be spent rather than having other people or circumstances dictate how your time should be allocated. In essence, your time should be consciously allocated over four basic areas:
1. Learning — obtaining the know-how and knowledge required.
2. Earning — applying what you know.
3. Living — doing what’s required to be healthy.
4. Giving — to others or the community at large.
Keep in mind how much time you decide to allocate to each of these four areas will vary according to your stage in life. Usually, early years are learning oriented, middle years are earning focused and later years devote more time to giving and living.
Money, on the other hand, should be invested passively — using no-load, low-cost index mutual funds that reflect the performance of the entire stock market. A passive investment plan is very simple:
1. Choose how to allocate your investment funds between domestic stocks, international stocks, bonds and cash. For example, you might decide to allocate your investments:
2. Buy no-load low-cost index funds that reflect your allocation.
3. Take 10% of every dollar you earn and add it to your investment fund.
4. Check your portfolio every year. Do nothing if it is within 10% of your original allocation. Rebalance it if your allcoation varies more than 10% from your plan.
Keep Wealth Building Simple
Simplicity is the key to wealth building. Use the 80/20 Rule to manage your time and compound interest (the Rule of y72) to earn financial freedom. Instead of earning to spend, earn to invest and build your $1 million nest egg.
The master key to becoming financially independent or wealthy is to keep things as simple as possible. The simplest ideas really are the most effective and powerful. In fact, all you really need are two rules to do well:
1. The 80/20 Rule — which says 80% of your personal effecetiveness will come from 20% of your activities. Therefore, to use your time productively, do those few activities, which ahve a high payoff and ignore all of the other more trivial items.
2. The Rule of 72 — to determine how many years it will take an investment to double in value, divide 72 by the rate of return. An investment paying 8% per year will double every 9 years. Once you understand this rule, you’ll realize how just a small investment made regularly and consistently will grow to a sizeable sum thanks to the benefits of compound interest. And that, in turn, will motivate you to harness this wealth-building engine to become financially independent.
That’s it. Those two rules are literally all you need to know and apply to become wealthy. The more you try to introduce other complexities, the less your returns will be. To maximize your wealth-building program, understand and then apply these two rules conscientiously.
Realize You’re Probably Going to Live Longer
Thanks to advances in the biosciences, your life expectancy is increasing. Plan yourself financially for many years to come.
To make an increased lifespan comfortable, you need to do three things:
1. Get and stay fit.
Resolve to take care of yourself physically and emotionaly so you have the good health to enjoy the opportunity to live longer.
2. Create your own endowment for the future.
Start thinking like a capitalist rather than an employee. Even if you keep your regular job, do some consulting projects or write a book in your spare time. Use that extra income to invest for the future. Resolve to build a retirement nest egg of more than $1 million on the back of the Rule of 72 and the 80/20 Rule. As a ballpark figure, work on the estimate you’ll need a nest egg that is 20-times what you want to receive as an annual retirement income.
3. Understand delayed gratification is not denied gratification.
Most people don’t even think of working hard right now so they can have the bonus of retiring early. Instead, they live from one paycheck to the next. To be certain, it will take some time and effort to achieve financial freedom, but the results will be well worth it. There is a wonderful quality of life attached to being financially independent, so much so that it is well worth foregoing some luxuries today to build a much better tomorrow.
Getting Wealthy is Like Getting Skinny
Getting wealthy is like getting skinny. We all want to do it, but few of us are willing to do what it takes. The secret to success, Frank Lloyd Wright said, is ‘dedication, hard work, and an unremitting devotion to the things you want to see happen.’ Are you on your way to seven figures in seven years? You have everything you need right now. So go for it!
-Michael Masterson
Generate a Better-than-average Return on Your Investments
November 30, 2007 by admin
Filed under Entrepreneurship, Investing, Wealth
(22003) Michael Masterson says:
A high income is a good start, but in and of itself this will usually not be enough to provide you with a seven-figure net worth within seven years. To achieve that goal, you’ll also need to make investments that generate a better-than-average return for you. This will never be a matter of picking some investment and then sitting back and letting it make you wealthy. Again, you will need to make some astute investments and then work hard on making those investments appreciate in value by applying the skills and know-how you bring to the equation.
The Secrets of Successful Investing
The 3 major investment types
There are usually only three investments you can make that will allow this intensive hands-on involvement on your part to generate extraordinary returns:
Essential investment knowledge
In order to achieve above-average gains on your investments, some inside knowledge about how each investment appreciates is usually required. These will be the closely guarded “secrets” of success the industry insiders guard jealously.Even from the outside, however, you can make an educated guess about what you will need to know to make your investments appreciate in value. For example:
The whole point is that to accelerate your rate of return on your investments, you have to work your investments. It isn’t simply a matter of looking far and wide until your have found the “right” investment and then sitting back and waiting for your ship to come in. You can generate above-average returns in any type of investment you choose as long as you know what’s required and you are prepared to work at it.Taking actionOnce you know what makes your investments tick, you can then go to work at adding still more value. You can:
Using the 3 Business Strategies
All of these different ways of optimizing and increasing your rate of return on your investments are really combinations of three general business strategies:
1. Secure profit-sharing packages
Put yourself into position to benefit from the good work you’re already doing by negotiating some type of profit-sharing arrangement. Typically, these are structured in such a way that you get a share of the additionl profits you generate for the business by introducing some new idea. If your employer is smart, this will be a no-brainer because you’ll become highly motivated to achieve something that benefits the business even more. There are many different ways to set these types of deals up.
2. Start a side business and grow it
Everyone should have a side business that allows you to generate money through the talents and skills you already possess. Not only does this add a second stream of income for you, but it also allows you to find the true market worth of your skills. If your part-time business grows large enough, at some point in the future you can decide whether to go into your own business full time or stay where you are. This gives you a good range of options. Set a goal to generate $25,000 a year through your side business by selling your services to noncompeting firms on a part-time basis to get started.
3. Invest in real estate
Real estate is th ideal investment vehicle. If you buy right, real estae will increase in value while you’re working away on other projeccts. To work real estate effectively, you don’t need to be actively doing physical work on your proerties. Instead, you make the most money in real estate by buying right. An active real estate investment program will mean you’re getting out in the marketplace and understanding value, getting on good terms with real estate agents who can steer good deals your way, and generally keeping tabs on what’s available. It also means watching for foreclosures and other great purchasing opportunities.
Wealth Building Success Stories
Example #4–From partnership to entrepreneurship
Approaches used:
Brad Solomon was a 27-year-old accountant in 1998. He met someone who convinced him the time was right to start an investor-relations business. This was natural extension of the kind of work he did as a corporate accountant, except it would also require that he learn how to write good public relations material that would appeal to potenial investors.To get started, Brad contacted someone who was already active in the financial publishing industry. Since he had more business than he could handle, he agreed to contract some of the more mundane aspects of his work to Brad. That worked out fine because it gave Brad the confidence to quit his job as an accountant and plunge into building his own company. The arrangement worked fine for a year or so until his client accidentally e-mailed Brad an invoice he was sending to his client. When Brad realized the other company was taking his bills and then doubling or tripling them for their clients, he realized there was much more money to be made if he dealt directly with the end clients himself.To build his profile, Brad started attending trade shows and industry conventions where he handed out his business cards. He also offered to do a few jobs on a love-it-or-you-owe-me-nothing basis. Gradually, he started getting clients and since he delivered more than they expected, he started generating some good word-of-mouth referrals. Within a year, he was regularly billing $10,000 to $20,000 per month. He then hired his first employee in 2002 and taught him how to find new clients.
To add another revenue stream, Brad then decided to start publishing an investment newsletter. He also started another business with his cousin to provide specialized healthcare workers. Brad agreed to put up the start-up capital and have his cousin run the company. By a stroke of luck, this industry was just about to enjoy some explosive growth and the new company literally took off.
By the end of 2004, Brad was making $400,000 a year from his investor-relations business and newsletter. He also made another $250,000 as a silent partner in the healthcare workers business. Brad started investing that money in small-cap stocks and real estate, where again he was fortunate to be coming into both markets when they were on the upswing.
By the time a large temp agency made an offer to acquire the healthcare workers business in 2005 for a very healthy price, Brad realized the value of all of his investments were rising rapidly. In fact, he ended up making around $2 million within three years just from his investment portfolio and the sale of his sideline company.
Example #5–Using sales skills to start a business
Approaches used:
In 1975, 18-year-old Bruce Buffer got a job selling office supplies at a 50-person company. Within two weeks he was the company’s number one salesman and within three months he was promoted to sale manager. He was earning $50,000 a year, but he could see the coompany was earning a lot more from his efforts, so he quit to start his own business. That was fine, except his previoius company hit him with a million-dollar lawsuit because he took their best salespeople with him, so Bruce returned to work for his previous employer for twice his salary plus a bonus.By 1993, Bruce Buffer got the entrepreneurial bug again. He already had a couple of part-time ventures going but he also wanted to help commercialize the success of his half-brother, Michael Buffer, who was a ring announcer for boxing matches who had the trademarked signature phrase: “Let’s Get Ready to Rumble.” Bruce and Michael decided to form a partnership to generate income from that phrase.Within three years, Michael Buffer was not only acting as ring announcer for boxing matches but also doing the same for the NBA, the NFL, WCW Wrestling, the NHL, the Indy 500, NASCAR and the MLB World Series. Bruce even came up with the idea of using personalized audio recordings of Michael for other events so they could generate more revenue without being imited by Michael’s in-person availability.
By 1999, Bruce and Michael working together had generated more than $400 million in sales. Michael even managed to negotiate one deal that saw him become the voice of the Ultimate Fighting Championship (a martial arts tournament) because Bruce was contracted to a competitor, the WCW Wrestling League.
Example #6–Writing a success story
Approaches used:
In February 1999, Justin Ford declared bankruptcy. He had tried starting his own import-export business and then building a publishing business, but all his efforts had come to naught. As he had a wife and three kids to support, he looked around for something he could do to make end meet. The only job on offer was to become a copywriter to develop marketing materials for another publishing company. Justin didn’t have any experience in the field, but with no other options he interviewed for the job. The publisher liked him and offered him a job with two salary options: Justin could take a starting salary of $60,000 a year or he could work for the company on a freelance basis earning the standard rate for freelancers plus a royalty on the sales he generated. Justin opted for the freelance position.Within a year, Justin’s income had doubled to around $200,000. About half came from copywriting fees while the other half came from the performance-based commissions he was generating as a marketing consultant. It was at about this stage that he came up with the idea to develop a program called The Seeds of Wealth, which would teach children how to save and invest money. Justin developed all the sales materials for his program and then approached a successful businessman to offer a 25-percent stake in The Seeds of Wealth for $25,000. The businessman loved the concept, was impressed by the marketing materials and made the investment.With his new idea launched and solid success as a copywriter, Michael had managed to save $30,000 by the end of his second year as a copywriter. He used that money to buy a piece of real estate that turned out to be a very good investment. He would be able to resell his property for an additional $85,000 within a couple of years.
By 2005, Justin had four income streams in place:
Learn more about Michael Masterson’s philosophies from his book Seven Years to Seven Figures.
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