He quit reading on page 21

I purchased the book Secrets of the Millionaire Mind by T. Harv Eker last week at a second hand store. I was very happy to get it (and a number of other great business books) for only $2.00 each. When I arrived at home I began to flip through the books reading headings, chapter titles etc.

Upon first opening the book, I saw underlines, scribbles and other “highlights” that looked something like this:

I started to get a little worried. Although someone had taken the time to point out the important sections of the book - a executive summary of sorts - I still like to read it myself. Just when all seemed lost, I reached page 21.

It all stopped.

No more scribbles. No more writing. No more Very Imp. on the side.

Of course, being an optimist I want to believe that after the first 20 pages, the previous owner of this book was so enthralled by the material that he read straight through the night. No pen or highlighter. Just the reader and T. Harv Eker.

What really happened

Mr. Motivation attended a seminar and bought this book (I think this because it is signed by the author.) He got home and told his wife and friends how excited he was about making a million dollars by the end of the month. After a short bought of laughter, he grudgingly went to the “home office” (most likely a basement desk and computer) to read his book.

After teaching everyone a lesson about how committed he was he reached page 19. This is the portion of the book that starts to talk about “Verbal Programming.” Wait! This isn’t telling me the step-by-step method to becoming rich! He reads one more page and goes to bed.

Blown out of proportion

Of course, as usual I’m taking this to the extreme. I could be way off and the guy was actually a real live millionaire who was keeping up with the competition. That being said, doesn’t this show you why only 1% of the population reach the status of super wealthy and something like 90% end up retired broke?

Just imagine what could have been learned on page 22.

Please note: I have been to see T. Harv Eker and he is a very good motivational speaker. I also picked up his Business Mastery courses (another great garage sale find!) and they are excellent.

** As of this moment, I have still not fully read this book - currently on page 1.

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Review: Ender’s Game

On first glance you may be wondering why I would be reviewing a Science Fiction book on a making money website. The answer is this: this book made me take a new look at leadership like nothing else before.

I’ve read a ton of books on leadership and success, both biographies and manuals; however, this little 357 page paperback brings out elements of leadership strategy that I don’t think I’ve seen anywhere else.

No Spoiler Here

I am not going to write a chapter by chapter analysis of Ender’s Game for you; however, I am going to take about a few of his tactics and examples. If you haven’t read the book, please stop where the heading says: Spoiler.

The basic premise for the book is that Aliens have attacked the earth and the F.I. is preparing for another attack. The world is united in finding a leader that will be able to lead their forces when the battle arrives.

Ender is a child genius who is put through this training. As the course of the book goes on, it becomes more and more clear that he may be the leader they are looking for. Testing of the children is done by making them compete in war games with each other. Of course, these games are designed to challenge the kids and make them the commanders that they are expected to be.

Will I like the book?

If you’re going to stop reading this post here then here’s my suggestion: go out to a book store and get a copy of the book (if you want, please contact Amzaon through my affiliate program.) This is a great read for people who want to get a completely new way of reading about strategy.

If you absolutely do not like science fiction; then I may suggest you reading a good biography instead.

Spoiler - read on here for the examples

The lessons from each scenario do not come from the actions that Ender takes, rather, they are presented through his thoughts as to “why” he has taken the actions in the first place.

Getting the message across
As the smallest and brightest child in a school, Ender was the victim of constant bullying. After having his ‘monitor’ removed - a device in all children that allows adults to monitor their behaviour - he was soon surrounded by a gang of bullies.

When the opportunity presented itself, Ender took a desperate blow and kicked Stilson (the bully) hard in the chest. Stilson falls to the ground and Ender has these thoughts:

For a moment, the others backed away and Stilson lay motionless. They were all wondering if he was dead. Ender, however, was trying to figure out a way to forestall vengeance. To keep them from taking him in a pack tomorrow. I have to win this now, and for all time, or I’ll fight it every day and it will get worse and worse.

Ender then proceeds to kick Stilson until there is no fight left in him. Of course, the rest of the pack do not consider fighting with him again.

This example is very early in the book and it really shows you who Ender is. He continues to think 10 steps ahead and uses each event to achieve more than one result.

Formations
When Ender is finally made commander of his own group he uses everything he has learned to create a new strategy.

Rather than going with the customary 4 Toons of 10 people and attacking with text-book formations, Ender creates his team with 5 Toons of 8 - each Toon having their own strategy and fighting capabilites. Of course, early battles are easy wins because each new group reacts slowly to the new empowerment of the team.

Doesn’t this happen too often in business? The “leader” tries to retain all decision making so is slow to react to changing market conditions? If I learned anything here, it’s to empower your employees.

The Real Enemy
Throughout Ender’s training it becomes clear that while he is continually competing against fellow students, the games are being rigged by the instructors to make Ender lose. The real enemies were the instructors not the students.

This made me think about my own life a lot. Have I identified the true challenges that are holding me back? Sometimes it’s a colleague or a boss but in many cases it was my own internal roadblock. Consider that when a challenge presents itself. What is the real outcome you want to see and what do you need to do to reach it? AKA - think outside the box!

Summary

While I obviously can’t cover in any real detail the events in this book, I would highly recommend that you read it.

The book describes numerous situations in which Ender learned from those around him and used different strategies to defeat his opponents. I found this to be a real motivator - not specifically in destorying your opponents - but in how you strategically move through your life and create success.

Maybe I’m reading too much into this book but after reading it in the last 2 days, I noticed that I began to use some of Ender’s ‘lessons’ in my business.

I learned that setting your goals high and managing your plan to reach them is important. It’s also necessary to have the right people in the right positions with the ability to make their own decisions for their teams.

If anyone reads this book, please let me know if you think I am reading too much into this book. I guess I figure that any lessons you can learn from anything you do will only help you further your goals.

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Review: Millionaire Maker

I just finished a book called The Millionaire Maker: Act, Think, and Make Money the Way the Wealthy Do by Loral Langemeier.

The reason I picked this book for the week was because Loral is one of the contributors to The Secret. Since I enjoyed that book so much, I thought I would read more from the people it featured.

Just The Facts

After reading through this book I would suggest that you take the time to read it if you are interested in being an entrepreneur. This is who the book is directed towards. It’s a quick and easy read so it shouldn’t take you too long. I found that although I’ve read a lot of her information in other books, she does have a good way of structuring your life to become wealthy.

Think Rich

Loral has some great advice for people that truly want to move on to the next step (the first step is being poor!) in their lives. In the first few pages of the book, Loral pronounces that too many people think that they either don’t deserve or can’t have a lot of money. As she says:

1. You posses every tool you need to make a lot of money.
2. Wealth is about access, and now you can finally access the information and opportunities too long kept in too small a circle.
3. There is no such thing as a self-made millionaire; it takes a team to make those millions
4. Taking control of your money takes stress and risk out of your life

I like where she’s going with this. I’ve been there just like everyone else. I’ve got a job that pays a solid income and it’s such a risk to leave something like that. What if I fail?

This book is basically a series of case studies that shows how normal people are taken from their everyday lives (kids, debt, jobs, etc. etc.) and can be taught how to turn their passions into long term wealth.

The Wealth Cycle

Loral has come up with two different cycles that people spend their lives.
The first is the Lifestyle cycle:
Expenses ==> Liabiliites ==> Expenses ===> Liabilities etc.
The second if the Wealth Cycle:
Income ==> Assets ==> Income ==> Assets

Breaking these two down, while the Wealth Cycle is the path to eternal happiness through abundant wealth, the lifestyle path is your fast track to nowhere. This way involves credit card debt (spending before you make it) and adding debt and perishables instead of assets. I know what you’re saying, “didn’t Rich Dad have the same model ten years ago?” My response is, “Yes”; however, in her book she assumes that you are intelligent enough to understand it the first time. She doesn’t need to show it one every page.

My favorite quote in this chapter is:

I believe it is possible to achieve wealth and have a latte with breakfast.

Touche David Bach!

Wealth Building Blocks

The basis for the rest of the book is in Loral’s 12 Wealth Building Blocks:
The ‘Must Complete’ Blocks
1. Gap Analysis - A financial model that defines where you are and helps you work towards where you want to be.
2. Financial Baseline - an overview of your financial situation using personal financial statements, revenue, expenses and your balance sheet.
3. Freedom Day - the realization of each goal and moving into millionaire status.
The ‘Used As Necessary’ Blocks
4. Debt Management - 5 step debt elimination plan
5. Entities - the organization of trusts, partnerships, and corporations to effectively manage wealth and to take advantage of potential tax strategies.
6. Cash Machine - the fuel that accelerates the Wealth Cycle (where the money comes from).
7. Wealth Account - the pay-yourself-first account (David Bach’s back in) that is used to purchase income producing assets.
8. Forecasting - a projection of your revenues, expenditures, assets, liabilities.
9. Assets - Direct and diversified asset allocation to create passive income.
10. Leadership - you are the linchpin of your wealth building empire.
11. Teamwork - as mentioned before, ther are no self-made millionaires. You need to create a professional team to help you succeed (lawyers, realtors, brokers, accountants etc.)
12. Conditioning - your financial way of thinking and your financial confidence.

The first three blocks (must do) basically take you through the process of finding out what you want, what you have and when it’s going to happen (ie. Goal Setting). What’s nice about this is that it takes you through the process and makes you focus on what you need to do to reach your eventual goals.

Sequencing

Now that all of these blocks are in place, you start with the first three to determine what needs to be done, then click in the remaining items as necessary. Each of the chapters in the book coincide with one of the items on the list. If you’re interested in figuring out where you fall in, I’d suggest picking it up.

As an example, one couple had a lot of debt and needed to get rid of some payments. After talking with the family, the sequence looked like this:
Cash Machine ==> Entities ==> Forecasting ==> Debt Managent ==> Wealth Account ==> Assets

Each student has a different order to their fiancial freedom. Have a read to figure out where you fit.

Who will this book help?

This book was written specifically for people who are ready to leave the rat race and move into an entrepreneurial life. In many instances, this is one of the key factors that will help improve the lives of her students. Since I am in this stage of my life, I found there to be a lot of great value from the book.

One word of caution when reading this book: Make sure the advice fits in with your goals.

Loral makes a lot of assumptions about returns, real estate investments and other ways to make money. She talks about running out to grab a few positive cash flow properties with 10% down then investing in a business that will net out over 40% per year. Once you reach her level of contacts, it may be possible to find these around every corner. Until then, keep searching and let me know what comes up!

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What To Think About Rich Dad

I’m not sure how to start this post.

I originally wanted to write a review of the Rich Dad, Poor Dad series by Robert Kiyosaki and detail all the pros and cons that I have found throughout the book and series. As I read more articles, and found a growing skepticism of Kiyosaki and his work, I started to analyze my own thoughts on what I’ve learned from the books.

One article that really changed my direction is a scathing review of Kiyosaki, his Rich Dad, Poor Dad series and his entire history. You can read it (please set aside 30 minutes or more) at johnreed.com/kiyosaki.html.

To give you a quick summary, Reed writes:

There are probably many ways to became a financial genius, but Kiyosaki has certainly chosen an unlikely route:

* flunked sophomore year of high school and had to repeat
* U.S. Merchant Marine Academy
* 3rd mate oil tanker (or was it “Love Boat” type cruise ship as he said in one of his books?)
* Marine helicopter pilot (or was it fighters?)
* refused to return to ship when it was ordered to return to combat (or just missed the boat)
* Xerox salesman
* failed businessman (nylon surfer wallets)
* failed businessman (rock and roll memorabilia)
* failed author (1993 book If You Want to Be Rich & Happy, Don’t Go To School?)
* failed MBA applicant
* homeless person
* bankruptcy (or maybe not)

Kiyosaki tries to make a virtue from all his failures and false starts—saying that’s how you learn and you have to get back up and all that. Fine. But couldn’t we see a little more actual success after all these great lessons were learned? And how did all this screwed-up stuff happen to a guy who had the benefit of “Rich Dad’s” brilliant wisdom back at age nine?

Investment Advice Means More At Different Times
I’ll admit that I’ve read most of Rich Dad’s early books. At the time that I was reading them, I still had a limited financial education and these books seemed to say exactly what I wanted to hear - get rich quick, book smarts make you poor (although I hold a Bachelor of Commerce degree), working will never make you rich. Maybe it’s just because I’m on the cusp of Generation X and Y but not working hard for a lot of money sounded pretty good straight out of school!

Over the past few years, as my financial education level has grown, I’ve quit reading the Rich Dad books because I realized that much of the same information is being recycled in each new title. In fact, many of the same stories are repeated through a number of different books. As you know, I have a strict requirement for adding value to what I do. Telling me a story that I’ve already heard twice is not adding value. It wastes my time and money.

I also began to realize that the advice that I was getting was not always in the best interest of me or my family. Although I agree that the education system in North America needs to implement a much better personal finance and wealth management aspect, I will never agree that working for a university or college degree somehow makes you less likely to become wealthy. According to Kiyosaki, I’m already a lost cause because I have a degree!

The Lessons Are Written Between The Lines
Although it looks like there is evidence that Kiyosaki may be a bit of a fraud, I still don’t want to discount everything that I learned from reading his books.

Prior to my financial awakening (Changing My Belief Systems) I thought nothing of spending everything I had and using the credit card to supplement my lifestyle. I no longer believe that. I now know that in order to have a successful life you need to have plans and live within your means. What that means is up to you. For me, it’s saving 10% of my income for early retirement.

What the Rich Dad books gave me was a push in the right direction for the investment portion of my plan. The entire series is basically focused around one theme (as I see it):

1. Assets are things that make you money, Liabilities are things that cost you money.
2. Focus your efforts on buying Assets and do your best to reduce the Liabilities.

It’s that simple. If you disregard everything else that he writes about the limited value of school education, mutual funds being a poor person’s investment or the repetitive stories about his childhood memories, this rule still holds value.

Buying assets just makes sense. Whether it’s in stocks, mutual funds, notes or real estate, buying things that will create wealth for you is crucial for a secure financial future. If you are able to filter out the rhetoric within the books I think that you will find some stories that can motivate you and information that will help you succeed.

The Story I Still Enjoy
One Rich Dad story that I think is valuable is the one about his new Porsche purchase. As the story goes, Kiyosaki found a Porsche that he really wanted to buy. On the advice of his wife, rather than simply buy the car outright, he bought an asset that would create the monthly cash flow to support the car.

Although I would much prefer an Audi R8 I still like this story as a way to think about wealth. If you create an entire life plan for yourself, you will be able to make decisions from a position of power and know how each decision will affect your future. Knowing your financial goals, your personality and your family expectations is important as you make these decision. It also helps to track where your money is going and what it is costing you to spend it on material things.

Back To Rich Dad
The more I read, the more I believe the negative press on Kiyosaki; however, I still think that his original Rich Dad, Poor Dad book is an important read. Grasp onto the pieces of information that will help you move forward in your financial education and leave the rest behind. If you’re serious about one of the strategies that Kiyosaki talks about, do a lot more research and find out what will work for you. If nothing else, you can speak intelligently to the millions of other people who read and follow his teachings.

Do It On your Terms
One last piece of advice is this: Don’t quit your day job on someone else’s terms. If you’re ready to exit the rat race to start your own venture then only do it once you are totally confident in your prospects and your family is ready for the change. If you blindly follow the advice of an author, mentor or colleague you are living according to their situation, not yours. They may be financially secure, completely comfortable with risk or any number of different things. You need to make decisions based on your own goals so you succeed. Simply use the advice from the rest as a way to move forward.

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Tags: rich dad, real estate, real estate investing, robert kiyosaki, investing guide, book review, make money online, multiple streams of income

Review of Smart Couples Finish Rich by David Bach

I was lucky enough to get this book as a gift from a friend. It’s one of the books I’ve walked by one hundred times but never actually picked up to buy. I’m glad I received it when I did!

David Bach, who invented the Latte Factor is a personal finance guru with a number of different books written. Prior to this one his best selling books include: The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich, Start Late, Finish Rich: A No-Fail Plan for Achieving Financial Freedom at Any Age (Finish Rich Book Series) and of course Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner.

This is another of those books that I read through the night to finish. By the time I was done I had made 5 or 6 pages of notes and realized that there’s a lot more to personal finance than budgeting!

What I liked the most about this book was that Bach took the focus off the end goal of “having a million dollars” and directed me to focus on my personal and family values rather than the cash. He transforms your thoughts from the normal, “I want a million dollars, in cash, by December 31, 2025″ and makes you look at your financial goals from the Do-Be-Have mentality. Do-Be-Have meaning that you start with who you are and what you like then what you want.

I also really liked the entire section on organizing your life. He helps you create your filing system, organize your financial papers, personal information and prioritize your next steps. This part of the book also really helped me to focus on getting my financial information and accounts in order.

For a quick summary of the book:

• Couple need to BOTH plan their futures together
• Couples need to fully understand the ins/outs of their financial situation
• Base financial goals on Values (Be-Do-Have) rather than just monetary
• Get your insurance and wills in order
• Debunks the Myths and reveals the Facts about Couples and Money
• Determine the true purpose of Wealth and Money in your life (as a couple)
• Focus on planning as a couple - integrating both your goals
• The Couples Latte Factor - little things you buy that put you in debt
• Money Basket # 1 - Retirement
• Money Basket # 2 - Secutiry
• Money Basket # 3 - Dreams (another great one!)
• The ten biggest financial mistakes a couple can make
• How to increase your income by 10% in 9 weeks

The last one is a little out there. Basically he says that you should be getting a 10% increase in your income or either accept your fate (poor and destitute) or find a new job. This chapter is one that I first questioned (and then successfully implemented) so it was definitely worth the read.

I would suggest this book to anyone interested in getting their financial house in order. I really believe that you need to be organized before you can ever hope to achieve great wealth.

Review of The Wealthy Barber by David Chilton

As I mentioned in my posting Changing My Belief System the bestselling book The Wealthy Barber was the first real financial book I ever read. Not only that, it has truly had the greatest effect on what I am today financially and the direction I have taken personally over the past five years.

The Wealthy Barber is narrated through the eyes of Dave, a soon-to-be father who is ready to get his financial house in order. The story focuses on a series of conversations between Dave’s friends Cathy, Sue, James and Tom and their new mentor Roy – the wealthy barber. The characters in the story have a broad range of issues and throughout the course of the book, Roy’s ideas on wealth generation, saving and investing change this group’s viewpoint completely.

Though being written in 1989, the concepts within the book still hold strong. Chilton focuses on a few main aspects of personal finance in a humorous yet informative way.

The Ten Percent Solution
There are very few people who have read a financial book in the last 10 years that don’t know about the 10 percent solution or “paying yourself first.” This is probably one of the best pieces of advice that you can take from the entire book. Set aside 10% of your pre-tax income and invest it in mutual funds. One funny point made by Roy is that mutual funds have a low PITA factor (or pain in the ass factor).

The interesting part about this chapter is that the 10% solution does not necessarily apply to retirement saving. It is reserved for use later in life on luxuries such as boats, cottages or luxury cars. This is your money to spend how you want without guilt!

After the Ten Percent Solution discussion, the next topic moves to wills, life insurance and taking responsibility for your life (and death!) The barber demonstrates the importance of buying the right insurance for you, your spouse and children (burial costs only) to the group. A key lesson about life insurance in this topic is the value of term insurance over universal or whole life products.

This chapter gives a great discussion about protecting your family and securing an income for your partner in the case of an accident. The bottom line in this chapter is to protect your family without over-insuring and without spending too much money.

Registered Retirement Plans (RRSP or 401k)
One phrase required: “Compound Interest.” In this section, Chilton also talks about the value of a solid investment fund. He states four main points for selecting a solid fund:

1. Invest in funds with solid returns
2. Buy diversified investments – international and across many industries – to spread risk
3. Choose value oriented funds and fund managers
4. Watch the costs (MER)

Home Ownership
Chilton takes a contrarian approach to today’s logic and recommends that a person truly examine the costs and benefits of home ownership. The best line in this chapter is “the reason that the vast majority of homeowners say that their house is the best investment that they’ve ever made is simple – it’s usually the only investment that they’ve ever made.”

Saving Savvy
One key part of this book that helped me move forward in a positive financial direction was the concept of budgeting. I am still not great at following a budget; however, I am great at knowing what I spend, where my money goes and how much I have left each month. I follow the 10% rule and the investment rules so I know what’s available for discretionary items like travel, motorbikes and golfing.

One piece of information I did not like is the suggestion that conservative investors stick their money in a bank CD then re-invest the interest. I know that Rich Dad – Robert Kiyosaki – talks about wanting his money back from every deal but investing with such a low return seems like a waste of my time. This tactic would be great for a person close to retirement but still wants some upside of a bull market.

Why did The Wealthy Barber change my life?

This book showed me what it takes to become a millionaire before the day I retired. The idea of a million dollars was always a distant goal but this book showed me how simple it was to achieve. While I have learned a lot of ways to increase the speed in which the million dollars arrives, the easy to understand concepts in this book pushed me in this direction.

For those people who need a good boost in the right financial direction this book will focus your mind. For those people who already consider themselves to have a good deal of financial knowledge, this book is still a great motivator to make sure you’re working in the right direction!

Get your copy of David Chilton’s bestselling book, The Wealthy Barber here.

Changing My Belief System

In early 2001, I was a normal twenty-something and loved to spend money. I worked in a resort town as a fine dining restaurant server and was bringing in about $100 in tips and $40 in wages each day. I made a lot of money (for a university student) and also spent a lot of money. When talking with my family I can distinctly remember saying,

if I can have a lot more fun now and it only costs me $100 or so in interest then I’d say it’s worth it.

At that time, I had a credit card balance of about $6,500 and, other than a snowboard, I had very little to show for it.

It wasn’t long afterwards that my mother handed me a book about personal finance called The Wealthy Barber. I sat in my living room with a fire burning and read it cover to cover through the night. I’m not sure how soon after reading the book I started to change my mentality but it wasn’t very long and it was drastic.

Since 2001, I have made a consistent effort to read everything I can about personal finance, mortgages, real estate, investing, goal setting, strategy, wealth creation and retiring young but it was that first book that completely changed who I was and what I believed. Before this book, I was the official ‘spend now and worry later’ type. As we all know, this leads to high debt and no way to grow your wealth and retire young.

After thinking about my own story, I realized that creating wealth really isn’t about the amount of money you make. It’s all about the attitude and belief system that you hold. If I had the same ideas about spending money today, I would have a very different financial statement and balance sheet. It’s very strange to look back and have a defining moment in your life that changed who you are. Is it a cliché to say that I owe it all to my parents?