Money 04 (Jan 14 - Dec 16)

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How to Get Rich in Five Years or Less, Part II By Amber Lee Mason

My friend Dean wants to get rich…

Yesterday, I shared Dean's story… He's not looking to become "billionaire rich." He just wants freedom. He wants to be rich enough to afford to live where he wants, to spend his days doing something he enjoys, and to not worry about money.

The first step Dean took was to quit a government job. The money wasn't bad… but the work was boring, and there was no real "upside" to his current position. So he switched careers… He joined a business that gives him much more freedom and a better shot of getting rich by his definition.

Today, I'll share the second idea that will help Dean achieve his goal.

It's one of the greatest secrets of building wealth… and when you apply it to your career, it's one of the fastest ways to increase your net worth…

The wealth-building secret I'm talking about is "compounding."

When it comes to your investments, that means reinvesting the income you earn. So if you own a stock paying a dividend, you use your dividends to buy more shares. Then those shares earn dividends… which you can use to buy more shares.

It's a "snowball" effect. It starts small. But with each new layer, it grows exponentially bigger. Eventually, you're earning multiples of your original investment.

You can do the same thing with your job. My friend and colleague Mark Ford explained it best in an interview he gave a few years back…

Joe Ordinary is 25 years old, makes an ordinary $30,000 per year income, and gets ordinary 3.5% yearly increases. Over a 40-year career, he will make a little more than $2.6 million.

Sarah Superstar, also 25, averages 5% yearly increases. Over the same 40-year period, she will earn $3.8 million – more than $1 million more than Joe.

You can find the full interview – which is great reading – for free right here.

The important part for my friend Dean is where Mark explains how to start earning raises in the 10% range…

It takes two steps:

1. You have to start doing more valuable work.

According to Mark, that means one thing: producing long-term profits. Even if your job isn't in sales, you need to do everything you can to make sure you're contributing to the company's bottom line.

As Mark says, you need to "transform the work you are doing now in such a way that it will produce those long-term profits. The better you can do it, the more money you will make. It's as simple as that."

Dean is in a position where he can use his work to directly increase sales. If he gets good at that, he'll be well-rewarded.

2. You need to make sure the folks who can give you a big, 10%-plus raise know that you're worth it.

The way to do this is to become indispensable. Mark says to make a list of things you can do to increase your value to your boss. Then start working through the list, one by one.

In January, for example, you might make it a point to get your boss his most important report a day earlier than normal. In February, you might tell him he can delegate to you the sales calls he hates to make.

Eventually, your boss will start assigning you more responsibility. And according to Mark, "he will see you as an entirely different and more important employee than any of the others he deals with."

Dean just moved to a remote tropical island, thousands of miles away from his business' headquarters… So he's going to have to put in extra effort to make sure his boss and his boss' boss know what he's up to. But that effort will be worth it if he gets a 10% raise this year… and maybe another one the year after that.

If he can increase profits and make himself valuable, his salary could double in five years. That'll put him well over his old government salary… and there will still be plenty of upside left.

A much higher salary will make it easier for Dean to live the lifestyle he wants without worrying about money. But there's still one more step he'll need to take before he can count himself truly "rich"…

In tomorrow's essay, I'll share the final piece of the puzzle…

It's an idea that will help Dean sleep better at night… and eventually give him the ultimate freedom to do what he wants, when he wants.


Source: Daily Wealth

[winston]

"Victory often goes to the army that makes the least mistakes, not the most brilliant plans."
-- Charles de Gaulle, 18th President of the French Republic

[winston]

How to Get Rich in Five Years or Less, Part III By Amber Lee Mason

My friend Dean wants financial freedom…

He wants to be able to afford to live where he wants, to spend his days doing something he enjoys, and to not worry about money. That's his definition of being "rich."

The other day, Dean and I were talking about how he could get there…

I shared with him the three greatest wealth-building ideas I know. The first was to join or start an ideal business (click here to read more)… The second was to compound his income by achieving a 10% raise every year (click here to read more).

Today, I'll share the final piece of advice I gave Dean…

For peace of mind ­– to really be free – Dean is going to need plenty of "go to hell" money.

This is a pot of savings that will allow him to walk away from a job or situation that doesn't work for him. It's the amount of money it will take for Dean to know he has the freedom to do whatever he wants.

And to get that, he's going to have to save like a squirrel in October.

My publisher Porter Stansberry wrote the best essay on the impact of being a good saver I've ever read. He wrote it for kids in their 20s… but it applies to anyone who wants to accumulate a big bankroll. You can read it right here.

Porter started with a 15-year-old and assumed a low salary ($9.50 an hour)… a very high savings rate (50% of gross pay)… a low investment return (5% after taxes)… and a long history of good raises (a 10% rate every year). He showed that this kid could have a nest egg worth $976,000 by age 40.

What variables really matter? Well, if you assume annual investment returns at 15% instead of 5%, his nest egg only goes up to $1 million at 40 – about $25,000 more net worth. Investment results make almost no difference to wealth building. (They make a huge difference to folks who are already wealthy.)

What about saving? What if you drop our kid's savings rate back to a normal 15%? Even with a 15% annual investment return, the size of the nest egg collapses to only around $318,000.

Saving is the single biggest variable.

Dean is starting out ahead of our 15-year-old. So if he practices the same discipline, he'll have a quarter-million dollars by year five. That'll cover a lot of "go to hell" situations. If he sticks with it, he'll have a million-dollar savings account in less than 15 years.

The key is to save a lot… and to continue to save a lot even as his compensation increases.

The temptation, of course, is to increase spending as income goes higher. As Porter writes, many people "tie their feelings about their self-worth to their spending, instead of to their net worth (their saving). They've badly confused the near-term experiences of living rich with the long-term goals of being rich."

Dean has modest tastes and good saving habits now. Like I told you on Monday, he drives an old motorcycle and wears old Converse shoes. If he can maintain these habits even as he grows his income, he'll have plenty of cash on hand to help him sleep at night.

In short, Dean might not realize it, but he's already closer to being richer than 99% of his peers.

He found a great job, he's doing what he enjoys and living where he wants. He's in a position to learn valuable skills and be well rewarded for them. He has so far avoided the trap of spending money he doesn't have.

He's taking the necessary step to get rich… to be free.

Are you?

Source: Daily Wealth

[winston]

“Only the man who does not need it, is fit to inherit wealth, the man who would make his fortune no matter where he started.”

– Ayn Rand

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I just made $6 million. It was easier than you think.

by Mark Ford

Source: The Palm Beach Letter

http://thecrux.com/what-the-rich-know-a ... -you-dont/

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Here's What $1.2 Quadrillion Looks Like

Source: Money Morning

http://moneymorning.com/2013/09/18/here ... ooks-like/

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3 Keys to Attracting More Prosperity Now

by Mary Morrissey

http://www.abundantentrepreneur.com/3-k ... erity-now/

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Always be around people who have abundance consciousness.

Then you will know how people with abundance consciousness think.

The rich dad teaches differently than the poor dad.

The sound BRZEE will help you get rid of scarcity consciousness and to attract abundance.

- Dr. Pillai

[winston]

Creating Abundance

How to create and experience abundance in your life, including financial abundance (wealth), social abundance (friends), and more.

http://www.mindbendingvideos.com/creating-abundance/

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Surprising Reasons You Should Become a Millionaire

By Jim Rohn

Here’s why you should become a millionaire. It’s not for the money.

Do it for the skills you have to learn and the person you have to become.

Do it for what you end up knowing about the marketplace, what you’ll learn about the management of time and working with people.

Do it for the ability of discovering how to keep your ego in check.

Do it for what you have to learn about being benevolent. Being kind as well as being strong. What you have to learn about society and business and government and taxes and becoming an accomplished person to reach the status of millionaire.


Source: HSI