Wealth Building
Forces Working Against You – To Make You Poor!
January 3rd, 2010
Forces working to make you poor!
There are “forces” working against you which result in you working harder and harder to “save a buck”!
The first step is to UNDERSTAND these forces. The second step is to make them work FOR you, or LESSEN them.
Here they are:
- Bad Debt. Paying interest on “bad” debt is hurting Americans. In fact, as much as a THIRD of the average American income goes to INTEREST PAYMENTS ALONE!!
- Taxes. As much as a THIRD of the average American income goes towards paying TAXES alone!! So now we have 2/3 of the average American income going towards either the government of a financial institution.
- Inflation. Inflation is a form of taxes. Inflation is actually HIGHER than most people think and what the government tells us. How? Well, I will keep it brief by saying that the cost of FOOD and ENERGY (e.g. cost of gas in your car) have been removed from CPI (Consumer Price Index – what inflation is based on).
So these are SOME forces working against you. There are others that I will not cover in detail, but include the fact that most Americans money (savings, 401k’s, etc) is just NOT working for them – they are being bombarded with “fees” and other things I won’t cover here.
So what can you do about it? LOTS!
If you ONLY knew what you did not know about the above, you would realize how people’s ignorance is costing them a LOT!
That is the premise of the online workshop Infinite Wealth System (www.InfiniteWealthSystem.com). The fact is that YOUR money is going out of your POCKET as you READ THIS. You own it to yourself to at least check out the website – www.InfiniteWealthSystem.com!
So it boils down to 3 things:
- Let those forces keep working against you as you work your *** off and you do NOTHING!
- Do something about it and start making these forces work FOR YOU to build wealth automatically!
- You decide “I NEVER SAY THIS” and play ignorant, which leads you back to #1. Keep working your &%^ off while the rest of us build wealth.
My New Year Gift To You All
January 1st, 2010
The Wealthy Code Training Videos
I want to wish everyone a happy and prosperous 2010.
As I was enjoying the holidays with friends and family, I decided to go ahead and record a training on becoming “wealthy” as a way of giving back.
There is a lot of mis-information out there and confusion. So I decided to record 3 to 4 hours of FREE training on becoming wealthy. Some of this was from before, so I combined it into a series I call “The Wealthy Code.”
Here is the link – enjoy. http://www.TheWealthyCode.com
Let me know what you think of it.
Investing in Private Offerings
December 27th, 2009
What you should expect as an Accredited Investor
One of the advantages of being an “Accredited Investor” is the ability to invest in “Private Offerings” or “Private Placements.” I have seen a lot of this happen, and I would like to share with you what you need to know and do.
Let’s start with a simple explanation of an “Accredited Investor”: Someone that makes $200,000 or more per year, or as a couple $300,000 per year (and has made that in the last 2 years), OR has a net worth of $1 million or more. (By the way, the rumor is that might be changing soon).
As far as “Private Offerings” – this is a private method for entrepreneurs to raise money for their businesses. When you “invest” in a “Private Offering” – you are buying shares in that company.
So here are SOME things to recognize:
- Accredited Investors invest in these things because they are hoping that a SMALL PERCENTAGE will hit big while the rest will fizzle and/or die. What that means in plain English is the Accredited Investors recognize that with a big percentage, they will LOSE MONEY! It is a fact – look at the statistics – most businesses go out of business. Savvy investors recognize that.
- Given the above, most savvy investors will invest a SMALL PERCENTAGE of their net worth into a whole bunch of private offerings – because they recognize it is a numbers game. Some make big money, most will go out of business.
- As a savvy investor, do your DUE DILIGENCE!!!
- Savvy investors do not invest in “ideas”, but rather they invest in the “people”. Find out everything you can about the MANAGEMENT team. Then, and only then, should you look at the “idea” and the demand for the product/service.
- Read ALL the documents you receive; At a minimum, read the PPM (private placement memorandum) and the Operating Agreement.
- Have experts review those documents – your attorney, your CPA, etc.
- I have heard many complaints that originate from misaligned expectations. In my opinion, the overly positive expectations of investors are their own fault for not doing enough investigation and due diligence. Also many of those investors expect to be paid within a short period of time when most small companies need a good 5 year run to be able to “make it.”
- The PPM lists specific RISKS that you need to read carefully. Spend time reading these carefully. It is under a specific “Risks” section.
- Make sure to ask a lot of questions – it is your right to do so.
- According to my mentor, NO ONE hits 1000 batting average. Recognize that you are taking a risk as well. THE WORST thing you can do is blame the entrepreneurs. I have seen it over and over again. People hear about someone that has done REALLY well over the years, making millions of dollars, then suddenly they want to invest with this “everything she touches turns into gold” person. The economy turns around like it did (beyond her control), and she loses that deal and the investors money, and suddenly this person now is EVIL and a CROOK when all she tried doing was the absolute best for the investors. This is all to0 common!
That’s why SEC prefers Accredited Investors invest in this. This is a game for the RICH – not for anyone.
So here is my message to everyone that is thinking about investing into such deals:
RECOGNIZE THAT THERE IS A HIGH PERCENTAGE OF LOSING YOUR MONEY INVESTED.
So either get in and shut up, or get out and stay out. Really!
The fact is that most people should NOT be doing this!
Protecting Your Idea/Name
December 17th, 2009Some students have asked me how to protect their idea and their trade name.
Here are some links:
Trademark protects titles, words, names, symbols, logos and designs that are used to identify a business’ goods (trademarks) or services (service marks) that are used in commerce.
For Trademarks, visit www.uspto.gov.
Patents are used to protect inventions
For Patents, you can also visit www.uspto.gov. However, Google has a GREAT site to allow you to search through patents. Great resource. Here is the link: http://www.google.com/patents
Here is an example of a patent (the toothbrush in 1941). Click here.
What about copyrights?
Copyright protects original artistic, literary, dramatic, musical and other intellectual property works, including compilations such as multimedia works and computer programs and websites. You cannot copyright an idea!
Here is a resource that has all the information that I used for this post : http://www.officialsoftware.com/portal/account-resources-r-intro.asp
Hope that helps.
Which “Track” Are You On?
December 11th, 2009Anyone that has taken our workshop called “The Investors Code” has heard me talk about this.
If you had played the game “Cashflow” (Trademark Rich Dad company) knows that there are 2 “tracks” in the game; the “Fast Track” and the “Rat Race Track”.
The “Fast Track” is where the wealthy play. It constitues mostly big businesses.
The “Rat Race Track” is where most people play (in real life). This is where people that work in a job because they have to. The type of deals in this track are real estate deals.
Most investors are so stuck in this track that they forget the true objectives of the tracks. The true objective is to develop enough passive cash flow to get out of the rat race and get unto the “Fast Track.” So why are they doing “flips” and other non-cashflow generating activities?
Beats me!
Play the game again and NOTICE what you do to get out of the rat race. Then mimic that in real life. Buy income properties (e.g. apartment buildings), become a private lender, etc.
I notices that there are TWO types of people in the Rat Race:
1) People with money. These people have to play a different game than the people without money. They need to leverage their money, safely, to increase cashflow. You have a LOT more options to tap into than someone without money. However, make sure you learn to “cover the downside” while you play for the upside, otherwise it will HURT if you lost your money.
2) People without money. These people MUST learn to raise capital (OPM) and buy income properties, cashflowing businesses, and learn to become private lenders & arbitrage money.
Now, here is the interesting part. You can also play the FAST TRACK without giving up on the RAT RACE TRACK. You cannot assume the FAST TRACK will “hit” though or generate the cashflow you want. Think of the RAT RACE TRACK is a path to becoming wealthy (with better odds) than FAST TRACK. FAST TRACK is more becoming RICH without any good odds.
That is a very vague way in describing that in a quick post. The key to take from this though is that you can play on BOTH tracks without having to “graduate” from one to another like the board game. Our Millione Group (www.TheMillioneGroup.com) is proof of that where students and I launch “big businesses” – not everything hits, but the idea is to have enough do to help all of us make it big.
So if you are working on the next Facebook, keep going at it – never give up, just don’t stop buying those income properties just in case.
Network Marketing – My Observation So Far
December 7th, 2009For years, I had been approached by students involved in network marketing. I have been asked to join various companies to do with juices, drinks, pills, telephones, websites… You name it, I have been pitched to join it.
I was sick and tired of it. For years, I did not think much of “Network Marketing” or “MLM’s”, and I was very open about it. “Stay away from me – I do not do MLM’s” was my motto!
Along the way, I had met some very successful people, some students, that were making a killing with this business model. I found it intriguing, but never wanted to get involved.
Deep inside, I felt guilty that I was shunning this business model without having it tried it.
Then I was challenged by a speaker. This gentelman had made millions in network marketing. He questioned why I would say the things I said about network marketing without having it tried it.
He also explained to me that now more people were getting involved in network marketing then ever before. This is were the money was for now.
So I decided to try it. That was almost 10 weeks ago. I figured I can “try” it and tell people how much I hated it.
Boy was I wrong!
Here are my observations:
- Network marketing teaches wealth builders the FOUNDATION of owning a business. How to communicate with people. I noticed that many people cannot communicate effectively – they don’t have a chance to run a business. So become an effective communicator through network marketing first before you even consider running a business or RAISING CAPITAL. Yep, raising capital is all about communicating!
- Network marketing teaches people to handle rejection. Whether you are running a business, raising capital or buying a building, do you think you will not have rejections. One of my mentors once told me jokingly that every bank in town has a photo of his in their bank for the most rejections for loans. Yet, he made it big! He always said to me, “if you can handle rejection, you can overcome fear!”
- Network marketing teaches you to make DECISIONS. Ever since we have been kids, we have never had to make decisions. Our parents, then teachers, and eventually our bosses have told us what to do. Suddenly, when people have to make decisions, it is EXTREMELY uncomfortable. I sometimes challenge students to dedicate a week of making decisions without sitting on the fence. Also notice people around you, very few people can make decisions. This leads to my last point.
- Network marketing teaches people to become LEADERS. With the ability to make decisions, handle rejections, and have good communicating skills, now you have the foundation to become a leader. Anything is possible now!
10 weeks ago, I was challenged by someone about my views on network marketing. Today, I think it is a great business model for most wealth builders to consider. It is hard to believe I have become a proponent of it. I finally “get it” – I also see why most people quit doing this so fast. It builds character, and anyone that cannot handle it cannot handle building a business, raising capital, or become an active wealth builder.
By the way, I have made money EVERY single week since I started. My last WEEKLY check was approximately $2250 – in just 10 weeks!
That is my 2 cents on the subject.
Robert Kiyosaki – Questions He Is Asked On TV
December 5th, 2009I have seen Robert Kiyosaki, author of Rich Dad Poor Dad, interviewed on several TV shows.
What strikes me as odd are the questions he is being asked. Robert Kiyosaki teaches people how to THINK as the wealthy do.
However the questions he is being asked on these shows are that of the middle class. An example of a question I heard being asked of him is “should I use a debt consolidation company or not.”
I want you to think about this for a second. Would you ask Donald Trump that question? If you say “yes”, then you have the mindset of a middle or poor class.
These people MAKE money. Ask them something related to that.
There are a few things I do not agree with Robert Kiyosaki, but I agree mostly with his teachings. I think everyone should read his books. He does not go into detail, but that is the point. There are many books out there that teach you the “how to” (like www.wealthclasses.com), but Robert Kiyosaki teaches you how to THINK like the rich, which I think is VERY important for everyone to do.
Active Investors Must Do 3 Things
December 3rd, 2009If you are an ACTIVE investor, here are THREE things you must do:
1) Become an expert in ONE strategy. This could be in a real estate niche or some business niche. For example, become an expert in income properties, or casinos, or franchises, etc. Do NOT move into another niche until you have “made it” in this one niche/strategy.
2) Become a capital raiser. Learn it. Know it. Do it.
3) Focus Focus Focus! Do not give up.
So in summary, here are the THREE things you need to do: Pick a STRATEGY, raise OPM, and FOCUS!
You do these three things as an ACTIVE investor & you have a MUCH better chance to make it than most investors! This is exactly what we discuss in the workshop “The Investors Code”! We discuss the right strategies to pick from (most of what people are learning about out there is a waste of time), and also the best method to raise OPM (most methods being taught out there is raising ‘small’ money), among other things.
Hope that helps.
Insurance – Good or Bad?
December 1st, 2009Insurance – I hear students saying it is “good” and others saying it is “bad”!
Well, here is my perspective.
Insurance, if used right, is REQUIRED! It should be part of your portfolio.
Having the right insurance person on your team is absolutely NECESSARY. The problem I see is that many insurance agents/brokers are interested in selling selling selling without understanding how their product fits into your overall portfolio.
The other problem is that many make generic statements like “Term Life is Good” or “Term Life is Bad” etc.
Insurance is a tool. You can use a tool for the wrong or right thing. So it is not about the tool, it is about how it solves the problem. Your QUALIFIED insurance broker/agent should be able to help you.
Just like I talked before about mortgages, there is a risk relationship between property owner and lender, and understanding that relationship is important.
I am no expert about insurance, but here are a few things that come to mind when I think insurance.
1) Insurance is about transferring risk away from you to another company. There is a cost for mitigating risk (or lowering risk of something happening). As I always say, cover the downside so that you can focus on the upside. Think of it as peace of mind, so that you can put your effort on the upside. Insurance can be a great vehicle. A simple example is life insurance, good car insurance etc. For example, if have a young family that you need to make sure is taken care of in case of your death.
2) Insurance can be a tool to building wealth. For example, I am adding a new module to Infinite Wealth System (www.InfiniteWealthSystem.com) that talks about “Arbitrage Wealth” using insurance. How would you like to generate six-figure residual income annually for the rest of your life 10 to 15 years from now WITHOUT putting up much money, by simply using arbitrage. This is something the wealthy have been doing for years!
3) Insurance can be used as a financing vehicle. For example, anyone that has taken the Infinite Wealth System (www.InfiniteWealthSystem.com) is well aware how to use insurance as a financing system to increase your net worth significantly. Imagine having your own “bank” to finance your next car purchase. This can be VERY powerful.
If you decide you would like to talk to MY personal insurance broker(s), contact (888) 888-3612 and ask for either Mark Peters or Jim Helton. They are both exceptional.
Doctors, Listen Up!
November 30th, 2009Many of Gabby (my business partner) and my students are doctors.
So this post is for you. Many of you doctors ask me what should you do now?
Anyone with a high income and no time to allocate towards investing, here are some things you can do.
1) Buy a good single family home in a middle income neighborhood in your area at a 10% or more discount. Use a low 30-year FIXED interest mortgage. Avoid high end homes or “war zones.”
I say that because people are expecting inflation to get much higher. You have to realize that the real estate market in the next 24 months will still be rocky, so you will have to ride that through.
2) Start generating cashflow ASAP. Contact a QUALIFIED and EXPERIENCED mortgage broker to start you up on private lending. One such company is www.NorcalTrustDeed.com.
There is a lot more information, but this is a good start.
- George
Hedging Against Inflation
November 26th, 2009
People ask me what to do to hedge against inflation.
Well I will give you a couple of ideas.
But let me say that if the “Feds” keep printing money, inflation is likely. So this is a good question to be asking now.
So here are a couple of things you can do.
1) Real estate is a good hedge against inflation. Consider this. If you can get mortgages at the low interest rates that we have now and inflation is creeping up, you get a good time to buy. I would get a long term (30-year or more if possible) FIXED interest rate mortgage and buy a single family house(s) in your area. The result is that you now have an asset costing you very little (due to cost of money on mortgage) and it is appreciating (beating inflation) HIGHER than inflation. You will end up with a good chunk of equity. You actually have a nice arbitrage opportunity.
For example, if you mortgage was 4.5% and inflation was 8%, historically appreciation has beaten inflation by 2%. So appreciation will be 10% if you have such high inflation. This results in a 5.5% spread. So even if rent covers mortgage, you are building your net worth FAST!
2) Another way to hedge against inflation is PRIVATE LENDING – meaning becoming a private lender. Why? Anyone who has taken this class will tell you – we discuss this in the class. As a private lender, you can get a % of the appreciation from the home owner. For more information, visit www.BecomeThePrivateLender.com.
So keep an eye on the Feds for now!
BTW, if they start increasing interest rates, then pull out of the stock market FAST!
Hope that helps.
Lesson Learned Today
November 24th, 2009I had lunch with a good friend/investor today.
We were discussing myths out there that many beginners believe.
I was sharing with him a story about one of my mentors who is worth A LOT! He had told me that he aims to make money on 30% of his deals. He typically loses or breaks even with 70% of his deals. That ratio (30%) is what got him to be worth a LOT!
Also Robert Kiyosaki had once said that he make a lot of money on 20% of his deals, loses on 20% of his deals, and breaks even on the remaining 60%.
This is consistent with many successful investors.
My friend shared with me his record during his first 3 years:
Year 1: He LOST money on every single deal he did (he did 11 total)
Year 2: He LOST money on 17 deals, made money on 1 deal.
Year 3: He MADE money on every of his 27 deals.
With that record, his net worth went from $0 to over $1 Million!
So for the beginner investor, here is what you are NOT being told.
Even the best of the best will lose money or break even on MOST deals. It just takes a few to cover all the losses and increase your net worth significantly.
Have I lost money? You BET!
The SHOCK Of My Life!
November 3rd, 2009This has NEVER EVER happened to me before!
Few weeks ago, I was teaching a class on raising private money with a good friend of mine from SacReia.com (Tuan).
On the 1st day of the class, we covered the legal aspects of raising private money.
On the 2nd day of the class, we were covering how to talk to people about raising private money and the importance of networking with people. We covered the “phases” of a discussion, and how you transition from one phase into the other phase to “close” and raise money.
One student raised her hand and said something to the effect “It is not fair that you never told us we had to talk to people to raise money! If you had mentioned that before the class, I would not have registered for the class!”
I WAS STUNNED!
I thought she was joking. She was not. I looked over to my co-trainer in disbelief, then turned over and asked “What did you expect?”
She was expecting a secret black book that showed you how to raise money without talking to people!
THAT’s when it hit me! NOT EVERYONE IS MEANT TO BE AN INVESTOR!
In fact, I instantly recalled 2 things:
1) I recalled an interview with Donald Trump where someone asked him “Can everyone be a real estate investor?” to which he replied “No!” – I agree with him 100%!
2) I then recalled my mentor asking me this one question repeatedly “how bad do you want to become wealthy?” – and if I said anything like “yes, but…” he would interrupt me and ask again “how bad do you want to become wealthy?” He kept doing that until I agreed I wanted to become wealthy with not “but’s” to which he said “then you will go out and learn to raise money – no if’s and not but’s!” That changed my life.
That day, I realized that many people don’t have the strong desire to face their fears to change their life.
I also realized why Donald Trump and Robert Kiyosaki promote Network Marketing – because it teaches you how to TALK to people, a skill EVERYONE needs to know, whether you are in real estate investing, business ownership, or whatever!
If you cannot TALK to people, then keep your job! You “ain’t” building wealth!
If you WANT to learn to TALK (& sell), then do what Donald Trump and Robert Kiyosaki. Join a Network Marketing company and face your fears and learn to sell. ONLY when you are comfortable with that will you succeed in business ownership and investing!
I agree with them!
Happy Halloween!
November 1st, 2009Just got back from trick-or-treating. My youngest daughter was dressed as a little devil (she’s 5 years old), my other daughter was a polar princess (she’s 11), and my son (13) was a scary bleeding skeleton (don’t ask). My wife was a punk rocker – kind of sexy 
Anyway, as the night is winding down, the kids in bed, I turned on the TV and flipped through some channels and ended up on a “Fox Business” show on “Money”!
This is a show where people call in with financial questions and the hosts answer their questions.
I WAS SHOCKED AT THE ANSWERS!
Answer after answer, they were giving the BAD information. They had 6 or 7 “experts” on this show!
For example, they congratulated someone for getting a 15-year mortgage, and gave the same advice to someone else that called. “Get a 15-year mortgage” they said!
Now anyone that has taken my IWS class (InfiniteWealthSystem.com) knows what I think of that.
Here is a synopsis: People think that a 15-year mortgage is better than a 30-mortgage because it allows you to pay your mortgage faster! People also think that a 40-year mortgage (when available) is a BAD deal!
People – WAKE UP! Educate yourself. This advice is putting YOU at risk! It turns out that a 40-year mortgage is actually less risky than a 30-year mortgage, which in turn is less risky than a 15-year mortgage.
I talk about some of this in my “Financial Leverage” videos on this blog. Make sure to watch it.
The biggest lesson here is that just because someone hears this “advice” on TV, does NOT mean it is good advice. It is hard for me to believe this “crap” I heard on this show.
Back On Track!
October 28th, 2009It’s been a while since I posted on the blog. I have been getting a LOT of requests to keep posting, so I am back on track here.
In the last 2 months, I have been busy with a number of investments. I will write about some of these very soon, but I will summarize it as this: We are in VERY interesting times.
We are experiencing the LARGEST transfer of wealth in our lifetimes.
Some people will sit by the sideline, some will dive in and participate in tapping into this transfer of wealth, and some will never know what happened!
Everyone WILL make a decision, and for those that THINK that will make a decision sometime in the future (or not make one), they ARE indeed making a decision right now to sit by the sideline and do nothing.
Now it’s your turn to choose…
