| MASTER A FORMULA AND THEN LEARN A NEW ONE: The power of learning quicklyIn order to make bread, every baker follows a recipe, even if it's only held in their headThe same is true for making moneyThat's why money is often called "dough
Most of us have heard the saying "You are what you eat I have a different slant on the same sayingI say, "You become what you study In other words, be careful what you study and learn, because your mind is so powerful that you become what you put in your headFor example, if you study cooking, you then tend to cookIf you don't want to be a cook anymore, then you need to study something else Let's say, a schoolteacherAfter studying teaching, you often become a teacherChoose what you study carefully
When it comes to money, the masses generally have one basic formula they learned in schoolAnd that is, work for moneyThe formula I see that is predominant in the world is that every day millions of people get up and go to work, earn money, pay bills, balance checkbooks, buy some mutual funds and go back to workThat is the basic formula, or recipe
If you're tired of what you're doing, or you're not making enough, it's simply a case of changing the formula via which you make money
Years ago, when I was 26,1 took a weekend class called "How to Buy Real Estate ForeclosuresThe next trick was to have the discipline to actually put into action what I had learnedThat is where most people stopFor three years, while working for Xerox, I spent my spare time learning rolex air king to master the art of buying foreclosuresI've made several million dollars using that formula, but today, it's too slow and too many other people are doing it
So after I mastered that formula, I went in search of other formulasFor many of the classes, I did not use the information I learned directly, 'i| but I always learned something new
I have attended classes designed for only derivative traders, also a class for commodity option traders and a class for ChaologistsI was way out of my league, being in a room full of people with doctorates in nuclear physics and space scienceYet, I learned a lot that made my stock and real estate investing more meaningful and lucrativeMost junior colleges and community colleges have classes on financial planning and buying of traditional investmentsThey are great places to start
So I always search for a faster formulaThat is why, on a fairly regular basis, I make more in a day than many people will make in their lifetimeIn today's fast-changing world, it's not so much what you know anymore that counts, because often what you know is old It is how fast you learnThat skill is priceless It's priceless in finding faster formulas-recipes, if you will, for making doughWorking hard for money is an old formula born in the day of cave menPAY YOURSELF FIRST: The power of self-disciplineIf you cannot get control of yourself, do not try to get richYou might first want to join the Marine Corps or some religious order so you can get control of yourselfIt makes no gucci men watches sense to invest, make money and blow itIt is the lack of self-discipline that causes most lottery winners to go broke soon after winning millions It is the lack of self-discipline that causes people who get a raise to immediately go out and buy a new car or take a cruise
It is difficult to say which of the ten steps is the most important But of all the steps, this step is probably the most difficult to master if it is not already a part of your makeupI would venture to say that it is the lack of personal self-discipline that is the No1 delineating factor between the rich, the poor and the middle class
Simply put, people who have low self-esteem and low tolerance for financial pressure can never, and I mean never, be richAs I have said, a lesson learned from my rich dad was that "the world will push you around The world pushes people around not because other people are bullies, but because the individual lacks internal control and disciplinePeople who lack internal fortitude often become victims of those who have self-discipline
In the entrepreneur classes I teach, I constantly remind people to not focus on their product, service or widget, but to focus on developing management skillsThe three most important management skills necessary to start your own business are:
1Management of cash flowManagement of personal time
I would say, the skills to manage these three apply to anything, not just entrepreneursThe three matter in the way you live your life as an individual, or as black quilted chanel purse part of a family, a business, a charitable organization, a city or a nation
Each of these skills is enhanced by the mastery of self disciplineI do not take the saying "pay yourself first" lightly
The Richest Man in Babylon, by George Classen, is where the statement "pay yourself first" comes fromMillions of copies have been sold But while millions of people freely repeat that powerful statement, few follow the adviceAs I said, financial literacy allows one to read numbers, and numbers tell the story By looking at a person's income statement and balance sheet, I can readily see if people who spout the words "pay yourself first" actually practice what they preach
A picture is worth a thousand words So let's again compare the financial statements of people who pay themselves first against someone who doesn't
People who pay themselves first
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Job--------------->|Income |----
^ |------------------------- |
| | Expense | |
\ ------------------------ |
\ --------------------------------------<
----\-----|------------------------
| Assets | Liabilities |
| | |
|_________|____________|
Someone who pays everyone else first- Often there is nothing left
------------------------
Job--------------->|Income |
|-------------------------
| Expense | ----> Nothing left!
tiffany jewelry wholesale ------------------------
-----------------------------------
| Assets | Liabilities |
| | |
|_________|____________|
Study the diagrams and notice if you can pick up some distinctions Again, it has to do with understanding cash flow, which tells the storyMost people look at the numbers and miss the storyIf you can truly begin to understand the power of cash flow, you will soon realize what is wrong with the picture on the next page, or why 90 percent of most people work hard all their lives and need government support like Social Security when they are no longer able to work
Do you see it? The diagram above reflects the actions of an individual who chooses to pay himself firstEach month, they allocate money to their asset column before they pay their monthly expensesAlthough millions of people have read Classen's book and understand the words "pay yourself first," in reality they pay themselves last
Now I can hear the howls from those of you who sincerely believe in paying your bills firstAnd I can hear all the "responsible" people who pay their bills on timeI am not saying be irresponsible and not pay your billsAll I am saying is do what the book says, which is "pay yourself first And the diagram above is the correct accounting picture of that actionNot the one that follows
My wife and I have had many bookkeepers and accountants and bankers who have had a major problem with this way of looking at "pay yourself new chanel bags fi |
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