Archives for October 2015

How Many Income Balls Do You Have in the Air?

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If you’re like most people, you’ve got one stream of income – your job. And if you’re like most people you are either poor or stuck in the middle-class. If you want to break out of poverty or the middle-class you need to begin creating multiple streams of income.

“But I’ve got two kids, weekends filled with running around from one sporting event to the next for my kids, kid birthday parties to attend and already too much job-related work on my plate as it is. How on earth am I supposed to find the time to add another stream of income?” [Read more…]

3 Types of Rich People

tip-o-the-morning

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I’ve been studying the wealthy and the poor for nearly 12 years now. One of the things that I’ve noticed is that almost 100% of the time the media misinforms its readers with respect to the definition of wealth. So, I thought I’d clear it up for you using the same language used by the media.

Three Classes of Rich:

  1. Affluent – These are individuals with net assets (assets minus liabilities) of between $100,000 – $1 million.
  2. High Net Worth – These are individuals with net assets (assets minus liabilities) of between $1 million and $3 million.
  3. Ultra High Net Worth – These are the individuals with net assets (assets minus liabilities) $3 million and above.

In my Rich Habits Study only Ultra High Net Worth individuals made the cut. But, in addition to having an Ultra High Net worth, in my study they needed to also have an annual gross income of $160,000 or more. Below is the two-part test every Ultra High Net Worth individual needed to satisfy in order to meet my definition of Rich:

  1. Net Assets of $3.2 million or more AND
  2. Gross Income of $160,000 or more.

Some might argue that those individuals who meet the High Net Worth category of between $1 million and $3 million are “Rich” as well. And you might be right. In order for the High Net Worth individuals to be considered “Rich”, however, they would very likely need to live what I call a minimalist lifestyle. A minimalist lifestyle is one where the individual either lives below their means or lives within their means. Examples always work best so let me give you one. Let’s say you have net assets totaling $2 million. And let’s say that that $2 million is sitting in an annuity or some other type of guaranteed investment kicking off 4% of guaranteed annual taxable income, or $80,000. If you are in the 20% Federal and State tax bracket that leaves you with $64,000. If on this $64,000 you are able to do the things you want to do in life and, at the same time, meet all of your living expenses then you are “Rich”. You don’t need to work in order to earn any income because you have more than enough income to live the life you want to live.

Now, you might also argue that 4% is too conservative a number and that it is possible to earn more income than 4% on your $2 million. This is called chasing yield and whenever you chase yield you must take on additional risk. The downside of finding an investment that pays more than 4% is the potential that that investment might return less than 4% during downturns in the economy or the investment marketplace. There are plenty of investment options out there that guarantee between 4% – 5% return without taking on any unnecessary risk. But there are not many investments out there that guarantee more than 5%. (Disclosure: my advice to you would be to find a qualified professional who can help you meet your investment goals.)

Those who are truly wealthy do not need to “work”. Their net assets generate all the income they need to live the “rich life”. The rich life means you can do as you please with your time, live the life you want to live and not have to worry about working to earn income in order to live that life.

 

The Power of Focus is God’s Gift to Humanity

tip-o-the-morning

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Most are completely oblivious to their own behaviors, habits and thinking as well as conversations of others, actions of others and their surroundings. Study after study has been conducted regarding this and they even came up with a phrase to describe it – Inattentional Blindness.

The main cause of this Inattentional Blindness is the brain’s inability to multi-task – to consciously do two things once. For the most part we are only able to focus on one thing at a time. Everything else simply fades away, ignored by our conscious mind. Our brain’s Reticular Activating System (RAS) blocks all sensory input, other than that input needed to complete the task at hand. This RAS will only deviate from this filtering function when something unexpected or novel comes to its attention. Example, you are walking down the street texting on your cell phone and a person in a monkey suit walks by you. Suddenly, your RAS nudges you to stop what you’re doing and take notice. Sometimes, however, when our focus on a task is so intense, even the RAS is unable to divert our attention. The ability to focus is extremely powerful.

While this might appear to be an inherent deficiency, it isn’t. The power to focus and ignore almost everything outside our focus is why humanity has been able to send a man to the moon, build the Brooklyn Bridge, split the atom and achieve so much. The ability to focus so intently on one thing is actually our strength. It is the reason why famous, successful people like James Cameron (director of Terminator movies, Titanic and Avatar) Jim Carrey (famous comedian/actor) and JK Rowling (Harry Potter author) can lift themselves out of incredible poverty and magically transform themselves into self-made millionaires. All three, at one time, were so poor their home was their car.

Unfortunately, the vast majority of individuals hold on to the belief that it is virtually impossible for a poor person to break free of poverty and become rich. This one limiting belief is the reason why we have so many stuck in a generational cycle of poverty and the reason why so many politicians are therefore able to buy the votes of the poor by simply offering them entitlements.

Any individual who accepts this belief is unable to use the power of focus to rid themselves of their adverse financial circumstances. And that is unfortunate, for the power of focus is the poor person’s escape hatch. It can lift any individual out of the most dire of financial circumstances. The power of focus is truly God’s gift to humanity.

Courage and Fear Wage War Inside Each One of Us – You Choose Who Wins

tip-o-the-morning

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“Mommy, my teacher asked me if I would like to play the role of Juliet in the school play. She said I had the perfect face and voice for the part.”

The little girl’s mom finished drying off a dinner plate, placed it in the cub bard and turned to her daughter. “Well, what did you say, Jodie?”

“I said thank you but I will need to talk to my mom tonight. My teacher said OK, talk to your mom and let me know tomorrow.”

The mother, reaching for another plate, asked, “why do you need to talk to me about playing Juliet in the play?” The little girl’s eyes widened and the mother could see tears welling up inside. She knew immediately what the problem was. She put down the plate she was cleaning, took her daughter’s hand and together they walked to the kitchen table and sat down. The mother looked her little girl in the eyes and began to speak.

“Every human being is born with two wolves inside their body. One is a dark, negative, angry wolf, filled with fear. The other is a bright, positive, joyful wolf, filled with courage. Only one wolf can survive inside the body. This means one must die. Both wolves constantly fight with one another inside our bodies. They fight for their lives every day until only one survives. Do you know which one survives?”

The little girl, with tears streaming down her cheeks, sniffled, looked up at her mom and said. “I hope the wolf filled with courage is the one who survives.”

The mother eyed her little girl kindly and said. “The one who survives is the one who you feed the most. If you want the courageous wolf to survive inside you, you must feed it more than the fearful wolf.”

The little girl smiled and stood up. “I’m going to tell my teacher yes first thing tomorrow.” The mother smiled back. “Wonderful Jodie, now go upstairs and brush your teeth.”

The very next day little Jodie Foster skipped up to her teacher’s desk, and with a broad smile said to her teacher, “I spoke to my mom last night and the answer is yes!”

When God Calls …. Pick Up The Phone

tip-o-the-morning

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I spent most of my adolescence obsessed with becoming a priest. I even visited a local seminary (St. Charles Seminary), spoke to a few priests and signed up for an introductory program they offered anyone who thought they had a calling. And I thought I had a calling. But I was not certain I had a calling. I understand now that when you get a calling, there is no uncertainty. It’s crystal clear. You just know it.

Most, unfortunately, never find their calling. It’s an unfortunate byproduct of modern day life. How many grew up playing baseball, basketball, soccer, football, swimming, tennis, etc? Most likely, you spent your childhood focused on two or three activities. With such limited exposure to novel things, it’s virtually impossible for anyone to find their calling.

Finding your calling in life requires exposure to dozens of activities. You simply cannot learn what talents you possess if you are limited to two or three activities growing up. For those few who do find their calling, that means they have unearthed their latent inner talents. Talents are genetically unique to each individual. Every person possesses certain talents that are specific to their genetic makeup. It’s the job of parents, mentors and educators to help kids uncover those talents.

Regrettably, most live a lifetime ignorant of their talents. Our education system, for the most part, is to blame. We are all required to follow a specific curriculum, dictated by a system whose primary objective is to teach fundamentals that will enable each individual to get a job. Getting a job is in the best interest of society. By society, I mean government. It’s in government’s best interest to have as many employees as possible. This ensures a steady stream of tax revenue in the form of federal withholding taxes. Government does not want entrepreneurs, or, more specifically, it does not want those who pursue a dream. Dreams take too long to create income that can be taxed. I find this counterintuitive, since it is those very dreamers who change society and produce the most wealth for society. Microsoft, Apple, Google, Waste Management, GE and many other companies were started by dreamers.

Dreamers are special. They represent a small, fractional portion of society who experience a calling. Thanks to my research (Rich Habits Study), I was fortunate to have been able to interview 177 such dreamers. These 177 self-made millionaires all shared one thing in common – they were doing something for a living that they loved. They were all pursuing their calling in life.

When you find your calling, it changes your life and it changes everyone Else’s life. It triggers the discovery of an inner genius possessed by virtually every human being from the moment of birth. Pursuing a dream as your calling unleashes something I like to call The God Gene. This God Gene endows every human being with god-like creativity and insight. Those who pursue their calling in life trigger this God Gene. As a result, they go from ordinary to extraordinary. Pursuing a dream also enables you to tap into a hitherto dormant passion that transforms even the most lethargic into the hardest, most persistent worker. It increases your IQ exponentially, allowing you to see opportunities and overcome seemingly intractable obstacles. It allows you, for the first time, to see your future clearly. It really is magic. But it’s more like witnessing a miracle in real time. When you find your calling in life, it is the closest human beings get to actually talking with God. And when God calls, pick up the phone.

Reacting to Anger

tip-o-the-morning

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We’ve all experienced it. Someone at work, at home or in your inner circle simply unloads on you for some reason. You may have done something to trigger the outburst or the anger is unwarranted or exaggerated.

Most respond by getting angry and will either internalize or externalize their own anger. But before you do, you should know this statistical fact: three out of every five individuals you come into contact with in life are going through a personal crisis of some sort.

It could be an illness in the family, a financial problem, an unexpected pregnancy, marital problems, etc. It may very well be that you happened to be in the wrong place at the wrong time when this someone unloaded on you.

Armed with this knowledge, the best course of action is to not react at all. Simply acknowledge the other person’s anger, apologize for whatever they think you did to them and forget about it. In all likelihood, if it turns out to be just that, a personal crisis they were going through, they will eventually apologize or come close to apologizing.

But I don’t want to become a doormat, allowing people to walk all over me.

This is a completely different issue. If an individual repetitively unloads on you, this is not crisis driven. This is habit driven. These types of individuals are locked into a negative mental outlook. They will continue to unload on you and make your life miserable. Misery does love company.

In this case you have two choices:

  1. Tell them to stop and get control of their emotions and come back to discuss the matter when they have regained their composure. This will work in most cases. But if it does not work then you have to move on to the second choice.
  2. Eliminate this negative individual from you life.

There are some individuals who simply have developed the bad habit of expressing their anger. These individuals function from a negative mental outlook and will eventually drag you down and turn your life into a living hell. You do not want to associate with negative people. You want to only associate with positive individuals. Negative people will drag you down and make you negative. Positive people will lift you up and make you positive. It is the Law of Association at work.

 

What Not To Do

tip-o-the-morning

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Understanding failure is more important than understanding success. If you want to succeed in life you must learn what not to do. There are two ways to learn what not to do when pursuing a dream or something you are passionate about:

 

  1. The Easy Way – Find a success mentor and learn from their mistakes and failures.
  2. The Hard Way – Taking action and learning through the school of hard knocks what works and what doesn’t work. This is the hard way because it often costs you time and money to learn what not to do. It is also an emotional roller coaster ride. Negative emotions, when things go wrong and positive emotions, when things go right. The Hard Way requires an enormous amount of persistence and patience.

 

Slave Thinking

tip-o-the-morning

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“I’m as mad as hell and I’m not going to take this anymore.”

This famous line from the 1976 movie Network, became so famous because it hit a nerve with the audience. There are many who feel as if they are stuck in life. Stuck in a job they either hate or could care less about. Stuck in toxic relationships that are eating them from the inside out. Stuck with too much month left over when their money runs out. And tired of always being the statue instead of the pigeon. When they feel like their going to burst, they pop a few pills, drink a few beers or have a few glasses of wine. Anything to numb the pain.

This is the life of the majority of people. They do nothing to change their life circumstances because they don’t believe they can. They don’t understand that they have the ability to design the life of their dreams. This is slave thinking. Knowing your life is not what you intended, yet doing nothing to change it because your beliefs tell you that you can’t. Too many believe they are not good enough, not smart enough, too lazy or lacking the right skills or knowledge. They believe that those who succeed do so because they were born into the right family, went to the right schools, had the right connections, etc. The fact is, success in life comes not in playing a good hand, but in playing the hand you were dealt. According to my data, and supported by independent third party data, 69-80% of all millionaires were self-made. They came from poverty or the middle-class. How is it possible that they were able to break free from their poverty or mediocre lives and achieve success?

We are all born with a genius gene. Every single human being possesses the capacity for greatness. Slave thinking keeps the genius gene switch in the off position. You need to stop being a slave to your thoughts and create new, positive, good thoughts. You need to transform your thinking from a victim mindset to a can-do mindset. You need to become disgusted with your life. You need to rise up and scream,”I’m mad as hell and I’m not going to take this anymore.”

How to Kick Bad Habits

tip-o-the-morning

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Habits never go away. They are with us forever. This is because habits are formed over many years by repetitive behavior. A habit is nothing more than a series of brain cells (neurons) that have wired together. Once the wiring occurs, the habit if formed and it never goes away. But there is a way to fool the brain into disengaging in a habit that is not serving you well. To stop yourself from engaging in a bad habit, you must avoid the environmental triggers that set the habit in motion.

For example, let’s say you have a habit of eating popcorn every time you go to the movie theatre. You promise yourself that the next time you go to the movie theatre you will not eat popcorn. But the moment you enter the theatre you feel that compulsion to buy popcorn. So what do you do? You avoid going to movie theaters. You change your environment.

Through the exercise of willpower, you are able to forge new habits. But just because you have forged a good habit, it does not mean that the adverserial old bad habit has been erased. It’s still there. Ready to pounce and re-engage, when the time is ripe. An example would be engaging in daily aerobic exercise. Let’s say you’ve taken up jogging. It’s been six months of jogging for 20-30 minutes a day for you. You feel great and you look great. Then you get sick and you’re unable to jog for a week. Or, you experience a death in the family and are unable to jog for a week. Or, you are forced to travel for a week for work and you are unable to find the time to jog that week. In short, some life event takes you off your new good habit for a week. What happens? The adverserial old habit, not exercising, is re-engaged. Because this old habit of not exercising has been with you far longer than the new habit, it is still far more powerful. When you return after a week off from exercise, it has woken up and now fights to stay awake.

What do you do? When you are forced to disengage from a new good habit, such as jogging every day, the only way to re-engage that habit is to start small. You don’t want to go to battle with the old bad habit. You want to fool it into thinking it is still re-engaged and dominant. When you return from that week off, go for a 5 minute jog. The second day try 10 minutes. By day three, your new good habit will awaken and you will be back to jogging 20-30 minutes a day. Your old bad habit will fall back to sleep, anxiously waiting for the next opportunity. Re-engaging a new good habit requires taking baby steps.

I have issues with money. I hate money. I always feel like I never have enough money. I am constantly worrying about money. Anyone have these thoughts? I do. So do hundreds of millions of people. How do you stop these thoughts from ruining your day and creating stress in your life? To change bad thinking habits you must repetitively engage in good thinking habits. For example, the next time a negative money thought enters your head, say one or all of the following:

  • I am grateful for the car I have. It runs well and it makes my life so much easier.
  • I am grateful for the house I have. I am putting a roof over the heads of my kids. I am proud that I have a house where my kids are warm and safe.
  • I am grateful for the paycheck that was just deposited into my bank account. It enables me to have this great car and allows me to afford the house we live in. I am grateful for every paycheck I receive.

Most of our money issues stem from being raised in a family that struggled financially. All of the fights, arguments and stress that we witnessed from our parents inability to make ends meet acts like scar tissue on the brain. That is, any emotional event, good or bad, forms the most lasting memories. Oftentimes, long-term memories give birth to certain beliefs, such as, I never have enough money. The only way to change beliefs formed in our upbringing is to become aware of those thinking habits, change your thinking and then track your new good thinking until it becomes a habit. Did I express gratitude for three things today? Put that on your to do list or on a bathroom mirror for 2 months to make sure you engage in that thinking. After a few months you will find yourself automatically engaging in the new thinking habit without any to do list or notes on the mirror.

Rich Habits Profiled in Epoca Magazine (Portugal)

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EPOCA MAGAZINE OCTOBER 2015