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Read this like your life depends on it…because financially, it does.
“In late 1974, I purchased a small condominium on the fringes of Waikiki as one of my first investment properties. The price was $56,000 for a cute two-bedroom, one-bath unit in an average building. It was a perfect rental unit… and I knew it would rent quickly.
I drove over to my rich dad’s office, all excited about showing him the deal. He glanced at the documents and in less than a minute he looked up and asked: “How much money are you losing a month?”
“About $100 a month,” I said.
“Don’t be foolish,” rich dad said. “I haven’t gone over the numbers, but I can already tell from the written documents that you’re losing much more than that. And besides, why in the world would you knowingly invest in something that loses money?”
“Well, the unit looked nice, and I thought it was a good deal. A little paint and the place would be as good as new,” I said.
“That doesn’t justify knowingly losing money,” smirked rich dad.
“Well, my real estate agent said not to worry about losing money every month. He said that in a few years the price of the unit will double, and in addition, the government gives me a tax break on the money I lose. Besides, it was such a good deal that I was afraid someone else would buy it if I didn’t.”
Rich dad stood and closed his office door. When he did that, I knew I was about to be chewed out as well as be taught an important lesson….
…On that day, I learned more about money and investing than I had in all my previous 27 years of life.”
(pp. 97-98 of The Cashflow Quadrant by Robert Kiyosaki)
The 11 Secrets to Make Money With Your Mind
1) How to handle “You can’t do that” – when you bring up a winning investment proposal, your advisors/realtors/etc may say “You can’t do that”. What they really mean is “They can’t do that”. It does not mean that it can’t be done. Don’t listen, make it happen.
2) $1.4 Trillion Looking for a home – everyday money is circulating electronically, it is invisible because most of it is electronic. If you know how to take care of money, money will flock to you, and be thrown at you. People will beg you to take it.
3) Train your eyes to see only 5% and your mind to see 95% when you invest – “The average person is 95 percent eyes and only 5 percent mind when they invest,” said rich dad. Be sure to only take advice from people who actually know what they are doing, and know their numbers…who know how to take care of money.
4) Train your brain to see money – The ability to make money begins with financial literacy, with understanding the words and the numbers
5) Know what real risk is – understand each investment, and how much is put in, how much the costs are, the return, possible set backs and pluses, practice with small investments and work your way up. Practice, practice, practice
Bad advice is risky – most people learn about money by modeling what their parents did with money, they hear advice or see what others do, and they can’t tell the difference between good and bad advice
6) Your advisors are only as smart as you – If you are financially naive, they must by law offer you only safe and secure financial strategies. If you are an unsophisticated investor, they can only offer low risk, low yield investments. They’ll often recommend “diversification” for unsophisticated investors. Few advisors take the time to teach you. Their time is also money. So if you will take it upon yourself to become financially educated and manage your money well, then a competent adviser can inform you about investments and strategies that only a few will ever see. But first, you must do your part to get educated. Always remember, your adviser can only be as smart as you.”
7) Know the difference between an asset and a liability
8) Understand THE GAME OF MONEY – Who is indebted to whom?
Money is debt – The more people you are indebted to, the poorer you are.
Words that lure you into the losing position of the game are:
“Low down, easy monthly payments”
“Don’t worry, the government will give you a tax break for those losses”
Who owes you?
The more people who owe you, the richer you are.
9) What is your interest rate…really?
10) If you take on debt and risk, you should be paid.
11) Understand the difference between facts and opinions
Common opinions are:
“You should marry him. He’ll make a great husband.”
“Find a secure job and stay there all your life.”
“Doctors make a lot of money.”
“They have a big house. They must be rich.”
“He has big muscles. He must be healthy.”
“This is a nice car, only driven by a little old lady.”
“There is not enough money for everyone to be rich.”
“The earth is flat.”
“Humans will never fly.”
“He’s smarter than his sister.”
“Bonds are safer than stocks.”
“People who make mistakes are stupid.”
“He’ll never sell for such a low price.”
“She’ll never go out with me.”
“Investing is risky.”
“I’ll never be rich.”
“I didn’t go to college so I’ll never get ahead.”
“You should diversify your investments.”
“You shouldn’t diversify your investments.”
Do you due diligence.
Understand the investment, do the math yourself, ask all the questions, after you analyze, act.
Did you know that over the last 7 years, I paid off almost $50,000 in debt, create a passive income stream that pays me monthly, and also increase my Net Worth to over $100,000?!?
Not only that, I became completely debt free in April of 2016 and left my bank job on December 23rd of the same year.
I have gone from working over 80 hours a week for money to now working less than 5 hours per week for money, as an internet entrepreneur who helps other mothers create financial freedom.
I had a lot of help along the way, from young financially free entrepreneurs in their 20s, 30s, and 40s.
Here are 11 tips that I learned that changed my life on wealth, passive income and investing.
11 Tips From Young Financially Free Entrepreneurs on Wealth, Passive Income and Investing
Tip #1 – The Habit of Saving is Important (Not the amount)
You would think that saving a lot of money makes you rich, and saving a little won’t.
However, the key is not how much you save, it’s the habit of saving. So, every time you have money come into your life, you take at least 10% and pay yourself first (meaning you save it for investing).
If you are waiting until you have more money to save, then you will never be rich.
The reason you don’t have enough money to save, is because you don’t have a savings habit.
Even if you have to borrow an extra dollar every month just to save money, do that, and at least start saving every month. Make it a habit.
Tip #2 – Understand The Rule of 72 and How Interest Rates Work So You Can Grow Investments and Grow Debt
The ‘Rule of 72’ is a way to determine how long an investment will take to double.
72 / Rate = Years to Double Your Money
72 / 14.99 = 4.8 years to double your money
Now you can see why it’s important to lower all of your debt interest rates as low as possible, and to increase the rate of return on your investments.
Tip #3 – Play Cash Flow (Board Game created by Robert Kiyosaki) every week until you can win the game in 30 minutes or less every time
This game really had me focus on financial freedom, rather than what everyone else does…focus on making more money so they can spend more money.
Financial Freedom = Passive Income > Expenses
When you play the game, you have to increase your passive income to be greater than your expenses.
If you’re passive income does not increase, you cannot get out of the rat race.
This helped me really focus on my passive income.
Tip #4 – 8% is the Minimum Return for Real Estate Investors, Don’t Invest in Real Estate Overseas Unless You Have a Resident Manager
So I was thinking of buying property outside of Hawaii at one point, and I talked to my wealth real estate investor friend, and he told me this advice.
First of all, I wanted to buy the house I lived in, but it was on the market for $1,000,000+. So I needed an investor to go in with me.
However, when I asked my real estate investor friend, he said that no investor would go in on that deal, because they would only be making 4%.
Then I looked to make money buying property in Las Vegas or LA, and then he advised me not to invest overseas unless I had a resident manager. The reason is if you have only one house or condo that you are renting, then if something goes wrong, you have to rely on a Property Manager, and they are not going to care about 1 small property owned by someone far away.
Repairs will be more expensive, and your tenancy rates will be worse, because they won’t look for new renters right away. You will be low priority.
The only way to keep expenses down is to have a resident manager.
Tip #5 – Have a Big Burning Why
If you don’t why you want to be financially free, then when obstacles come (and they always do), you will not get past them.
A burning desire fuels the energy you need, to learn what you have to learn, to make mistakes and learn from them and keep on going, no matter what.
My friend’s big why was that he felt embarrassed by his lack of wealth, and had great pride. And he also wanted before his dad died, so he had a time limit too.
Tip #6 – Negotiate With Your Creditors (Debt, Credit Cards) to Lower Your Interest Rate
So, when I got this advice, I had at least 3 credit cards that I had debt on. And the interest rates were all pretty high. When I heard this advice, it really helped me. I used it to lower the interest on ALL of my credit cards…so it works.
Tip #7 – Track Your Net Worth
Tip #8 – Set The Next Big Goal Before The Current Big Goal is Achieved
Tip #9 – Do The Mental Work
Tip #10 – Only Take Advice From People Like You, Who Already Do What You Want To Do
Tip #11 – READ, READ, READ
Rich Dad Poor Dad by Robert Kiyosaki
The Cash Flow Quadrant by Robert Kiyosaki
Money is My Friend by Phil Laut
The Richest Man In Babylon by George Clason
Secrets of the Millionaire Mind by T Harv Eker
Your Money or Your Life by Joe Dominguez & Vicki Robin
It’s Not About The Money by Brent Kessel
How To Make A Hell Of a Profit and Still Get To Heaven by John DeMartini
The Values Factor by John DeMartini
You Can Heal Your Life by Louise L. Hay
Would you like to avoid the 5 Biggest Mistakes People Make When Investing in Real Estate?
Well, pay close attention to today’s training and learn what I’ve learned from multiple millionaires who are successful real estate investors, including Tom Wheelwright from his book Tax-Free Wealth, and Robert Kiyosaki from his book Rich Dad Poor Dad.
5 Biggest Mistakes:
1) Thinking that buying a home to live in is an investment
-People end up using all of their savings as a down payment
-They stop saving when they realize how big their mortgage is
-end up paying money to the bank in mortgage interest
-they spend all their time improving and maintaining their house
-they don’t get experience as an investor
-Property taxes might increase at any time, causing some home owners to have to sell their homes
– Consolidating debt with home equity loans often causes increased spending, which leads to further debt
2) Not properly looking at the cash flow of an investment property
-Insurance (mortgage insurance, hazzard insurance, flood insurance, etc)
-Maintenance (plumbers, handy men, roof repair, leaks, etc)
-Management (handle rental laws, and evictions, filling vacancies, screening renters)
-Cost of down payment
-Cost of mortgage fees, points, interest
-Fixed interest mortgages vs adjustable rate
-Tax prep fees
3) Buying your first rental property out of state, or out of your country
-Paying more for maintenance (not being able to check work)
-Management will be less likely to service you (as you are farther away)
-Cost to visit your property
-Lacking experience to run your own property and not gaining it as the property is out of state or out of the country
4) Not Claiming Depreciation for the building
According to Chapter 7 of Tax-Free Wealth, by Tom Wheelwright, one of the biggest mistakes people make, is that they do not claim depreciation of their real estate investment property.
Why, it’s because they are lazy, or their CPA is lazy, or they are ignorant of this important deduction.
In his example, he shows what would happen if you have an investor who buys an $800,000.00 apartment building that cash flows $12,000/yr, or $1,000/mo.
$800,000 (cost of home)
-$200,000 (cost of land)
$600,000 (cost of building and contents)
-$100,000 (cost of contents)
=$500,000 (cost of building)
x 3.6% (depreciation for building)
=$18,000 (depreciation deduction)
Without claiming depreciation for the building, you would have to pay taxes on the $12,000 earned from the rental property.
When you claim the $18,000 in depreciation, the rental income is completely tax free, because your business claims a loss of -$6,000!
Not only that, if you structured it properly, the -$6,000 will pass through to your ordinary income tax, reducing your taxable income by $6,000!
5) Not Claiming Depreciation for the contents of your rental property
Tom Wheelwright points out that separating the contents from the value of the building alone is the proper way to file your taxes.
There must be a study conducted by either a CPA or an engineer to evaluate which parts of the investment property are considered contents, and which parts are considered the building structure.
The good thing for an investor, is that contents depreciate at a much faster rate than the building, which leads to a higher percentage used to calculate the depreciation of contents vs. the building structure.
In his example which I showed above, the contents of the building were valued at $100,000.
$100,000 (contents of the apartment building)
x 20% (depreciation for contents)
=$20,000 (depreciation deduction)
So, with the building depreciation, you can reduce not only the taxes on the rental income (you pay no taxes), you also reduce your personal taxable income even more!
$12,000 (rental income)
-$18,000 (building depreciation)
-$20,000 (contents depreciation)
In this video training we discuss Examples of How To Keep Your Money & Pay Less Taxes – from Tax-Free Wealth by Tom Wheelwright.
How much did you pay in taxes in 2016?
Can you guess how much my friend worth $24 Million Dollars paid?
I recently hosted a private training with a local real estate investor/developer on June 7, 2017, and the shocking truth of his tax bill was revealed…
In 2016 he paid in taxes only $5,000!!!!!!!!!!!!!!!
How did he do it?
How is it he pays less in taxes than most people working pay check to pay check, and he is a multi millionaire?
The key to wealth is in the details…the tax details!
BUT how can a working class person learn to understand taxes like the ultra rich?
Well, that’s why I’m here, to make the secrets easy to understand for everyday people, just like you and me.
Watch this video training and be ready to finally understand how to use the tax laws to create more money in your pocket.
Did you know that, according to T Harv Eker in the book Secrets of the Millionaire Mind, we have wealth files in our brain?
These wealth files determine whether we are going to be rich, middle class or poor.
We can change our wealth files too if we put in the work!
This blog will focus on the first 3 Wealth Files, and the exercises you can do to reprogram your wealth files to create a rich life!
Wealth File #1
Rich people believe “I create my life.”
Poor people believe “Life happens to me.”
DECLARATION “I create the exact level of my financial success!”
Touch your head and say “I have a millionaire mind!”
1. Every time you catch yourself blaming, justifying, or complaining, slide your index finger across your neck, as a trigger to remind yourself that you are slitting your financial throat.
2. Do a “debrief.” At the end of each day, write down one thing that went well and one thing that didn’t. Then write the answer to the following question: “How did I create each of these situations?” If others were involved, ask yourself, “What was my part in creating each of these situations?”
Wealth File #2
Rich people play the money game to win.
Poor people play the money game not to lose.
DECLARATION “My goal is to become a millionaire and more!”
Touch your head and say “I have a millionaire mind!”
1. Write down two financial objectives that demonstrate your intention to create abundance, not mediocrity or poverty. Write “play to win” goals for your:
a. Annual Income
b. Net Worth
Make these goals achievable with a realistic time frame, yet at the same time remember to “shoot for the stars.”
2. Go to an upscale restaurant and order a meal at “market price” without asking how much it costs. (If funds are tight, sharing is acceptable.)
P.S. No chicken!
Wealth File #3
Rich people are committed to being rich.
Poor people want to be rich.
DECLARATION “I commit to being rich.”
Touch your head and say “I have a millionaire mind!”
1. Write a short paragraph on exactly why creating wealth is important to you. Be specific.
2. Meet with a friend or family member who is willing to support you. Tell that person you want to evoke the power of communication for the purpose of creating greater success. Put your hand on your heart, look that person in the eye, and repeat the following statement: “I, _________[your name], do hereby commit to becoming a millionaire or more by _________[date].”
Tell your partner “I believe in you.”
Then you say, “Thank you.”
Follow the exercises, and see your wealth files change to be set for wealth!
Please put your experiences and your answers to the exercises in the comments below!
Would you like 11 key steps to get you on the path to financing your freedom?
I’m talking about time freedom, the freedom to choose your lifestyle, the freedom to work on your own projects, take a day to meditate and work out, go to matinees with your spouse…whatever you want.
Do you want real freedom in your life, so that you have time time to really explore what you were meant to achieve, bring forth and accomplish on this planet?
That’s what today’s video training is all about, the 11 Key Steps to Finance Your FREEDOM.
Freedom is a lot closer than you think!
P.S. I left my bank job on Dec 23, 2017 and have since been helping become financially free faster, CLICK HERE to see how I can help you spend more time with your families, and doing what you love!
Ever wonder what tax strategies that the middle class miss out on…and the wealthy seem to be using all the time?
Well, this blog will open your eyes to the possibilities that you may have not considered for yourself.
I learned entrance into a smarter way to live my life and do my taxes back in 2009, and haven’t looked back since.
Yet I’ve seen so many members of the middle class who never heard of these strategies.
Some of them have heard, however, still have not implemented them, paying thousands more to the IRS every year than they are required to by law.
Why is this?
In this live webinar starting at 6:30am HST / 11:30am EST, Joe Stauffacher and I will be showing you exactly what tax strategies that we are referring to, and how to implement them in your life today.
Be sure to get a pen and paper, or your tablet of choice, or just make time to pay close attention, as this webinar will have a positive impact on your life and the money you get to keep for yourself and your family.
P.S. I love blogging, researching and sharing what I learn and do to create financial freedom in my life and for others. If you have a passion, and you want to learn how to use it to create your own online business, then CLICK HERE, watch the free video and get started!
Have you ever wondered how millionaires make the massive wealth that they do?
Ever see someone who is ultra successful who always seems to have great energy and is very productive in so many projects?
How do the mega-rich read so many books, and stay so educated and on top of the market?
Well, from the words of one successful millionaire, it’s important to follow certain rituals to create balanced energy throughout your day…
First, it’s important to always get at least 8 hours of sleep…
Second, if you have family, schedule time to be with your family, so that you don’t feel like you’re neglecting them…
Third, do your most important work at the beginning of the day…
Fourth, break up your work into 90 minute sessions
Fifth, follow a 15 minute ritual to re-energize and refocus…
This 15 minute ritual includes 5 minutes of physical activity, like kung fu, or dancing or singing…
…then doing some meditative chanting…
CLICK HERE to see a video from one millionaire as he explains his 15 minute ritual that takes him to the next level in his entrepreneurial online business…