Money Secrets of the Rich: Learn the 7 Secrets to Financial Freedom

PART 1

Finding and Following the Path to Financial Freedom – Laying Down Strong Foundations

We all have two choices: we can make a living or we can design a life.

Jim Rohn

CHAPTER 1

The 7 Levels of Investor

If you reach for the stars, you might not quite get one, but you won’t end up with a handful of mud, either.

Leo Burnett

What type of investor are you? Have your investment experiences been positive, negative or mixed? Would you like to know why you get the results you do when you invest? Of course you would! And the good news is that I am here to tell you!

Over the past 25 years, I have devoted myself to the study of money. I have driven myself to know exactly how it works and why. I have read almost every book, watched so many videos and DVDs, and listened to countless tapes and CDs. I have also interviewed, counseled and trained many thousands of people in the practices of wealth building.

During this in-depth study of what I refer to as the Money Game, I made a startling discovery: despite the many and varied personality types in the world, there are really only seven basic types (or levels) of investor. And while it is common for an individual to drift a little from one level to another, most people stay fixed at the same level for their entire lives. The bad news is that they are often stuck at a level that prevents their financial success. The good news is that with a little effort anyone, including you, can easily upgrade his or her skills and investor level.

What level investor are you?

Knowing this will give you a clear understanding of why you get – or do not get – the investment results you desire. Armed with this new awareness you can then adopt (or maintain) the attitudes required for your desired level. You can then empower your awareness and attitude with the appropriate action to give yourself the results you so richly deserve.

Hot Tip!

Always carry with you the Three A’s: Awareness, Attitude and Action. I have found that whenever people are off track, it is because one of the Three A’s is not being properly applied.

As I mentioned, the great thing about your investor level is that it can be easily changed. So as you read on do not despair if you are currently operating at one of the lower levels. You can always upgrade. Think of the process as a financial evolution. The key to your evolution is to first determine where you are and then where you want to go.

People often get caught up in the I need to make more money trap. In fact, your income actually has very little to do with your ability to obtain Financial Freedom. Let me be clear, the 7 Levels of Investor have nothing to do with your income. Rather, they relate to what you do with your income. I know people who make millions of dollars every year who are financial failures (I know, I agree this is ridiculous, yet it’s true). I also know a guy who was a student of mine who is a multimillionaire, yet he never made more than $18,000 a year from his job.

So don’t get hung up on your income. Concentrate instead on understanding that it is what you do with your income that makes all the difference!

As you read through the 7 Levels of Investor I want you to know that at various times in my life I have been at every single one of these levels. It was only as my knowledge increased that I was able to upgrade myself to the level I am at today. At some point in the descriptions of each level you should be able to recognize yourself and the people in your life. I recommend that you write down on the side of the page the people who you know at each level and also where you currently are. It will really help to open up your awareness.

The 7 Levels of Investor

Level Zero: The Non-Existent

This first Level of Investor is actually not an investor at all. These people are the financially Non-Existent. They live their financial lives with their heads in the sand. They essentially have no investments or savings and are completely unconscious or oblivious to money matters in general, and their own spending habits in particular. Their financial lives are often so completely mismanaged that they do not even qualify for the simplest credit products and so, ironically, although their financial outlook is bleak, they are often in a better financial position than the person for whom credit is all too easily available.

When asked what their problem is they will invariably state that they just don’t make enough money; if they just made more money, they would be okay. The fact is, in many cases, they are now starving on what they dreamed they could earn five years ago. These people fail to see that the problem is not necessarily their income (or lack of it) but rather their Money Habits.

Level One: The Borrower

People at this level are also not (technically speaking) investors. The Borrower is often in a far worse financial position than the Non-Existent, although his or her potential for change may be greater.

The Borrower often has very high levels of debt – they spend all that they make and more besides. What they know how to do best is consume. When they have money it gets spent, and at best they survive on a month-to-month basis. Their solution to a money crisis is to either attempt to spend their way out of it or to take on even more debt, oblivious to both the short and long-term consequences of their actions. Their idea of financial planning is to get a new credit card, or to refinance their home in order to buy more things on credit.

Like the Non-Existents, Borrowers also refuse to see that the problem is not necessarily their income (or lack of it), but rather their Money Habits. I know of one individual who was making more than $3 million a year and yet was still a Borrower.

Borrowers often get themselves caught in a vicious cycle of spiraling debt, coming to believe that their situation is hopeless, and as a result, giving up. They often live in complete financial denial. Unless they are willing to change, their financial future is bleak and they will accelerate towards financial oblivion.

Level Two: The Saver

The Saver usually puts aside a small amount of money on a regular basis. The money is generally deposited into a very low-risk, low-return vehicle such as a checking account, savings account, money market account or certificate of deposit (CD).

Savers usually save to consume rather than to invest (that is, they save for a new TV, stereo or something else to buy). They are afraid of financial matters and unwilling to take financial risks. And even when they are shown that in today’s economic environment cash investments usually give a negative return (after inflation and taxes), they are still unwilling to alter their investment habits.

The Saver’s idea of an aggressive investment is to start an insurance-style savings plan or buy whole life insurance (a horrible investment that almost no one should ever make – I will tell you why later). From my years in the business, I can tell you that the insurance industry loves this type of person because they can prey on their conservatism and deep-seated need for security, and make huge commissions in doing so.

Although the strategy of saving worked well for my grandfather way back in the first half of the last century when inflation was low and the temptation to consume was minimal, it no longer works in today’s economic environment. We need to face the facts: the days of old are gone. No longer do we work for the same company all of our lives and then retire with a nice pension. Few people working today will retire to live in the same home (mortgage-free) that they’ve lived in for the majority of their working lives. In addition, at retirement, my grandparents’ generation was able to receive the benefit of pensions and/or retirement plans that were almost fully funded by the federal government or their employer. And all these benefits of old were provided with only nominal contributions required by the employee. Thus, for them, the strategy of saving for the long term worked well. Over the course of their lives, by diligently saving and only paying cash (except for modest borrowings to buy their home), they were able to live comfortably when they retired.

Would the same be true today? It’s very doubtful. Let’s look at the main reasons for this:

1. Inflation – in recent times inflation has proven to be very irregular. The luxury days of counting on bank interest rates to keep up with inflation are over.

2. Consumption – throughout the world the level of consumption has exploded. The last two generations have become the ultimate consumers, eating up much of the money they should have saved for retirement.

3. Income taxes – the average family loses between 20 and 40% of their lifetime earnings to local, state and federal governments in the form of direct and indirect taxation.

4. Social security plans – when Social Security was first set up in the United States there were 15 people paying for every one person receiving benefits. Not only that, but benefits kicked in at age 65, whereas the average American male died at age 62. So there was plenty of money in the system. This is not the case today. Currently, $0.15 out of every dollar paid in wages in America goes to fund this dinosaur. And to make matters worse, Congress puts the money into Treasury Certificates, which don’t even keep up with inflation! The Social Security behemoth is doomed. Most experts predict its demise between 2015 and 2025 unless the government increases taxes and/ or radically reforms the system for the better. I don’t think for a second that the current youth of America (Generation X and the young Baby Boomers like myself) are going to pay the 20 to 30% Social Security tax that experts say will be needed to keep the system alive long term – there will be a revolution first!

The potential for the failure of over-taxed, under-funded social security systems is being realized throughout the world. Make no mistake, the governments of the world are keenly aware that they cannot continue to fully fund retirement. Many countries have already gone down the path of compulsory employee/employer non-government contribution retirement plans. This is a clear demonstration of their intention for individuals to take responsibility for funding their own retirement.

5. Increased longevity – people are living longer and requiring extra funds to sustain their lives beyond retirement. At the same time, employment opportunities for older people to extend their working lives (at their current level of pay) are diminishing for social and skills-related reasons.

6. Higher cost of housing – housing costs for the average family, in major cities where employment opportunities are most available, have risen dramatically in relation to the wages offered. It takes the average family many more years to pay off their home today than it would have taken their grandparents.

For all of these reasons, unless Savers have already put away enough for their golden years, they are destined for financial mediocrity. Their retirement will require family, government and employer subsidies (if available) just to provide the basic essentials for living.

Level Three: The Passive Investor

At the next level is the Passive Investor. These people are aware of the need to invest and usually max out their 401(k) retirement-type plans by making the maximum contributions. Sometimes they even have outside investments in mutual funds, stocks and bonds. Generally speaking, they are intelligent people. They are part of the two-thirds of the population that we call the middle class. However, when it comes to investing they are Financially Illiterate. The Passive Investor typically falls into one of three categories:

The Gone into a Shell Passive Investor

This category is comprised of people who have convinced themselves that they do not understand money and never will. They will say things like:

I’m just not very good with numbers.

I’ll never understand how this investment works.

I’m just too busy to follow everything.

There’s too much paperwork.

It’s just too complicated.

I prefer to leave the money decisions to the professionals.

Then they follow up with these types of rationalizations:

But that’s okay, because I have a great accountant.

My stockbroker picks all my investments for me and she’s a pro!

We have a great financial planner.

I have the best financial advisor in town, I don’t need to understand everything that’s going on. He’s a great guy.

The personnel department at work handles everything, it’s fine.

The excuses and justifications go on and on. All designed to relieve them from having to take responsibility for their own money . . . and future.

Because of their beliefs, they have very little idea where their money is invested or why. These investors blindly follow the market and then squeal (a lot like pigs) before running to their own slaughter. Professional traders actually commonly refer to these types of investor as PIGS because of this behavior. The most amazing consequence of this farmyard mentality of investing is that over the last two decades or so, during the greatest Bull Market in history, these investors have literally amassed no net returns on their investments!

2. The It Can’t be Done Passive Investor

This type of Passive Investor has determined that all investments involving anything more than the most basic research, and promising anything more than a 10% rate of return, are beyond them and "can’t be done" by anyone other than the most gifted, lucky or connected businesspeople, high-fliers or wheeler-dealers.

They truly believe that high rates of return on investments are extremely risky, probably illegal or available only to the chosen few. They believe that the knowledge and skills required to even recognize such investments are beyond them.

This type of Passive Investor’s usual defense to demonstrations of successful investing by friends or high-profile investors is that the successful investors must have known something that they themselves could not possibly have known. They will claim that they are not privy to the same opportunities or resources that successful investors use to make their investments so profitable. This is a most convenient justification.

Typically, you will hear them state, even in the face of irrefutable evidence to the contrary, that the successful investment strategy they have just heard described in complete detail, cannot be successfully, or indeed legally, undertaken by them in their particular circumstances or financial position. They are willing to defend their position to the death while their friends (the higher-level investors) continue making great investment after great investment. It often seems as if they take some form of perverse delight in thinking that they are right by trying to poke holes in well-proven investment strategies.

It is common for these people to whine and complain about missing out on investment opportunities after the fact, as if some barrier other than their own mindset was responsible.

I have great compassion for this type of investor, but let me be frank. The bottom line is that these people have given in to fear. They are paralyzed by their fear and block themselves from taking appropriate action, even when they are shown exactly what to do and how to do it. Often vocal, they are quick to try to bring others down to their level. Because they are afraid and unwilling to gain the knowledge they need to invest successfully, they choose instead to shoot down and criticize others in an attempt to make themselves, and their beliefs on investing, right.

My advice is to spend as little time and effort as possible discussing money or investments with these people. When they see you moving forward, their natural tendency is to put you down and try to convince you of all the reasons why you can’t do it.

Why do they do this? Because if the people around them become financially successful, they believe that this makes them wrong. And thus in their minds it makes them a loser. As a form of self-preservation, they instinctively strike out to pull down all who are trying to escape the rat race.

Avoid discussing matters of finance with these people at all costs, and if your spouse or significant other happens to be one of them, please don’t argue with him or her. Let them be right in their own minds, for the time being. Just go out there and put some runs on the board. As you become a successful investor, and start to show them the money, they will probably begin to come around to your way of thinking. Again though, if positive results still fuel their negative fires, don’t waste your time and energy trying to put the fires out, you will probably only succeed in fanning the flames.

3. The Victim Passive Investor

The Victim is the third category of Passive Investor. Like the people who have Gone into a shell or those who fight for the truth of It can’t be done, these are intelligent people. However, they have few Principles or Rules for investing. They impulsively buy high and (in a panic) sell low. They look at the stock market about the same way as they look at a Las Vegas craps table. It’s all just luck, so throw the dice and pray. They are endlessly searching for the secret to investing and continually looking for new and exciting ways to invest.

My good friend Dr. Van K. Tharp, the trainer of traders who was featured in the book Market Wizards, educates many of the world’s elite investors in stocks, futures and other derivatives markets. He calls this behavior the pursuit of the Holy Grail. For Victim Passive Investors this pursuit occurs, usually with repeated failures, as a consequence of superficial and quick reliance on others for which investments to buy and sell, and how to buy and sell them.

With the stars in their eyes distorting their view of investment opportunities, Victim Passive Investors believe that finding the Holy Grail is all about striking gold somewhere in the outside world through some amazing new investment that they were quick enough to recognize and jump into. They are always searching for the secret to investing outside themselves, rather than investing within by changing their unsuccessful behavior.

Because they are not afraid of risk (in fact, they actually find risk exciting and often actively pursue it) they are easy marks for brokers. They often fall for investment telemarketing schemes, direct mail opportunities and the hot offerings in newspapers and magazines. They are quick to jump into initial public offerings (IPOs or floats); commodities and futures trading; foreign exchange (FX), and other low-probability/high-risk ventures; pre-IPOs; wine growing; foreign or offshore ventures; and every other risky, trendy, exotic or tax effective investment known to mankind. They love to use sophisticated investment techniques such as margins, short-sells, puts, calls, warrants and other options, without proper knowledge of what it is they are committing to or the real investment risks they are taking.

These people are easily the worst investors the planet has ever known. Always trying to hit a home run, they usually strike out in a big way. When asked how they are doing, they will almost always say that they are about even or a little bit up. The truth is that they have lost money many times and often in huge amounts. In fact, Victim Passive Investors lose money more than 90% of the time! They will never discuss their losses but will always brag about their big win during the real estate boom of 2006 (and say nothing about being left holding the bag on five negative cash flow homes in Vegas!). Despite the rarity of such big wins they will eagerly keep coming back for more (like Bart Simpson to a hot-wired cupcake – Bzzz . . . Ow!). They believe that all they need is just one big one to be on easy street.

Society refers to these people as incurable gamblers. Dr. Tharp describes them as people who fail to appreciate their own ability to think and be unique. They jump into any and all investment schemes, sufficiently convinced by the sales pitch to shut down their own inner wisdom and instincts long enough to hand over their hard-earned cash. Always searching for the Holy Grail in entirely the wrong places, they run around so fast that their inner abilities and powers of independent thought cannot catch up with them long enough to show them, as Dr. Tharp best puts it, that People make money by finding themselves, achieving their potential, and getting in tune with themselves so that they can follow the flow of the market.

Level Four: The Automatic Investor

When you reach the level of Automatic Investor, your investment success is assured. You are truly on the path to Financial Freedom.

Automatic Investors are clearly aware of the need to invest. However, unlike Passive Investors, they are actively involved in their investment decisions. They have a clearly laid out, written, long-term plan that will enable them to achieve their financial goals. And they follow the 7 Money Secrets of the Rich: seven simple action steps that, if followed religiously, will enable anyone to achieve Automatic Financial Freedom.

The 7 Money Secrets of the Rich

1. Paying Yourself First

2. Reinvesting Your Investment Returns

3. Receiving Automatic Investor Rates of Return

4. Knowing What Your Money is Doing

5. Adopting the Automatic Money System

6. Financial Competence (Intelligence and Responsibility)

7. Avoiding Debt and Living Debt-Free

As you work through each chapter, completing the tasks and assignments required, you will learn each of these Money Secrets and how you can easily put them into action to produce financial results that will astound you. Excited? Read on!

Make no mistake, Automatic Investors are not what you would think of as glamorous, big-time investors. Far from it. It is doubtful that they invest in futures, commodities, foreign exchange (FX) or any other exciting investment vehicle. They are unlikely to be interested in speculation, and if they are, will only speculate with small percentages of their total investment capital, with clearly defined parameters for minimizing risks and losses. Rather, these people have adopted the same type of intelligent, long-term approach used by investors such as Peter Lynch of Fidelity’s Magellan Fund fame (one of the largest and most successful mutual funds in history) and Warren Buffett (the world’s best investor and one of its wealthiest men).

Automatic Investors are not concerned with what the in crowd is doing. They look for a good story and then invest through an Automatic Investment Plan (AIP). They do not get fancy – they rarely use options, margin accounts or any of the other stuff that the sophisticated money managers use. They just buy good stocks, proven mutual funds, real estate or other solid investments and hold them for the long term. And they do so without ever over-committing themselves. They are the people living next door to you driving the three-year-old second-hand Ford (I strongly recommend you confirm this by reading The Millionaire Next Door by Thomas J. Stanley, Ph.D., and William D. Danko, Ph.D.).

I know that you might be thinking, Come on John, let’s be realistic. You’re saying all I have to do is invest in a solid investment – like stocks, mutual funds or real estate – through an Automatic Investment Plan (AIP) and I’ll become rich? No way! Well, let me give you an example of what this simple strategy can do for you:

If you had given Warren Buffett $10,000 just 30 years ago, today you would have $68,417,563! That’s not a typo. That is over 68 million dollars!

If you had given him $200 a month in an AIP, starting 30 years ago, today you would have $47,165,321!

And if you had done both, given him $10,000 plus the $200 a month, today you would have a tidy $115,582,885!!

Compound Interest – the eighth natural wonder of the world

Never again question the power of money invested over time. This power is known as Compound Interest. According to Albert Einstein, compound interest is the "Eighth Natural Wonder of the World" and the most powerful thing he ever encountered, including the atom. With as little as $100 to $200 a month, you too can unleash the power of Compound Interest and become a millionaire over time.

A long-term AIP, in conjunction with the debt and expense reduction techniques you will soon learn, will provide you with all the money you will need to retire wealthy. Your understanding and acceptance of this reality is critical to your financial well being. (We discuss the AIP in detail in Chapter 3.)

Hot Tip!

As an Automatic Investor, keep it simple. Stick to investments that you are comfortable with and stop waiting for that one big deal to come along. If you are just beginning, start with small deals like mutual funds. You can always move up to a bigger game, but you can never get back the time and money you lose waiting for that elusive big deal.

It is the life-changing habits represented by these smaller investment decisions and initiatives that are the true Holy Grail of the Automatic Investor. They are your foundation.

If you are not yet an Automatic Investor, make the decision now to become one as fast as you can. Read on and take action. If you are already at this level, congratulations! You have already unleashed the power!

Level Five: The Active Investor

The top two levels of investor are reached by only a very small percentage of people. Contrary to what most people believe, you do not have to be a Level Five or Level Six Investor to become wealthy. But you do have to master the habits of the Level Four Automatic Investor. Under no circumstances should you forego becoming an Automatic Investor because you are sure you can become a big-time investor. I have seen friends take this approach and the results have been disastrous. If you want to become a Level Five or Six Investor, that’s great. I will even teach you the Principles and Rules involved later in the program. But you must become a Level Four Automatic Investor first. You must not skip this stage. Remember the golden rule of Level Four: if you skip you will trip!

Active Investors understand that to move to this level they must become very clear on their Principles and Rules for investing. Their investment vehicle of choice might be real estate, discounted paper, businesses or stocks. Their investments may vary but their Principles and Rules seldom do. These investors actively participate in the management of their investments. Their main focus is on increasing their assets and thus their cash flow. And they consistently strive to optimize performance while minimizing risk. It is common for Active Investors to have long-term annual rates of return of between 20 and 100%, and even more. They intimately understand money and how it works. Their money philosophies vary dramatically from those lived by the poor and middle class. A major distinction they have made is that:

Rich people work hard to have their money work hard, while poor and middle-class people work hard for their money.

This is a huge distinction: rather than investing what is left of their money after spending, they believe in spending what is left of their money after investing. This shift in perspective is a fundamental one for the budding millionaire.

Level Six: The Capitalist

The final type of investor is the Capitalist. Few people in the world ever reach this level of investment excellence, and fewer still manage to remain there. Capitalists have two principal motivations:

1. to be a good steward of their money while they are living; and

2. to create a legacy to continue after they are gone.

To fulfill these two motivations, they apply the bulk of their money to the task of making more money. These people are the movers and shakers who have propelled many western nations forward to become economic and industrial powerhouses. They are the Rockefellers, the Kennedys, the Fords, the Carnegies, the J Paul Gettys, the DuPonts, the Bill Gateses, the Warren Buffetts and the Rupert Murdochs. These great Capitalists have provided more jobs, more homes and more financial benefit to the world than all the poor people who ever lived combined.

They also contribute hundreds of millions (if not billions) of dollars to causes and charities throughout the world. The Rockefeller Foundation, for example, generates more money for charitable distribution from its investments each year than the Gross Domestic Product (GDP) of many third world countries (US$343 million in 2005 alone). And it never spends its capital.

So perhaps you are beginning to understand how the Level of Investor you are has influenced your investment results to date. As I said, don’t be concerned if you are currently at a level that is hindering rather than helping your financial success. The Money Secrets of the Rich program that you are about to embark on will show you exactly how you can improve your investor level. Use this new awareness to inspire you into action and you’ll soon be on your way to Automatic Financial Freedom.

Accelerate your results by visiting the Money Secrets of the Rich online money resource center

As I mentioned earlier, this is not a book that I want you to read and put back on your shelf. I want you to use it to make real and lasting changes to your financial situation and to set yourself on the path to Automatic Financial Freedom. As you will see, not only does the Money Secrets of the Rich program tell you exactly what to do and how to do it, but I’ve also put together a phenomenal online money resource center that will give you all the links, resources and other tools you need to put your learning into action. Please, use the web references in each chapter to look up specific content that you are interested in, and while you are visiting the site take a good look around to see what else is available. The online information is constantly updated and reviewed, so bookmark the site and revisit it again and again. It will become your ultimate guide to all your financial needs.

Visit www.moneysecretsoftherich.com, your ultimate online money resource center.

Ready to upgrade your current investor level? You absolutely can’t go past the online resources we’ve put together for you. We’ve done the legwork and found our favorite websites for everything you need to know about choosing a mutual fund, investing and much, much more. If you’re about to begin investing for the first time, this is the perfect place to start. And if you’re already an experienced investor, this is the place to make sure you’re getting the best possible bang for your buck. So, be sure to visit www.moneysecretsoftherich.com ASAP!

Action Steps

• Study the 7 Levels of Investor and honestly identify which one you are today. Remember, no matter which level you are starting from, with a little effort you can upgrade your skills and improve your level. Make a commitment to your Financial Evolution.

• Jot down the names of people you know alongside each of the 7 Levels of Investor as you identify which level they are. Be especially aware of what level your partner is if you are working toward Financial Freedom together.

• Take this new awareness and combine it with the attitudes and actions of successful investors to get the results you desire. Awareness + Attitude + Action = Success.

• Remember, the 7 Levels of Investor have nothing to do with your income. It is all about what you do with your income.

• Aspire to become a successful Level Four: Automatic Investor. Make the commitment to learning and applying the 7 Money Secrets of the Rich in your life, starting today.

• Realize that the road to Financial Freedom as an Automatic Investor is not just for the fortunate few, or the high-fliers – you too can live the life of a wealthy Automatic Investor simply by committing to and following the 7 Money Secrets of the Rich.

• Pick up a copy of Stanley and Danko’s The Millionaire Next Door to read.

• Fall in love with the idea of Compound Interest – the Eighth Natural Wonder of the World and your sure path to Financial Freedom.

1.1 Our best web picks for up-to-the-minute information about mutual funds and investing.

1.2 More about the Rockefeller Foundation may be the inspiration you need to move up to Level Five or Six.

CHAPTER 2

Committing to Your Financial Goals

A journey of a thousand miles must begin with a single step.

Ancient Chinese proverb

The most important step in achieving Automatic Financial Freedom is making a 100% commitment to, and completing, the Money Secrets of the Rich program. This book is not intended to give you a warm fuzzy feeling and to be put back on your shelf. Neither is it intended to make you feel worse than you already do about your current financial situation. It is designed to make you take action. In fact, the Money Secrets of the Rich began as an educational program, and the book you are now holding in your hands is based around that program and its activities. So, if you are serious about changing the course of your financial future, make a 100% commitment to completing the Money Secrets of the Rich program. That means not just reading the book, or parts of the book, but reading, learning, implementing and changing what you’re currently doing that isn’t working for you. Are you ready?

At the end of each chapter you can expect to spend anywhere from a couple of minutes to one hour on your assignments. That’s all it will take. Just think, in around 20 hours you will be applying the Money Secrets of the Rich in your life, and be well on your way to Automatic Financial Freedom. Of course, many people complete the program in far less than 20 hours, while others spend several days. What’s important is that you complete the program in its entirety, and that you take the right amount of time for you. What I recommend is that you complete just one chapter per day, rather than charging through on a 20-hour-financial-freedom-marathon. Completing just one chapter each day for 30 days will give you plenty of time to do all your assignments and for all the new information you are learning to sink in.

I know that your desire for control in your financial life will motivate you to complete all of the tasks required. But if you do find yourself tempted to skip over certain chapters or tasks, take a good look at your reasons for wanting to do so and check that they are indeed serving you rather than hindering you on your journey towards Financial Freedom.

Hot Tip!

Get together with like-minded close friends or family members and complete the program together for extra team motivation.

Setting your Financial Goals

We begin the program by determining your Financial Goals in writing. This first step is so easy that you might be tempted to skip it. Don’t. It is my experience that one of the biggest differences between those people who are financially successful and those who are not is this critical first step. Indeed, repeated studies have demonstrated that having written Financial Goals dramatically increases your motivation, and therefore your achievement of financial success.

Take at least 30 minutes to sit down with your partner (if applicable) and discuss your financial situation. Write down your responses to these questions:

What do I/we want to achieve in the next 30 days? Be realistic when you answer this question.

On a scale from 1 to 10, where is my/our commitment level? Be honest when you answer this question.

Then ask:

What are my/our dreams?

What are my/our goals?

What are my/our values?

What strategies should I/we use?

Qualify your answers to each of the above by also giving serious thought to:

Why?

When?

How?

Some other questions to consider include:

What do I/we really want to accomplish in life?

What is my/our purpose?

Where do I/we want to live? What type of lifestyle do I/we want?

What have I/we always dreamed of doing?

What "toys" would I/we like to have?

How much income each month (cash flow) do I/we need to meet my/our current needs? Future needs? Retirement needs?

How much will it take for you to become financially free?

The answer to this question depends entirely upon your lifestyle. What we want to do here is find out how much money you would need to have invested so that you can live the lifestyle you desire while never having to work for money again. When you run the numbers, assume that your money will earn 10% per annum. For example, at 10% interest the earnings on $1,000,000 would provide an income of $100,000 a year, or $8,333 a month.

Decide for yourself how much money you need to enjoy life and to do the things you passionately want to do. Then calculate how much money you need in order to live comfortably.

Your total investment capital is the amount that we are now going to embark on creating by applying the Money Secrets of the Rich in your life. Don’t be concerned if this figure seems a little unrealistic at the moment. The important point is to commit to the decision to start, even though you may not be entirely