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Steps to Freedom
A Blueprint for Achieving Wealth, Health, and Happiness
by Noel Swanson
This book is copyright (c) 2004 by Noel Swanson. All rights reserved. However, you are encouraged to pass this on to your friends - in fact you can even make money by doing so (click here to find out how) - provided you do not change the text in any way (apart from your affiliate links, of course).
Published by Allegretto ltd. 8 Westborn Road, Fareham, PO16 7DH, UK www.7stepstofreedom..com
Table of Contents
Intro - Just 7 Steps to Your Dreams Step 1 - What do you Want? Step 2 - What is Important? Step 3 - Passion, and Maths Step 4 - Stop the Bleeding Step 5 - Your Plan for Security Step 5 cont - Live for Success! Step 6 - Your Plan for Comfort Step 7 - Your Plan for Prosperity Step 7cont - More Paths to Wealth Step 8 - The End and the Beginning How to Make Money from this Book 3 6 11 15 21 37 44 47 61 73 79 83
Intro - Just 7 Steps to Your Dreams
his is a book about Freedom. How to get it, and how to keep it.
If you stick with me and work through this book deliberately and diligently, you will be well on your way to achieving everything you ever wanted from life. So what do I mean by "Freedom"?
freedom is having the time, ability, and opportunity to do the things that I want to do in life It is about enjoying life to the full. About extracting every second's worth of life out of every minute lived. About being able, on one's death bed, to be pleased with a race well run, a life well led with no regrets. Is it about money? Yes, money is a part of it. It is hard to be free if you are broke. But money is not everything - there are plenty of rich men and women who are as miserable as sin. They are hardly free. In my book, freedom includes having enough money to do the things you love to do - yet without letting money become your master. Is it about love? Yes, because life is about passion, and about emotions. Without both of these we are as un-free as a robot. But love can also be a prison, and so Freedom is about learning how to enjoy your emotions, your passions and, yes, your loves in a way that brings liberty and life to all parties - whether they be your lovers, your children, your family or your friends. Is it about time? Of course! Every one of us has only 24 hours in a day, 7 days in a week, 52 weeks in a year, and maybe 80 or 90 years in a lifetime. How will you spend those precious moments? Because, once spent, they can never be regained. For 95% of the worlds population their time is effectively controlled by other people and other demands - every moment of the day is soaked up by the ever-present need to earn enough to pay the bills, to clean the house, to look after the children, to satisfy the partner or spouse, and to keep the in-laws at bay. That is not freedom!
7 Steps to Freedom by Noel Swanson
For me, freedom is about being in charge of my own time: choosing if and when I will work, when and where I will go kayaking, skiing, scuba diving, or oil-painting. Having time to sit and drink wine with my friends, take walks through the beautiful countryside of England and Canada, or sit on the beach and watch the Caribbean sunset. Is it about pure, simple, care-free hedonism, with no concern for the needs or wants of others? No! Simply seeking after the pleasure of the moment, like taking drugs, leads inevitably to an empty and shallow life. Yes, it is fun for the moment - but the regrets will surely follow as night follows day. Is it about manipulating and controlling others? I hope not! You know, what you will learn through this book, and through the recommended reading is so powerful that you could, if you chose, use it to do just that. But then that is the danger of powerful tools a sharp knife can both slice the ropes and knots that bind you - and slay your best friend, your lover, or your enemy. In my mind, true freedom comes when you honor and respect others, not when you control them. I hope that you will use what you learn in that spirit. But, in the end, that must be your own choice - for that is what freedom grants you: the ability to make your own choices about your own life. The Keys to the Dungeon My Friend, you are about to embark on a most amazing adventure. Your life will never ever be the same again. Why not? Because, today, you have been handed the keys to your dungeon. You may choose never to use them. In that case, your life will continue as it always has done - with one difference: You will always know that it was your own choice to stay in that dungeon. Perhaps you have good reasons, so you thin, for why you wish to remain there. Perhaps you just don't believe it could be any different. Either way, if you never put the keys in the lock, if you never turn them, you will always wonder what it might have been like... Your other choice is, of course, to open the doors and walk through them, a free man or woman. Now, at this point I do have to issue a warning! This book is your key. But it is not a magic wand! You will learn that there are immutable laws at work in the universe. You will learn to use these laws to your advantage, and you will be amazed at the changes in your life that they bring.
7 Steps to Freedom by Noel Swanson
But it won't happen overnight. The lock on your dungeon is rusty and difficult to turn. The door is stiff and heavy. You will have to work at them if you are to successfully open them I will show you what to do. But you are the one that has to do it! And so, as you work through this book, you will find tasks set for you. Do them! This book is not light bedtime reading: it is a workbook; the blueprint for a better life. For that reason I strongly suggest that you print out this entire book now. Go on, do it this is your first task! Then punch some holes in it and put it into a ring binder so that you don't lose any pages. Did you do that? No? How are you going to progress if you don't even take the first simple step? Print it out now. Okay, lets get started. Here is what will you learn through the coming weeks and months: How to set yourself free financially How to eradicate guilt and dependency from your personal relationships. How to maximise your use of time How to remove the clutter from your life All this, and much more. But above all, you will learn how to think! Because, as you shall discover, it is not your boss, your poverty, your spouse, or your disabilities that keep you enslaved. It is your own mind. So where do we start? Well, I'll tell you what. Why not start with a simple little project that will sow the seeds of your financial freedom down the road. It will take you about 10 minutes to complete, and will cost you not one penny. Here is what I want you to do: Go over to the chapter on "How to Make Money from this Book" and follow the instructions. (Just click here and you will be taken right there.) Then go to the Table of Contents and start on Step One. Oh, one more thing. In the following chapters, I will talk much about "retiring" and "building wealth". Why? Because, for most people, the two biggest hurdles they face are about becoming financially free, and emotionally free. And of these, the first is usually the most obvious (although probably not as important as the second.) So I will use wealth as our prime goal. And I will use the term "retiring" as meaning the same as "financially free" - i.e. that you have sufficient financial resources that you can -5-
7 Steps to Freedom by Noel Swanson
choose whether and how to work. "Retiring" does not have to mean you never work again - you may like your career and want to continue in it. Great! As long as that is your choice and not a necessity. But perhaps you have different priorities and goals in life? No matter. The principles will apply in exactly the same way. Just follow the instructions and you will get there. See you on the other side!
Step 1 - What do you want?
hy is it that most New Year’s resolutions barely make it through to the end of January?
The reason is quite simple - most of them are based on either a “wish” or an “ought”: “I wish I could lose some weight” “ I wish I could stop smoking” “I really ought to get more exercise” “I really ought to eat more healthily” And so on. In contrast, let me ask you why it is that you, and 95% of the adult population, get up in the morning, go in to work, trade eight or more of the best hours of your day for a pathetic amount of money, doing a job that causes you stress and worry, and then come home worn out, only to repeat the same exercise day after day, for forty years? This is often known as the 40/40 plan - 40 hours a week for 40 years. And at the end of it, you get what? A so-called pension that pays you even less than you have been living on for all those hard working years. So now you are old, perhaps ill, with free time to do what you want - except you have no money. So why do you do it? Let me tell you why: FEAR . That’s right. You are afraid. Of what? ‚ ‚ ‚ ‚ ‚ ‚ Of not having enough money to pay the rent or mortgage. Of having your house repossessed. Of not being able to feed yourself and your family. Of not having clothes to wear. Of being destitute and dependent on a state pension when you are old and frail. Of being ridiculed and pitied by your friends, neighbours and relatives.
If that is not true, then why do you do it? Because you love the job? Let me ask you again: if you had enough money to pay all your bills, expenses and luxuries, would you still work at the same job for the same number of hours? I am willing to bet that the day you could afford to, you would cut your hours, no? So there is a lesson to be learnt here: Fear is sufficient motivation to keep you doing something you would rather not do year after year after year. On the other -7-
7 Steps to Freedom by Noel Swanson hand, a wish or an ought is not enough to keep you going for even a month.
So, since money is such a big issue for most people, can we agree that becoming financially free is a worthwhile goal? In a later Step we will talk in detail about how you are going to make your money. But, safe to say, it is extremely unlikely that it will be through your current job or employment. Most likely you are going to have to start some kind of new venture. Now, making serious money takes commitment and perseverence. Things don’t always go as planned. There will be set backs on the way. You will have to make some sacrifices. If you are starting a part-time business alongside your full time employment you will probably have to give up some of your free time in the evenings. At times you won’t feel like doing it - just like when you don’t feel like going to the gym, or staying on your diet. So if you are to stick to your wealth building plan you are going to need something more than just a vague wish like “I wish I had some more money”, “If only I didn’t have to go to work every day”. Those just won’t cut it when the going gets tough. So what do you need? You need two things: 1) A clear goal, and 2) A reason why. These need to be so powerful, and so entrenched in your very being, in your soul, if you like, that they start to shape the way you see the world. Take a world class athlete like golfer Tiger Woods, or 5-times Olympic gold medalist Steven Redgrave. What makes them train and practice so hard, day in and day out? It certainly isn’t the money. It is a deep seated passion - both for their chosen sport, and also for winning. They must win. And that passion drives them on when others would give up. If you are serious about becoming free in the next 2 - 8 years, you too need that passion. There is another aspect to this. Once your focus is clear. Once you know what it is you really, really want, and you set out to get it, all the excuses start to fall away. To start with your mind will come up with all sorts of reasons why you can’t do it you’re too young, too old, too thin, too fat, too stupid, too clever, the wrong sex, the wrong education, and so on. But once you have decided, once there is an iron-fast conviction in your soul that says “that’s where I am headed, come what may”, then your mind starts to look for ways around, under, or over the excuses. Instead of “I can’t”, you start to find the reasons why you can. Henry Ford but it best when he said “Whether you say you can, or you say you can’t, you are correct”. -8-
7 Steps to Freedom by Noel Swanson
Note that all this applies to the whole of your life, not just your finances. Whether it is losing weight, stopping smoking, getting fit, meeting more friends, getting married, or starting any new venture or adventure, it probably won’t happen unless there is that passion, those goals and dreams first. Of all the reasons why people fail to make it in their new venture, the lack of a clear goal, and the lack of passion for that goal are the top of the list. On the other hand, for everyone who has made a real success of life, (however you might define success), you will find a strong and powerful passion that has driven them onwards. This is of vital importance. Before you go any further in looking at various business opportunities and ventures it is crucial that you really nail down your own personal reasons why. It is this step that many people will skip over. “What’s the point?”, they would say, “Why not just get on with making the money?” So why is it that these people are broke, while the millionaires stress the number 1 most crucial factor in success is getting your thinking straight. Who would you listen to? Remember I said that you would need to do some work? Well, if you are still with me, and still interested in learning the secrets of wealth and freedom, here is this week’s homework: Write down your answers to the following questions (you have printed this out on paper, haven't you?): 1) What is your number one priority for starting a new venture? Common reasons include: Extra Income Financial Freedom Having your own business More spare time Personal development Helping others Meeting new people Retirement Leave a legacy It does not matter what your priority is - nor how big or small your goal is. What matters is that it is yours, and it matters to you. 2) Why did you pick that one priority?
7 Steps to Freedom by Noel Swanson 3) Why is that important to you?
4) What are the consequences of not having that
5) Why would that worry you?
6) Now look ahead 5 and 10 years. What do you want for yourself then - where will you be, what will you be doing, what will you own? Be as specific and detailed as you can. Avoid negatives - don’t look at what you won’t be doing (e.g. “I won’t be living in this dump”), look at what you will be doing instead (e.g. “I will be in a 4-bed detached cottage in the countryside, with the mortgage fully paid off.”)
Do not miss out this exercise - it really is vital. Spend some time thinking and dreaming about this - and then right down your answers in as much detail as you can. The more detailed, the more vivid, the more real your description, the greater chances of success. Sounds crazy, but it is absolutely true! Build a Habit of Success This process of describing and refining your goals and dreams does not stop here - you will want to be doing this everyday of your life until you reach those goals. This is why successful people are constantly reading and listening to motivational books and tapes. I strongly encourage you to start to do so also. In fact, this is essential if you are serious about unlocking the doors to your dungeon. As a first step, go to onto the internet and get yourself The Midas Secrets package. It is only a small investment in your future, and has invaluable lessons (provided you do them, of course). In fact, it was The Midas Method book that first launched me on the path to success! Like the Remmington shaver fellow, I liked it so much I bought the rights to it! Here is the link: click here and get your copy now. Done that? Okay, that’s enough for this week - you have some work to be getting on with! -10-
7 Steps to Freedom by Noel Swanson In Step 2 we will be looking some more at how to develop your millionaire’s mindset, and the grit and determination to reach those goals.
Remember, if you always do what you’ve always done, you’ll always get what you’ve always got. Isn’t it time to do something different?
Step 2 - What is Important?
id you write down your goals from Step 1? If you did - congratulations - you have made a crucial first step to achieving them. If not - well, you won’t be the only one! It is so easy, isn’t it, to let other priorities and demands get in the way of what is important. In this step I want to cover some tools that will help you to organise your life so that the important things do get done. Some of this is based on an excellent book by Stephen Covey called The 7 Habits of Highly Effective People. Well worth getting hold of. You should be able to get it from your public library, or else click on the link and it will take you straight to it at Amazon.com Take a look at the grid below: Important Quadrant 1 Quadrant 3 Not Important Quadrant 2 Quadrant 4
Urgent Not Urgent
All of your daily tasks can be mapped onto this grid. You will note that some of your tasks are important (by this I mean important to you). Classed in this are things such as: < eating < paying the mortgage (or you will be repossessed) < earning money < paying bills < keeping fit and healthy < seeing your long-standing friends < having the car serviced (regular maintenance saves you money in the long run) Whereas others are not important, such as: < watching soap operas < reading junk mail < doing favours for someone else (it might be important to them, but that does not mean the task is important to you - although the friendship might be) At the same time, some of these tasks are urgent. That means they need to be done now -12-
7 Steps to Freedom by Noel Swanson
and can’t wait. Often this is because of some deadline imposed by someone else (like the boss, or the tax man). Other things are much less urgent. For example, the car does not have to be serviced this week. Next week, or even next month would probably do. Likewise, you don’t have to go to the gym today - tomorrow is probably just as good. And the ironing can wait until there is time. Now, take a look at your own life. If you are like most people - stressed out by too much to do and too little time in which to do it - the chances are that most of your activities fall into either quadrant 1 or 4: Quadrant 1 activities - these things are both urgent and important. You have to do them, and they have to be done today. Tomorrow is not good enough. These activities probably take up most of your day. Many of them are of the “putting out fires” variety. In other words, things that have to be done today, because you did not get around to doing them a week, month, or two months ago. For example, the car has broken down, because you never got around to replacing the oil 6 months ago. As you do these, you are probably getting stressed by all the Quadrant Two activities (important, but not urgent) that you know you should be doing, but just can’t find the time for. Like going to the gym, or keeping up to date with developments in your field of work, or painting the house. In fact all those things on your mental “to-do list”. In between all the stress of dealing with Quadrant One you spend a bit of time trying to relax by indulging in Quadrant Four activities - doodling, filling in the crossword, daydreaming, watching TV with a beer. Then, on top of all that, a colleague, relative or friend comes along and asks you if you wouldn’t mind helping them with X as they really are in a bind, and your help would make such a difference to them. And, being kind hearted and generous, you say “yes” to this Quadrant Three activity (Urgent, but not important - to you - it’s their agenda, not yours). And what happens to Quadrant Two? All those tasks that are vitally important, but sit quietly in the background waiting for you to get around to them. Which you would, if only you had the time. Most of these activities are of the maintenance and improvement type - looking after your property, and yourself. Included here are things such as getting exercise, maintaining your house and car, and improving and developing your knowledge and skills. Reading this course is a Quadrant Two activity - it is important to your future - but could easily be pushed to the bottom of the pile until you have time to do it. The same with the exercises from last week and from The Midas Method. But these activities are important. They need to happen. In fact, if you could do them regularly, you would find that they actually help to prevent many of the Quadrant One -13-
7 Steps to Freedom by Noel Swanson emergencies!
So how will they happen? Only if you make sure, in each day, that you do them. At the beginning of each day, schedule in some time that is reserved for these activities - and stick to it. Here are some suggestions: With each task you do today, ask yourself which quadrant this fits in. If it is from quadrant 3 or 4 - say “no”! You must work on what is important to you before you work on what is important to other people. You don’t have to be rude or unhelpful. But equally you certainly don’t have to be a doormat. Most people find this very difficult. But if you are going to reach your goals, you must learn this skill. Get some books, listen to some tapes. This brings me on to the second main point for Step 2: Who is in charge of your life? Is it you? Or is it something outside of you - other people, fate, the will of god, the government? If you are to achieve the success you deserve, your answer to this must be “Me!”. Life is all about the decisions you take. You are where you are because of the decisions you took in the past. Of course other people and events have played a part. But whatever they did, and whatever happened, what was crucial was what you did in response. Now, there is a balance in all this. The goal is not to get into self-pity and self-blame about all the mistakes you have made in the past. We have all made mistakes. What matters is where you go from here. The future is unwritten. It is a blank slate for you to write upon. How it turns out for you is down to the decisions you take from here on. You can choose to carry on as you are - or your could choose to move abroad, or change jobs, or get divorced, or start a business, or... And whatever you do, or do not, decide, will affect your life from then on. This opens up tremendous possibilities for you. You really can reach your goals - if you make the right decisions. Or you can sit around, complaining about the circumstances, and hoping that someone else will do something to improve your lot. Sorry if this sounds rather hard. But in 17 years of working with families (I am a medical doctor and consultant psychiatrist, remember?), I have found this to be one of the biggest reasons for why people continue to have stress, misery, and problems in their lives. And often one of the hardest for them to overcome. So, to summarise, here are your tasks for the next month:
7 Steps to Freedom by Noel Swanson At the beginning of each day:
1) Set aside an hour for quadrant two activities - use this for reviewing your goals, getting some exercise, doing repairs, studying, etc. Make sure you do it each day. Try and do it at the same time each day - the goal setting is best done at the beginning of the day, the rest can be at any time, as long as it happens. 2) Make a list of the 6 most important (to you) tasks for the day. Then start with number one and persist with it until it is done. Make every effort to avoid being sidetracked or distracted from it. If you come to a point that depends on some external event (like waiting for someone else), then move on to task two and stick with that until it is done. By the end of the day you will either have completed all 6 or just some of them. If you did them all, great! If you didn’t - you would not have done them using any other system either. But at least you worked on the most important of them. Tomorrow make a new list (which might or might not include today’s items). Okay - your task this week: Do both of these every day. If you miss a day - don’t beat yourself up - but make sure you don’t slip up again! After all, the only person you are cheating is yourself. If you have not already done them, put your Midas Method goals at the top of your list as your Number 1 priority. See you next week in Step 3!
Step 3 - Passion, and Maths
arl Nightingale, one of the original and greatest motivational teachers, tells the story of some Africans riding in the back of a truck. As the truck was bouncing along down some dusty track, they decided that this was the point at which they wanted to get off. So instead of hammering on the side of the truck to signal to the driver, they simply climbed out of the back - only to find themselves bouncing and rolling down the road themselves! Fortunately none were hurt, and the incident provided them with some great stories to relate to the friends and relatives. Why did it happen? It is easy to point to their lack of experience with fast moving forms of transport. But Earl Nightingale prefers to see it as a wonderful demonstration of the Law of Cause and Effect, of which the poor African villagers seemed to have been surprisingly ignorant. This Law is one of the most fundamental laws in the universe, and underlies just about everything that we do. It has been stated by many people, in many different forms, depending on the type of circumstance that they were describing. Here are some of the most famous; “For every action there is an opposite and equal reaction.” Newton. “"Give, and it will be given to you: good measure, pressed down, shaken together, and running over will be put into your bosom. For with the same measure that you use, it will be measured back to you." Jesus, Luke 6:38. So what does this have to do with making money? Absolutely everything. This law pervades the entire universe. It has its effect every time we do anything, whether we like it or not. Since this is the case, we would be wise to learn this, and use it to our profit. It is through an understanding of this law that cars drive, planes fly, and rockets are able to land on the moon. And once you fully understand it, it will also be the means to your own financial security. Lets see how it works in a financial sense: Your income is and will be directly proportional to the benefit that you bring, the number of people to whom you bring it, and the difficulty of replacing you. Here are some examples: A window cleaner brings a small benefit to one household at a time. It is a relatively unskilled job, and so it is easy to replace him. Consequently his pay is low. A lawyer or doctor brings greater benefit, but still to only one client at a time. But because of the long and arduous training she is rather more difficult to replace. So her -16-
7 Steps to Freedom by Noel Swanson income is above average.
A best selling author brings a small benefit (a few hours entertainment), but to millions of readers. Also, skilled writing is fairly uncommon, so his income can be quite large (in fact, proportionate to the number of readers). The same also applies to star-quality actors, entertainers, and sportsmen and women. Is a World Class football player really worth more than a skilled doctor? Surely the doctor provides a greater benefit to people? Yes - but the problem is that it is to only one person at a time! So, how do you apply this if you want to make some serious money? Clearly you need to find something that: 1) provides benefit to people - the greater the benefit the better. 2) can be supplied to as many people as possible, and 3) is scarce, or cannot be easily provided by someone else. Getting this combination right is the maths. If you can get it right, then, as sure as the sun will shine tomorrow, your reward will follow. But be clear that it is in that order first you provide the benefit, then the rewards follow. To expect otherwise would be like telling an empty fireplace, “you provide the heat and then when you have done that, I will put the logs on.” It does not work that way around. And yet so many people expect just that. This is especially true in employment - they expect the pay rise or the promotion first, before they will put in the extra work. If you are in employment and wish to rise through the ranks, here is how you do it: Become the best employee there is - become so indispensable to the company that they cannot manage without you. Produce the highest output, the best ideas, the greatest number or sales or clients. But work smart, not hard. Don’t just do “grunt work” that anyone could do - find a niche in which you become the expert or the specialist. It is not necessarily about working all hours of day and night - such employees simply get taken advantage of. Instead it is about positioning yourself so that you alone are the one that provides the unique benefit that the company depends on. If you can do this, then your reward will follow. The trouble is, it is very hard to become financially independent as an employee - for the simple reason that, in the end, all your efforts are primarily going to benefit someone else - namely the business owner. The reason for that is very simple - the deal is that you exchange your hours of labor for money. And there are only so many hours that you have that you can exchange. The maths is simply wrong.
7 Steps to Freedom by Noel Swanson
Consequently, the only way to make more, is to find a way to multiply your efforts, so that they benefit more and more people. Clearly, to achieve this, you will also have to provide a service or product that people want. It is no use putting all your efforts into something and then finding out that nobody wants it. Much better to find a niche where people are begging for your service - whether that be a hungry crowd desperate for a burger, or collectors desperate for football or pokemon cards. Then the maths is right. There is, however, as second side to all of this. Life is supposed to be fun. I believe that life is just too short to be spending it doing things that you hate, or that bring great stress. Why do it when there are so many enjoyable things to do. Whatever means you choose, to make enough money to become financially free is going to take some work. So why not, at least, have fun while you are doing it? This is what I call the passion. If you look around, you will probably find that most millionaires have worked very hard to build their fortunes. Most could probably be described as workaholics. Yet if you asked them, most would probably tell you that they love what they do, that it is not so much work, as play. And why not? You are much more likely to put in the hard work if it is fun, then if it is tedious. You are much more likely to persevere, and see it through to the end if you are passionate about what you do, than if it is a total bore. So get the maths right. But also find something that you love. Find something about which you have a passion. Or, to put it the other way around - do what you love, and then find a way to make it pay! Passion + maths = freedom Lets look at some examples: You love teaching - but teaching a school class has the wrong maths. What about finding a way to extend your teaching to hundreds, thousands, or even millions? This could be done by books, training tapes and videos, and/or large conferences and seminars. You love skiing - but being a ski instructor doesn’t pay. Could you set up some kind of tourist operation - perhaps filling a niche market for a particular type of skier (e.g. handicapped, school/business groups) or destination (undiscovered and exotic locations, off-piste powder tours)? You love helping people. You could volunteer at the local homeless shelter and be rewarded with a warm fuzzy feeling about how much you are helping them. Or you could develop a business in which you help other people to be successful. Network (or multi-level) marketing is wonderful tool for doing just that. By its very nature it is -18-
7 Steps to Freedom by Noel Swanson
structure so that you more you help others to build successful business themselves, the more you yourself will earn. We will be looking more at this in a later Step. You hate meeting strangers and having to talk to people you don’t know. But you love working on a project - such as writing, or computer programming. You could be employed by a company to develop their products - or you could develop your own product that has value to many, and either use the internet as a tool to make it available to the masses, or joint venture with someone who does like networking or selling. In a later Step we will be looking at a number of vehicle or tools that you can use to make your money. So at this stage I don’t want you to be worrying about the maths. Your task for this week is to think about your passion. What is it that you really love doing? What is it that turns you on? What are you good at? Do not think only in terms of skills (like writing, or programming, or fixing cars or cooking). Think also about your personal character traits. Are you good at meeting strangers? Can you quickly put people at ease? Are you a strategic or analytical thinker, or are you more artistic and intuitive? Are you good at leading others, or do you prefer to just be given a job to get on with? If you could do anything at all, what would give you the greatest pleasure and satisfaction? Do not limit yourself - let your imagination take you where it will, you might just find your life’s calling! To help you, here is a question that might prompt some thinking.
What is your purpose in life?
Now, lets just think for a minute. There are two points to consider here. The first is that wealth comes from bringing value to other people. The second is that happiness is a by-product of doing something that is worthwhile. So if you can find a purpose to your life that brings value to people, is worthwhile, and suits your personality and unique pattern of strengths, then you are on the high road to both success and happiness. Note also that the notion of purpose is that of action, of doing something. The joy is in the journey. Life is not an end point, it is a process. One way to think about this is to develop your own mission statement. You have probably noticed that many companies are developing mission statements to help them to focus on just what it is they do as a business. So why not have a personal mission statement. Here is how you can do it (I am indebted to Joe Karbo's The Lazy Man's Way to Riches for this). All you have to do is to fill in three blanks in the following statement. “My mission (or purpose) in life is to _____________________ (do something) -19-
7 Steps to Freedom by Noel Swanson __________________ (type of people you will serve) to _______________” (towards a goal)
Now all that you have to do is to fill in the blanks. Below I will give you some ideas. But don’t be limited by these, keep brainstorming until you find your own, unique, mission. When you do, there will be a “eureka” quality to it, you will feel it resonate with your whole spirit and being. You will say “Yes! That’s it! That’s what my life is about, what I love doing, and what provides me with satisfaction and excitement.” Start with finding the right verb. The list in Table 1 nurse acknowledge facilitate may give you some ideas, but don’t be afraid to find guide organize assist heal prepare awaken your own verbs to use. What is it you love doing help referee challenge with people? Are you a natural born teacher, leader, influence refine coach inform serve discover encourager, entertainer, or what? Even if you prefer instruct soothe educate to hide away in your den working on a computer lead stimulate elevate liberate strengthen empower programme, remember that the purpose of what you manage support enable massage validate encourage do is to convey some benefit to someone. If there is minister enroll enhance no benefit of some kind, then guess what? You won’t mystify enlighten entertain network expand find any financial reward in it. Even drug dealers provide a “benefit” to people - they relieve their Table 1. What you do. craving for drugs (never mind that they caused the craving in the first place!) So keep searching until you find what it is that you love doing. With the right verb you should be able to complete the first stage: “My mission is to ______________ people.” Step two is then to identify the recipients of your actions. It might be an audience if you are an entertainer, or motorists, if you are a mechanic. Table 2 lists some other possibilities. Note that this might be anything form individual people right up to large groups, or even countries (if you fancy being Prime Minister!). “My mission is to __________ ____________.”
aliens armies artists athletes audiences babies boaters boys brides burned cancer sufferers children gifted girls graduates grandparents handicapped homeless informed inmates listeners men millionaires minority groups nations parents patients poor retired scientists self-employed seniors sick singles teens toddlers viewers weavers women wounded choirs couples
Finally, identify the desired outcome of your work with these people. In what way will this be of benefit to them? What will they have, or be Table 2. Who benefits from what you do. able to do as a result of your actions? Table 3 lists some ideas. Of course there are many, many more. I will leave that to your imagination. When you find the right outcome, you have your completed mission statement:
7 Steps to Freedom by Noel Swanson
“My mission (or purpose) in life is to __________________ __________________ to ________________” Here are some examples: “My mission in life is to mentor self-motivated people to achieve successful and joyful lives.”
achieve wholeness act find adventure appreciate art be responsible be healthy be fit
earn explore have fun happiness hear experience joy laugh learn
love play golf relax rest retire succeed swim travel
Table 3. How will they benefit?
“My mission in life is to nurse children with cancer to die with dignity and without fear.” “My mission in life is to discover new places to which adventurous golfers can travel.” As you can see from these examples, you can play around with the form of words to make the mission fit you. Keep doing so until you have something that makes you feel good. At this point do not be thinking about how you will do it. Concentrate only on what it is you want to do. --- oOo --Your task for this week? Yes, you have guessed it! Complete the blanks above. In the Step 4 we will be looking at how to take stock of where you are now. Life is a journey. So far we have been looking at where you want to get to, the destination. Next you need to know where you are now. Only then can you work out the quickest route to get from here to there. Hang in there!
Step 4 - Stop the Bleeding
< < <
elcome back for the next step!
If you have been doing your homework you should, by now: know that you can achieve whatever it is you set your mind to, have clear, specific and detailed, goals written down as to what you want to achieve in the short, medium and long term. be excited about the type of contribution that you will bring to the world, the way in which you will make a difference to people’s lives.
Before we start to look at the ways in which you will do all of this, we still have one further preparatory step. Once again, do not rush over this. It is as important to know where you are now, as it is to know where you are going. Suppose, for example, your goal was to “travel to York, England”. How will you get there? Will you travel by foot, bus, coach, train, air, ship? Doesn’t that depend on where you are now? It might be a bit difficult to travel there by foot, if you are currently in New York, USA. And an aeroplane might not be so appropriate if you are just down the road in Leeds, England. So, this week’s task is to take full stock of your situation, your current starting point. Before we do that, I want to talk a little bit about how to create your own personal financial statement. You will find a much fuller explanation of this in Robert Kiyosaki’s best-selling book “Rich Dad, Poor Dad”, and the sequel “Cashflow Quadrants”. I thoroughly recommend them. (They are a bit wordy and repetitive at times, but the content is first class.) You can order them through Amazon.com , or through your local bookstore. There are two parts to a financial statement. The income and expenses report (also known as a profit and loss statement), and the balance sheet (which details assets and liabilities). Let’s look very briefly at both of these. At this point of time, most of your income probably comes from a job or other kind of -22-
Figure 1Figure 1 . Income and expenses
7 Steps to Freedom by Noel Swanson
work that you do. This income goes into the income section of your report (see Fig. 1). Unfortunately most of this money immediately flows out again. Some of this goes directly out as expenses (of which tax is the biggest one) - arrow A. The rest goes on the various liabilities you have accumulated - arrow B. What is a liability? Kiyosaki defines it thus: “A liability is anything that takes money out of my pocket.” In contrast to an asset which is “anything that puts money into my pocket.” From this definition, you can quickly see that your house, your car, your sofa, and pretty much everything else you own is a liability in that they are costing you money every month. So, you can see the direction of your cash flow: it flows in from the job, and out through expenses and liabilities. The trouble is, if you ever lose your job - ouch! The expenses continue, but the income stops. That is not what I call freedom. In contrast, the financial statement of the rich looks like Figure 2. In this you can see that the majority of their income comes not from their work, but from the assets they have accumulated (arrow C). For example, if you owned a rental property, and the rent your received was greater than all your expenses in terms of maintenance, repairs, and loan interest, then that property would be putting money into your pocket. In other words, it is an asset. This is what you are trying to achieve for financial freedom - having sufficient passive income from your accumulated assets that you can more than meet your everyday living expenses. Clearly there are two ways to achieve this - one is to cut down on your liabilities and expenses and the second is to build up your assets.
Figure 1Figure 2 . Cashflow of the rich
Incidently, the rich also manage to sidestep most of the taxes as well. They do this by passing their passive income through various tax efficient (legal) structures such as limited companies or family trusts. So, you are trying to get from Fig. 1 to Fig. 2 as quickly as possible.
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But first you need to know where you are now. To do that you need to prepare your own financial statement. In addition, since success is about more than just money, you also need to do an inventory of the other parts of your life. This is your task for Step 4. It comes in two parts, so let's allow for two weeks to complete it. Once again it will require some work on your part - but then, that is what separates the winners from the losers, isn’t it? Ready? Okay, for the first week, complete your personal financial statement. You will find the template on the next page... and you will probably need to put it as top priority on your priority list, or it won't get done!
Preparing your Personal Inventory
Part 1 - Your personal financial statement
For the purpose of this, convert all your income and expenses into monthly figures, i.e. divide yearly amounts by 12, and multiply weekly amounts by 4.3 This is best done for your whole family rather than doing separate ones for you and your partner. Monthly Income
Make a list of all your current income. Include: a) earned income, such as (Where you can, put the Gross Earnings here - and put the deductions, such as tax and NI in the expenses column), Job, 2nd job Tips Self-employment
Businesses in which you are heavily involved for their day to day running
Subtotal b) passive income, such as, Benefits: child benefit & Tax credit, disability allowances, social security, etc.
Interest on savings.
Dividends from your investments.
Businesses from which you receive an income, but are only a sleeping partner, or minimally involved in terms of day to day management.
Other investment income (you can either list the net profit, or you can list the gross income here, and also the expenses - such as the maintenance on your rental property - in the expense column)
Overall TOTAL INCOME -25-
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This is the tough one! The challenge to honestly list all your expenses as they really are, not as you wish they were! Subdivide into the following categories: Tax, Social security, National Insurance, council rates, Daily living Groceries and other regular shopping Clothing Rent Communications Land and mobile phone charges Internet service provider Utilities - Water, sewage, electricity, gas, House maintenance Repairs, redecoration, replacing carpets, looking after the garden, replacing windows, new kitchen, etc. Insurance Buildings and contents Life, accident & sickness, disability, Private medical Professional indemnity, employer’s liability, etc. Pet Leisure activities Entertainment (pub, cinema, meals out, pizza deliveries, videos) Sports - gym and other club memberships, equipment, travel Holidays Gifts, e.g. Christmas spending (often substantial), birthdays Travel Car - petrol, servicing, MOT, insurance, road tax Bus & train passes and fares Car depreciation Smoking and other drugs Loans Mortgage Car payments Other hire purchase (sofa, boat, caravan, etc) Credit card interest (be honest!) Boats & other toys - depreciation and other running expenses Other commitments Alimony & child support fines Exceptional expenses - every month there is some expense that is unexpected, or a one-off. The strange thing is that there are so many of these unexpected expenses that you need to budget for (expect) the unexpected (e.g. the boiler/furnace breaks down, a window breaks, etc.).
Overall TOTAL EXPENSES
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Here you list everything that puts money into your pocket - either by providing an income, or by going up in value. In the totals column, put how much you could get for it if you sold it today. Put your own house here, but do not put your car or boat here unless they will genuinely go up in value over time, and you also put an entry for depreciation and running costs in your expenses column above. You will understand your finances better if you put your boat and car in the liabilities section.
Your house Pension Rental & investment properties
401-K, RRSP, ISA’s, Savings bonds, premium bonds etc.
Stocks & shares
Businesses you own or receive dividends from Precious metals and gemstones Other
Overall TOTAL ASSETS
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Totals Liabilities Here you list everything that takes money out of your pocket. Put the total amount that is owed as of today. Short term debt Outstanding amount on credit cards
Overdraft Other bank loans and financing (car, boat, sofa, etc) Long term debt Your mortgage Business loans Mortgages on investment properties Cars, Boats, Toys and trinkets (although these could be sold for money, and therefore
could be considered assets, they actually take money out of your pocket in maintenance and other expenses, so they are really liabilities. Enter them here. If they have a present day value (e.g. a boat or car worth $5,000) do two things: 1) enter a negative value in the column on the right i.e. they are a liability of -$5,000, and 2) at the same time enter a monthly value for depreciation in the expenses column above. For example if the boat or car will only be worth $3,800 next year then its depreciation is $1200 per year, or $100 per month. Put $100 in the expenses column.
Overall TOTAL LIABILITIES -28-
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Do you have: A current, valid Will? Life insurance (Have you reviewed the insured amounts?) Disability and/or critical illness insurance? Have you planned for avoiding Inheritance Tax (In Britain IHT will hit you if you have assets over £250,000 including your house!) Do you have multiple streams of income that will see you through in case of unemployment or economic depression? Now, what do you do with these figures? First do these sums: Monthly savings = Total Income - Total Expenses Net worth = Total Assets - Total Liabilities Your Retirement Quotient = Passive Income/Total Expenses = ____________ = ____________ = ____________ yes / no yes / no yes / no yes / no yes / no
yes / no
If your monthly savings are negative you are in serious trouble and need to do something NOW! As someone (Bernard Shaw I think, but I am probably wrong) said: “Income, $100; expenses $99; result, happiness. “Income $100; expenses $101; result, misery” Most likely you need to find some way to cut your expenses. If your monthly savings are positive, well done! Now use those to start building up your assets. If your net worth is greater than $250,000 you probably need to be thinking about planning to avoid inheritance tax. Your Retirement Quotient tells you what percentage of the week you can take off (i.e. -29-
7 Steps to Freedom by Noel Swanson
retire, go part time). For example, if your monthly expenses are $1,500 and you are receiving $500 a month from your investments, then 1/3 of your expenses are covered so, theoretically, you could cut down your working week to earn just $1,000 per month. Obviously, once your RQ exceeds 100%, i.e. your passive income exceeds your expenses, then you can fully retire. If you have got this far - WELL DONE! It is not easy doing all that! But tell me, did you learn something? Was it something of an eye-opener where all your hard-earned money is going? Next week we will do the second part of this step - covering topics such as: Your Health, Your Relationships, Your Children All of these are important if you are looking for true FREEDOM. After that we will start to develop Your Action Plan. Until next week.....
Preparing your Personal Inventory
Part 2 - Your personal life
till with me? Wow! You are definitely well ahead of almost all of your peers. It never ceases to amaze me how most people just muddle along in life with absolutely no idea of where they are going, where they are now, and how they are going to get there. Of course, as you will have learnt from The Midas Method the reason is that they have been deceived into thinking that is simply their lot in life! Yet once you understand some very basic principles, the “law of cause and effect” being chief among them, you can very quickly take charge of your life. Then you can map out your own destiny. Which is exactly what you are starting to do. So, it is time to continue with what business people call an “environmental scan” and a “SWOT” (Strengths, Weaknesses, Opportunities and Threats) analysis. Just a fancy way of asking “where am I now, what do I have going for me, and what is getting in the way?” In the last lesson we did this for your personal finances. This week it is time to look at personal relationships and health. Why personal relationships? There are two very important reasons: 1) Success is about much more than just money. Stuart Goldsmith is an excellent example. Over the space of 8 years he made himself £10 million. So what is he doing now? Still slaving over his business? Absolutely not! As he says in “Seven Secrets of the Millionaires”, before you even start on your journey to riches, you need to decide how much is enough. When do you get off the gravy train so that you can do the things you really want to do. Like spending time with your family and friends. Or seeing the world. Or pursuing your sports or hobbies. Money is a tool towards success. But real success is about living life to the full, about enjoying rich and rewarding relationships, making a difference to the people and community around you. If you focus just on money, and neglect to build up other areas of your life, then you will end up just like Scrooge: rich and miserable. 2) Equally important, and much less known is this: Money is not real, it is just an idea. Look at the coins and banknotes in your pocket. How much are they really worth? What would you pay for a piece of paper about 6" x 2"? Or a disk of metal weighing about a 1/4 of an ounce? What would the recycling plant give you for them? Nothing probably. So why are they “worth” so much? Purely and simply because people say -31-
7 Steps to Freedom by Noel Swanson
and believe they are. When you exchange your note for a bag of potatoes, the only reason the merchant will go along with it is because he believes that he will be able to exchange that same piece of paper for some goods that he wants. Money is merely a tool, a mechanism, for exchanging value between people. And this in turn depends on the agreements that people make with each other. When you buy a book from me, you do so on trust that I will deliver value to you. If I fail to do so, then the agreement between us is soured, and either I have to make it right again, or you will be pretty angry and will never deal with me again. The money that passes between us is just a record, or token, of that agreement. In the end, making money is, therefore, all about honouring agreements with people. The better you are at that, the more you will make. But there is still more. Money is worth nothing unless it is moving. A suitcase of banknotes under you bed is worth nothing. It does you no good at all. If anything, it is a bit of a fire hazard. It is only worth something when it starts to move - when it gets passed around from one person to another as a token of agreements being made and fulfilled. Wealth is therefore about FLOW. Now, this is where it gets a bit metaphysical. Have you had times when everything just seems to be going your way? You are on a winning streak. Everything works out, and you feel confident and in control? And then there are times when you just feel stuck. The Flow has ceased. Nothing goes right. The creative energy is blocked. The first is when you are in the Flow, the second is when the Flow is blocked. It really is like some kind of spiritual force. Wouldn’t you rather be in the Flow than out of it? Well you can, and that is what this week’s lesson is about. Flow can be blocked, and it can be released again. It is very much tied in with the notion of agreements. Both are about more than money. In fact they are about every aspect of your life. Because of this, if you get blocked in one part of your life, it will affect every other part. So if you want true success, you will want to make sure that every aspect of your life is an open channel for this mysterious Flow. What can block your flow? Pretty much anything. For example, have you had times when the garage or the garden shed are just full of clutter and junk? So much so that you can barely get into them? I know I have. When it was like that, did you feel the weight of it on your spirit? And when you finally got around to cleaning it out, how much lighter and freer did you feel? That clutter was literally blocking your flow. And -32-
7 Steps to Freedom by Noel Swanson
in some mysterious way, that would be putting a block on all areas of your life - even your finances! Your task this week is to identify and then start to sort out the blocks in your life. Note that this is an ongoing process that you will need to be reviewing regularly. The questionnaire below will help you to do that. Once again, be honest with yourself as this is entirely for your own benefit. Remember that wealth is about honouring your agreements - including agreements you make with yourself! In fact, we will start with your own agreements before going on to agreements with others... Your Health Do this sum: write down your height in metres (e.g. 1.80m = 5' 11). Multiply it by itself (1.8 x 1.8 = 3.24). Then take your weight in Kg (e.g. 72 kg = 158lb). Now divide your weight by your height squared (72/3.24 = 22.2) . This final figure is known as your Body Mass Index (BMI) and is an indication of how fat you are! So now you can compare your BMI with the following table (note this applies only to people over the age of 18): BMI Under 18.5 18-5 to 25 25 to 30 30 to 40 over 40 - Underweight - Healthy - Overweight - Obese - Very Obese Yes/no Yes/no Yes/no Yes/no Yes/no Yes/no Yes/no Yes/no
Based on this, do you need to do something about your weight? Do you smoke? Do you get a minimum of 25 minutes sustained aerobic exercise (e.g. walking, cycling, running, etc) three times a week? Do you drink more than an average of 2 units of alcohol per day? (Be honest. No, I mean really honest!) Do you drink more than 4 cups of coffee, tea, or cola a day? Do you eat at least five portions of fruit or vegetables each day (I bet you don’t!) Do you take any “recreational” drugs? If you are over 40: Have you had your eyes screened for glaucoma in the last 5 years? -33-
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If you are a woman: have you had a cervical screen (Pap smear) done in the last 3 years? Have you had a dental checkup in the last year? If you have know medical problems (heart disease, high blood pressure, diabetes, etc) are you following the prescribed treatment regularly and correctly? Do you eat fish at least twice a week?
Yes/no Yes/no Yes/no
Give yourself one point for each correct answer (you know what they are!). If you scored 10 or more, well done! If you scored less, set your self some Midas Method goals to deal with it. If you are a smoker, it really is time to stop! Go over to my website and check out the Guaranteed Way to Stop Smoking and Quit Smoking Right Now. One or other of these should sort you out - so you now have no excuses left! ( Do it now - don’t put it off again! Look, I am serious. Not only is your smoking costing you money everyday, but also it is cluttering up your flow and so is harming your finances much more than you can imagine. Not to mention your health and fitness... Click on these right now: Guaranteed Way to Stop Smoking and Quit Smoking Right Now Your Relationships Integrity is the key to success. Cheating yourself or others may work in the short term. But in the long term it will come around to bite you in your ass. Sorry about the language, but it’s true. Here are some challenges to work through: Make a list of all the people with whom you have some type of unresolved conflict whether it is from the past, or is still going on as an active argument: Immediate family Relatives Colleagues Friends Bosses Authorities (taxman, police etc) Unresolved conflicts are the same as broken agreements - they seriously impede your flow and will prevent you from achieving true success. Resolve NOW to do whatever it takes to resolve the conflict.
7 Steps to Freedom by Noel Swanson < <
If you need to apologise, go and do it. If you need to put things right, then pay the price and do it. It may cost you in the short term, but it will more than pay for itself over the long haul. < If you need to own up to something, bite the bullet and tell the truth. < If you need to forgive (you probably do), then do so - it is only yourself that you are harming by failing to forgive. Yes, I know - they don’t deserve to be forgiven. Even so, do it. Not for their benefit, but for yours. I know that if you have had some serious trauma or abuse in the past that this can be very hard. But it is absolutely the key to freedom - and I am a consultant psychiatrist, so trust me on this. If you cannot do it on your own, then get a friend or counsellor to help you. You cannot afford to have relational clutter messing up your life. Now think about those that you count as your loved ones and your friends. What have you done recently to celebrate that friendship? Here are some suggestions: < Buy some flowers unexpectedly < Write them a short note or card to express what they mean to you < Arrange for a special evening or day out - or even a holiday together. (My best friend and I planned a special holiday to celebrate 20 years of friendship.) < Let them have their way for a change! None of these will immediately put pennies into your pocket. But these are solid Quadrant 2 activities that will pay emotional and financial dividends for many years. (Just as an example - a bit of marriage maintenance now might prevent a very emotionally and financial expensive divorce in five or ten years.) Your Children The problem with children is they demand the most time and the most money just when you can afford both of these the least! Once again, investing time, thought and energy into raising them right, will save money and heartache down the road - and not just for you, but for generations to come. Truly “the sins of the fathers are visited on their children down to the third and fourth generations” as it says in the Bible. This is another quadrant 2 activity. Don’t let it be squeezed out by the “urgency” of all the other things you had to do, including making money. And especially don’t make the common mistake of working long hours to buy them everything they want. They would much rather have you than the toys! In the clinic I always cringe when I hear parents say “He doesn’t want for anything - we get him everything he could want.” And it is usually the poorest parents who say that. Like everything in life, you (and your kids) will reap rewards if you make some effort -35-
7 Steps to Freedom by Noel Swanson
to learn how to be a better parent. You don’t have to be perfect. But once again, there are principles that apply, and if you can learn and apply them, you increase your children’s chances for happy and successful lives a hundred-fold. Don’t know where to start? Then have a look at my book, “The GOOD CHILD Guide”. The health visitors I have taught believe it should be compulsory reading for every parent! Your Home Alright. Time to take a look around you. Your home is where you spend most of your hours. It ‘s physical state affects your spirit, and that affects your flow. I am not sure I go so far as to go along with the Feng Sui practitioners, but I would certainly agree with them that a well kept home will enhance your health, your happiness and your prosperity. No, you don’t need a mansion. No you don’t need to be obsessional. But you do need to throw out all that junk! Sort out your wardrobe, repair the guttering, and do all those other little jobs that you have been meaning to get around to. Make a list. Put them one at a time on your Midas goals, and sort them out. You will feel so much better when you do. Yourself Probably the hardest of all. For you to be successful, you will have to be happy with yourself. Stuart addresses this in terms of self-belief in The Midas Method. But this is an ongoing project. So here is a task: 1. Make a list of character traits that you are not happy about, e.g. You get angry too easily, you give in and don’t say “no” enough, you lie, your are unreliable, your procrastinate, and so on. Now, for each of these, put next to them what you want to be instead. For example, instead of being angry, you might want to be more easy going. Then for each of these, picture (visualise) for yourself some situations in which you would want to demonstrate your new, positive, character traits. Finally, one at a time, put them on you Midas goals, and work at them until you achieve success. Once again, you may need some help with this. And it might take you some time (after all, the reality is that life is a life long project). But you don’t want to end your days as some miserable old “git” that nobody likes, do you?
2. 3. 4.
So, are you still with me? That is quite a bit of homework I have given you. As you have probably realised, this is all about developing a lifestyle of success. You will not complete all these exercises in a week, nor even a month or a year. That is not the goal. The goal is to develop habits that will last a lifetime, and will pay you dividends over a -36-
7 Steps to Freedom by Noel Swanson lifetime, dividends including: < < < < < < greater health and longer life happier and more fulfilling relationships less stress, worry and guilt happy and successful children peace and contentment money
As I have said, these are all Quadrant 2 activities. The temptation will be to put them off until you have enough time. Don’t. You will never have enough time. Do them now, make the time for them, and somehow, magically, you will find you have plenty of time. It is called getting into the Flow. In the next Step we start to put together your action plan. See you then.
Step 5 - Your Plan for Security
kay, this week we will really start to rock and roll!
But first lets just review how far you have come. By now I hope that your dream is starting to dominate your thinking. Why? Because it is your dream that provides the motivation to succeed. The easy thing to do in life is to drift. That is what most of your friends and acquaintances are almost certainly doing. It is also what you will continue to do unless you have a strong reason to do otherwise. That reason is your dream. Let me give you an example: If I were to lay a plank of wood, say 9 inches wide by 30ft long (25cm x 9m), down on the ground, would you be able to walk along it without falling off? Sure you would. How about if it were raised a foot (30cm) off the ground? No problem, eh? Now, what if it were suspended 100 feet off the ground between to tall towers? With no safety net. Would you walk across it then? No? What if I offered you $30 to do it? How about $150? What if your little nine-month old baby was crawling along the plank and was about to fall off? I am guessing that most of you, especially those with kids, would be rushing down that plank to rescue the little one. So what was the difference? The only difference was the motivation, the reason why. Until your reason why is strong enough, the chances are you will not do what it takes to make the money you desire. That is why I spend so much time emphasising the dream and the goals.
7 Steps to Freedom by Noel Swanson
You have to be constantly reminding yourself of the reason why. If you don’t, when the going gets tough, you will quit. Believe me I know it - I’ve been there and done it countless times myself - and wasted years in the process! But back to business. So far you have: Step 1 - Developed your Dream Step 2 - Written down your Goals Step 3 - Developed your own, unique, purpose in life Step 4 - Identified your starting point (where you are now) Now it is time to find a vehicle that is going to carry you to your destination. This is your action plan. It will be done in two stages. The first stage is this week Step 5 of the plan, and the second stage is Step 6. You already know that life holds no guarantees. You might do everything right, and then be hit by a bus as you cross the road tomorrow, or your loving partner might develop leukemia, or there is another great depression like in the 30's (actually, this is quite likely as we are well overdue for it - see Rich Dad's Prophecy), or... In fact, even as I am writing this I have just leant that my sister has flipped her car over. Fortunately she is unhurt, although, I am sure, very shaken. But the car is a write-off. You just never know what is around the corner. In the face of all this uncertainty, what can you do to protect yourself? That is the goal of this week - to develop your plan for security. With this you can have the confidence that whatever life does through at you, you will do okay. You will survive. This is important, as it is only when you have this kind of confidence that you can safely embark on Step 6, which is to develop your action plan for prosperity. First security, then prosperity. Walk, then run. You do not need to take excessive risks to become free. From Step 4 you will have already identified the holes in your security. So now it is simply a question of finding the right tools to plug those holes. Once you boat is watertight, then you can attach the outboard engine to it. So, pull out Step 4 and lets look at it again: We will start with the worst possible scenarios, and then work backwards Your death What happens if you die? Will your loved ones be looked after? Will your possession go to the people you care about? To make sure, you need: -39-
7 Steps to Freedom by Noel Swanson
1) A valid will. Without a will your possessions will be disposed of according to the prevailing law of the land - normally to your nearest kin. Often the process can take a long time. You also have no option for any kind of tax planning. No will is bad news write one now. So how do you do that? These days you can either do it yourself or get a lawyer to do it. Unless your affairs are very complicated, the do-it-yourself route works perfectly well and is a lot cheaper. You will need to get a write-yourself-a will kit. You can either buy a printed one from a stationers, or you can use a computer program that guides you through the process and then prints out your will at the end. If you are in the UK, try this one, it is only £9.99: It really is easy, so don’t put it off another day. 2) Life insurance. If you have no dependents (e.g. you are still a single student) or you are already financially independent then you can miss this out. Everyone else needs life insurance. There are basically two types. Term insurance basically says this: “If you die at any time in the next 10, 25, 40 years (the predefined term) then we will pay out to your dependents or your estate the fixed sum of X. For that peace of mind you will pay us a monthly/yearly premium of Y until either the term expires or you die, whichever comes sooner.” Whole life assurance (which comes in many different guises and names) says this: “You pay us a monthly amount of Y until your retirement. We will invest this money (usually in the stock market or in bonds). When (not if) you die, we will then pay out to your estate the minimum sum of X. In addition, if by then we have made enough profit on the investments, then we will also pay you a performance bonus of Z. If you make it to the predefined retirement age, then we will pay you a cash settlement dependent on the value of the investments. ” So term insurance is pure insurance that protects you in case of the unexpected. Whole life is a combination of insurance plus savings/investment. If you die sooner than expected, the insurance kicks in and they pay you the guaranteed minimum. If you live longer than that, then hopefully you will gain on the investment part. In the old days whole life insurance was very common and probably worked quite well. These days you want to avoid it like the plague! Just get term insurance to cover the unexpected, and look after your own investments for your retirement.
7 Steps to Freedom by Noel Swanson
How much cover do you need, and for how long? You need to work out how much your family are going to need to live on if they no longer have you to bring home the bacon. Then multiply that figure by a factor of 10-20 to get the level of insurance cover you need, and add in a factor for inflation. How long do you need it for? You will need to consider the age of your children, whether your partner will go back to work, and what your expenses will be down the road (for example will the mortgage be paid off). Obviously the longer the term, the more expensive the premiums as they have to cover not just the increased risk due to time, but also that due to your aging. When choosing an insurance company - go for rock solid. This is not about getting the cheapest deal. This is about getting the safest deal. You want that company to still be there, ready to pay out, in 20 or 30 years time. Standard Life is perhaps the most solid of them all. Check them out first. How do you arrange it? See an independent financial adviser who is not tied to any one particular company. You need independent advice, not a hard sell for one company! Or go for one of the online quote brokers, eg. for the UK: http://www.quotelinedirect.co.uk/main/index.asp US: http://www.insure.com Then, once your insurance is in place, you need to review it every time your circumstance change - especially if you have more children! Once you are rich you can cancel the policy. Until then, you need it. 3) Inheritance planning. If you have any decent Net Worth you need to take some advice on how to minimise death duties. In Britain you have to pay 40% on everything over £250,000 (which is not a lot if your mortgage is paid off!). But with simple planning you could easily save yourself over £50,000 in taxes. Your independent financial adviser can help. If it is more complicated than that, see a specialist tax adviser. Don’t scrimp - his £200 fee could save your tens of thousands, so get a good one. That does it for death planning. But what if you are just injured or sick and unable to work? How long could you survive without your regular income? The chances of you becoming incapacitated for several months, if not permanently are, statistically, horrendously high. This is particularly true for occupations that require manual work or mobility. What if you are severely incapacitated and unable to make decisions for yourself. You need to be thinking about setting up a power of attorney and perhaps a living will. -41-
7 Steps to Freedom by Noel Swanson Check out this article (US perspective, but applies more or less everywhere): moneycentral.msn.com/content/Retirementandwills/Planyourestate/P34945.asp To protect yourself you need:
1) Cash in the bank. Start putting some regular savings aside into a high interest savings account. Ideally you want to have enough money set aside to live on for 3 months. However, if you are deep in debt, then your first priority is to pay off the debt. If you choose to, you can probably pay off your entire debt, including mortgage, in just 7 years, without any increase in your income. Here is how: a) Look at all the debts that you listed in your balance sheet (Step 4). b) Write down how much you are paying each month in debt servicing. c) If there are a lot of credit card debts, see if you can have the entire balance transferred to a new card at 0% interest (they often offer this as a 6-month enticement to get you to switch cards). Once you have done this, CLOSE the old accounts. This is vital, or you will end up in even worse debt. d) Now tear up your new credit card. Seriously. You don’t need it. Pay cash instead. If you have no cash, then go without whatever it is you were trying to buy. e) Because you have transferred your balance to a new, no interest, account, your monthly repayments will be less. It is crucial that you still pay off, each month, exactly as much as you wrote down in b). Pay the minimum on all your other debts, and then put everything else towards the credit cards. By doing this your credit card balance will rapidly reduce. Hopefully you will have paid it all off before they start charging you interest again. If not, see if you can repeat step c). f) Once the credit cards are paid off, then start on the next debt - always working from highest interest down. And ALWAYS paying off at least as much as you wrote down in b). g) Eventually you will be left with just the mortgage. Renegotiate this so that each month you are paying back the sum in b). You will probably find that by doing so your mortgage will be gone in just a few years. h) Of course this will only work if you STOP SPENDING money that you do not have! If you want something, save up for it - then you can either negotiate a special price for paying cash, or you might even decide that you do not need it after all! You will never be free if you are a slave to instant gratification, if you -42-
7 Steps to Freedom by Noel Swanson want everything NOW.
2) Income protection or disability insurance (goes by different names). This says: “Pay us a regular monthly premium. If you become ill or injured and are unable to work, we will then pay out the following: “For the first, waiting, period (anything from 2 weeks to 6 months) we will pay nothing. After that we will pay out X per month, provided this is not more than a certain fraction (usually about 2/3) of your normal gross monthly earnings. We will pay this until you are back to work, or until a certain age (normally retirement age). The amount we pay out may or may not be linked to inflation. Unless you pay extra premiums, then we could insist that you go back to an easier, lower paid job, rather than to your old profession. We will not cover you for any illnesses or disabilities that you already have.” This type of insurance is, unfortunately, very expensive - simply because they have to pay out so often. The cost is more if you opt for a shorter waiting period (which is why you are better off with some cash in the bank), if you are old, in a high risk job, or have various risk factors. If you work for the government there is a high chance that they provide this type of coverage as part of your employment package. Check it out. There are very many different types available so, again, you will need someone who is independent to guide you through it. Cheaper, but less useful are various types of critical illness or accident insurances. The problem with these is that they pay out only for certain pre-defined illnesses or accidents. If you are off work with the wrong illness, you get nothing. Avoid pure accident coverage. It seems cheap, but is actually relatively expensive considering how limited the coverage is. You may also be offered mortgage protection insurance. This comes in two varieties: One pays off your mortgage if you die. This again seems cheap, but is usually more expensive than plain ordinary term insurance. Get the latter. The other variety protects you in case of unemployment. Might be worth considering, depending on how secure your job is! So, to summarise, here is your shopping list this week: 1) Write a will (and think about organ donation) 2) Review your life insurance -43-
7 Steps to Freedom by Noel Swanson
3) Review your disability/income protection insurance 4) Do some inheritance tax planning 5) Pay of your debts and put some regular savings aside as an income cushion. 6) Put some regular savings aside as an income cushion. 7) Consider a living will and power of attorney Here are some useful links to help you with this: http://www.7stepstofreedom.com/ukwills.html This will redirect you to will-writing software that costs only £9.99 http://www.smartmoney.com/estate/ http://moneycentral.msn.com/planning/home.asp Both of these offer good, free, advice on estate planning and insurance, although from a US perspective. They have useful worksheets to help you calculate how much insurance you need. http://www.quotelinedirect.co.uk/main/index.asp Great source for UK insurance quotes Don't put this step off! It might be tomorrow that you are hit by that bus. We will continue Step 5 next week...
Step 5 cont. - Live for Success!
ast week you started to put into place your plan for security. Mostly we dealt with the unpleasant realities of death and incapacity.
This week, fortunately, we can be a bit more up-beat. Last week we were preparing for the worst, this week we will prepare to avoid the worst. The goal is to remove all the things that are blocking your flow. This really is very simple. Go back to “Step 4 continued”. On there you will see some questions that you answered either “yes” or “no”. Right? So now set yourself the goals of turning those “no’s” into “yes’s”. Naturally this will take some time, but if you never start, you will never achieve it, so put it onto your Midas Method goals and get going: Here is some help: 1. STOP SMOKING! You know it is crazy to carry on - it ruins your health, your good looks, your fitness, your taste buds, your sex life - and it costs you money while it does this to you! Look, I know it is difficult to stop. You have probably tried a dozen times and failed. So, help is at hand. Click here and take a look a GUARANTEED way to quit smoking. 2) Get a low-fat cookbook and experiment with some of the recipes - you will find they taste just as good as the high fat junk you are used to! Also think about adding some quality supplements to your diet. Modern food is desperately short of good nutrients. Indeed, over the last 100 years the sperm count of healthy males in the USA has dropped by 95% simply because of the poor diets we eat. Furthermore, the evidence continues to mount up about the dangers of over-processed foods and high fat diets. At the same time, it is becoming clear that the effects of aging are, to a large extent, due to oxidative damage. This can probably be prevented to a large degree by making sure we consume sufficient anti-oxidants - found in fresh fruit and vegetables. But don’t go for any old supplements. Make sure you get the best - produced from pure organically grown herbs and vegetables, not created in a laboratory. Why? Because in some cases the organic vitamins and minerals are much better absorbed and utilised than the inorganic ones. Furthermore, there are probably a whole host of other vitamins etc. in the herbs that so far we know nothing about. Naturally, none of these are present in the artificially products. I strongly recommend the book Health Defence by Dr. R. Clayton for a proper, very readable but very well researched account of nutritional supplements - what they do, what you need, and why. Get it. -45-
7 Steps to Freedom by Noel Swanson
3) Take up a new sport - it is much more fun to keep fit by doing a sport than by going to a gym, and there are so many to choose from! Ask at your local library for details of local clubs and courses, and then go along to watch or ask questions. You will meet new friends, and find a whole new dimension to life. Here are just a few ideas: mountain biking, hill walking and rambling, squash, badminton, tennis, golf, sailing, canoeing (can be done on rivers, lakes and the sea), marathon running, windsurfing, swimming, climbing, archery, martial arts, football, ice hockey, netball, fencing, and many, many more. If you really (and I mean really) cannot find the time to do this, then take a look at Get Fit While You Sit. With this programme you really have no excuses. 4) Cut down on caffeine, and alcohol, although 1 glass of red wine a day is good for you as it contains high levels of flavanoids that protect you against various cancers etc. 5) Go and see your dentist, doctor, and optometrist/opthalmologist for your screening checks. 6) Clean out the garage and basement. If you have not used it in 2 years - throw it or give it away! The same with all your junk in your bedroom and wardrobes. 7) Make a decision to start dressing for success. There has been some very interesting research about the effects of first impressions. In one, they took some volunteers. They first dressed them in rough, casual clothes and sent them out to a variety of high street stores and restaurants. Then they dressed them in quality, smart clothes, did their hair up, and maybe added some jewellery. They sent them out to the same places. The difference was unbelievable. None of the businesses recognised them. Nearly all off them treated them with much more respect and attention. The restaurant that was “fully booked” now suddenly had a table free. How you dress does affect how people treat you, and what opportunities are open to you. So why not use this to your advantage? Not only that, but when you start dressing smartly, you will start to feel better and more confident yourself. This, plus the greater respect from those around you, will open up many doors you had never before considered possible! 8) Resolve you relationships with family and friends. If you need to apologise to someone, go and do it. If you need to forgive, go and do it - it is only hurting you, not them! Over the years, both as a psychiatrist and as a businessman, it has become absolutely clear to me that the biggest difference between the rich, and the rest, is in they way they think. 90% of people are trapped by their thoughts. It affects their self-worth and -46-
7 Steps to Freedom by Noel Swanson
happiness, their marriages and other romantic relationships, their interactions with friends, bosses and colleagues, and their bank balance. You have already started to change your thinking by reading my newsletter, and by reading books such as The Midas Method and Rich Dad, Poor Dad. But that only touches the surface. What rarely gets talked about, and what really traps people, is that way that tools such as guilt, fear, duty, and so on are used by the powerful to herd the sheep in the directions they choose. The only place I have ever seen this so explicitly exposed is in Stuart Goldsmith’s Inner Circle. It certainly opened my eyes! In fact, I was talking to a friend about this just yesterday. One of his comments was how much more confident I myself had become since joining the Inner Circle. To become wealthy, powerful and free, you are going to have to invest something in your personal development. If you have The Midas Secrets (surely you have by now????) you will have already received the first month's teaching materials and will probably have already joined the Inner Circle. If you haven't, go and do so now. If you don't have The Midas Secrets (unbelievable! () then click here and get them both together. And while you are there, take a look at a few of the hundreds of testimonials the course has received. Remember, there is the usual 100% money back guarantee, so what have you got to lose? Or are you not serious about your future?
"A brilliant course. Do not miss the opportunity to do this course. It's a MUST if you want a life!"
Kaz Lemmon, Tidworth 9) If you are having difficulties with your children’s behaviour or learning - do what it takes to get it right. Read some books, take some parenting classes, hire some extra tuition. Don’t let your false pride prevent you from having a happy and successful family. The GOOD CHILD Guide is an excellent, even essential, place to start. On my website you will also find suggestions and help for other behavioural and learning difficulties. Okay. We are done with the “boring” stuff. Next week we start Step 6. In this we will look at some of the money-making vehicles available to you. What are they and which are the best?
Do your homework, review your goals, stick to your priorities, and see you next week...
Step 6 - Your Plan for Comfort
elcome back! This week we really set the wheels in motion. But make sure you are sitting down, as it may get pretty scary! I am sorry if the last few weeks have been rather hard work. But unless you lay the right foundations, the house will just collapse - I should know, I’ve been there and done it! If only I had known 10 and 20 years ago what I know now. But that’s what experience is all about, isn’t it? Last week you finished off working on your Plan for Security. By the time we have finished you will have in place three plans. The plan for security was no. 1, this week we work on no. 2, your Plan for Comfort. You see, life is uncertain. Too many things are out of our control. So while I am building my business, (as I hope will be too - step 7 coming up soon!), I am also making backup plans, just in case... That is the purpose of the Plan for Comfort. The idea of this is that it is automatic, routine, and requires no thought. It's goal is to provide us with a comfortable standard of living, even if all our attempts to be prosperous or even rich fail. Now, although the plan requires no thought or work, what it does require is time. It is essential that you start this plan NOW, if you have not already done so. And make sure you teach your children to start theirs now too. If you are already over 45 then time is something you are running out of. If that is your situation, then you have a big problem. But don't bury your head in the sand. Face the problem now, and sort it out. What does our Plan for Comfort consists of? Quite simple: month after month after month we put aside a regular amount of savings. The aim is to get as high a rate of interest as we can. Take a look at the table below to see why: Suppose you put aside 10% of your income each year. Lets assume you are on a fairly average $30,000 per year. That would be $3,000 savings per year. So what would it be worth if you invested this amount, year after year, at 5, 10, 15 or 20% return? Turn over to find out...
7 Steps to Freedom by Noel Swanson
Int. rate: 3000 1
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 6000 9000 12000 15,000
150 308 473 647 829 3,150 6,458 9,930 13,577 17,406 21,426 25,647 30,080 34,734 39,620 44,751 50,139 55,796 61,736 67,972 71,371 74,940 78,687 82,621 86,752 91,090 95,644 100,426 105,448 110,720 116,256 122,069 128,172 134,581 141310
300 630 993 1,392 1,832 2,315 2,846 3,431 4,074 4,781 5,559 6,415 7,357 8,392 9,532 10,485 11,533 12,687 13,955 15,351 16,886 18,575 20,432 22,475 24,723 27,195 29,915 32,906 36,197 39816 3,300 6,930 10,923 15,315 20,147 25,462 31,308 37,738 44,812 52,594 61,153 70,568 80,925 92,317 104,849 115,334 126,868 139,554 153,510 168,861 185,747 204,321 224,754 247,229 271,952 299,147 329,062 361,968 398,165 437981
450 968 1,563 2,247 3,034 3,939 4,980 6,177 7,554 9,137 10,957 13,051 15,458 18,227 21,411 24,623 28,316 32,564 37,448 43,066 49,525 56,954 65,497 75,322 86,620 99,613 114,555 131,738 151,499 174224 3,450 7,418 11,980 17,227 23,261 30,200 38,180 47,358 57,911 70,048 84,005 100,056 118,514 139,741 164,152 188,775 217,092 249,655 287,104 330,169 379,695 436,649 502,146 577,468 664,088 763,701 878,256 1,009,995 1,161,494 1335718
600 1,320 2,184 3,221 4,465 5,958 7,750 9,899 12,479 15,575 19,290 23,748 29,098 35,518 43,221 51,865 62,238 74,686 89,623 107,548 129,057 154,869 185,843 223,011 267,613 321,136 385,363 462,436 554,923 665908 3,600 7,920 13,104 19,325 26,790 35,748 46,497 59,397 74,876 93,451 115,742 142,490 174,588 213,105 259,326 311,192 373,430 448,116 537,739 645,287 774,344 929,213 1,115,056 1,338,067 1,605,681 1,926,817 2,312,180 2,774,616 3,329,539 3995447
18,000 1,020 21000 1,221 24,000 1,432 27,000 1,654 30000 1,887 33000 2131 36,000 2388
39,000 2,657 42,000 2940 45,000 45,000 3237 3399
45,000 3,569 45,000 3747 45,000 45,000 3934 4131
45,000 4,338 45,000 4,554 45,000 4,782 45,000 5,021 45,000 5,272 45,000 5536 45,000 45,000 45000 45000 5813 6103 6409 6729
7 Steps to Freedom by Noel Swanson
The column labelled Capital is how much cash you have paid into the plan (in this example, we are putting in $3,000 a year for the first 15 years), profit is the profit earned that year, and value is the value of your portfolio at the end of the year (consisting of the previous end-of-year balance plus the new profit). Notice three things: 1) The dramatic effect of a higher interest - after 10 years you are almost 2.4 times better off if you are earning 20% compared to 5%, i.e. a 4-fold rise in interest rates leads to a 2-fold rise in value after 10 years, yet a whopping 14.5-fold increase over 25 years ($1.6m v. $110,000). Moral: you must go for the very highest rate you can get, as every percentage point makes a huge difference over time. But don't forget safety as well. 2) The effect of time - it takes a long time for the profits to build up, especially at low interest rates. In fact, at 5% return, even putting aside $3,000 a year for 30 years, it would take you 50 years to build up to a yearly profit of over $30,000. In other words, at under 15% interest you will never be able to retire. Especially since inflation will have watered even that $30,000 down considerably. 3) At 15% you can retire (i.e. live of your passive earnings of $30,000+) after 18 years. So - take a look at your financial situation (from Step 3), map onto that your current age, and you can see what your position is going to be when you are too old to work. And if that has almost caused you a heart attack, I am sorry - but better to face it now, than when you have run out of both money and time at 70. Now before you say, "that's okay, my pension or the government will look after me", consider this: The baby boomers (you are probably one of them) will start to reach retirement age (65) in 2011, with the bulk of them retiring between 2015 and 2020. At that point, instead of putting money into savings and into taxes, they are going to start to take money out out of their pensions (i.e. the Stock Market), out of savings (probably also the Stock Market, or property), and out of the government (state pensions, health care). At the same time the younger generation will still be putting money into those things. The problem is that there are ever more elderly people, and they are living ever longer. As a result, there are fewer and fewer young folk having to pay to support more and more of the old folk. So how does that work? Not only that, but if all these retirees are taking money out of the investment markets in order to live, what do you think will happen to the invesment markets? Yes - they will -50-
7 Steps to Freedom by Noel Swanson
go down in value. And when the young folk see the market going down rather than up, what will they do? You got it - they will take their money out for safety. Net effect: Stock market crash. Caused not by fear or panic (although both will be there in abundance), but simply by the weight of demographics - more old people, less children to support them. Then, on top of all this is the rising cost of medical care, plus that fact that the elderly consume the most medical care, and are thus the most expensive to look after. Who will pay for this? To meet all these expenses, the government will have to put taxes up. But rising taxes means that those with wealth, and those that run businesses, will leave to go to countries with lower taxes. The result is a business depression which, in turn, leads to less taxes actually paid. So, given all this, what do you think will happen to your pension???? Are you happy to rely on it? No, nor am I. That is why we all need a Plan for Comfort. And we need to start it now. Someone once told me that "Optimism is believing the best will happen. Confidence is knowing what you will do if it doesn’t". Steps 5 and 6 are about building confidence. Your Plan for Security (step 5) is the bedrock for your confidence. Your Plan for Comfort (this week) is the foundation you build on that rock. Your Plan for Prosperity (Step 7) will be the building you erect on that foundation. But if the wind and the storms come (as they might), and your house comes tumbling down - your secure foundation will ensure that you don't get washed away with it. The Plan for Comfort is supposed to be a conservative, low risk strategy. It is supposed to enable us to survive, even if all else fails. To work it needs the maximum amount of time. And it also needs as much pump-priming money as you can put into it. For example, in the above chart, we have put in a total contribution of $45,000 spaced out over 15 years. At year 20, at 15% interest, you would have $330,000. You could get the same result by starting with a lump sum of just $23,000 and no further contributions. Why? Because time is working for you. So where do you get a good consistent high rate of return? At present, the best bet is still the Stock Market. Despite the bear market we have had over the past 2 years, there are still some factors that would support a futher boom period before the major crash that will result from the baby boom crisis in the years following 2010. The other main option is to invest in residential property (e.g. houses to let). However, I -51-
7 Steps to Freedom by Noel Swanson
would caution you on this one. Houses have gone up in value (like shares) for the past 40 years. If they continue to go up you can, indeed, become very wealthy by investing in them. BUT, the reason you make so much money is because of leverage i.e. using a mortgage to multiply your investment, and your profits. But if property prices should go down (as they did by 80% in Japan during the 90's), you will find yourself very rapidly bankrupt. So take care. Wait until the crash and then buy as many houses as you can. Or look to new, emerging, property markets to find some real bargains. The new entrants to the European Union (e.g. Hungary and Czech Republic) are prime examples. Whichever you choose, you need to develop your plan, and stick to it. If you set it up right, you can develop a system that could pay you, on average, 10-20% interest year after year. Maybe more. Until we hit the next depression. The trouble is, the plans for security and comfort are boring. There is no excitement in paying the insurance companies their monthly dues. And there is no great excitement in putting aside, every month, our regular savings into the "system" - the "bottomless pit" my mother calls it, as whatever goes in there never comes out again. You see, the system is just that, a system. All I have to do is to follow the rules and do what it says. But, gosh, that is so hard!!!! I want to do it my way. I want to chase the latest "Hot Stock" that is all set to double over the next six months, or buy options on oil, or speculate on gold or currencies, or... anything with a bit of spice (and risk) to it. But no, the system says buy these, sit on them, sit on them, sit on them, sit on them, now sell them and buy these. And sit on them.... Get the picture? BORING! Don’t you wish you had started this 20 years ago? Now, of course, in real life it is never are smooth and regular as that. Some years are way better, others rather flat. But, over the long haul, the effect is the same. So, what do we learn from this? 1) Get your comfortable plan in place, and STICK TO IT, like glue. No matter how boring a 10-20% return seems, just keep plodding away. Sure, if your business takes off and you make your millions quicker than this, fine! But if not, at least you have a back up plan. Put that regular amount of savings away month after month after month. Set up a standing order so it happens automatically. Do NOT put it off, saying "I will start next year when I have a bit more money". Start today. No, I mean, TODAY. If you put it off another year, you will be another year older before you get to enjoy the profits. How will you manage without the money? You will. You will find a way, I promise. You could stop smoking for example (I told you I would keep nagging you!) You will -52-
7 Steps to Freedom by Noel Swanson
be amazed at how much money literally goes up in smoke! In fact, see if you can guess how much a packet a day is worth over 10 years. Then have a look here to see how close (or not) your guess was. 2) Do not, under any circumstances whatever, take anything out of your comfortable plan - at least until your yearly profits are double what you want to comfortably live on. Using the table above, if you were still living on $30,000 a year, and you could get an average 15% return, you could retire in year 18. That is why it was called the Bottomless Pit. Whatever goes in, stays in. That is the only way the compounding can work. Read that last paragraph again. Now read it again. Are you getting it yet? Put the money in, and don't take it out. 3) Teach your kids. Imagine if you HAD started when you were 15? Just 10% of your income. Won’t be much at first, but start the habit and it soon will be. 4) Keep your eye on the (financial) weather. When you see the storm clouds gathering, run for cover before the heavens open and it all comes crashing down. Even with the very best system you cannot just keep blindly putting money into it without any regard for what is happening in the real world. Keep your eyes open. Keep learning. Keep reading. The more you develop your financial intelligence, the lower the risk of being destitute when you are old.
How to earn up to 20% on your investments
Want to know how to do it? Okay, lets go. The goal this week is to put together the nuts and bolts of your plan for comfort namely, your boring, regular, monthly savings that will, over time, build up to your retirement fund - unless, of course, your Plan for Prosperity gets you there quicker. Once again, however, I must emphasise that you must do this. Do not put it off any longer. Do not delude yourself into thinking you don't need it because your plan for prosperity is so sure-fire and risk free. That is optimism speaking, not confidence. If your plan for prosperity does work, and I hope it does, it will work even if you are doing the boring plan for comfort. But if adversity comes you way - and it can come from all sorts of unexpected directions, you will be very glad that you took my advice! Tax - the hole in your bucket The biggest hindrance to growing your wealth is tax. It really is like a hole in your -53-
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bucket - no matter how are you work at filling up the bucket, it just keeps leaking away. So you have to be smart and tax efficient in how you set up your savings plan. I am going to give you some suggestions to think about, but remember, I am not an accountant or tax advisor - do not rely on my suggestions. They are suggestions only, anything you do is at your own risk, so if you have any doubts about what you are doing, consult a suitably qualified professional. Furthermore, these suggestions apply to middle class people who are either employed or self-employed. People who run or control large businesses, and the rich, have many more tax advantages they can use. But right now we are developing your safety net, so we use what we can at this level. Tax-efficient saving schemes First, check out whatever government supported tax-efficient savings schemes there are. Most countries have them and they are normally of two types: Type 1 - after-tax savings: You put your normal, after-tax money into the scheme. Once in, the money can grow tax free, and can be withdrawn tax-free without penalty. This is the system used in Britain (ISA's) and the USA (Roth IRA). Type 2 - before-tax savings: You put your normal after-tax money into the scheme. Then you reclaim the tax that you had paid on that money. Suppose the tax rate is 30%. You earn $100, so you pay $30 tax, leaving you with $70 in your hand. You put that $70 into the scheme and claim back the $30. So your $70 of savings has cost you only $40 out of your pocket. This means that you can put more into your savings. The savings can then grow tax free. But, the drawback is that when you come to take your money out, you then have to pay tax on it at the prevailing income tax rates. Of course, if you have decided to retire to a sunny Caribbean tax haven, then you may not have to pay any! This is the system used in Canada (RRSP's) and USA (401(k)). The big problem with the before-tax plans is that it is not easy to take your money out once you have put it in. It is fine if you retire on a lower income (and therefore a lower tax bracket) than when you put the money in. But suppose the storm clouds gather, and a major stock market crash looks imminent. If you took all the money out at that time (if, indeed, you are allowed to), you would likely be hit with a tax bill at the highest rate of tax. So be careful. One of the most risky situations to be in is to have no control over what you can do. I am sorry, at this time I do not know which system other countries use, - perhaps, you could inform me? Both types will have rules about how much money you can put in each year. Do your -54-
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research, know their limitations and, if appropriate, use them to their maximum. I will tell you in a minute what you are looking for from them. For the average person, these schemes are a must - sign up for one, set up your monthly standing order and standing instructions, and forget about it (see below). Using Corporations If you are self-employed, or running a business, it will almost certainly be more tax efficient for you to form a legal company (limited company in UK, 'S' or 'C' corporation in the US) and to pay yourself dividends than to be a sole trader or on a salary. Read Robert Kiyosaki's books for more information about how this can benefit you, and then seek professional advice. If you do have a company, you may find that it is better to leave your savings in the company than to withdraw them. But be careful. If the savings are still owned by the same company as your business, they are at risk should your business go under. That is to be avoided at all costs. The way around this is to have a holding company that in turn owns, as a subsidiary, the company that runs your business. Then pass the profits up to the holding company for safe keeping. If the business goes down, the holding company should still remain afloat. But get professional advice. The whole point of a plan for comfort is, after all, that it is a lifeboat in case everything else goes wrong, so make sure that wherever you put your money, it is safe, and under your control. Using Trusts If you have a lot of money, or are resident in more than one country, you may find that you can protect your assets from the tax man, from inheritance tax, from vindictive ex-spouses, and from personal bankruptcy and disaster by using carefully constructed Trusts. This is very specialised so you must get advice. But this is what the rich do - so it obviously works. Your goal, over all, is to get you money into a place where it can grow tax free, and be safe from any personal disasters you might face. This is your security blanket, so make it safe! Having said that - you need to get started NOW. So this is what you need to do: 1) Open up your tax-efficient saving scheme (ISA, RRSP, Roth Ira, 401(k) etc) 2) Then think about the other ideas.
7 Steps to Freedom by Noel Swanson You cannot afford to dilly dally. How much do you have?
Okay, the next question is how much do you have to invest right now? There are three bands to think about: 0 - $20,000 $20,000 - $50,000 $50,000 + Follow plan A below Follow plan B below Follow plan C below
Plan A - current investment of less than $20,000 You do not have enough, yet, to invest in individual stocks or shares. Instead, you will invest in an Investment Trust or Mutual Fund. These are companies that buy stocks and shares in huge quantities, and then let you participate in what they have done. That means that if they do well, so will you, and if they do poorly, so will you. The good news is that this allows you to participate in the stock market, which, over time, will almost certainly give you a better return than fixed interest savings like bank accounts, national savings certificate, certificates of deposit, T-bills, or bonds (gilts in UK). The bad news is that most, no, all fund managers have a follow-the-herd mentality. You will not get spectacular, consistent results. Yes, you may have some phenomenal years, but on average you will do averagely - in other words you will follow what the market as a whole does (as indicated by the market indices such as the FTSE (pronounced footsie), the S&P 500, Dow Jones, TSE 100, etc. These are the indices that you hear quoted on the news. Don't worry, this is not bad. You will still get excellent returns over the long haul. Until the crash, that is. So. here are the steps to take: 1) Find a good fund in which to invest. It needs to meet the following criteria: Be suitable for your tax-efficient scheme (ISA, RRSP, 401(k)). Many of then will run their own scheme, which is very convenient. Allow you to automatically invest a regular, monthly sum by standing order. You set -56-
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up the order, and they automatically invest it into the scheme, buying the shares or units at the prevailing price at the time. Commissions or other front or rear-end charges ("load") must be minimal. Some companies charge as much as 5% for you to invest in their fund! Check the charges very carefully, and make sure that they are either nil - or that the charges go down to nil if you leave the money in for a few years. Management charges should be low (less than 1%). This is how much the company charges you each year for running and administering your account for you. The company should have a proven, above average, track record. Don't look for last year's stars - they rarely perform well this year. Instead, look for which company has been consistently at the top of the pile over 3, 5, and 10 years. You want solid consistency, not hot-shot flash in the pan. 2) Do the same for your partner. 3) Invest your initial lump sum in the scheme. 4) Set up your regular standing order for a minimum of 10% of your gross (pre-tax) pay to go straight from your bank to the scheme. Set it up so that it goes right after your pay arrives in the bank. Don't forget to increase the amount whenever you get a pay rise! If you have a decrease in income, try to resist the temptation to lower the amount. Above all, never, never, never, completely stop the monthly savings - however little you are earning, still put 10% aside. 5) Readjust your expenses so that you can live within your means. 6) Keep going until the total amount invested is worth over $20,000. When that happens, move onto Plan B Plan B - current investment of $20,000 - $50,000 At this level you have a bit more flexibility - and some more challenges. First of all, you probably have too much to put straight into a tax-efficient scheme. So maximise the use of the ISA, RRSP, 401(k) etc. Then investigate the alternatives - using a company or trust. Don't forget to see if you can use your children's allowances too. If all else fails, you will just have to put it into an ordinary investment account and pay up the taxes when they are due. A real pain, but the only alternative is to move to a lower tax country. Actually, there is a lot of sense in thinking about this: Many of them are not only tax -57-
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free, but also they have lovely climates, and a very low cost of living. So for not a lot of money you can live like kings. Take a look at the British Virgin Islands, Isle of Man, Vanuatu, Philippines, Belize, Goa (India), and so on. The only thing that stops you is your fear.... In fact, have a look at www.escapeartist.com for information on various expatriate havens around the world. Why struggle to become a millionaire, when you could move to one of these places and live like one right now? Anyway, back to the plot... At this level you move on from investing in Unit Trusts, Mutual Funds and Investment Trusts. You now have enough to begin investing in individual shares. So, this is what you do: 1) Find a tax-efficient scheme that allows you to make your own choice about what shares to invest in. In Canada this is called a self-directed RRSP. In England, www.sharepeople.co.uk run a self-directed Maxi ISA. You are, again, looking for minimal set up and maintenance charges. You are also looking for low trading costs (commission on buying and selling shares). There are now many, many, companies that offer on-line or telephone trading at $29 or less per trade (some as low as $8). These are known as discount brokers. E*Trade, Scottrade, Charles Schwab, TD are examples, They will not give you any advice about what to buy or sell - but you don't want that anyway. All they will do is take your instructions and act on them, which is just what you want. Normally you can do this by phone, fax, or online. 2) Invest the maximum amount you can into the scheme. 3) Find a non-tax efficient discount broker and set up an account for the remainder of the money (or use a company, trust, or whatever if you can). 4) Set up your monthly standing order to go into the second account for the rest of this financial year. Next year you will be able to put this into the tax efficient scheme as you will have a new yearly allowance. 5) Get hold of How to Retire Rich by James 0'Shaughnessy. Read it. Then put into practice one of the smaller (10-share) strategies such as "Dogs of the Dow". Divide up the total amount that you have to invest, and spread it evenly across the 10 shares that qualify. Note: these strategies will work equally well on your own country's stock exchange, provided you can find the information you need. If you can't - then just invest in US shares (provided your scheme's rules allow it. Canadian RRSP's restrict the amount the you can invest in non-Canadian shares). Follow 0'Shaughnessy's instructions exactly - it is very little work. Don't try to second-guess the market. Just follow the instructions. Yes, I know its boring. Just do it. You will earn a higher return than Plan A, but it still -58-
7 Steps to Freedom by Noel Swanson won't be 20%
6) Continue with this strategy until your total portfolio is worth $50,000. Then move on to Plan C. Plan C - current investment of more than $50,000 Now you are really rocking. At this stage you can go for a full-blown diversified portfolio of 25 different shares. Follow steps 1 - 4 of Plan B, then read James 0'Shaughnessy's book and do one of the big strategies (Reasonably Runaways, Leaders with Lustre, or the combination of the two). Please note, however, that Reasonable Runaways has significant volatility. That means that some years you may make a loss! Overall, however, you should make 18-19% return. But you must view this as a long term strategy of at least 10 years. Preferably 15 or 20. Any less and you could be in for a nasty shock if luck is against you. Particularly over the next 2 or 3 years as I personally believe that we are likely to have another serious market crash very, very, soon (i.e. perhaps in 2004 or 2005). We are probably even going to go into a depression as serious as the 1930's. Hmm, sounds kind of like I am contradicting myself here doesn't it? I tell you to put your money in shares, and then tell you the market will crash? Tricky. First, I don't have a crystal ball - and don't let any fancy market analyst tell you that they have - they don't! Second, just because the market has gone up for 40 years doesn't mean it will go up forever. In fact probably quite the opposite. So, if I knew for sure the market would crash next year, I would tell you to keep your money in cash until then, and then invest after the crash (always the best time). But that would mean you have to get into the game of trying to predict the market, which defeats the object of having a mechanical plan. And even cash might not be safe. In fact, probably the safest bet would be gold (if you want to read more about the likelihood of a depression, read Financial Reckoning Day and Conquer the Crash). On the other hand, the crash might not happen for another 5 to 10 years as predicted by Robert Kiyosaki in Rich Dad's Prophecy. But this is supposed to be a mechanical, no-brain, long-term plan. I.e. put the money away each month and forget about it. Leave the thinking and predicting and speculating to your active plan-for-prosperity (next week). But for your boring, passive, mechanical plan for comfort, just follow the rules. But be warned, it may well be a rocky ride for the next few years, and you may start panicking that you are losing instead of making money. Maybe you will over the short term, and maybe it won't earn 20% or even 15% or 10% over the next 15-20 years - but do you have a better plan? So how come your not already rich and free? -59-
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As you can see, this is all about getting your head straight. There are NO guarantees in life. You are on your own and you have to figure it out yourself. So play for the long term, and have a backup plan. That is what this is all about. Follow O'Shaughnessy's instructions exactly. Especially forget about it during the rest of the year - thinking about it will only make you stressed. Remember this is your long term back-up plan, so stop worrying about it and go and get a life! All three of these plans require minimal work. They will take a few days to set up, and then you just forget about them from one year to the next. The will work excellently up until we have a major stock market crash. After the crash they will work again. The advantage of these systems is that they are completely mechanical and require no thought. You can literally forget about them from year to year. The disadvantage is that they are completely mechanical and require no thought. You can literally forget about them from year to year. That might cost you big-time if, as a result, you are asleep and oblivious when the crash comes. So, this is my suggestion (and it is a suggestion only, I am not your financial advisor, so can accept no responsibility for how much you win or lose by doing this): Start the plan NOW. Follow the instructions religiously. Then, once the plan is up and running on autopilot, get to work developing your financial intelligence. Hopefully, by the time the crash comes, you will have learnt enough to be able to protect yourself from it. In the meantime your lifeboat is in place and you are allowing time and compound interest to do some work for you. Don't wait to know more before you start - you have to start pedalling the bicycle before you can start to steer it. In fact, if you do devote yourself to developing your financial IQ, before too long will probably start to take a more active interest in your plan. You can probably quite easily get a higher return than these (20%+) with greater safety and less volatility, but it will require more work, namely following the market each week according to some pre-defined rules. You can even learn to make money when the market is going down. But none of this is applicable to your plan for comfort at this stage. This is your Plan for Comfort. It won't make you rich. That is not the goal. Hopefully it will prevent you from being poor. That is the goal. Okay there it is: now you need to go out and make it happen. See you next week for Step 7 - Your Plan for Prosperity!
STOP! Before you go, let me ask you one thing: Are you actually going to do it? Set
7 Steps to Freedom by Noel Swanson up your comfortable plan, I mean. I bet you don’t.
Do you know why I say that? Because it is so boring - there always seem to be much better/easier ways of making money than putting 10% into savings each month. Beside you "can’t" spare the money right now. And it takes so long...10, 15, 20 years. Who wants to wait that long to make some decent money? But you know what? 10, 15 and 20 years will pass. And when then do, will you still be broke like you are now (And like 95% of everyone else)? Wishing you had started this 20 years ago? Or will you have a tidy sum in your investment account? Don’t put it off, do it now. Want to read more about this principle? Get hold of The Wealthy Barber, or The Richest Man in Babylon. Two excellent books that have been widely read - yet rarely followed! Also get hold of Robert Kiyosaki's Rich Dad's Prophecy. Essential Stock Market Books The plans described above are completely mechanical. You need know nothing about the stock market to operate them successfully. In fact, it is probably better if you don't, since you are then less likely to fiddle with them!. If you are having any thoughts at all about playing the stock market in any way, you must first read Trading for a Living and Come Into My Trading Room, both by Dr. Alexander Elder (another psychiatrist, by the way!). These are the best books I have ever read on how to invest (and I have read plenty). They are absolutely essential reading. In fact, I think you would be stupid to try to invest in the stock market (other than by a mechanical plan as above) without first reading them.
Step 7 - Your Plan for Prosperity
t last we are getting the meat of it! This is what you signed up for in the beginning wasn't it? I hope you realised now how important it was to cover all the other stuff first?
So, here it is: your Plan for Prosperity. Remember we talked about Optimism v. Confidence? Your plans for Security and Comfort are about confidence. Your Plan for Prosperity is about Optimism. Over the last few weeks we have been planning for the worst. This week we start to plan for the best. By now you will have (I hope) some clear dreams and goals. If you don’t then living your life is rather like getting on a bus without first checking on where it is going. If you do that, you shouldn’t complain if it takes you where you don’t want to go! Dreams and goals do two things: 1) They keep you on track, and stops you getting side-tracked. If you know where you want to go, you won’t get on the bus that goes somewhere else. 2) They keep you motivated. If the bus you are on breaks down, you will do what it takes to either find a different bus, or find another means of transport. Without the passion inspired by the dream, you would probably just sit down beside the road and hope that someone comes to rescue you. But Dreams and Goals, in themselves, won’t get you there. You need a vehicle. But note again, the vehicle you choose depends a lot on the destination you have in mind. A bicycle will get you to the nearest convenience store. But you need a jet or a ship to take you to a different continent. This week we are going to look at some different vehicles that you can use to get to your goal. Which will suit you will depend on your dreams, and on your mission in life (Step 4, remember?). Perhaps none of these will suit you, but hopefully they will, at least, act as a spur to find your own vehicle for success. There are, of course, as many ways to reach your goals as there are people. However, they do fall into a number of categories, some of which are a lot easier than others. I will start with what I believe to be the very easiest ways to make money, and then work downwards.
7 Steps to Freedom by Noel Swanson
Ultimately, in order to make money, you will have to provide a service to people. The greater the value of that service, and the greater the number of people, the more money you will make. Except in very rare situations, if you are to be the one that makes the money from the service you provide, you are going to have to run a business of some sort. You don’t get rich working for other people - you just make your boss rich instead! So what business can you run? Having looked a countless numbers of businesses, here are my suggestions, in order of preference:
1) The internet.
Well I had to put this as number 1 didn't I? There is so much hype about the fortunes to be made on the internet. But what is the truth? Well, the reality is that it is like anything else - the majority of websites make no money. But if you get it right, work hard, and persevere, you can become very wealthy indeed. In the end there is nothing special about the internet. It is just another medium, like newspapers, direct mail, radio and TV, through which business can be conducted. The beauty about it, however, is that it is so cheap to get started, and so quick to produce results. Both of these make it ideal for the keen and determined newbie. So how do you make money on the internet? Essentially you have to do one or both of the following: a) sell a product or service b) sell advertising There is no other way. But there are many ways of doing the above. People who are selling products or services need customers. They can only get customers by getting the word out and telling them about their products. To do this they need to advertise. Almost always their goal is to attract people to visit their website where they will, in turn, be induced to buy. How do they get traffic? Here are some of the many ways (in no particular order): 1) Get listed on the search engines - and then find a way to be at the top of the list. To do this, they might employ various search engine optimisation strategies. Or they might buy their position through Google Ad-words, or Overture.com -63-
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2) Buy banner ads on other people's web pages. But that is only worth doing, if the web pages get a lot of traffic themselves. 3) Send out regular email newsletters to people who have expressed an interest in their product, service, or company. 4) Buy ads in email newsletters that go out to thousands of opt-in or paid subscribers. 5) Recruit other people to sell on their behalf, and then pay them a commission for each sale. These sales people are called affiliates or associates. 6) Encourage word-of-mouth advertising by giving people some inducement to spread the word. Often this is done by giving away free samples or free information (ebooks) and is termed viral marketing. 7) Sell the product by auction using Ebay or similar. Then, once they have successfully sold to a customer, they will want to sell to that same customer again and again. They will normally do this by repeated e-mailings to their client base. Now, if you want to make money from the web, there is a host of ways in which you can get involved in the above list - either as a seller of a product yourself, or as someone who provides services or products to assist in the above process. Here are some ideas to get you started: 1) Join an affiliate program - such as my own (click here for more details about my own, and some other excellent affiliate programs). You can get started with absolutely no capital. With my program, for example, you can earn commissions simply by branding this ebook and giving it away free! How hard can that be? And yet, every time someone buys something as a result, you will earn a 40%- 50% commission. Better still, if they then become affiliates themselves, you will earn 15% commission on everything they sell! A good affiliate program will provide excellent training on how to become successful after all it is in the company's best interests to make you as successful as possible. Like mine, most will provide regular emails, free ebooks and other tips and tools to get you up and earning money as quickly as possible. Joining an affiliate program is probably the easiest, and certainly the cheapest, way to start making money on the web. But again, if you don't want to waste a lot of time and really want to make the big time, you would be wise to invest some money on further training and education. -64-
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Frank Garon and Terry Dean's tape set "Instant Internet Income Streams for Ordinary People" explains step by step how to get started, and how to avoid the common mistakes people make. In fact, it was these tapes that got me started on my journey to internet profits - so I can highly recommend them from personal experience! Click here for more info. 2) Develop your own mailing list of opt-in subscribers. Why not start a newsletter about your hobby or other passion? As you develop a loyal following, they will start to listen to, and trust, your advice and recommendations. At this point you can then sell advertising space in your newsletter, or suggest products from which you will earn a commission as an affiliate. Again, "Instant Internet Income Streams for Ordinary People" gives the information you need to do this right, or better still, the CD series "How to Harvest the Gold from your Mailing List" explains it in even more detail. 3) Develop your own website, full of content, that attracts many visitors. It can be about anything in the world. But the more visitors you can get, the more money you can make by selling advertising on your website. A quick word about advertising: There are three payment models that are commonly used: CPM: this means Cost per Thousand Impressions. You get paid for the number of times the ad is shown - this could be the number of visitors to your site, or the number of people in a mailing list. PPC: Pay per Click - you get paid for everytime someone clicks through on the ad. This is the method used by Goodgle Ad-sense. Commission: You get paid for each sale. This is the affiliate model. All of these work, but clearly have pros and cons. But the bottom line is that you need lots of people to show these ads to, if you are going to make some money - so make your site interesting - for example, by providing some kind of free service. Take a look at anonemailer.com for an example of a very simple site that attracts people for the free service. One with a lot more content is, of course, Yahoo. And you can get everything in-between - on football, ice skating, skiing, knitting, movies, pets, games, etc. etc. How do you build a content-rich site? My recommendation is to go to Site Build It. At first sight this appears expensive. However, when you work out the cost of all the services they provide, plus the fact that they walk you through every step of building a successful content-rich site, it is money well spent. Note, this is for building a contentrich site, not a mini-site (more on those later). The great thing about Google's ad sense is that the adverts automatically customise -65-
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themselves to the theme of your web site. Highly recommended! (See how they have been successful in promoting word-of-mouth advertising?) 4) Sell your own product or service. Essentially this falls into two types: B2C - Business to Customer - you sell a retail product or service that the ordinary man in the street wants for personal reasons - it might be a novel, a car, a boat, hairspray, a newsletter, whatever. B2B - Business to Business - you sell component parts, tools, services or information to other businesses to help them to succeed. Examples include: accounting services, graphic design, tools that help automation, e.g. autoresponders, pneumatic drills, skips, search engine optimisation, etc. The key to both of these is to find a niche. Even better, to find a niche that has a desperate need that is currently poorly met. Obviously Money, Sex, and Health are major needs that everyone has, and so there are huge industries trying to exploit these "niches". But, as a newbie, you would be far better off looking for small niche markets like teaching your parrot to sing, or how to collect bird feathers, or how to be a better transvestite. I know, I am quoting silly examples. But the point is that there are countless tiny markets waiting to be filled. Have a read of this free ebook for more information about how to find and use niche markets. One way of using this strategy is to put up hundreds of different mini-sites, each focussed on one niche product. Each site might earn only $5 - $10 a day. But if you had a hundred, how much would that earn you? To do this quickly, you need some tools. The good news (of course!) is that I have put just such a bundle together for you. Click here to see how I can save you a bundle of time and money in getting your niche mini-sties up and running in no time. 5) Not for the faint hearted. There are two other businesses that earn people huge amounts of money, yet are rarely talked about in internet marketing circles. Why? Because most people would be too embarrassed or ashamed to admit that they are involved in them in any way (and most of them are NOT involved - lest any of the internet gurus start accusing me of libel!). What are they? Well, pornography is the biggest, and online gambling is a close second. Do I hear a shocked intake of breath? Are you astounded that I even dare to mention them? Well, I will be quick to point out that I have no personal experience of either of these, so cannot point you very far in the right direction. But, if your morals and ethics permit you, they might be worth your consideration. Be aware, however, -66-
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that the tactics and methods used to promote these businesses are very, very, different from mainstream marketing. So, once again, do your homework before you dive in. And do stay on the right side of the law. Oh, okay then, I do have something that could get you started. Click here for information on starting an online casino. But that's all I am going to say about it! Starting your own internet business Developing an internet business is very flexible, you can fit it around your normal daily schedule, so it is ideal for starting alongside your regular day job. How long will it take you until it is paying you a full time wage? Do not expect to be rich overnight. It took Frank Garon eight months of hard work and a lot of hours before he was able to quit his full time job. How long it takes you depends on your determination, persistence and, probably most importantly, your willingness to pay money to learn from others rather than trying to re-invet the wheel yourself. There is loads and loads and loads and loads and loads and loads of information on the web about how to start and run an internet business. That in itself is a problem as you just don’t know where to start. There is a very true maxim about information, especially on the web: Information can be: Free Quick Good but rarely all three. In other words, you can quickly find a lot of information, but either it will be of poor quality, or you will have to pay for it. If you want good quality information then you will either have to pay for it, or you will have to spend long hours hunting for it (and remember, time is money). Remember also that often the most expensive information is the stuff that comes free (apart from this ebook, of course!): If it is bad advice, or sets you off in the wrong direction, you will end up spending more and wasting much more time than if you had purchased quality stuff in the first place. So be very careful about what you go for. If you are really serious, then you are probably well advised to buy a full package of advice and tools, which might cost you $100 - $3000, than to try to do it on the cheap by -67-
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picking up little ebooks here and there for free or $9.99 or whatever. (Actually, the same applies for every other business - the Golden Mailbox, for example, will cost you some pennies. but once you have it, you don’t need anything else to get going and to become successful) So, again, where do you start? My recommendation is to go to someone who knows what he is talking about, has been there, done it, and is able and willing to share it. The resources I have recommended above are invaluable. Get them. Also go and visit Frank Garon and Lee Benson. These guys are the very best, so don’t be afraid to buy their expertise.
2) Investing in real estate.
Sooner or later, if you make any money, you are going to be involved in real estate deals. So why not use them to make your millions? Probably more people have made there fortunes from property dealing than any other medium. McDonald’s, for example, is not a hamburger business. It is a real estate business that uses hamburgers as its tool. The big advantage of Real Estate is the leverage you can achieve very easily through mortgages. It is not difficult to buy properties for no money down. That means that any rise in its value is money that you are making out of thin air! It also means that if the property goes down in value, then you might have to pay out money if you want to sell it. So if you get it wrong it can be a slow and very painful death. So, how do you get it right in real estate? Do the sums. Carry out your due diligence. Check the location, location, location. Ideally you want to find properties that are being sold in distress - e.g. repossessions, that are in an area that is clearly on the way up. This means you can buy them below market value. Obviously this eliminates most of the risk. Auctions are a good place to look. But be careful. At an auction you can easily end up paying MORE than the property is worth. So check things out. Then you need to either renovate and sell at a profit, or else rent out. If you rent out, the NET rent (after all maintenance and management costs) needs to pay more than the cost of a 100% mortgage (this is true even if you are not using a 100% mortgage). If it pays less than this, then you would be better off just investing the money in the bank.
7 Steps to Freedom by Noel Swanson
Then you repeat the process. In the space of two or three years you can easily build up a portfolio of a million pounds worth of properties - providing you with a very comfortable passive income. Ultimately, to retire, you are probably going to want to have a portfolio of income producing properties. Just one point of warning. People say that property will always go up. That is not true. In Japan property prices have gone down by 80%. At the moment (2004) we are in a property boom. That means two things - it is a great time to be an agent, as more sales means more commission. Also is is probably not a good time to get on board as an investor. The average length of a property bull market is 7 years. This one has been going on for 10 years or more. At some point there will be a correction, perhaps a major one. That will be the time to buy, not now. So do your research and studying now so that you are ready to go when the opportunities strike. Remember luck = opportunity + preparation. First do the preparation. Do not try to jump into this as an amateur. Don’t be reckless. Don’t be just optimistic. Stay out of a deal until you are confident (i.e. you have a plan for if it all goes wrong). So, if this takes your fancy, here are my recommendations: Take the time to learn the business. The best way of all would be to get a job as a real estate agent. By working in the field you will rapidly get first hand knowledge of it and get paid at the same time. However, this in itself will not be enough. You also need to supplement that with learning about how to invest for yourself (i.e. not just how to sell to other people!). Learn about financing deals, taxation, landlord-tenant laws, how to survey a property for yourself, local planning permission rules, etc. Start with Robert Allen's book.. Also look here for ideas on how to buy with no-moneydown. Look at lots of properties before committing to buy - you need to know how to recognise a good and bad deal The only way you can do this is to crunch the numbers. You have to do your research. What is more, you have to do it accurately. A quick sum on the back of an envelope is fine for deciding whether an investment is worth looking at more carefully. But it is not enough if you are about to invest thousands of hard earned dollars. A very common mistake that people make is to neglect to include all the incidental expenses involved in an investment - the buying costs, legal fees, broker's commission., taxes, renovations, allowance for vacancy rates, and even the selling costs. And then they wonder why their "perfect investment" is eating them alive! Clearly, therefore, one absolutely essential tool that you need for this is a Real Estate Profit Calculator. A good one will prompt you for all the important figures, and then calculate your projected profits or losses. You should do these calculations with your -69-
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optimistic figures (e.g. how much you hope prices will go up each year) and also your most pessimistic figures (how bad could it get?). Only when you have done all of that, can you make a sensible decision as to whether a particular investment has an attractive risk-reward profile. You can get your profit calculator from here. Don't try to do real estate investing without it. Although you can do no-money down deals, realistically you are going to need a bit of capital to get started in this, depending on the size of deals you area wanting to start off with.
3) Become a Joint Venture broker
This has got to be one of the ultimate ways of making big money with no downside! Suppose, for example, you know of an excellent restaurant. And you also know of an excellent flower shop. Now, if you take your lady to a restaurant for a special occasion, wouldn't it be lovely if the restaurant presented her with a large bouquet of flowers? So how about you approach the restaurant and flower shop and broker an arrangement between them so that the restaurant can offer this service to their clients? Naturally you would take a cut out of the deal - and you would receive this percentage year after year. Obviously this is a very small example, and you would have to protect your interests in setting it up, but it demonstrates the principle. Similarly, if you can become an expert on marketing, you do a deal with a company that goes like this: "I will give you advice and suggestions on marketing tactics and strategy. I will even design specific campaigns. I will do all of this entirely at my own expense at no upfront cost. All I ask is that if I earn for you a $1 that you would not otherwise have earned, that you will give back to me just 25c. As you can see, this proposition carries no risk to the company - yet offers to you enormous leverage if you can get it right. Far better than just charging an upfront, one-off fee. Clearly you will have to do some studying first. Then you might have to do some jobs completely free of charge- the only fee being that they give you referrals and endorsements to their own contacts so that you can build up a client base. However, most ordinary companies are absolutely dreadful at marketing, so once you know your stuff, making this kind of money should be easy. Who does this suit? Obviously you have to be the sort of person who can go out there and make it happen. You will have to be confident of what you know, and confident at approaching people and selling your proposal to them. You will need to be an analytical and creative thinker. And you will have to be prepared to work first, and only earn later. (But then that is true of every business.) Apart from your initial learning costs, your capital requirement for this is very low. -70-
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How do you get started in this? Send me an email, and I will point you in the right direction.
4) Direct Mail and Mail Order
My next recommendation is a home based business. Why? Because the statistics show that 90% of conventional businesses fail in the first 5 years - but 90% of home businesses succeed! This business does have a bit higher start up costs than a pure internet business but, again, has been used by countless people to haul them out of servitude and into the ranks of the wealthy, often in a very short time. It is very time efficient and, naturally, allows you to multiply your efforts for maximum profits. That means you can run it in your spare time, alongside your day job, until it provides enough for you to retire. The principles are very easily learnt and, again, if you follow them then you can achieve your dreams. However, unlike the first business, you are pretty much on your own with this one - by that I mean you have to work out for yourself, exactly how you are going to run it. (But then that applies to just about every other business I can think of!) Risk is low - you can get started for under $1000 and build it up from there. Who does it suit? Once again, this one can work for pretty well anyone. It is not a people business. In fact, you need not have any contact with anyone if you so choose, as it is all done from a distance. Why have I put this in the number 4 slot? Because it has unlimited upside (Ted Nicholas made over $200 million off just one product!) Requires minimal time, and has low risk. It is a very easy business to run, and requires no technical ability. It can be started on a shoestring, but if you can put more money into it, then you can grow it much faster (which is true for pretty well any business). It does also require you to come up with some products to sell. You can create these: ink and paper, i.e. information are ideal. Remember that most people are NOT on the internet, so there is a huge market offline for the same information that is selling online. Or you can buy them wholesale. The principles and techniques of direct mail are also invaluable for both a conventional offline business, and for an internet business. Indeed, it can very effectively enhance both of these - bringing your online business to the huge offline market, and bringing your offline local business to a much wider, more distant market. So how do you get started? The very best way is to work through The Golden Mailbox by Ted Nicholas and Stuart Goldsmsith. Both have made millions from the business so can, and do, tell you exactly what to do and how to do it. Click here for more details. -71-
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5) Network Marketing
My fifth choice is much maligned, but well established type of home based business Network Marketing. Now, to be honest, you either love it or hate it! But if you are thinking of dragging all your friends around to your house to hear you present something on a whiteboard about how they can make money from selling soap, think again! Network marketing (also known as muli-level marketing, MLM) has come a long way over the past 30 years. There is no question that done right, and done diligently, MLM can bring you a very substantial passive income. On the other hand, the reality, as with everything else, is that the majority of people who get into it never make a dime. The business model is very sound. In case you are not familiar with it, the concept is simple: The company produces a product (ideally one that has repeat customers, like a subscription, or a consumable that is used daily - like soap or vitamins) that it wants to sell. Rather than opening up an expensive store, or selling by direct mail, they decide to use sales people who are paid strictly on commission. But they also give these sales people the authority to recruit more sales people. And then they reward you for the sales made by the people you recruit - and the people they recruit - and further on, down through many levels (hence MLM). This is identical to an affiliate program, except that it goes several layers deep instead of just two. The emphasis, therefore, goes not just on selling products, but also on recruiting more people to sell products as part of your team. Done, right, and you can have hundreds of people out there selling stuff - and you get a small commission on every item they sell! Works great for the company - they just pay on results. Works great for the sales agents (that's you) also - provided you can build a large team. In pre-internet days, this meant that you had to compile lists of all the people you knew who might be interested in starting their own home business. The internet has, of course, changed all of that. Now your prospects, and your team, may live in any country around the globe. And you can grow your team much faster than every before. But still you need to be good at communicating, and good at motivating people. You -72-
7 Steps to Freedom by Noel Swanson will still need to use the phone. And you will have to love talking to people.
Of course there are hundreds of companies that now use MLM as their chief means of marketing. Some have been around for decades. Others sprang up last month. Be very careful which programs you join. Make sure they have a strong and reliable history, a great product (that you would use yourself) and, perhaps most importantly, that they provide a lot of training and support to help you become successful. Then all you need to add is your own enthusiasm and determination. Want to know how to get started? Whatever you do, do not waste time and money fumbling around trying to find a decent program. Get hold of the CD set Network Marketing in the Internet Age by Frank Garon who, personally, makes half his income from his MLM team. This will absolutely get you off to the very best start. Or, after listening, you may decide that MLM is not for you. Either way, you will have saved yourself a lot of time, a lot of money, and a lot of grief, frustration and disappointment. Be wise and get the knowledge first. Click here for more info. Are there other ways of making big money? Of course there are. But these five, I believe, are the easiest and most reliable for the ordinary person to get into. None of them are a free ticket on the gravy train, nor do any of them guarantee success (which is why you are still working on your plan for comfort, right?). For all of them you will need commitment, determination and perseverance. You don’t have to be a genius. You just have to want your dreams badly enough. When you embark on them, you will experience times of excitement and exhilaration as you see your dreams getting closer. You will also have times of deep despair, when you wonder if it is ever going to work. Hang in there and just keep working the system. Quitters never win and winners never quit. Next week we will look at some other ways to make money. Different things suit different people, so you should know about them and consider them. In the meantime, check these five out carefully. My guess is that one or other of these is just what you need.
Step 7 cont. - More Paths to Wealth
re you starting to get excited about the possibilities? There is more than enough money in this world for you, me, and all your friends to become fabulously wealthy. The only thing that stops you is your fears and your ignorance - and both can be cured! Keep reading. Keep listening to tapes. The more you develop as a person, and the more you raise your financial IQ, the more opportunities you will see. The difference between the rich and the rest is not their special skills, nor their better intelligence, nor luck - it is the way they think. Success is 75% in the brain, and only 25% in the vehicle or tool you use to achieve it. Here is a common scenario: A young entrepreneur develops a new business and becomes a millionaire. The business then fails and he goes bankrupt. After that he then starts a completely different business and becomes a multi-millionaire. Why does all that happen? He makes his first fortune because he is able to see the opportunities. He loses the fortune because he lacks the financial intelligence to safely manage his success. He learns from his mistakes. The next time he both sees the opportunity AND has the financial intelligence to keep the fortune and even to make it grow. Mistakes are not bad, provided you are willing to learn from them. This week we examine some more ways of making money. These are either much harder and more risky than my top five, or else they require much higher levels of start-up capital or specialist expertise. But still, if they suit you better, then go for them! 1). Consulting. Are you an expert at what you do? Have you been working at a high level in a traditional big business - perhaps as a senior technical advisor, or senior manager, or marketing director, etc.? If so, then you might be able to branch out as a freelance consultant. Now, you may have thought of this before. But the key to making big money in this is in the way that you do it. Once again, the goal is to leverage your time and expertise so that they work for you. What you do not want to do is to offer your expertise as a flat fee or a fee per hour. If you do that, no matter how much you charge, you are still limited by the amount of work you, personally, can fit into a week. Also, once you stop working, your income also stops. Instead, what about offering yourself on a profit-sharing basis? Your work must be valuable to your client, otherwise they would not think of hiring you. So that value -74-
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must translate in some way into either increased income for them, or else decreased expenses for them. Either way, you could negotiate with them for you to receive an ongoing percentage of either their increased profits or turnover, or of the amount your expertise is saving them. In other words you work just like the lawyers do with their contingency fees - if your consulting brings them no benefit, then they pay nothing. But if you can improve their bollom line - then you receive a percentage - each month, year, or for as long as you can negotiate! To achieve this you will have to position yourself in the market correctly. To do this you will need some training in marketing yourself, and in negotiating. It is expensive, but I can’t recommend highly enough the seminars and tapes produced by Jay Abraham. You will also find invaluable help from the tapes by Nightingale-Conant. 2) Investing. Over the past 3 years the stock market has been going up and down like a jack-in-the-box. The most recent boom (most of 2003) seems to have come to an end and now the market does not know what it is doing. It is very easy to get burnt. Once again, risk has to do with ignorance. The average man in the street - and indeed the average "expert" is losing money. But the sophisticated investor is making money. How? By using different tools such as options and spread betting that allow you to make money whether the market is going up, down, or sideways. So how do you make money on it? Two things: knowledge, and a system. To be consistently profitable, you need to have a very disciplined system. There are systems that work, that ordinary people can use. But you have to stick to them over the long term. Whatever you do, don’t listen to your stock broker - remember, he lost money too! Ultimately, as you become wealthy, you will be developing an investment portfolio. But unless you are very clever, it is unlikely to be the means by which you achieve rapid wealth. However, as you develop your wealth through other means, it can certainly be the means to maintain and even multiply your wealth. Now, we have already talked about using the Stock Market for your Plan for Comfort. Whatever you do, don't stop doing that! If you choose to take up investing as your Plan for Prosperity, that is fine - as long as you also continue the boring Plan for Comfort. That is so important. Start to develop your investing knowledge. The best place to start? Go down to the library and start reading everything you can find about investing and the stock market. Then start trading with a "virtual portfolio" before you put any real money into it. Remember, the key to building wealth is first to not lose it! As Robert Kiyosaki says, Return of investment comes before return on investment! As I have said before, I consider the number 1 most essential books to be those by Dr. -75-
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Alexander Elder. Get those first. If you can't afford the time to study, or the money for the books, then you need to stay well clear of the stock market! 4) Franchises. A brilliant concept. First you develop a business that works. Then you roll out that business in multiple locations, using the exact same formula. But rather than risking your own money on it, you rent the system to other businessmen. McDonald’s is the example everyone knows about. But there are much smaller franchises also. Obviously if you can be the originator of a successful franchise chain, then you are laughing all the way to the bank. But is it a good plan for the franchise buyer? Yes and No. Yes, because it is a low risk way of getting into business - someone has already taken the risk and done the work. The system now works, and all you have to do is copy it. There are, however, two problems: First, you have to pay the franchiser a start up fee in order to learn the system and get on-board. Then you usually have to pay ongoing fees to contribute towards the consolidated advertising budget, which is all handled centrally. This means that there is quite a high barrier to starting up. It probably costs about a million to start up a new McDonald’s franchise! And even to run a wheelie bin (type of garbage can) cleaning service in England costs £7000 to get into! And how much money can you make doing that??? Also you have no control over how the marketing is being done - but then the whole idea is that you are trusting them to do it right, as they have done so in the past. Finally, there is a cap on how much you can earn. You cannot multiply your business - because they are the ones doing the multiplying. On the positive side, you are pretty much guaranteed to make a profit from the business, as all the details have already been worked out for you. Be careful with the small ones (like wheelie bin cleaning, and lawn maintenance) that you don’t just end up buying yourself a job! The goal is to become free - not to tie yourself down to having to go out there everyday to spray lawns or clean garbage cans! So, my assessment is: high cost to get into, and limited upside potential (although you can still get pretty rich from some of them), and still potential for losing everything (it happens - even to McDonald's) 5) Traditional Businesses. Arrrgh! Don’t even go there! 80% chance of failure and losing all your capital. High capital to get started. Headaches with staff and government regulations. Almost certainly long hours. And you won’t make any money for the first 3- 5 years! With business no.1 (from last week) you could already be retired by that time! Even then, most businesses are not making their owners rich - they are merely -76-
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getting by. Take a look at the owner of your local high street store (non-franchise). Do you think he is getting rich running that??? Think of all the overheads he is paying. Okay, maybe you are already in a traditional business. What then? Well, how is this for a plan: Build it up as quickly as you can to a highly profitable level, and then sell it. How do you build it up? Ah! Now there is the rub! Well, guess what? Almost certainly the key is going to be the marketing. Yes you need good products. Yes you need good customer service. But you can have all of those and still go broke? Why? Almost always because of either poor marketing, or poor cash-flow management. The good news is that both of those can be fixed! Provided you are prepared to do your homework, of course. The first place to start is with the financial management. Go see your accountant and plug all the holes through which your money is leaking out. Then start to learn about advertising. And I don't mean go and spend a bundle on some radio ads or newspaper displays that earn you nothing. You are going to have to do something a bit different if you are going to stand out from the crowd. For that reason I would suggest you take some money out of your next advertising budget, and buy both of these resources instead: a) The Golden Mailbox and, b) How to Promote Your Offline Business Online I know, I know, you are not running a mail-order business and you don't know anything about marketing on the internet. Well, not yet anyway. The fact is that whether or not you end up using "pure" mail-order, or the internet, what you will learn about marketing from these materials and their bonuses will be invaluable for your offline, traditional business. In fact, I am so convinced of this that I want you to order both these materials right now (click here to get them together as a bundle for a special price - and yes, they will work whatever country you are in.). Use what you have learned from them for a full year. If, by the end of that time (or at anytime before then), you are not fully convinced that will have paid for themselves 10-times over, I will refund you your entire purchase price without any quibbles or hassle. That's right, these materials (together as a bundle) have to earn you at least 10 times their purchase price, or I will refund the entire cost. Go get them now, and turn your traditional business into your retirement cash cow. -77-
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6) Creative Arts - writing, music, acting, sports. If you have a genius talent at something, then by all means exploit it. Find a brilliant agent and marketing manager, and get out there and strut your stuff. But remember the odds are stacked against you there are countless thousands of highly talented people who never get discovered. Much has to do with who you know, and with luck ( dare I say that word?) and timing. Take John Grisham as an example. His first novel sold 5000 copies. His second became a bestseller. Later on, they re-issued the first novel. This time it sold hundreds of thousands. So what was the difference? Why did it only sell 5000 the first time and yet so many the second? If it was that good, why did it not make it the first time? Or if it was that mediocre, why did it make it the second time? It takes persistence to write a second one when your first one made no money. His second could just as easily have flopped again. Would he then have written a third? Would that one have been discovered? If you follow this path, please make sure that you also are developing your plan for comfort and maybe even another business (such as business # 1). i.e. do your art as a hobbie until it starts to pay off! Finally, if you have already written what should be a best-seller, you might be interested in learning just what strategies and tactics people like Mark Joyner use to get their books to the number 1 bestseller slot - even if only for a day! Click here for the low down! 7) Sales. Some people are born salesmen. If that is you, then you can use your talent to set you free. But once again you have to do it right. The key, once again, is about leveraging your time. In this case it is about selling things that produce a long term residual income. The classic example of this is life insurance. You sell one policy. You get a good sized commission cheque up front. And then, year after year you get a smaller cheque each time the client renews. Work hard in the early years to develop a large client base, and you can continue to receive these cheques for many years to come. But only try it if you are a genius at selling. And again, developing your mind and your skills will be crucial. Read all you can. Learn all you can about marketing. And learn about doing Joint Venture and percentage deals - don't work for a one-off commission work for a piece of the action that will continue to pay you year after year, or that will reward you in proportion to your success, not your time. Right, that’s about it. There are as many ways to make money as there are people, but most will fall into the above categories. Choose one (or maybe more). Study and learn. Invest in your financial education. And stick to it. Keep working the system until it works for you. Above all, be focussed. You can't do them all.
7 Steps to Freedom by Noel Swanson
To start with you will probably have to continue with your day job until your plan for prosperity starts to pay more. But even here you can be smart. For example, if you want to build up a real estate portfolio - then why not get a job as a real estate agent? That way you earn money today, and at the same time you are increasing your knowledge about the market as well as meeting the right contacts. Remember - you can either keep working the 40-40 plan - 40 hours a week for 40 years to make someone else rich. Or you can work your own plan - probably for only a few years - and then be FREE. The choice, as they say, is yours.
Step 8 - The end is the beginning
o, we have reached "the end". Of course you and I know that it is just the start, not the finish. At school you had 12 years of indoctrination, teaching you how to be a good employee. After that you maybe had further education or vocational training, also teaching you how to be a good employee. After all that brainwashing it is going to take a bit of time to get your head straight. Remember, the key to wealth is not what you do, it is how you think. This is attested to by everyone who is a self-made success - in whatever field of endeavour they are in. Ask the businessmen, the athletes, the explorers, the artists, the inventors... In every case, the edge that separates the best from the rest is their mindset. So the end really is the beginning. We have gone full circle. At the beginning I was talking about dreams and goals, about possibility thinking, about daring to believe. At the time you probably thought "Oh, yeah. I’ve heard all this before. But what has this to do with me becoming free?" I also recommended some reading, like The Midas Method, Inner Circle, and Rich, Dad, Poor, Dad, and you probably did not buy any of them - "how is this going to make me rich?". I recommended them because I think they are the best. They certainly transformed my thinking! Now that we have been through a bit together - and if you have genuinely done the exercises you will have done some hard work - I hope that it is all making more sense to you. You see, the very fact that you were suspicious of the teaching on changing your mindset was a symptom of your old, employee, mindset! Everyone who is wealthy says "Read the books, listen to the tapes, change the way you think." In fact, many of them spend literally tens of thousands of dollars doing so. Yet you, in your daily-grind job, knew better than them! Which is, of course, why you are poor and they are rich! But you have stuck with me this far - evidence that you are not content to stay as an ordinary Joe. That you have made it to here does, indeed, show that you have got what it takes to make it big. So where do you go from here? Well, guess what? You need to WRITE DOWN YOUR PLAN. We have covered an awful lot of stuff over the past few months. So now, to keep you on track, you need to write down what your three plans are: your Plan for Security, your Plan for Comfort -80-
7 Steps to Freedom by Noel Swanson and your Plan for Prosperity.
I mean actually write down, on a piece of paper that you can keep going back to, the daily, weekly and monthly activities that you plan to keep doing so that in 2 to 15 years you are able to retire. Put it in the back of your ring binder, along with this book. There will be two parts to each of the three plans - first will be your to-do list. Things that you need to do in order to set the plan up - like making an appointment with your independent financial advisor, or opening an investment account, or writing your will. Then the second part will be the more general strategy. You might categorise this into categories or strands: e.g. Strand 1 - Real Estate goal - to buy one property every 4 months activities - regularly read Property Auction News, subscribe to auction house mailing lists, go and look at 3 properties per week.
Strand 2 - Investment goal - long term build up of capital activity - invest $100 pm into investment account using O'Shaughnessy’s strategy to-do - open up account, research shares using his system.
Strand 3 - Business Develop mail order business using strategy described in The Golden Mailbox
Strand 4 - Education read 2 books a month, listen to 4 tapes, attend one business training seminar.
7 Steps to Freedom by Noel Swanson Strand 5 - Job look for a job that frees up more time, or that provides me with the learning opportunity I need (e.g. real estate agent)
And so on... Notice Strand 4. One of the most crucial things you need to do is to build in a regular habit of feeding your brain with healthy food not junk!
Garbage in ! Garbage out!
You need a regular diet of positive possibility thinking. So turn off the TV and radio and stop reading the comics (that's what I call the newspapers). They are hardly uplifting! Instead, get yourself into a programme of regularly listening to those tapes and reading the books. You need a combination - some general motivational stuff to help you to keep going even when it gets tough, and also more technical, educational material about the specific business you are in. Whatever business you have chosen - become the best. Through my newsletter I will continue to provide you with motivation, tips, encouragement and also some recommendations for further learning and training. Buy them. No, not every one will be the best book you have ever read. But even if they are not, you will still learn something from each and every one. I will certainly try to pick the best ones that I know of. If you have some favourite books that you recommend, then please let me know so that I can pass that recommendation on to others. In this way we can help each other. Similarly, if you know of any good resources or links, please tell me, then I can pass them on to others. I would also really like some feedback. At then end of this email you will find a short questionnaire. Please would you click on your "reply" button, fill in the gaps, and send it back to me. Why do I want the info? So that I can fine tune this 7 part course and make it even better for future subscribers. Why will you fill it in? Well, I am hoping that you have found this FREE course to be of value to you. If so, then doing the questionnaire will be a way of saying thanks. Also, if you are running an internet business, you will have an excellent opportunity for promoting that business further (see below). If you have not enjoyed the course, then I hope you will be good enough to give me your constructive suggestions on how I can improve it for others.
7 Steps to Freedom by Noel Swanson
This is the end of the 7 Steps to Freedom. But I hope it is not the end of our association. As I said, I will be in touch from time to time with recommendations on reading materials, links to useful sites, and special offers on my own and other people’s products. These may range more widely over other issues such as home life, parenting etc, as well as financial, including internet marketing. Remember, my goal is to help you to achieve success - in all areas of your life! If you have any topics or questions you want covered, then please tell me - perhaps we can start a bit of a dialogue through the newsletter. Also, if you have any products that you would like to offer to others through the newsletter, then please get in touch. Depending what it is we may be able to work out some kind of deal! - Joint venturing is always the way forward! So, remember what Sir Winston Churchill said: "Never give up. Never give up, Never. Never. Never." Okay, I have given you a lot of valuable free information. Now, in return, I am asking you to do one simple thing for me. Would you please take a moment, right now, to give me some feedback. Just send me an email at email@example.com and tell me what you think. What has been most useful to you? How has it made a difference to your life? Is there anything else you would like to have covered? If you are sending me compliments, please also include a URL to your website (a great way to promote it) and maybe even a thumbnail photo that I can attach to your testimonial, if I publish it on my website (see, for example, the Inner Circle testimonials). Thank you for your feedback! Keep working your plan. Your friend,
Noel Swanson P. S. Don't forget to turn over to the next page for the instructions on how to brand this ebook and use it as your own, personal, cash generator...
How to Make Money from this Ebook 1.
Click here, and sign up to my affiliate program. It is absolutely free, and when you do you will receive a free mini-course teaching you exactly how to make money as an affiliate. I will even introduce you to some other well respected and high-paying affiliate programs. When you sign up, you will emailed your unique 4-digit affiliate code. Write it down! At this point you have two options. You can either brand this book, and pass it out to your friends by email or on disk. Or you can simply tell your friends about the book and point them to my website. Either way, if at any time in the next year they buy anything from any of my many websites, you will earn a commission. It's that easy. What's even better is that when they then sign up as affiliates, you will earn money when they pass the book around to their friends! How bad can that be??? To tell your friends about this book Simply use this link: http://7stepstofreedom.com/x.php?adminid=483&id=XXXX where XXXX is, of course, replaced by your 4-digit affiliate code. To brand your own copy of this ebook
Click here to download your brandable version of this ebook (if you have not already done so.) You will know if you have, since it will be called "7stepsbrandable.pdf".
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The Brander will then come up with some codes and ask you for input as follows: 5134 Enter your 7 Steps to Freedom 4-digit affiliate code Illya Mahatma Enter your name as you want it to appear on the front cover www.7stepstofreedom.com Enter your full website address WITHOUT the http:// firstname.lastname@example.orgEnter your email address as you want it to appear on the front cover
Once you're finished entering your details, click the "Brand!" button. The brander will then come up with a dialog box, asking you to automatically save the PDF under -84-
7 Steps to Freedom by Noel Swanson the name '7steps_branded.pdf' in the same location as the original file. Click 'OK' to automatically save the PDF, 'Cancel' if you want to save it under a different name or in a different location. If you have any questions, don't hesitate to email me at email@example.com
Start giving away the book to your hearts content - the more you give it away, the more money you could make. But remember - any spamming and you will be fed to the wolves!
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Noel Swanson firstname.lastname@example.org +44 (0) 1329 513296 (UK time zone) P.S. Did you sign up for my FREE newsletter? If you were given this ebook by a friend you are probably missing half of the benefit! Take yourself over to www.7stepstofreedom.com/index.html and sign up - In addition to valuable tips, great wisdom (!?), and the odd bit of rambling or ranting, you will also receive frequent free gifts and some very special offers. For whom is it intended? Anyone who wants to see life improved for themselves and isn't afraid of putting a bit of effort into making it happen. Naturally you can unsubscribe at any time. ABCEDEFGHIJKLMNOPQRSTUVWXYZabcedefghijklmnopqrstuvwxyz1234567890! "£$%^&*()-_.,;/?:'@~~\=+ -86-