Becoming wealthy is not the mountainous impossibility you think.
I’ve observed many wealthy people who don’t really understand how and why they became wealthy. I’ve also worked with many that completely understand the process and plan they mapped out and how they meticulously followed and worked the course.
The problem is one person’s cool plan is another person’s messy curse.
It sounds counter intuitive but it is irritatingly true.
So how would you know what kind of plan might or might not lead to wealth?
Here’s a secret: It’s very difficult to replicate another person’s success no matter how closely you “model” them.
Another secret? Modeling a successful persons behavior can be helpful but only to a point. Then replication of the behavior fails. Sadly modeled behaviors ultimately must fail. I will explain all of this in detail. People who speak of modeling the wealthy as a means for you to achieve are not trying to pull a fast one on you. They are simply ignorant of key facts that caused their own wealth. They really believe that if you start buying the stocks Warren Buffet buys you’ll get rich.
People also believe that mutual fund managers have insights into the markets that investors miss out on.
The fact is that the vast majority of mutual fund managers can’t and don’t beat the index funds they are measured against.
Sure, any manager can do it for a few years by simple luck, but over time?
Over a 10 year period ending 12/31/2015, usnews.com reported that 82% and 88% of managers didn’t beat the index funds.
The savvy reader says, “aha!” 15% are beating the market in their category!
The savvier readers says, “Huh, I wonder how they did the previous decade?”
I think you know the answer…
What’s all this mean to you and me?
We’ll invest, because it means you’ll keep SOMETHING of what you have earned…but you and I won’t invest our way to wealth.
It would be hard to guess that even 5% of people that have become wealthy, did so by investing. It’s not impossible. It’s simply so unusual and fraught with potholes that the vehicle is not worth riding in…
I want to show you what most wealthy people know and most others do not. A few simple examples will enlighten.
Your buddy has a website that is doing $1,546 per month. He gives you permission to post your own copy of the entire website including keywords, title, description, exact font…the pages are 100% identical twins.
AND, when people search for your topic/subject/niche/product/whatever you and your buddy are both #1 50% of the time and you are both #2 50% of the time.
You both have the exact same number of links pointing to your website with the same exact ranking of those links in the “eyes” of the search engines (the gods of the world online).
None of your sales come from your own list, and the product has nothing to do with branding.
EVERYTHING except the the domain name, (www.mywebsite.com) is exactly the same. You will have the exact same number of visitors, time on page, exact same demographic.
Here’s the question!
Will YOU sell $1,546 per month? More, or less?
Let’s say the product is pure beautiful crisp refreshing mountain spring bottled water.
Remember both webpages(sites) are exactly the same.
His website is www-bottled-water.com
Your website is www-bottled-municipal-water.com
Are the websites going to produce the same revenue?
Of course not.
That “municipal” is going to kill sales. How bad will it be? Bad.
How about the EXACT same website layout and content, yet your website’s URL is www-recycled-gray-water.com?
I’m thinking your sales just went down even further. Meanwhile, let’s say you use the same exact promotional page as your friend does on a different site. In this case, everything is still the same and the new URL is www-pure-bottled-water.com
Sales go up? Better than the $1546? That would be my guess too.
So, even though the entire PICTURE is identical, something as simple as the online street ADDRESS, the URL, makes an enormous difference.
Ultimately models help but you need more than replication.
Wealth building is the same for everyone right?
Not even close.
My girlfriend witnessed how our internationally regarded Inner Circle works in Las Vegas.
She was fascinated by the talent in the room. People with real skills and knowledge. She saw very specific responses and solutions to very specific life/biz challenges.
She was thinking about things like these specifics and asked me yesterday if I give the same or different plans to everyone in my Inner Circle as far as wealth building.
This question has two answers of course.
The first answer is NO.
People have different skill sets, beliefs and values from each other. They have different life circumstances. As far as money a single young person with no children in good health that has a doctorate degree has a wider range of wealth models he can use than does a married, middle aged person with a chronic disease, no formal education and two kids and an infant.
People live in a CONTEXT. That context determines the direction I point a person in.
CONTEXT is where life and building wealth BEGINS.
Limited resources and tools can slow down the process of wealth building. BUT some contexts of limited resources can also INCREASE the process and speed of wealth building.
The second answer is (for some aspects) YES.
EVERYONE has to do certain things to enhance the speed and completion of wealth building.
Wealth doesn’t happen by accident and certain factors are stable across CONTEXT and TIME for accumulating wealth.
Think like wealthy people and put your thinking into action.
A lot of people think that means to interview a rich guy and “do what he does.”
Behavioral modeling is important. Modeling Solution Thinking is even more important.
You have to find out how successful people THINK and DECIDE and then isolate how they ACT on their thoughts and decisions.
The problem with interviewing the rich guy MIGHT be good advice. But you don’t know. Because if you Surprisingly, quite often when you interview a poor guy, you find out he thinks the same things as the wealthy guy. Teasing out the important factors and growing in a CONTEXT is no easy task unless you’ve been in BOTH life experiences and know what to look for.
Fortunately, a lot of wealthy people tend to share certain types of thinking processes.
Wealth is not wired in to your genes.
I remember seeing a program entitled, “You Were Born Rich”. Pfft. Yes. This and other flawed thinking can really mess with the average person’s mind.
You (probably) were NOT born rich.
Can you imagine believing that you were “born to be rich?” Someone must feel like a real loser if they entertain the notion, because those little mis-truths can stop someone cold if they think too hard on it.
Born rich and look what I have done!
You might have been born into a wealthy family. You might have been born into a poor family or nation. Here’s the thing: Most countries have enough personal freedoms for citizens to allow for you to be wealthy, if you wish.
From a genetic standpoint, you are born with advantages and limitations. Some are born with severe limitations like disease. Some are born with strong advantages like intelligence, disposition, emotional stability, strength and attractiveness.
There is one certain fact: You almost certainly were not born rich.
In most countries, you are born with the CHOICE to build wealth.
People who believe that they are “born rich” are by and large…broke…or will be very soon.
Now, let’s get to “thinking.”
Conscious thought is a powerful driver of behavior.
Unconscious reactions however, are the VERY POWERFUL drivers of MOST behavior.
The vast majority of people predisposed to being overweight and obese will stay that way because in most people U > C.
(Unconscious actions are greater than Conscious Thought.)
It’s that simple.
The title of the aforementioned program should be, “You Were Born Fat”.
The fact is that U > C formula is going to come in very handy in acquiring wealth. Here’s what happens…
Ready to get the puzzle pieces, both big and small?!
You’re about to think in a totally different way…:
Rule #1: Restructure Your Mind
You are going to be what you want to be.
If you set your mind to work for somebody as an employee, you will look for a job and you will become comfortable and familiar with working as an employee.
You won’t build wealth in 99% of these contexts. There are a few exceptions. Not many.
If you set your mind properly to attain financial freedom, in due time, you will find means of being wealthy without the challenges of working for someone else.
If someone tells you that you can be financially free in one year, they are either ignorant or lying.
That said, you CAN be financially free.
I’ve never considered salespeople “employees”.
Salespeople are revenue generators. Without salespeople the company dies. And, a lot of salespeople working for lots of different companies have become wealthy, very wealthy. How? Salespeople quite often determine their own income.
Therefore when I begin sharing thoughts about running your own business, or being at risk/being in control, I’m referencing salespeople in the mix as well.
Preface: There is nothing wrong with working for someone else.
It takes a lot of stress off someone to have to only do one set of tasks each day. And it provides a place where you get paid to learn about business!
Very few people can get out of high school or college or anywhere and build wealth with their own business. Schools simply can’t teach you everything it takes to be successful in a business of your own.
Education can and will teach you a FEW aspects of achieving wealth. Formal education also generates contexts that are correlated to wealth.
But think about it:
- Accounting and Taxes (Yuck)
- Product Development
- Product Research
Those are a few of the things you’re going to need to be competent at when you start your own business.
The best way to learn a lot of these things is to get your feet wet in as many aspects of a company as you can. By watching how the people who have money at risk in a company make decisions, you begin to see what it takes to succeed or fail. You get to see what works and doesn’t, up close and personal, for free.
Watching a CEO is somewhat interesting, but really you want to watch marketing, advertising and talk to the sales people at the company you work for. These are the CRITICAL skills you do NOT learn in traditional education (even if you took classes that had those names attached to them).
Thus, you learn while you earn. And while you’re doing so, be a huge asset to your company. The endorsement you get from your employer of five years is GOLD.
Make it so that when you leave your company they will have a very hard time replacing you for the same money.
The mindset of the person who is going to eventually bridge from employment to build wealth is to create as much success for the company they are at and then take those skills and knowledge into their own adventures.
When you write your biography, it will read a lot better if you were loyal to your company, helped a division grow, trained the awesome sales team and so forth …
Obviously it’s difficult to create wealth as an employee.
Of course not.
Sam Walton and Bill Gates created a lot of millionaires who were willing to work for stock and wages instead of just modestly higher wages. Those people gambled on their company’s business plan, and won big.
Thousands of people, of course, have taken similar gambles and lost.
The reality is that most people in a corporation outside of sales and upper management will not become wealthy. And, of course, most in sales and upper management won’t either …
What is it that wealth building requires?
It begins with the choice to be financially “free.”
Building Wealth Requires a Very Specific Mind Set.
The mindset of people who are employees is that of being so pre-occupied with a “job” that they forget or unintentionally fail to cross the line at some point in life … to see how they can create real wealth. Just like a coin, they never bothered to turn it over and find out what it looks like on the other side.
Example: Who is on the front of a $100 bill in the USA?
Of course. Ben Franklin.
Now, what’s on the back of the $100 bill?
Exactly … no one ever turns anything over to see what anything is really about in life. It’s why people “don’t get life.”
You don’t carry hundreds?
Who’s on the front of the $5 bill?
Of course. Abraham Lincoln
But we see his face everyday. That’s fairly simple.
And what’s on the back?
The Lincoln Memorial.
Don’t worry, only about 1/5 gets this one right.
Oh, the $100 bill.
The back has a nice “engraving” of Independence Hall.
People are so used to viewing life through one very specific lens that they fail to see entire pictures.
And this isn’t just some people, it’s everyone.
Problem is, when it comes to wealth, you really want to know what is on the reverse side of that metaphorical $100 bill.
It’s an interesting coincidence that INDEPENDENCE Hall is on the back of the $100 bill, the largest note used in circulation in the USA.
Independence. Being wealthy …
Now, back to the office…
One more time.
Do not misunderstand:
Working for someone else is a GOOD THING. You learn how people slough off, get on Facebook when they should be generating…SOMETHING for their employer and so forth. You SEE first hands why small companies have such a difficult time hiring people who are worth more than they cost to employ.
The Person at Risk is Most Likely to Have Wealth
I’ve said this many times:
Employers provide jobs and that’s a GIFT.
A job means someone takes 100% risk on you; and you take zero risk in return. That is a gift.
When you go into business, you eventually become an employer yourself. You take YOUR MONEY and GIVE it to someone else in exchange for someone performing some set of duties or projects. If people don’t “get that”, they will not succeed and build wealth. The person writing the check is the person who is at risk. And it’s a fascinating paradox that being at risk is the only predictable way to build wealth.
And if you’re going to put yourself “at risk,” it’s going to require skills in the knowledge areas I touched on above.
Palms facing up is receiving, reminiscent of begging. Palms facing down is giving. Employees receive. Employers give. Where do you want your palms’ position to ultimately be?
Being at wise risk, intelligent risk, well calculated risk, is where wealth begins.
The 2nd Rule of Wealth is…
Rule #2: Think And Act Like the Wealthy
Always keep in mind that you can pretty much bring into your life as much money as you choose by knowing that it is all in the mind and in your execution of what is in mind.
If you are willing to forego some things in life, (read as tradeoffs) and are very focused, you can work on a 7-figure bank account if you want that.
I don’t know what your definition of “rich” is. To me “wealth” means ENOUGH IN CASE.
You Need More in Your Nest Egg Than You Think
I can tell you that you DO want in excess of $1,000,000 in your bank account when you are 65. Get to 65 and you are looking good for 85. (If you are going to die young, it’s much less important to accumulate wealth.)
Some people tell you that you will need about 70% of your current income in retirement. That is a statement made by people who are broke and will stay broke.
Taxes will be higher when you retire.
If you are younger than 55, inflation will be next to astronomical when you retire and it will erode a lot of nest eggs.
The cost of major purchases like homes, automobiles and so forth is likely to soak up most or all of someone’s money.
You will need about 150% of your current income in retirement. Imagining that you live those 20 years. The dollar you have at the beginning of the 20 years will be worth about 50 cents in that last year…if there is very minimal inflation.
Now do the math again.
Don’t let anyone B.S. you on this.
Fortunately, for most people in most free countries, your income is pretty much self determined.
There’s always unexpected variables, but the fact is, it’s your choice what you want to earn and you will earn pretty much what you want to earn. You’ll decide what is enough and what isn’t.
It is what you choose to think, and act upon, that produces the wealth you want. When you stop acting upon producing wealth then you stop building wealth. What you think will be … pretty much … will be.
Assume the Limo
I don’t spend a lot of money on junk. If I buy something I want it to go UP in value. Books (knowledge) goes up in value. A house MIGHT go up in value.
A car doesn’t. Food doesn’t. The yacht doesn’t.
BUT when I am not at home, I give myself what I need to be consistent with home. I get in the limo and I stay at a hotel that reminds me of home.
If I don’t…it’s going to be a bad trip.
I used to get in the limo and think, “Man, this is wild.What the heck am I doing in this 24 foot vehicle?”. “This is extravagant.” “This is wasteful.”
Today, what I once experienced as a preface, is now something I have earned. You don’t need a lot of luxuries in life. Traveling first class can be one that causes you to feel something that most other luxuries don’t. The “feeling” if channeled properly, can pay off handsomely.
I’m not big on visualizing “stuff” because I generally don’t care about “stuff.” I don’t have a lot of stuff.
I do have a MASSIVE library.
You grow up and live 20 years without “stuff” and you wonder what the heck you would buy with money if you have it. I can look back daily and sit with the memory of that life each and every day. It’s very motivating on many different levels.
Consider this idea: Kevin likes controlling the context. When your environment is spacious, it trains your brain in some very unique ways…
Start Making Inroads in The Brain
Now, play along with me for just a second …
I do want you to “visualize” for just a minute. But I want you to do it just a bit differently.
Here’s a picture of my theater room. I use it to play guitar and put concerts up on the big screen but imagine it was yours. What would YOU have up on the screen? Who would sit in the chairs their? What would you watch? What would the sound be like?
Don’t need a 6′ TV? No problem, this one is free because it’s in your brain. Play along.
This visualization won’t cause you to be wealthy. Instead, it allows you to be familiar with the integration of your CURRENT SELF within a DIFFERENT CONTEXT.
Go ahead and visualize a house that might be cool to have as your own. How many rooms does it have? Take a relaxing soak in the bath tub. Smell the food aroma coming out from the spacious kitchen. Maybe play sports in your own private gym.
(Come on, I’m trying, go with me. I have a pool table, isn’t that the same as a gym?) Visualize that home theater you recently considered.
The important thing here is to essentially see yourself as living the life without having to spend the money (yet).
It’s important to bring the YOU OF TODAY with YOU to the FUTURE. Interesting?
It is kind of cool.
By doing this exercise, you are coding into your unconscious mind a bit of a direction and directing it to move you in the direction you’re dreaming of …
Be Grateful, Not Blessed
And then be grateful.
If you feel “blessed”, you put yourself above other people. (You’re blessed and the poor person down the street is not?)
You AREN’T above other people.
Be grateful you were born in a free country.
Grateful that you can DREAM a DREAM that can become reality when so many can’t even do that.
By being grateful, you are confirming that you are graciously accepting your life experience.
If you earned it, you deserve it.
Be grateful you did the right things to get you where you are.
It’s OK to be grateful for your good decisions!
I used to have a daily mental exercise (you might call it self-hypnosis) where I saw myself in the surroundings that I wanted. I vividly experienced being with the kind of people I wanted to be with. I can tell you that today those pictures often mirror the imaging that took place many years ago.
You may be astounded by the results.
We’ll revisit this concept later in the series of articles.
Many people think that wealthy people are selfish and that’s why they have lots of money at hand. Right?
While this may be true in some cases; there are a lot more individuals who are wealthy because they know how to give. And I’m not just talking about charitable acts.
The Wealthy ARE the Tax and Charity Base
Wealthy people pay for everyone to survive in the United States and in fact, most countries. 1% of the people pay 43% of the taxes in the USA. 2% of the people pay way more than half of all the expenses it costs to run the United States. (That and the loans the Chinese and Japanese give us every year.)
And then the wealthy go further.
It would take tens of thousands of people to match what Bill Gates has given to millions of starving people over the years. Wealthy people are generous by nature and context.
When you give something from your heart without expecting anything in return, you open the door to a powerful mindset that will trigger your mind to act as if you are capable of performing that behavior again … and again.
(All for another day.)
Whenever possible, be generous with others. You will notice that what you receive emotionally (spiritually), will be “worth” more than what you give.
Don’t get into a habit of thinking of reciprocation when you give … or you are destined for resentment and anger.
Give freely from your heart.
(Do give wisely. I used to make a lot of bad decisions about where my gift money went to … I don’t do that anymore!)
To put it in the most spiritual way possible: The act of giving can summon the spirit of joy to come into your heart.
How will you feel when you’ve given something to others who are less fortunate? Let me tell you that nothing could brighten up a day more than hearing them express their most heartfelt gratitude and seeing their smile extend from ear to ear.
Yeah, it’s kind of selfish…I’ll take it…
When I was a kid, every other year, Mom’s friend Monroe Abels would take me to the Cubs’ opening day at Wrigley Field in Chicago. I was a huge Cubs fan, and that was like a dream for me.
He’d pull strings in the Cubs organization to get us seats right above the dugout when he could.
One year, he had most of the Cubs players sign a scorecard which was given to me at Wrigley Field on April 8, 1972.
I’ve never had the scorecard appraised. I still have it, of course. I don’t care if it’s worth $10 or $10,000. The deal is that it reminds me how good it felt … how special and important I felt to have that experience.
Two years later, Monroe took me to Opening Day, and in the second inning we went for a walk at the park … a long walk … all the way up to the Cubs WGN broadcasting booth. I got to meet one of my idols, Jack Brickhouse, who was the Cubs announcer.
This was particularly special because of the timing. My step dad was dying and would only live five more months. Each day was like living in hell … except this one. One of my dreams came true. When you can do something like this for someone, their life changes … and so does yours.
And every now and then, you want to give those experiences to other people in life.
Make a Difference
At Christmas last year, I got an email from a friend in Poland. They told me what they were doing for some very poor children in southern Poland. Within 24 hours they got a call from Western Union on Christmas Eve morning, allowing 4 times as many kids to have Christmas as they had planned.
Nothing feels cooler than making a difference.
And, what you give doesn’t necessarily have to be something material. It can also be time, effort, talent, service, or even an affectionate feeling.
For 7 of the last 10 years, Coffee with Kevin Hogan Readers have helped raise money for one of UNICEF’s many projects around the world. We’ve raised money for children to have food, coats and immunizations in Rwanda, Iraq, Afghanistan, and a few other countries. We’ll do the same again this year. (I match the sum of what is donated by our readers. It makes the world a little bit better place.)
And I mention UNICEF because they do such good work and are always in need of more money to help more kids in ways that tear your heart out. And they aren’t the only group out there doing good … but they are a darned good one.
But a lot of times you don’t say ANYTHING when you give.
You are Santa Claus.
You do it in secret.
And dang it’s fun to do that. People get all this stuff and they are like … “Wow…maybe there is … “
And that’s some of the best feelings inside you’ll ever experience.
DO THIS. Just once and you’ll be forever addicted.
You’ll need to take my word because there aren’t any formal research studies on this: When you give secretly, you feel a true and good “power” inside. You have a strength to help, to care for, you believe in yourself more. You have more self-confidence … and you know that your behaviors match your words and beliefs.
The next Rule: Don’t be afraid to…
Don’t Be Afraid To Lose
Winners are not afraid to lose, because failure/losing is a BIG part of the process of success. People who are afraid to fail, lose success.
When I fail, I get irritated.
Last week I forgot to put a link to an article out of Coffee with Kevin Hogan.
So 1000’s of people are not going to read a really cool article because there is no link.
But it’s not feared.
In the scope of life what does this failure to use my brain mean? Not much. (OK, it means it was stupid …)
Who CARES if you fail?
If you really care that you fail, your ego is waaaaaaaayyyyy too big.
People who are afraid to lose or fail, essentially have zero chance for success.
To be continued…
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