Chapter #3:
The Most Important Rule in Investing
What Does Investing Mean To People?
What comes in to your mind when you mention the word investing?
Does it mean, putting your money in insurance, mutual funds, the stock market or even
high-yield investments?
Other people might only think about investing when they are about to die and they
haven’t left anything for their offspring.
Some even shiver when they hear the word, often claiming that they have no money to
invest or feel that is too complicated a subject to even discuss about.
Many people even invest heavily in health supplements, personal trainers and
beauticians to make themselves live longer, healthier or even look younger! Imagine the
advertising budget for beauty companies nowadays.
All these are legitimate concerns when it comes to investing, but I am talking about the
most important investment a person can make in his lifetime.
Invest in Yourself
The most important and No.1 rule is “Invest in Yourself” – if you don’t, who else
will?Develop Your Financial IQ
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Your parents will only invest in your education only until you leave college. But that is
just the basic necessities provided and does not teach you important lessons about
financial education.
Would you depend on colleges or universities to teach you how to make money? Most
colleges only teach you skills so you can earn money working for other people. How
about business school? Honestly, if business lecturers are such experts at business,
why are they still lecturing there instead of making a fortune in business ventures?
Would your boss teach you how to succeed in business so that one day, you will be in
his position?
You and only you have to be proactive enough to take that responsibility
You see, when you invest in yourself, it means taking on the importance of educating
yourself. Education not in the academic or technical sense, though they are necessary
skills to be developed in life. Our education doesn’t stop at college.
For most working adults, their education enters retardation stage after they leave
college. They stop learning and therefore they stop growing. They only grow sideways
from eating too much pizzas or take-out during their busy lunch breaks.
We know that IQ is important right? But why aren’t the most intelligent people in the
world the richest people in the world? There are many accountants and financial
planners rushing to their cars every evening trying to beat the after work traffic
congestions! They are not rich!
How about EQ or Emotional quotient? Do working hard, having a great attitude and a
positive mindset solve our financial situation? These are important when running a
business, but let me illustrate:
If you are driving from Boston to New York using the wrong road map, you won’t get to
our destination no matter how fast you drive your car (working hard)! You can work
harder, but you would only get to the wrong destination faster! You may have the best
attitude in the world or the most positive mindset, but you still won’t get to New York
(although the journey wouldn’t bother you since you are feeling positive about it)Develop Your Financial IQ
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The Importance Of Financial Education
You must FIRST invest in your Financial IQ.
Having good financial IQ is not about saving tons of money or dumping them into mutual
funds. It is developing a healthy relationship money and building a wealth of assets that
will generate you money.
What does it take to develop your financial IQ?
Delayed gratification is one of the most important aspects to developing your financial
IQ. Take this as a hypothetical example.
Would you pay for a pint of milk or a cow?
If you buy milk, it is consumed and it is over. You will have to buy milk over and over
again when it is finished. Even if the milk costs less than a cow, in the long run, you will
still be buying milk again and again.
Now, if a cow were to cost 50 times more than milk, you might pay through your nose
when you purchase the cow, but after consuming 50 pints worth of milk from the cow,
you would break even on your investment and save more money in the future. In fact,
the cow might give birth to 2 or more calves and you could sell one of them for profit!
Get the idea?
EVERYONE is capable of creating wealth. When you take a beat up old car and give it
an overhaul, paint it with a new coat of paint, and change a few more parts to make it
start running again, you could sell that car for more money than if it was just a beat up
old car. You would have created wealth in the process!
How about a farm? If you turn a farm into a country home getaway resort, wouldn’t the
value of the farm land increase manifold?Develop Your Financial IQ
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It is the same principle for chefs, computer programmers and craftsmen. The sum of the
whole is greater than the parts. We are all capable of creating wealth even out of thin air
and that is the first step to getting our creative juices flowing.
The value of anything is defined by supply and demand.
You don’t need to be a Major in economics to understand this. Money is just an idea.
Remember the desert island example? The true measurement of money is not the cents
or dollars it represents.
If you have developed a product that people want, would they pay more to you than
usual? Would you apply your skills in creating good assets?
Bottom-line is this:
Invest in assets that bring long term value. Anything that brings you more income is an
asset. Don’t invest too much in liabilities like cars or boats.
Even houses are not considered assets until they are fully paid off (If you lost your job
tomorrow and you can’t pay for your house, is your house an asset or liability?)
Are you willing to step out of your comfort zone and pay the price for financial IQ
or ignore the signs of the times and expect your boss, the government and the
bank to take care of you financially for the rest of your life, living below your
means and never taking risks to better your family’s future?Develop Your Financial IQ
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Chapter #4:
How To Get Out Of A Financial Mess
There are two methods I can recommend about getting out of a financial mess.
Defensive Strategies
The first one is defensive:
Cut down what you are already spending on. You can’t start a business being in a
financial mess. Cash Flow is more important than revenue. And you need to have lots of
cash flow coming from your pockets if you are going to succeed.
Here are some things you can cut down on
Smoking – if you can’t quit, just cut down on a few sticks
Alcohol – booze can drain your finances faster than a running tap
Night outs – spend some nights at home thinking about making more money
Gambling – if you plan to gamble, it is better to gamble in a business
Vacation and Country Clubs – you won’t die without a few memberships
Food – eat healthily and you can even think clearer
Laziness – The biggest thing that will hold you back!
Most important of all, don’t buy anything that constitutes a liability. A liability is anything
that takes money out of your pocket no matter what they are worth in the future. Think in
terms of cash flow. What can I invest in today that will give me funds tomorrow?
Now let’s move on to offensive strategies:Develop Your Financial IQ
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Offensive Strategies
One of the best, low-cost ways to invest in your business skills is to join a Network
Marketing company. There are many other options such as starting a traditional
business or maybe even an Online Business.
But if you want to guarantee yourself something concrete where business skills are
concern, my take is on Network Marketing.
Regardless of what you have heard about this industry or how much money people have
lost there, the biggest reason why I would recommend everyone to invest in a network
marketing company is because of what you can learn there, and not because of how
much money you can make (although it would be fantastic if you can make a living out of
it).
You see, network marketing companies are the one place where people will share their
trade secrets FREELY. It is logical because in order for your upline to succeed, they will
want you to succeed as well! Therefore, they will not hold back in teaching you the skills
of a business person.
Furthermore, the relatively low cost of investing in a network marketing company will
amaze you for what you can learn for the price you are paying (a few bottles of vitamins
and a business kit for the experience of a lifetime!) They will patiently train you in the
attitudes and business skills you need to succeed in this industry.
Basically, you can’t succeed in network marketing with an employee’s mindset. A
network marketing company will train you in sales, communication, teamwork,
leadership, positive thinking, self-improvement, time and money investment as
well as the support of your upline as a personal coach and mentor. I dare say that
even if you didn’t make a cent, but diligently went through their program, the skills you
develop will last a lifetime.
You can also develop skills by attaching yourself to an insurance agency. The job may
be challenging, but those companies will also teach you the same skills above and
maybe even gain a few tips on financial planning as well.Develop Your Financial IQ
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How about an Internet business? If you have the aptitude for computers, Internet
businesses offer a low cost, high-profit margin business that can earn a lot of money and
tap into a worldwide market.
Other places you can learn about business skills can be found at financial planning
courses, real estate investment courses, time management courses and lots more.
All these I have suggested will be the safest way you can start a new business. You are
only spending a few hundred to a thousand dollars in start-up and education. A
traditional business might be too risky for someone without any business experience.
You invest tens of thousands of dollars and you might struggle trying to break even. But
once you have developed the skills above, you will have a higher chance of succeeding.
The most important thing of all besides a good learning attitude are the people you mix
around with.
It has been said before; you are the sum of the five people you spend the most time
with!
This is very hard to swallow but imagine if you start talking to your five beer drinking,
poker buddies that you want to go out on your own and make a fortune, what would they
tell you? They would laugh their socks off before tearing your ego into a million pieces!
At the heart of man lies jealousy. They don’t want to see the people around them
succeed. If you succeed, it makes them look bad. They know in their hearts that they are
going no where yet they embrace that lifestyle and pull you down with them. They will
steal your dream, and rob you of your financial freedom if you are not careful!
The key point to remember is: Only mix with Positive thinking people!
Positive thinking is not wishful thinking. A wishful thinker is a dreamer who doesn’t take
action. Positive thinking is backed by action and you will feel the energy of people who
believe in you and support your dreams.
If you hang out with ducks, you will quack… but if you hang out with eagles, you
will soar!Develop Your Financial IQ
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So start looking for people who will follow your vision or are willing to grow together with
you.
Lastly, you must BELIEVE IN YOURSELF!
The task of stepping out of your comfort zone may seem terrifying and many will not
support your dream. They may even go on the offensive even if you don’t share your
dream. That person may even be your parents or your spouse.
Then you will be faced with the question, is my financial freedom worth the price I am
paying now? Can I live another day with the same routine, the same job, the same
paycheck or the same drudgery? If the answer is no, then take action NOW. Not
tomorrow, you will wake up and forget about your dream.
Write down your desire on a piece of paper and hang on tight to it everyday. Share it
with someone positive and take that first step.
You won’t regret it.
