Investment risk comes from not knowing what you are doing.
The government taxes the income you work hard for more than the income your money works hard for.
IMPORTANT: The key to becoming wealthy is the ability to convert earned income into passive income or portfolio income as quickly as possible.
TYPES OF INCOME:
1. Ordinary earned
Don’t play it safe, play it smart.
Action always beats inaction.
Small people remain small because they think small.
Most people look for what they can afford, so they look too small. Think big.
PROFITS ARE MADE IN THE BUYING, NOT IN THE SELLING
For there to be profit in a deal, there must be two elements: a bargain and change.
It is repetition that causes to see slight differences.
MAKE OFFERS, SOMEONE MIGHT SAY YES!
Copying or emulating heroes is true power learning.
A common bad habit is “dipping into savings”.
Savings should only be used to create more money, not to pay bills.
1. Don’t get into debt. Keep your expenses low.
2. Don’t dip into your savings or investments
3. Use financial pressure to come up with new ways to make money.
Personal self-discipline is the number-one delineating factor between the rich, the poor, and the middle class.
You become what you study.
The reason you want to have rich friends is because that is where money is made. It’s made on information.
Wise investors buy an investment when it’s not popular.
Invest first in education. Each of us has the choice of what we put in our brain. First invest in learning about investing.
STEPS TO GET STARTED
1. Find a reason greater than reality: the power of spirit. Deep-seated emotional reasons born out of wants and don’t-wants provide the energy to do the work.
2. Make daily choices: the power of choice. Our spending habits reflect who we are. Choose to be rich. Dedicate time to take actions and to learn. Invest first in education.
3. Choose friends carefully: the power of association.
4. Must a formula and then learn a new one. The power of learning quickly.
5. Pay yourself first: the power of self-discipline.
6. Pay your brokers well: the power of good advice.
7. Be an Indian giver: the power of getting something for nothing. When you invest, ask yourself: how fast do I get my money back?
8. Use assets to buy luxury: the power of focus.
9. Choose heroes: the power of myth.
10. Teach and you shall receive: the power of giving.
People use arrogance to hide ignorance.
Whenever you find yourself avoiding something you know you should be doing, ask yourself: “What’s in it for me?” Be a little greedy.
You overcome laziness with a little greed.
The most common form of laziness is laziness by staying busy.
Staying busy as a way of avoiding something they do not want to face.
I don’t-wants hold the key to your success. (I think he means that what you fear most or don’t want to happen is a great motivation to keep you productive.)
INVESTING IN REAL ESTATE
An obstacle to invest in real estate is the time it takes. The solution is to hire a competent property manager.
A great property manager is the key to success in real estate.
Diversification means playing it safe. Focus means to contrate on one thing until success.
Failure inspires winners. Failure defeats losers.
People don’t win financially because the pain of losing money is far greater than the joy of being rich.
Obstacles to Success:
4. Bad habits
The primary difference between a rich person and a poor person is how they manage fear.
Be able to give as well as to receive. Be a good teachers as well as good students.
You must manage three things in order to be successful:
The world is filled with talented poor people.
Fear of failure and rejection are the main reason people are unsuccessful.
Get over your fear of failure and rejection.
1. Find an opportunity that everyone else missed.
2. Know how to raise capital outside the banking system.
3. Hire people who are more intelligent than you are.
4. Manage risk instead of avoiding it.
Good investors create investment opportunities through knowledge and research.
It’s not the smart who get ahead, it’s the bold.
Wealthy people own nothing. They control everything but own nothing.
1. Accounting: the ability to read numbers.
2. Investing: creative strategies and formulas of making money from money.
3. Understanding Markets: the science of supply and demand.
4. The Law: tax advantages of incorporating. A corporation can pay expenses before paying taxes. Protection from lawsuits.
If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.
Businesses that do not require your presence (if you have to work there it’s not a business, it’s a job).
Income-generating real estate.
Royalties from intellectual properties.
Anything else that has value, produces income or appreciates, and has a ready market.
Keep expenses low, reduce liabilities, and diligently build a base of solid assets.
MINDING YOUR BUSINESS
To become financially secure, a person needs to mind their own business. Your business revolves around your asset column, not your income column.
There is a big difference between your profession and your business.
The rich focus on their asset columns while everyone else focuses on their income statements.
The rich buy assets.
The poor only have expenses.
The middle class buy liabilities they think are assets.
Wealth is a person’s ability to survive so many number of days forward—or, if I stopped working today, how long could I survive?
Invest in income producing assets.
When it comes to money, high emotions tend to lower financial intelligence.
An intelligent person hires people who are more intelligent than he is.
More money seldom solves someone’s money problems. Intelligence solves problems.
Cash-flow tells the story of how a person handles money.
More money will often not solve the problem. In fact, it may compound the problem.
Money only accentuates the cash-flow pattern running in your head.
ASSET V. LIABILITY
An asset puts money in my pocket. A liability takes money out of my pocket.
RULE 1: You must know the difference between an asset and a liability, and buy assets.
Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
It’s not how much money you make, it’s how much money you keep.
Be an observer, not a reactor to your emotions.
People’s lives are forever controlled by two emotions: fear and greed.
It’s easier to change yourself than everyone else.
If you think someone else is the problem then you have to change them. If you realize you are the problem, then you can change yourself.
Money is one form of power but what is more powerful is financial education.
I don’t work for money! Money works for me.
There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.