Firsts Steps to Wealth – Dani Johnson

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Whatever wealth you think you want or need, getting it requires something I call TEEM: Time, Energy, Effort, and Money.

I somehow felt compelled to reach out to this woman. I wanted to know why she was working at McDonald’s. Initially I imagined it was because she wanted to work, or maybe she was bored in her retirement age and wanted something to get her out of the house. But when I saw her resting after wiping each table, I quickly tossed out those assumptions and decided to start up a conversation. I went over, sat next to her, and said in a soft voice, “Hi.” She smiled at me and said, “Well, hello there, honey.” Her sweet smile and gentle-yet-raspy voice touched my heart. After a few minutes of chitchat, I had to ask a question. “How long have you worked here?” “Oh, for a little while,” she said. “Do you like what you do?” “Well, honey, I am just glad to have a job.” “Really? Why is that?” “Social Security and my husband’s pension just is not enough to live on, so I have to work.” “What? Are you kidding me?” “No, sweetheart. I wish I was.” “If you don’t mind, can I ask you a personal question?” “Sure.” “How old are you?” She sighed and chuckled before saying, “I am eighty-nine and will be ninety next month.” Tears welled up my eyes as I heard this. I was so upset at this injustice! I wanted to tell her to quit her job right then and there so I could support her and her husband financially.

Then the reality set in. I could barely take care of myself, let alone this sweet, elderly couple. Where were their kids and grand kids? Who was letting her work like that? What kind of a family did they have? There I was, twenty years old and looking at my possible future.

Now, back to that shocking information that I had learned briefly before meeting the McDonald’s lady. It was a statistic that 98 percent of the population will end up dead or dead broke by age sixty-five. Let me repeat that: 98 percent of the population will end up dead or dead broke by age sixty-five. Only 2 percent of the population will succeed financially.

As I have travelled around the world I have encountered scenarios similar to the McDonald’s lady’s time and again – people living life by default instead of by design, and working breathlessly hard throughout their lives only to end up broke at the end of their race.

Ninety-eight percent of the people I come across are miserable. They put on a game face to convince themselves and others that everything is okay, but it is not. They are working too hard, they are maxed out on credit cards, their marriages are unhappy, and they do not know how to handle their children. They are filled with regret and confusion and do not know how to fix the situation. They have no clue what the end of their path even looks like, let alone how to get there.

Number one, he said, “If you give me one excuse, I will not work with you.” Since that time – in the twenty-two years of being in business and working with tens of thousands of people from all over the world – I have found that people spend more time creating excuses than they do creating results. They spend more time justifying their failures and mediocrity than they do creating results. It takes so little time to create results, but most people spend more time coming up with excuses instead of creating results. Let me give you the definition of an excuse: a well-planned lie. 

At one point I was in a meeting with a man who was making $500,000 a month. It was a private board meeting with several men who were all making a lot of money, and they were sharing ideas. I thought it was an invitation to share ideas, so I piped up and said, “Hey, listen, I have an idea.” He slammed his hand on the table and said, “You are so stupid.” My blood started to boil, but I kept quiet. “How much money do you make?” he asked. “I am just getting started, sir,” I said. “How much money do I make?” “Half a million dollars a month.” “That is what’s wrong with you 98 Percenters,” he said. “You are so busy trying to size yourself up to my success that you’re missing the opportunity to learn from me. If I pay attention to your ideas, I am going to go broke just like you. If you pay attention to my ideas, you have a chance of making half a million dollars a month.”

How do you want to live? It’s up to you. Do not live your life by default – live it by design.

The media sold us the fantasy that buying is the way to be successful and wealthy. The part they did not tell us, though, was the pain, stress, and emptiness “stuff” brings. Or the money and time it takes to maintain and clean the five-bedroom house with six bathrooms. They didn’t tell us about the burden of debt and the stress it causes on a marriage. There is a lot of pressure that goes along with keeping up with “the Joneses.”

Here is a real easy rule of thumb for success and creating wealth. Find out what everyone else is doing and do the exact opposite. The masses historically are wrong, so go in the other direction.

I have a holistic approach to wealth. True wealth to me is accumulating money without sacrificing your marriage, kids, health, or fun.

I have discovered three things you need to know about money: • How to make it and more of it • How to keep it • How to turn it into your slave.

Money is always looking for a place to go. If you do not direct it, your money will get sucked into department stores, grocery stores, and the Internet. It will be sucked into those companies’ bank accounts instead of remaining in your bank account.

Will you be part of the 98 percent who are dead or broke at age sixty-five? Or part of the 2 percent who are living a wealthy, successful, favored life?

So what is your specialty? Is it gossip? Do you specialize in excuses? Sports stats, collecting fashion magazines, junk food, watching TV, Tweeting? Your specialty is where you spend your time. Unfortunately, 98 percent of the population spends its time specializing in things that don’t lead to wealth or happiness.

When you are an entrepreneur, you get paid for results. You do not get paid for time wasted with unproductive feelings.

Desire always reveals design and destiny. An eagle was designed to soar, and it has the desire to soar. The eagle was perfectly designed for it to soar. It was not designed like a chicken. It doesn’t have the desire to cluck around on the ground with a destiny of being deep-fried. Its destiny is soaring. Is the baby eagle designed with a skill to soar? Absolutely not. The baby eagle has to get on the momma eagle’s back and the momma eagle takes the baby soaring. Then the momma eagle tilts her wings and drops the baby off her back. That baby eagle flutters and, I am sure, has a heart that pumps incredibly fast. It works hard, yet it does not soar. It sinks fast in the air. But have no fear. Momma eagle swoops down, lifts the baby onto her back, and then soars up. She tilts her wings and lets the baby off her back again. She does this repeatedly, day after day, until the baby has the skill to fly.

Ego Keeps You Broke, Ego will render you broke for the rest of your life. Ego says, “That is not me” or “Gosh, I would never do a business like that” or “What would my friends think if I was doing something like that?” Ego says it is everybody else’s fault and takes no responsibility. Ego focuses on everybody else’s failures and not your own. Ego wants somebody else to pay for how you feel and somebody else to admit they were wrong.

Make a commitment to stop hurting people and to be someone who is building people up and creating good relationships. Be a source to other people. Be part of a rare breed of people who is achieving success and wealth while honoring others.

Why is it impossible to succeed without the Law of Forgiveness? Because there is one guarantee in life: We are going to face troubles with other human beings. So to succeed in life, in relationships, or in business, you have to know how to deal with people.

I had that sick feeling that I was supposed to do something I did not want to do. I knew it was the thing I was supposed to do, but I did not like the answer. I had to weigh my ego against my bank account. Desperation was not going to afford me the luxury of spending a year looking for the right business. I wanted desperately to be no longer homeless or a failure. I needed to change my life.

If I had ignored that weight-loss box in the back seat of my car and searched for something else to do, I do not know where I would be today. I am so glad that I was desperate and did not have time to be picky or to “find” my passion. I did what was in front of me, working with excellence and diligence. It was clearly worth it!

Then I had heard a voice say, “If you can be faithful with what I have given to you – Hans and the kids – then I will multiply your efforts.”

I have a question for you. Where is your focus today? When you are sitting at your place of work, whether you own the place or you work for someone else, where is your focus when you are at work? Are you answering personal phone calls? Are you texting? Are you Facebooking? Tweeting? Are you searching the Internet? Are you IM-ing – sending instant messages to – friends and forwarding joke e-mails to your office and personal friends? If you are doing any of those things, your focus is split in many different directions and you are not using the Law of Focus to your benefit. You would be amazed at how much more you can get done in your life when you focus.

The Law of Promotion is not just associated with influence and money, but it does correlate with time. If you waste time, you lose it forever. Time is something you never get back again, and it is more valuable than money. If you’re not faithful with your time, your life spins out of control. Your life gets sucked into destruction. Your life gets trapped in an unproductive cycle that destroys your confidence and eventually leads to depression. However, if you are faithful with your time and if you focus, you will be given more.

It is not always the products and services that make people happy. It is the relationship you have with them that makes them happy about being your client. How they feel about it is more important than the product itself. People are not loyal to the products, they are loyal to the people. If they like you, they will do business with you. If they do not like you, they will do business with somebody else.

If you want to be wealthy, you have to know how to sell. But selling is not about trying to get people to like you or buy your products; it is about building relationships and growing your influence. It is about honoring people around you. It is about making people feel valued. Influence is where sales take place.

It is so easy to influence people. It boils down to this simple thing: Give people what they want. What do people want? Everybody wants to feel special. Every human we pass by every single day wants to feel valued. They want to know they matter to somebody. It is easy to gain influence in another person’s life simply by valuing him or her.

Treat everyone like he or she is a friend. This is a very powerful concept. You are happy to see friends and happy to be with them. So if you treat all people with that same sense that you are happy to see them and you like being around them, the same energy is produced as with being with a friend. That is how you should communicate with every person you encounter. Your attitude toward people makes a huge difference. If you are flying on a plane, your feelings toward the airline will be very different if a flight attendant treats you courteously instead of rudely. We have all been talked to in a way that provokes us to give that bossy broad a dirty look and keep our cell phones on. We have also experienced the ones who are sweet and speak to us in a friendly manner, which makes us want to turn off our cell phones. The “Friends First” concept is simple. Talk to every stranger the way you talk to your friends. Be friendly, warm, and inviting. Use the same tone of voice and make them feel comfortable. This disarms strangers and helps them relax and become interested in you.

You can do this by asking questions using something I call FORM. “F” stands for family. “O” stands for occupation. “R” stands for recreation. And “M” stands for message. Asking people about their family, occupation, and recreation is a way to find out what people are interested in and to show interest in them. So get people talking about those three simple things.

When you are FORMing people, you are specifically looking for their SIGN. It’s not their horoscope – it stands for Strengths, Interests, Goals, and Needs.

You should honor, value, and recognize the people all around you, and act in your job as if you own the place and want the people to stay there. It is a natural progression that they will pick you when a management position opens because you are fair and good. You will have gained the people’s favor.

You cannot influence people or get to high levels of influence if your heart is not in the right place. Eventually, the truth comes out about exactly who you are. You will make decisions that will expose who you are, and what you build will not last. Your business will be shaky. You will not sleep well at night knowing you have manipulated people. You will develop a reputation as being untrustworthy and you will have to bribe people – with gifts or money – to be your friends. If you are going to be wealthy, be a wealthy person with an outrageous reputation for treating everyone well, not just the rich and famous or the important people. Be trustworthy in everything you do.

Instead of trying to get something from someone in return, have the larger view of trying to make a difference in the world and in your community. You will be amazed at the outcome and where it will take you.

I expanded my mindset to influence people not for selfish reasons but because I want them to have a better life.

If you have an appointment with a Sapphire, do not expect him or her to be on time. When you get upset with a Sapphire who is late, it is your fault for getting upset. That’s the way they are wired – love them for their strengths. Tell them thirty minutes earlier than you need them and bring your computer so you can get some work done while you wait. You will wait.

Emeralds can be more productive if they remember it is not about perfection, it is about getting the job done with results and testing the results. Why try to learn everything in advance when you may already have a baseline of skill and things you did not have to learn? You wasted time learning some things you did not need to, but if you test the results, you will see the areas where you need to focus.

Rubies always have to have the next step, a goal, or a challenge in front of them. They constantly have to be moving in a forward direction because that is what they were born to do.

The Law of Promotion means to prosper where you are planted. If you show you can be trusted with what’s in front of you, you will be made ruler of much. A lot of people think they will treat people a certain way when they are successful, or they will give to charity when they are wealthy. But you have to treat people that way now, and you have to give to others now. Invest in your job like it is your own company, and that’s how you will get promoted. Turn where you work into something better than it is. Ninety-eight percent of the population thinks they deserve a raise just for showing up. A raise means an increase – and you get an increase by increasing. You have to get better than when you got there, and you have to make it better. You have to make a difference instead of just sucking up oxygen and expecting a paycheck. Ninety-eight percent of the population wants to find a job that they love, but that is not how it works. If you find a way to love your job now, you will be given more. If you cannot manage your current job, how can you manage a bigger one? If you cannot manage your employees now, how can you manage them if your business grows? One of the basic steps to wealth is to take care of what you already have.

That same message has hit me in many areas of my life, from my marriage to my business: If you cannot respect and honor what you have now, and you do not take care of it, you will never graduate to the next place.

You have the ability to change your environment without changing your physical location. Your environment is in your head. It exudes out of your being. Hating your job never opens the vault to blessing, but it will decrease your production. It will open the door for you to gossip about your boss, to going on Facebook, to e-mailing friends, and to forwarding jokes while you are supposed to be working. Hating your job will cause you to avoid your boss and to avoid the people who are at the top and who need to see your good attitude, your good work, your excellence, and your diligence. Hating your job will never help you to become diligent or proficient or to find shortcuts that will help you raise the company’s revenue or to make you more valuable in the workplace.

Ask yourself every day, “How can I increase my value at the job?” This will happen with communication – communication with the boss and communication with other people. Build a foundation of making yourself incredibly valuable to your job, to the boss, to the company, and to clients. Is your boss frustrated with you, or does your boss feel as though he or she could not live without you? You become valuable to your boss if you get the job done and relieve stress for him or her. But it is more than just getting the job done – it is the working relationship. Do not think of your work as just a job, something you have to do. You are a partner on a team, and you want that team to be successful. When the time is right, sit down with your boss and have a frank conversation. First, thank your boss. Second, practice the Law of Value. Ask your boss: Show me, tell me, and coach me on what I can do better on the job to help this company succeed.

Thank-You Notes: When was the last time you wrote your boss a thank-you card? Learn your boss’s personality so you know how to communicate to your boss.

Many employees are trying to focus on twelve things at the same time: answering text messages, checking their personal e-mail, instant messaging their friends, forwarding e-mail jokes to a couple of co-workers and friends, listening to the news, and checking their Facebook page – all while trying to work. When you have your focus divided in all of these directions, you are totally unproductive.

To get a raise you have to raise your value to the company. There is always a way to make yourself more valuable so your boss wants to pay you more for doing the same thing.

I taught you to honor people by FORMing them – asking about their family, occupation, recreation, and message – as well as asking about their signs – strengths, interests, goals, and needs.

The most common question I get is, “Dani, how did you do it? How did you go from homeless to making millions?” My answer is always the same. I decided never to return to being broke again. I decided not to end up like those who had raised me. I decided not to be the failure everyone said I would be. I decided no longer to be the failure I had become.

When you make a solid decision it is always followed by action, and action leads to success.

If I were a chiropractor, I would say to every potential client, “There are a lot of people who are in pain yet not deadly serious about their health. I am just interviewing for a couple of clients who are truly serious about attaining good, solid health to make sure they are going to go the distance with me. How serious are you about getting your back straightened and living a pain-free, healthy life? I am after your long-term health. I want to get you well so we don’t have to see each other very much.” That is turning the tables on the prospect. They are expecting you to sell to them, so don’t. Make them want you instead. I was no longer selling. I was interviewing, and that’s how you have to think if you are marketing something. You have to interview instead of sell. Selling causes people to guard their wallets. Interviewing causes them to impress you and tell you why they need you, versus your having to tell them why they need you.

There is a philosophy out there of finding something that’s within you, what you would like to do. If I had followed that line of thinking, I would still be homeless. Did I like sales? Heck no. Was I good at it? No. Was it one of my natural-born talents? Oh, my gosh, no! What were my natural-born talents? I didn’t have any!

You do not have to love what you do. Start where you are.

Do something that makes a profit. Or find somebody else’s profitable idea and do that. For example, housekeepers are a dime a dozen. What could you add to make your service a little different from every other service in the area?

Some people go in and out of being teachable. Most people start off unteachable. They say, “I’ve got it all figured out.” But it takes failure to bring people to a place of being teachable. And usually then they only stay teachable until they have a little bit of success. Once they have that little bit of success, they figure they have the rest dialed – until they fail again. So they go on this rollercoaster – and some never get off the rollercoaster to be teachable.

Entrepreneurship is people and finance.

Financial pressure is not a great way to start a business for most people. Some of us can do it. Sometimes it is the financial pressure and the squeezing out on all sides that makes you desperate enough to drop your ego and do whatever it takes to be able to make money. But if you are spending eight thousand dollars a month, you are not there yet because you will start a company and spend the same way you do now.”

This process is the pathway to bigger profits. It has three simple steps: increase exposure, increase conversion, and increase scalability.

Testimonials need to be short, quick, and to the point. They need to be about the results of the product/service and the problem that has been solved for your clients who use it.

You cannot have the attitude that just paying them is enough because people care more about recognition and approval than money. Edifying them makes them feel special and important, and that means more to them than the actual paycheck they receive.

As an employer and would-be employee-preneur, it is also important for you to have systems in place that reward others for their efforts. You want to be able to pay your people well and to have a bonus structure in place that will help motivate your internal team.

I had a massive awakening. My things had consumed my life and I hadn’t even realized it. I saw that I was crippled by greed. I was a slave to money and a slave to recognition. I had grown up in poverty and although I had made millions of dollars, I still had the poverty mentality, which spends everything that is made – and for what?

Wealth is accumulated and then passed down for generations to grow the wealth even bigger. I was accumulating stuff instead of wealth. You kick poverty when you are able to keep the money. It has nothing to do with how much you make. It has everything to do with how much you spend.

Do not pass down debt to your children who will pass it down to their children. Instead, choose to pass down wealth, which is what I believe you were designed to do. Choose to give them the gift of wisdom of accumulating wealth and understanding how money works and the freedom that it brings.

You were designed with wealth in mind. We know that to be true because the Law of Desire states that if you have the desire for wealth, it is because you were given the design to have wealth. You bought this book, First Steps to Wealth, because you have a desire to become wealthy. When the Great Designer put you together, he did so with all that I showed you in Chapter 1. The desire is not for stuff; it is for freedom.

Your monthly income is supposed to grow something, just like a seed, but most people live from paycheck to paycheck, which means they are eating all of their seed. They have nothing to plant and grow. Your seed is supposed to reproduce itself. It is not supposed to be all eaten. But instead, people spend their money on cell phones, televisions, food that goes to waste, and clothes they do not wear left hanging in their closets with tags still on them.

Another question, how did we ever get suckered into financing a depreciating liability?

Ninety-eight percent of the population has lived under a false sense of wealth because we can afford to waste money.

Only 2 percent truly understands wealth. Ninety-eight percent of the population will eat all of their seeds. Money is seed. It is supposed to multiply, and it cannot multiply if you are consuming all of it. You have to stop being a consuming human being and start being an income-producing human being.

Do you know what happened to the money you made in the past five years? Two percent of the population knows exactly where the money goes. Ninety-eight percent of the population doesn’t have a clue.

You have been allotted a certain amount of money every single month. You exchange your skill for that money. This money is the financial territory you are in charge of governing. Let’s say your allotment is two thousand dollars a month. If you are faithful with that two thousand dollars a month, then it is going to good use and you are multiplying the money. When you are multiplying the money, you will be given more financial territory to govern. But if you spend all you make every month, you will not be given more territory. You have to be faithful with the two thousand dollars a month to get four thousand dollars, to get six thousand dollars, to get ten thousand dollars, and to get a hundred thousand dollars a month. Once you realize that this is the financial law and you start playing by the rules, you will start gaining more financial territory and accumulate wealth.

Two percent of the population knows exactly where the money goes. The other 98 percent hasn’t a clue.

The 98 Percenters use credit cards to buy stuff, whereas the 2 Percenters use credit to build wealth.

If you are financially independent, you can have the big house or five Lamborghinis if you want. Live the life you want to live. But if you are in debt, you do not have the right to be shopping at the mall every week.

Your debt-free lifestyle is in your pantry, closet, and garage. You have the money for a dream vacation, but it is wasted in small things.

All debt is based on greed. Your mortgage is also a type of debt. As I said in the last chapter, your mortgage is making the bankers rich, while you are enslaved in debt, paying interest.

Give a dollar for every ten dollars you make, and your needs will always be met. The wealthy use this principle.

Debt is evil. When you have debt, you become a slave to money.

The impoverished spend their money on stuff. Middle-class people spend their money on what they think are assets, but it is really just stuff. The wealthy invest their money on income-producing assets.

Invest in what you know. Investing is all about risk; it is all about calculating and running your numbers. It is about learning new skills.

Do not buy according to ego, but according to what is wise. Buy below your means, not above. Buy an older, small two- or three-bedroom house and rent it for almost double of what your mortgage will be.

I only possess the skills I have because He wrote how to get them. Everything I have talked about in this book came from the Bible.

When I finally came to God, I realized I had been practicing a lot of His principles already, and I did not have to be a pastor to do God’s work. I decided to read the Bible and seek the answers myself. I learned that Abraham was a wealthy businessman, not a pastor or an evangelist. Isaac was also a wealthy businessman, and Moses was a politician and judge. He was not a pastor as we see pastors today. He looked and dressed like an Egyptian and I believe he had tattoos. He would be harshly judged today by many churches in the world that care more about their rules of how to dress and how to look like a “good Christian” than they do about what the Bible really says. Joseph, a former slave, learned how to become an architect and business manager. He managed laborers and did engineering. He was an excellent administrator and had some incredible accounting skills. He was not a pastor. He too looked like an Egyptian with tattoos, short skirts, a wig, and eyeliner. He looked so much like an Egyptian that when his brothers saw him after being separated for many years, they did not recognize him. They thought he was the Egyptian ruler, and in reality he was. These famous men who have been talked about for thousands of years were not the heads of a modern church -those structured buildings and organizations did not exist then. God used everyday average people with professions in the marketplace to develop a people, and He raised up an army that would impact people’s lives for the better. David – the apple of God’s eye, the one God promised that He would establish His kingdom forever – was a political leader, singer, songwriter, military leader, and businessman.

It is almost like your timeline gets synced with God’s. It is the right whisper in your heart at the right time. It is the right voice in your head that gives you the exact answer you were looking for. That voice speaks to you when you train yourself to listen to it and obey. That voice wants to bless you so much that you fall to your knees and thank Him for everything He has done.

Your business and work are also ways to impact people’s lives. What kinds of seeds are you planting there? What will people be saying about you fifty years after you are gone? Will they even know who you are?

Although Hans and I make money in our businesses, our business model has always been about helping other people. We are making a difference not only with our staff and our employees and their families, but also with our clients.

You will never be able to convince your family that your crazy ideas or your new mindset is the way they should be thinking. It is like a crab that is trying to get out of a bucket, and the rest of the crabs try to pull him back down. Some are jealous; some are scared for you – they are overprotective because they do not want you to fail; and some maybe have an inkling that you might succeed and your success will make them look bad. Whatever their motives are, none of that really matters. What matters is this: The only thing that determines success is results. So do not try to convince your friends and family to dig into all of this information and to buy investments or start a business. Get results – they speak louder than anything you can say. When your friends and family see your results, they will be begging for you to show them how. That is how you will get their attention.


Summary: The Richest Man in Babylon

The Richest Man in Babylon - George Clason
The basic principles of effective money management are: Save at least 10-percent of all that you earn for an investment fund for the future. Learn to live on 90-percent or less of your income. Invest your accumulated capital into projects that will provide a safe, steady income, taking full advantage of compounding of the interest received. Invest only in areas in which you have expertise or with people who are experienced. Buy the house in which you live so you don’t waste any money on rent. Have a realistic insurance program Always keep working at various ways and means of increasing your income.

Anyone who is struggling under the burden of debt lacks any ability to think rationally, and to accumulate wealth. It is much more productive to take positive action and get out of debt before embarking on any program to accumulate wealth.

People create their own luck by the level of work and commitment they put into a project.

Money represents success only through its ability to provide freedom to do things. It is not an end in and of itself – only a means to an end. The possession of sufficient amounts of capital makes possible the enjoyment of the very best services and goods the world has to offer.

‘‘A man’s wealth is not in the purse he carries. A fat purse quickly empties if there be no golden stream to refill it. Arkad has an income that constantly keeps his purse full, no matter how liberally he spends.’’ –Kobbi

The key principle at the very foundation of any program designed to generate wealth is at least one-tenth of all that a person earns is theirs to keep.

Anyone with a desire to accumulate wealth and put it to good use requires two things:

– Time. All men actually have this in abundance, but only a few put it to use making themselves wealthy. Instead of looking for constructive, useful ways to apply the resource of time, many people fill their lives with diverse activities which simply help them to pass the time.

– Study. There are two kinds of learning that are useful to anyone seeking to generate wealth – learning about specific subjects and learning how to find out what is not commonly known about any topic. Both kinds of learning are useful and valuable.


There are several basic principles which apply to the acquisition of wealth:

  • Live on less than you earn.
  • Seek advice from those who are competent to give it through their own experiences.
  • The accumulation of wealth moves forward much quicker when a person allows the effect of compound interest to work in their favour. Instead of frittering away the interest received on capital accumulated, put that interest out to work in other projects which have the potential to earn additional income.
  • The accumulation of wealth should be an exciting and adventurous project rather than a source of misery. Make the journey into an adventure and start enjoying that now,
  • Life is full of many good things which are worthwhile and good value for money. Don’t become so focused on saving that you miss out on all the good things there are to enjoy along the way.

‘‘Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed, the sooner the tree shall grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner you may bask in contentment beneath its shade.’’


  1. Start thy purse to fattening
  2. Control thy expenditure
  3. Make thy gold multiply
  4. Guard thy treasures from loss
  5. Make of thy dwelling a profitable investment
  6. Insure a future income
  7. Increase thy ability to earn

While it is highly satisfying to have a regular savings program, this is just the start of a wealth accumulation program. The trick is to put that gold out to work in other projects which will generate additional earnings. A key to any man’s wealth is the establishment of an ongoing income stream which can generate wealth irrespective of any other factors. In this regard, capital reserves accumulated through savings should be applied to other profitable projects.

The ideal characteristics of an investment are that the principal is safe, it can be reclaimed whenever required and it earns a fair rental.

THE FIVE LAWS OF GOLD The five laws of gold are the secrets of success which separate wealth builders from all others.

  1. Gold comes greadily in increasing amounts to any person who will save not less than one-tenth of their earnings to create an estate for the future well being of their family.
  2. Gold labours diligently for the person who wisely selects a profitable way to apply it.
  3. Gold clings to the possession of the cautious investor who seeks the advice of people with investment experience.
  4. Gold slips away from the person who invests in business fields which are unfamiliar or which are not used by those without experience in investments.
  5. Gold flees the person who forces it to try and generate impossible earnings or who follows the advice of tricksters or confidence men, or who trusts it to his own inexperience and romantic desires in investment.

THE GOLD LENDER OF BABYLON In the field of investment, it is far better to have a little prudent caution than to end up with nothing but regrets. Whenever a person starts to accumulate wealth, they will be beseiged by people who are anxious to use that money in their own endeavours. Out of the proverbial woodwork will come numerous projects and proposals, all with the common aim of separating the possessor from their capital. There are several things to avoid when considering any business proposals: Some of the most persistent people seeking funding usually are close family members. Most of these projects will turn out to have only a marginal chance of succeeding at best, and more likely most projects will have virtually no likelihood of success at all. Even worse, if you invest in a family member’s project that does not succeed, the borrower will resent you even more. It’s a no-win situation that should be avoided at all costs. The safest loans are made to people who have possessions far outweighing the value of the loan required. In this situation, the lender can act secure in the knowledge that other assets can be sold to repay the loan if required. People in the throes of great emotional upheavals rarely make good investment decisions. Avoid them. People who borrow for successful business projects tend to be absolutely prompt in their repayments. People who borrow to repay money lost through their indiscretions rarely make a habit of promptly making repayments. Merchants who have knowledge and experience in their field of trade make excellent credit risks. By financing the business activities of these merchants, wealth is generated for the entire city. Capital reserves have a way of slipping away from anyone unskilled in applying it wisely. Therefore, first seek security of the principal when evaluating any investment proposition. Next look for safe, dependable and steady ways to make the capital increase.

The person who spends freely and lives beyond his means sows the winds of needless self-indulgence from which he is sure to reap trouble and humiliation.

Anyone who is struggling under the burden of debt lacks any ability to think rationally, and to accumulate wealth. It is much more productive to take positive action and get out of debt before embarking on any program to accumulate wealth.

‘‘That man who keepeth in his purse both gold and silver that he need not spend is good to his family and loyal to his king. The man who hath but a few coppers in his purse is indifferent to his family and indifferent to his king. But the man who hath naught in his purse is unkind to his family and is disloyal to his king, for his own heart is bitter. Therefore, the man who wisheth to achieve must have coin that he may keep to jingle in his purse, that he have in his heart love for his family and loyalty to his king.’’ –Mathon

People who work hard tend to attract the company of other people who are also industrious. This, in turn, leads to other associations and creates other opportunities and business arrangements.




Money Secrets of the Amish – Lorilee Craker

Money Secrets of the Amish - Lorilee Craker

Use it up, wear it out, make do, or do without.

To pay someone on time is an extension of the commandment “Do not steal”, if it is due on the tenth and you pay on the fifteenth you are stealing that man’s money for five days.

Without a stash of money set aside, there is nothing standing between us and very stressful times.

P.T. Barnum: If you have money saved in the bank, you will wake up richer every morning than you were the night before.

P.T. Barnum: Money is in some respects life’s fire: it is a very excellent servant, but a terrible master.

P.T. Barnum : As a general thing, I have not ‘duped the world’ nor attempted to do so… I have generally given people the worth of their money twice told.

P.T. Barnum : No man has a right to expect to succeed in life unless he understands his business, and nobody can understand his business thoroughly unless he learns it by personal application and experience.

Early Retirement Extreme – Jacob Lund Fisker

Early Retirement Extreme - Jacob Lund Fisker


In real life, the prisoners of Plato’s Cave are those who are prisoners or slaves to their wages and their culture.  A wage slave is a wage earner who is entirely dependent on their wages.  While the wage slave is free to leave the current job, he is not free to leave the job market altogether and he can likely not imagine the possibility of doing so.  He is still entirely focused on the wall.

The wall shows other people not as who they are, but as what they own.  There goes a man in his new sports car, what is not seen is that the car is bought on credit and the man is stressed because he is having trouble making the payments.

Wage slaves have jobs where they can go and spend their most productive hours writing high powered memos so they can be more productive, while other people spend their time ignoring memos so they can be more productive too… … This endless working and playing is called “making a living”, yet people are so busy “making a living” that they have no time for living.  A wage slave is a person who is not only economically bound by mortgages, loans, and other obligations, but is also mentally bound by an inability to perceive that there are other options available. Like the prisoners in Plato’s cave.  Their chains are not physicals; the chains are mental, which in some sense makes them worse because it turns the prisoners into their own prison wardens.

Is spending the most productive years of your life chained to the job market to collect a lot of rarely used stuff that gathers dust in the closet or takes up space in junkyards a wise choice?  Were you really born just to die, leaving a large pile of discarded consumer goods? I realize that not wanting a house full of things makes me look weird and even “unpatriotic”.  After all, more is better and who does not want to be better?   But perhaps conformity is not the only way to live.  In fact, by taking the other end of the bargain, saving as much as other people are spending on wants, it is possible to retire and lice on invested savings after just 5 years of full time work.  Rather than increasing the amount of work to acquire more stuff, reducing this superficial need reduces the amount of necessary work.  It is possible to reduce the amount of work all the way down to zero: financial independence.  Indeed, playing the shadow game for five years provides a permanent way out of the cave!  Alternatively it is also possible to return to the cave for a few months every year to earn money for the next adventure out of the cave.

The resulting freedom could be used on personal projects such as reading books, visiting places, entertaining, exploring, cooking, learning, and experiencing.  It can also be used to start businesses, engage in a second career, etc without worrying about having to support oneself.

We have come to a point where spending money is one of the few recognizable signs of success.  For instance, spending half an hour in a traffic jam getting from A to B in an expensive car is considered more successful than spending half an hour in a traffic jam getting from A to B in a cheap car.  I am not sure why that is.  Even more puzzling, both of these are considered more successful than spending 25 minutes getting from A to B on a train, or spending 20 minutes on a bicycle from A to B while passing cars.

Similarly, it is considered more successful to sit on a couch in your home, if there is an additional unused couch in an additional unused room, compared to a house with no unused couches and no unused rooms. In the real estate market, a house with a greater potential for unused rooms generally commands a higher price than a house with fewer but constantly used rooms.  Perhaps there is personal fulfillment to be had in cleaning and maintaining a larger home? Or perhaps the fulfilment comes from paying someone else to do it?

Recently much attention has been paid to great kitchens and great kitchen appliances, while less attention is paid to great cooking and great cooks (except those on TV).  Why boil eggs in a pot when there are 350 varieties of electric egg boilers available?  A common misconception is that money is better or more successfully spent on granite countertops and restaurant strength food processor and burners than on cooking classes and practice.  Who has the time anyway?

This behaviour is pervasive.  People with more money than time buy $3.000 road racing bicycles with ultra light carbon frames to shave 2 pounds of the bike, regardless of the fact that they themselves are probably 10 pounds overweight, and only take a slow ride once a week.  Compare this to the amateur enthusiast with more time than money, who rides every day and thus has the power to ride his much less expensive bike much faster.  Who enjoys more?

For recreation, many believe that saving for a year to drop a large sum on a hectic one-week vacation in an exotic locale is more recreational than staying closer to home and taking a month off to relax.  A hectic tourist experience is considered very successful.

All debt comes with a contractual obligation of repayment, which is usually structured to last 30 years to minimize individual monthly payments, but definitely not to minimize the total number of payments which is maximized by increasing the maturity of the loan as much as possible.  If the maturity is extended in perpetuity, the interest payments become similar to rent (this is rent for loaned money you will have to return anyways).  If the only means of repayment is a job, this means that working must also last 30 years.  This way a single decision just after leaving school turns out into a lifelong commitment that is very hard to escape, given that the borrowed money has been spent into increasing consumption rather than into increasing production.

Salary men have options, but they do not create options. This linearization makes them predictable and subject to indirect control.  This control is exerted by providing a choice within a narrow range.  “You can choose between the following three models of cookie-cutter homes.  You should not modify them or your resale value will be impaired”, “You can chose  between the following two political candidates, you should not vote for others or your vote will be wasted”, “ You can chose between the following 25 heavily advertised breakfast cereals, but don’t think of starting your day with anything but breakfast cereal”, “ Chose the size and type of your TV and the number of channels, but don’t consider not watching TV, or you might miss out”. This gives the illusion of freedom while retaining control.  Wage slavers can choose to change their job, but they are not free to quit their job.

Few people pay cash anymore and “financial success” depends on being good at managing debt.

While the lack of a steady pay check might seem risky, it is actually safer as the working man has been conditioned to the situation of having to find new jobs he actually thinks of them as clients rather than employers, and thus considers it normal. A salary man is rarely without a job, but when he is, it is a high stress event, almost like a death in the family.

Many people spend more time maintaining their homes or their car than the time they spend maintaining their health.  Too many forget that they live in their body first and in their home second.  After all, where else are you going to live? Hence, taking care of the body should be the priority before taking care of the rest of the world.

Financial skills are important.  In particular, they become increasingly important for anyone who accumulates more and more assets.  It’s strange how specialists gladly spend a great deal of time perfecting their skills to pursue a five percent raise, while at the same time there is a fatalistic tendency to accept whatever investment strategies are currently fashionable on Wall Street when it comes to generating passive income.

Focusing on utility rather than consumer products or instructions is a key tactic.  Success is then redefined from accumulating and consuming the maximum number of products or the most expensive products to deriving the maximum utility.

You must be willing to change your frame of mind and conquer old habits.  In particular you must be willing to do things that 95% of the population won’t be able to understand and 99% won’t be willing to do.   Freedom is attained by creating a large gap between production ( revenue ) and consumption ( expenses ). This can be done in two ways: earning more or spending less. Nothing new there.

Giving up wants can be as though or easy as going on a diet, giving up smoking, or changing other habits dependent on strength of character.  However, doing without is often thought of as a sacrifice, especially when strongly attached to material comforts.  It is quickly realized ( about a month ) that happiness does not stem from being surrounded by possessions, but that being surrounded by them is the result of an addictive habit.  Thus, it can be tremendously liberating to not “need” something to be happy.

Notice how possessions tend to increase and expand to cover all possible closet and storage space.  Sooner or later the house will feel cramped with clutter.  This happens when storage becomes inefficient and more and more effort has to be put into playing Tetris with your stuff.  At this point consumers start talking about the “need” for more bedrooms.  These bedrooms are costly.  Not only are bigger houses more expensive; they also come with higher property taxes.  Its traditional to heat the entire house to 19 C, in other words, money is paid and gas is burned to make the possessions as comfortable temperature wise as the inhabitants.  Interestingly, storage costs are related to volume and not the price of what you are storing, transportation ( and often environmental ) costs are typically related to weight. As consequence, I consider not only the price, but also the volume and mass when I buy something.  The costs manifest mainly as real estate costs, that is, paying to put your stuff somewhere, and if you put it in your main residence and subscribe to central heating, the cost of keeping it at a comfortable temperature.  Stuff is also hard to transport, so having a large amount of stuff makes it difficult to move ant therefore it acts as an anchor on your mobility.

I don’t own anything tangible that would be heartbreaking to lose or which has substantial replacement costs.  The sum total of my possessions, including my residence, would cost less than 10% of my net worth.

Price might be higher if it leads to a lower ownership costs.  Ex 30 dollars shoes that last a year, VS 100 dollar shoes that lasts 5 years, VS 50 dollar used shoes that lasts 3 years.  Annual cost= ( your costs – used costs ) / Years in service. ( to lower the annual cost the item might be sold at the end, that is why we have “used costs” in the equation ).

The idea is therefore to seriously consider whether your current living arrangements are optimally aligned with your liberty and pursuit of happiness.  Is your money best spent on an extra bedroom or five years of freedom?.

Children naturally try to emulate their parents, at least in the early years, and for the most part a child’s values are a direct reflection of his parent’s, either conformingly aligned or diametrically opposed.  Traditionally parents have played a large role in their children’s upbringing.  Through watching and emulating, children learn life skills such as respect for others, the virtue of doing chores or performing a day’s work for a day’s pay, balancing a check book or keeping track of money, how to judge value, how to get good deals, eat inexpensively, cook a meal and do dishes, bake bread, clean, de clutter, ride a bicycle, tend a garden, hang up a shelf, or fix a plugged drain.  However, as people have increased their expenses, households now require two incomes, and thus, as it so often goes in out rime, parents have outsourced their children’s upbringing, and possibly taking a lesson from their own situation as wage slaves, they now act as managers of their children’s lives and careers rather than as role models, signing them up for extracurricular activities that are so very important for their resume to get into their dream college.

If new loans are the only way to raise cash, because all existing income goes towards bills and cost of living, and new loans are not available because credit has been maxed out, then a sudden need for cash ( for instance to fix a leaky roof, or any other emergency ) is a serious problem.

As our productivity has gone up, we have increased the size of our homes and filled unused rooms with unused purchases, which just wait to be thrown out or given away.  We are surrounded by the inedible landscapes of lawns and asphalt.  We have moved away from work and the market so we can waste time driving there, and money on maintaining our multiple cars.  In our spare time we waste time watching TV, waste our bodies eating junk food, then waste money treating the results of those habits.  These behaviours make no one better off, except those who sell the enabling products, who, as mentioned above, are often ourselves.

Think of health as wealth, the wealth that matters the most, and being wealth, its usefulness lies in its ability to serve as an asset in our lives.  The healthier the life, the better the life.

There is an absolute standard of fitness. To be fit is to be able to drag or carry an unconscious adult out of a burning house on one, maybe two gulps of air.  To be fit is to be able to fight and defeat anyone who can outrun you and outrun anyone you can’t defeat.

The staples are: ammonia, baking soda, borax, chlorine, soap and vinegar.  Just remember to never combine chlorine and ammonia.

On a parallel note, the US used to be known for its auto companies.  Today, some of the biggest industrial companies are in the business of selling junk food and cholesterol lowering drugs.  Food for thought?

Voluntarily stepping out of the consumer cycle and saving enough to replace one’s job with investment income instead of working is not “normal”.  The great majority of people do neither, and those who do one almost never do the other.  Anyone not consuming as much as possible tends to do so out of external necessity and thus does not have savings to invest.  Anyone investing for income tends to have plenty of money and thus consumes at an average if not above average level.  There are a few doing both, most do neither.

On the other hand, it is possible to find other people pursuing frugality as well as people interested in investing.  If you prefer to avoid confrontation, keep allow profile with it comes to this area of your life.  Don’t mention that you also happen to manage a six figure portfolio to your “voluntary simplicity” friends and don’t mention that you only have one bedroom to your investment friends unless you are prepared for the resulting discussion.

The golden rule of volunteering is that the volunteer gets to do it his way.  If you want to eat better for less, volunteer to cook.  If you want to save money on cleaning supplies, start making them yourself.  This takes leadership abilities, but if not you, then who?

An investor is a person who lives from his assets.  For an investor, the start of financial independence includes a strong vision of one day creating a metaphorical forest and living harmoniously with the forest.  It starts by planting seeds.  These seeds grow into saplings and the mind starts connecting the vision to the upcoming reality of a mature forest.

P=401p  ( using a conservative rate of return of 3% ) This means that each $1 dollar a month not spent is equivalent to reducing the required fund size by $401.  For example, the cost of a $20 cell monthly payment might seem inexpensive to someone earning $15/hour, but with an asset based income, it actually represents $20 * 401 =$8020, which represents over 4 months of work at the given hourly rate.  P =(aprox) 12 ( because is a monthly exp ) *p / interest ( interest 0 – 1 )

Los Secretos del Hombre mas Rico del Mundo, Carlos Slim

Los Secretos del Hombre mas Rico del Mundo, Carlos Slim

Los Secretos del Hombre mas Rico del Mundo, Carlos Slim

Creo que la pobreza no se puede enfrentar a través de dádivas No puedes luchar contra este flagelo mediante donaciones deducibles de impuestos o con programas sociales. La pobreza la enfrentas solo con buena educación y con puestos de trabajo.

Como regalo de bodas Slim recibió un millón de pesos de parte de su mama, patrimonio con el cual compro un terreno en Polanco. Según la costumbre libanesa era para construir la casa de la nueva familia. Pero la nueva pareja concibió una variante de esa tradición: construyeron un edificio donde ocuparon un piso y rentaron los otros departamentos.

*** El secreto de este moderno rey Midas para hacerse multimillonario surgió de su admiración por la filosofía de algunos grandes financieros como Jean Paul Getty, Benjamin Graham y Warren Buffet.

Slim asimilo las enseñanzas de Benjamin Graham quien sostenía los siguientes principios:

El inversionista debe ponerse alguna clase de limite en el precio que paga.
Mucho mas importante que saber cuando comprar o cuando vender es saber cuando NO comprar.
Nadie le pregunta a un experto como conducir los negocios y su vida… menos la bolsa.

Existen tres ámbitos donde una persona educada debe conducirse como un descerebrado: la religión, la bolsa y las matemáticas En los tres casos no solo “queda bien” considerarse un perfecto ignorante, sino que incluso es de mala educación discutir.

En pocas palabras: El empresario solo es un administrador temporal de la riqueza.

La ocupación desplaza a la preocupación y los problemas al enfrentarlos desaparecen.

“La riqueza es como un huerto. Tienes que compartir el fruto, no los arboles”.

Slim fue de compras en medio de una de las mas severas crisis económicas de la historia moderna mexicana. Esto es, mientras los inversionistas extranjeros y locales intentaban deshacerse de sus activos a cualquier precio, Slim hizo lo contrario: compro empresas de minería, tiendas minoristas, fabricas de cable y mucho mas. Precisamente durante la crisis, construyo el mayor conglomerado económico del país: el Grupo Carso.

“Los malos tiempos son buenos, si sabes que hacer con ellos:  Era el mejor momento, nadie quería comprar y todos querían vender”.

Bajo la óptica de Slim los negocios son simples:

  1. Cuida a tus clientes.
  2. Invierte mucho.
  3. Controla tus costos y tus gastos.

Los diez principios básicos de su imperio, fueron tomados de las enseñanzas de su padre, Julián Slim Haddad:

  1. Estructuras simples, organizaciones con mínimos niveles jerárquicos, desarrollo humano y formación interna de las funciones ejecutivas. Flexibilidad y rapidez en las decisiones. Operar con las ventajas de la empresa pequeña, que son las que hacen grandes a las grandes empresas.
  2. Mantener la austeridad en tiempos de vacas gordas fortalece, capitaliza, y acelera el desarrollo de la empresa, asimismo, evita los amargos ajustes drásticos en las épocas de crisis.
  3. Siempre activos en la modernización, crecimiento, capacitación, calidad, simplificación, y mejora incansable de los procesos productivos. Incrementar la productividad, competitividad, reducir gastos y costos, guiados siempre por las mas altas referencias mundiales.
  4. La empresa nunca debe limitarse a la medida del propietario o administrador. No sentirnos grandes en nuestros pequeños coralitos Mínima inversión en activos no productivos.
  5. No hay reto que no podamos alcanzar trabajando unidos, con claridad de los objetivos y conociendo los instrumentos.
  6. El dinero que sale de la empresa se evapora. Por eso re-invertimos las utilidades.
  7. La creatividad empresarial no solo es aplicable a los negocios, sino también a la solución de muchos de los problemas de nuestros países Lo hacemos a través de las Fundaciones del Grupo.
  8. El optimismo firme y paciente siempre rinde frutos.
  9. Todos los tiempos son buenos para quienes saben trabajar y tienen con que hacerlo.
  10. Nuestra premisa es y siempre ha sido tener muy presente que nos vamos sin nada; que solo podemos hacer las cosas en vida y que el empresario es un creador de riqueza que la administra temporalmente.

*** Me recomendó dos libros, How to be rich de Paul Getty, y Supermoney de Adam Smith.

Todos los que suenan con el éxito quisieran que Carlos Slim les confiara como hizo su fortuna hasta llegar a la cima. Ante esto Slim responde que no hay nada oculto, que su secreto consiste en trabajar, ahorrar e invertir.

Cuando Slim es interrogado acerca de que se siente ser el hombre mas rico del mundo, Slim ha respondido “se trata de un asunto que no tiene relevancia por que no es una competencia, no estoy jugando fútbol Al fin al cabo nadie se lleva nada de este mundo al morir. Sin embargo la riqueza debe ser administrada con eficiencia, probidad, eficacia y sobriedad.

…en ese entorno se destaca la escultura “Los últimos días de Napoleón”, acerca de la cual Slim ha dicho a sus amigos que “esta ahí para que no se olvide tener los pies en la tierra”.

Para los autores de “The Millionaire Next Door” cerca del 80% de los estadounidenses que han logrado riqueza ha sido a través de la acumulación de un dólar a la vez, trazando y siguiendo un plan para volverse millonarios, con mucha autodisciplina, habilidades y sin perder el enfoque de sus objetivos. Lo importante es dar el primer paso, pues el primer millón de dolares es el mas difícil de conseguir.

En todo caso, cual seria su legado?
– “Mi principal legado serán mis hijos. Muchos piensan dejar un mejor país para sus hijos, yo pienso dejar mejores hijos para mi país”.

El investigador, seguramente, querría enlistar los secretos de este guru financiero que lo llevaron a ser el hombre mas rico del mundo, pero encontraría solo uno: negociar de manera inflexible hasta el ultimo centavo.

“Mi padre, me inculco principios morales y de responsabilidad social muy claros. Actuar con la mas estricta moralidad y honradez.”

A finales de 1952, cuando yo tenia 12 anos, y con el fin de administrar nuestros ingresos y egresos, mi papa nos estableció la obligación de llevar una librea de ahorros, que revisaba con nosotros cada semana.

“Si mis hijos hubieran querido ser boxeadores o atletas tendrían que haber competido entre ellos. Pero en la vida real para conseguir tu felicidad no necesitas competir contra nadie?

The Wealthy Barber Returns – David Chilton

The wealthy barber returns - dave chilton


The Wealthy Barber Returns – David Chilton

The price we are willing to pay is based on our assessment of how much value the item will bring in our lives. The problem arises when we have to make the value assessment on products we will use during an extended period of time, such a new car. Those firsts moments are worth a lot of “joy units”. However will you be as exited in three years when your chariot is showing its age? Probably not.

We usually give no thought whatsoever to declining marginal utility when we are contemplating buying something, we assume that our affection will never wane. So the next time you are tempted to make a major purchase, especially an impulsive one, step back, think a year or two out, and then ask yourself “Will I still be as pumped as I am right now?”

“Gratitude is riches. Complaint is poverty”

Dito Diderot “Regrets of Parting With My Old Dressing Gown: or a warning to those who have more taste than money”. “I was an absolute master of my old gown, but I have become a slave to my new one”. Few thing influence your spending decision today more than your spending desitons of yesterday ( like buying a brand new house, then you need new furniture, then a new car, new clothes, etc ).

I fear credit cards… … they allow us to act impulsively on our impulses ( and that is not redundant ). They also help us create those impulses by making us less sensitive to cost. Even those who fully pay their credit cards every month, many overspend.

Banks are a business, and like any other business they sell something. In their case the something is money, technically they are renting their money to us.

Your bank’s metric for debt affordability and your metric as the prospective borrower are very different, or at least they should be. All the bank calculates is whether you can make the monthly payment, based on your income and debt servicing. You on the other hand, need to determine whether you can make all your loan payments while still funding your retirement programs, perhaps doing some saving and – not unimportantly – having a life.

Your bank’s efforts to load you up with as much debt as you can service is often not in your best interest.

Too much available credit often leads to too much unaffordable spending, and stress, lots of stress.

I have friends who treat their LOC like a second income. “I’m glad our kitchen is so nice, it’s just too bad we cant afford food”.

Almost every financial planner tell us that there is a difference between good debt and bad debt: first house, good debt. Outdoor furniture, bad debt.

“Good Debt” should be defined as any money borrowed to buy an appreciating asset where the cost of servicing the loan doesn’t affect your ability to save to the appropriate level AND where the principal will be fully repaid before your retirement. Bad debt is everything else.

Cashtration: The act of buying a home, which renders the subject financially impotent for an indefinite period of time. A lot of Canadians have been cashtrated and they were their own surgeons, with the banks only too happy to pass the scalpels.

The problem with stretching to the max to buy a house is not the oversized mortgage payment. It goes way beyond that: The higher property taxes, the higher utility bills, the higher maintenance costs, also our new neighbour Diderot ( See above ).

Stretch to buy a house and you will inevitably stretch to buy your furnishings, appliances and even your driveway decorations ( ie cars ).

*** Two of the finest minds in personal finance, Charles Farrell ( your money ratios ), and Thomas Stanley ( the millionaire next door ) argue that overspending on one’s home may be the single biggest inhibitor to achieving financial independence.

Financial types like me love to focus on wise savers, but there are wise spenders out there too. They view their expenditures as investments and seek the highest available return, not measured in dollars or percents, but in joy.

The best way to be prepared for an emergency is to consistently live within your means and keep your debt levels well under control.

Judicious shoppers often “re frame” the cost of an item by figuring out how long they would have to work to earn the money, post deductions, to buy it. This also makes them more aware of an important concept: When we buy something we are really spending time, not money.

Leonardo da Vinci one wrote “Simplicity is the ultimate sophistication”. Keep it simple and get out of your own way.

More Than Enough – Dave Ramsey

More Than Enough - Dave Ramsey

I have realized that the lessons money teaches us are no only financial, they are spiritual; they create new character qualities; and they will improve your relationship with your spouse, family, and loved ones.  After more than five thousand hours of answering financial questions on “The Money Game” I have seen again and again that money is just the method that the Great Teacher has chosen to expose and correct our flaws as well as give us “ataboys” for a job well done.

Do you feel like I am going overboard?  I’m not if you want excellence in your life, relationships, and finances. You see, if you want uncommon results you have to think and do thinks that are uncommon.  If you want things you have never had, you have to do things you have never done.  Vince Lombardi said “The quality of a person’s life is in direct proportion to their commitment to excellence, regardless of their chosen field of endeavour”.

Albert Schweitzer said: “Man must cease attributing his problems to his environment, and learn again to exercise his will, his personal responsibility”.  Enough whining, I am sick of whining… Whining is a sign of lack of character on your part.

When bad stuff happens resist the human urge to blame and instead join the elite group called the doers.

I have had she-bears get violent with me for suggesting that purchasing $178 tennis shoes while the electric bill is not paid is stupid.  There is an old Danish proverb that says if you give a child everything he wants he cries and a pig everything he wants when he grunts you will have a fine pig and a sorry child.

James Baldwin says that children have never been very good at listening to their elders, but they have never failed to imitate them.

Ready for a test?

  1. What missing or twisted value has been holding me back?
  2. What could I do this week that would give me more connection to my spouse, my child or my best friend?
  3. Are there any ways that I could better show my boss my loyalty tom job and my coworkers?
  4. What activities am I involved in that I could fire myself from that would simplify my life?

Proverbs 9:18 says “Where there is no vision, the people perish” Perish as in die? YES.

The six figure earners all think in five year blocks or more of time. They are very unconcerned about today except for how today is a building block toward their vision, which may not be fully realized for another twenty years.  They think long term in all decisions.  Six figure earners think about the long term implications of every move they make and don’t make those moves unless they move them one step closer to their vision.

Short term thinking is why the poor get poorer.

Vision will make you an investor instead of a consumer; it will make you think ahead five, ten, or twenty years instead of only thinking about today or tomorrow.

Separating your money when you live in a couple only put you in the spiritual and emotional position of separation: You remember, what do you do right before divorce?

Patrick Overton: “When we walk to the edge of all the light we have and take that step into the darkness of the unknown, we must believe that one of two things will happen, there will be something solid for us to stand on, or God will teach us how to fly”.  Hope moves us forward when logic and energy are gone.  Hope is a motivator.

Soup is good for you:  Go to your local homeless shelter and volunteer to serve soup.  Take your mate and your kids with you; it will do the family good to reset the view of reality.

Most folks don’t know what real problems are, and the serving of soup will make you ashamed for having worried about whether there was enough in the budget to gibe Barky the schnauzer a haircut.

*Use a symbol of hope: Be it a light house or something else as a way to raise your chin toward heaven when you lose directions.

Sharon and I have made a pact that nothing major financially will be done without agreement with the other.

So if you are trying to get your wife to share in budgeting and planning you need o treat her with respect.  Try approaching her like this:

  • Honey, I’d really like to have your advice on our budget.
  • We need to think about how we are going to save money, but I cannot do this without you.
  • Our future is important, and both of us need to plan it together.

Andrew Carnegie said: “The average person puts only 25 percent of his energy and ability into his work.  The word takes off its hat to those who put in more than 50 percent, and will stand on its head for those few and far between souls who devote 100 percent”

“What is the first requirement for success?” Thomas Edison was asked. His answer? It is “the ability to apply your physical and mental energies to one problem incessantly without growing weary”. If you get up at 7 AM and go to bed at 11 PM, you have put in sixteen good hours, and it is certain with most men that they have been doing something all the time.  The only trouble is that they do it about a great many things, and I do it about one.  If they took the time in question and applied it in one direction, to one object, they would succeed”.

Focus has the power to create permanent change where nothing else will or can.  You can focus. You can endure anything for a short period of time. Six months, a year, or even eighteen months, compared with the rest of your life it is a very short period of time.  

The mother of more: Momentum.

Voltaire said: “Work keeps us from three evils: boredom, vice, and poverty”.

Work is doing it. Discipline is doing it every day. Diligence is doing it well every day.  Diligence is not just showing up, or just showing up every day; diligence is showing up every day with Excellence.

St. Ambrose said: “Work like it all depends on you and pray like all depends on God”.  Prayer is vital, but God is not in the business of rewarding lazy.

Jim Rohn says: “You will build more wealth if you trick yourself into discipline.  The pain of discipline weighs ounces, but regret weighs tons”

Teach the children: There has never been a child born who gets up every morning, makes his bed, cleans his room and brushes his teeth without instruction.  By removing work from a child’s life you cripple them.

It would be a shame for any of us to have discipline in just one area such as building up wealth and not have the health to enjoy it, the relationships with spouse and family to share it.

Patience is golden because it will increase the satisfaction you take from achieving your goals and desires.  And patience is golden because it is formed from heat much like pure gold is.  To purify gold the goldsmith of old would stoke the fire to bring the gold to a boil, and as the gold boiled the dross, the impurities, would rise to the top. The goldsmith would skim off the junk until he could see himself.  Problems that we face, the heat of life, make the junk come to the surface, and God skims the junk out of our lives until He can look at us and see some of Himself.

A lack of patience causes debt.

Patience is growing up.  Patience knows that one definitions of maturity is learning to delay pleasure.

Patience will cause you to build wealth because you are willing to save and pay cash instead of borrow.  When you don’t have any payments it is easy to save and invest enough to become wealthy in just a few years.

The Goose with the Golden Egg: they were becoming steadily wealthy, then greed kicked in, now they had no goose and no more eggs.

** If you are not listening to your spouse sit down tonight for at least twenty minutes to talk and listen.  Remember to listen even if you don’t care about the curtains she wants to buy.  Chose one night each week when the two of you will forgo TV and listen to each other.  Learn the count-to-five rule.

Try letting the kids plan one Saturday a moth. Yes, you may end up sitting through some activities you’d rather not, but you will not only learn patience, you will also gain years of memories and shared time with your children.

When you have contentment you can easily get out of debt.  When you have contentment you can easily save and invest.  When you are content it changes your giving habits and your relationships.  When you are content it brings an inner strength that will push you into another zone.  You are able to move fast or slow, and you are able to have patience or intensity when you are content.  Contentment is a magnificent personal gift.

Contentment is not apathy and yet we often confuse the two.

What is that causes one couple to be able to prosper on an annual income of $35.000 while the other is heading toward bankruptcy with over $84.000 in yearly income?

*** Juliet Schor in The Overspend American: Research shows that each added hour of TV viewing per week increases the spending by roughly $200 per year.  So an average level of TV watching of fifteen hours per week equals nearly $3.000 extra spent per year!

The Bible says in Proverbs 28:20 “A faithful man will abound with blessings, but he who hastens to be rich will not go unpunished”.  The reason the get get-rich quick folks are punished, usually by losing their riches, is because character is more important than circumstances in the scope of eternity.  Get-rich-quick folks still need to mold their value system into one that can truly find happiness. They are looking for love in all the wrong places, so the punishment is not for the offence off trying to get rich quick, the punishment is a course of correction so that we learn to look for contentment and happiness  where it can really be found.

In order to have deep, abiding contentment in your financial and relationship decisions, you have to reach the pint you just don’t care what “people” think.  I drive a ten year old car with over 150,000 miles on it and I keep it in near perfect condition.

My pastor told me that his father had to walk 6 miles to work, they would come into the home with dust to his knees from the six mile hike, and he would wash and sit down to eat.  Each night they thanked God of honest work.  My pastor said he never once heard them whine about the circumstances.  Where have those men go? Don’t get me wrong, I don’t want to walk six miles to work, but where have those men gone?  Those were people of deep character who understood that not having everything was not the end of the world.

Hate is not the opposite of love, apathy is.

Why does “giving” work in the formula for more than enough? Giving works because you are designed to be a giving being.  Your wiring schematic is built for giving.  You are made in God’s image and He is a giver; so that means in order for you to be all you can be you must be a giver too.  Your emotions, spirit psyche and even your chemistry are changed to a higher level when you give.  When you give creativity is enhanced.  When you give, passion, joy and intensity come to you like waves crashing at the seashore.

After one of my seminars a pastor approached me.  He said that in 35 years of ministering a large congregation he had never had a couple file for divorce who gave their Christian tenth of their income.

When you give you are getting maximum horsepower out of your personal design.  People who don’t give are stopped up.

You are planting seeds when you give and when you don’t give.  If you plant nothing, by default you planted weeds.  If you plant corn don’t scratch your head and wonder why you got corn. The earth and life will return to you what you plant in great abundance.  The sad thing is that most people don’t plant and are real confused as to why they get a great crop of weeds.  You must plant on purpose what you want, become a farmer for life.

“Money is a terrible master, but an excellent servant”.  If you want to be a powerful giver you should view your wealth as the goose and give the golden eggs.  If you give away the goose, the golden eggs are gone, and so is your ability to help others.  Those of you who think “those nasty rich people should be made to give up the wealth they have earned” are not only stupid, your shortsightedness kills the goose, and the poor are not really helped.

Many off the wealthy understand it is not a privilege, but instead a great responsibility to have wealth.

Andrew Carnegie said: “surplus wealth is a sacred trust which its possessor is bound to ADMINISTER in his lifetime for the GOOD of the COMMUNITY

This release of emotional ownership is called generosity.  The folks who are able to emotionally release the ownership of stuff and feel more like managers don’t worry as much.  This release of ownership virtually guarantees that as you build wealth you won’t become arrogant.  It is very hard to be arrogant about something you manage for someone else ( God ). Remember that is the emotional position those who have more than enough put themselves in.

Prosperity may be a bigger test than poverty when it comes to exposing your weaknesses.  Fear, worry, selfishness, and arrogance are all some people get with wealth.  People who get it know that a firm grip on the money is not the path to happiness and fulfillment.  True prosperity is not wealth, it is “more than enough”, which can include wealth, but must include the loose holding of that wealth.


How To Travel The World on $50 a Day – Matt Kepnes

How to travel th the wold on $50 a day
Matt’s page

If your rent it $900 per month, that’s $30 per day, which is 60% of the daily budget set out in this book Add in food costs, gas, insurance and cable, and your set expenses are mostly higher than the number you need for a year abroad.  And that’s before you have done anything else with your life.

Round the world tickets:  Oneworld.  It is the RTW pass you can buy.

RTW alternatives:

The best search engines are those with no affiliation with airlines, and those who make their money on advertising, not commissions:

I highly recommend the site or

Get a travel discount card: YHA, youth hostel association.

If you really need your mail while abroad you can sign up to

There are four major hospitality exchange organizations:

When I am looking for a couchsourfing host, I use the following criteria to ensure the host is legitimate:

  • There has to be a picture with the profile.
  • The profile has to be filled out completely.
  • There should be reviews from other users.
  • Though not necessary.  I like when people have been verified by Couchsourfing.

Last minute hotel deals:

House Sitting:


Service Apartments:

If tap water in your part of the world is not drinkable you can use Steripen the best reference website on Asia.

Southwest Asia booking:  There are not many online resources for booking online, however there are three that are worth mentioning.


The ultimate Cheapskate’s roadmap to true riches – Jeff Yeager

The ultimate Cheapskate’s roadmap to true riches
The ultimate Cheapskate’s road map to true riches – Jeff Yeager

“Please forgive my husband, he has spending phobia”

Conduct your own “what the hell was I thinking” audit each week / month.

Never ever go first when negotiating, always negotiate from a position of nice.  “ Do you have a special discount for nice guys like me?”.  Also “people give to people they like”

Diet based of foods costing 1 dollar a pound?  How much money do you spend demolishing your health with crappy food? Then how much money do you spend trying to repair it?

Uses for vinegar:

The not so big house *****

Would anyone drive a 60.000 car if no one were there to see them in it?

Energy and equity:

Live well without a car… Chris Balish *****

The cheapskate: someone who proudly consumes less and conserves more, because it increases the quality of his own life and the lives of everyone else on the planet.

Good health means good wealth, also there is a strong correlation between good health and good wealth because of the awareness of small errors in judgement.

Once we’re above the survival level, the difference between prosperity and poverty lies simply in our degree of gratitude. —Your Money or Your Life, by Joe Dominguez and Vicki Robin.

If you’re up for a cheap challenge, I’ve posted an annotated version of the official Cheapskate Next Door Questionnaire on my website,, so you can see how you stack up against the cheapskate next door.

You need to do the math and figure out how much something costs based on how long it’s going to last, not based on how long you’re going to keep it before you throw it away.

Amish or not, when the cheapskates next door shop for things like furniture, homes, automobiles, and even clothing, they tend to approach it as an exercise in acquiring assets rather than simply buying disposable commodities.

Julia told me: “One of the most useful ideas I was ever exposed to was the idea that the object we wish to purchase really represents a feeling we want to have. A woman buys clothes so that she can ‘feel’ attractive. We buy houses in certain neighborhoods to ‘feel’ secure … and ‘feel’ respected and of higher status. Once I understood that idea, I was able to break the connection between the object and the way I felt, which opened up a whole world of other possibilities (for getting what I really wanted). If what I really want is to feel attractive, perhaps I can try a new hairstyle, combine my existing clothing in new ways, or buy used clothing at a fraction of the price.”

“It took a while for me to explain to our kids that if a company needs to advertise its products all over the place, there must either be something wrong with it or it’s something that people really don’t need”.

The best way to double your money these days is to fold it in half and put it back in your wallet.

“If you can’t afford to pay for it now, you can’t afford it.”

“That’s one of the primary reasons we don’t own a television,” Wayne Curry told me. “We don’t want our kids to be seduced by all that advertising … The advertisers aren’t just trying to get inside the kid’s piggy banks, they’re trying to recruit our kids against us, so that they’ll try to tell us what we need to buy.”

Toy libraries are often operated in conjunction with existing book libraries, and sometimes they are established as independent organizations. Contact the USA Toy Library Association ( for a directory and more information, or get involved in your local public library and encourage them to add a line of donated toys.

buying them used on websites like,,, and You can also rent textbooks at Always find out the exact International Standard Book Number (ISBN) of the textbook you’re looking for, and go online at to compare prices from various retailers.

Americans are only 5 percent of the world’s population, but we consume roughly 30 percent of the world’s resources.

Unplug electrical leeches when they’re not in use, or for greater convenience attach multiple appliances to a single power strip (like my favorite, the Gem Sound SP-8500) that can easily be flipped on and off. Savings: A 10 percent savings on the average U.S. household electric bill would be more than $120 a year.

Xeriscaping: landscaping in such a way as to eliminate the need for supplemental irrigation (see

Bottled water is 240 to 10,000 times more expensive than water from the tap, usually costing more than $10 a gallon … Think about that the next time you complain about gas prices.

*** Emergency Food Storage & Survival Guide (Three Rivers Press, 2002).


Freecycle Network (see Cheap Shot), but a complete directory of local reuse groups is available on Also check out and the “Free” stuff listed in the For Sale category for each city featured on

Free software ( Free alternative to Microsoft Office. Bill Gates, watch your back, there’s a cheapskate on your tail. Free meals for the kids ( A nationwide directory of thousands of restaurants where kids can eat for free when accompanied by an adult. Free audio books ( Volunteers record books found in the public domain (i.e., no longer covered by copyright), and you can download their recordings from this nonprofit website. Free calling ( Use Skype software and worldwide computer-to-computer calling is free. Another cheap—but not free—favorite is the $40 magicJack device ( in canada that plugs into the USB port on your computer and allows you to make unlimited local and domestic long-distance calls for $20 a year. Free foreign languages ( Jumpstart your training in a wide range of foreign languages using these online audio and visual teaching tools, compliments of the British Broadcasting Corporation. Free puppy love ( Search a nationwide index of pets available for adoption from humane societies and other animal shelters. Free stuff on your birthday ( An unscrupulous acquaintance of mine claims it’s his birthday whenever he eats in a restaurant. Based on the number of free pieces of birthday cake he’s finagled, the jerk is over 1,200 years old. Check out this website for an impressive list of legitimate freebies you’re entitled to on your birthday. Free wheels ( Plan your travel around transporting someone else’s car, and you’ll avoid rental fees and other costs. Free cocktails ( I stopped at a tavern once on the Tour de Cheapskate that had a sign above the bar reading free beer tomorrow. I was so excited that I changed my travel plans so I could go back the next day to partake. The sign said the same thing the next day, but the bartender got a good laugh out of it. MyOpenBar can help hook you up with free—or really cheap—drinks in various cities. More free stuff!: Other top sites for product samples and all things free include:,,,, and the granddaddy of free-stuff websites,

*** The Scavengers’ Manifesto (Tarcher, 2009).

Travel the world without having to pay for overnight lodging? CouchSurfing (

As a child my family’s menu consisted of two choices: take it or leave it. —Buddy Hackett

Google “promotion code”

Online barter clubs, like and, help facilitate trading. Some barter sites allow users to trade goods and services for credits instead of actual stuff, thereby increasing trading flexibility. Credits can be redeemed at any time for the goods and services you want, rather than depending on finding a swapping partner who just happens to be looking for what you have to offer, when you have it to offer. Specialty bartering websites are popping up on the Internet like cheapskates at a going-out-of-business sale. Your can swap books at sites like and, trade kids’ stuff at and, and swap just about everything else at You can trade clothes, shoes, accessories, and even cosmetics at, and specializes in music, DVD, book, and video game trading.

Help you trade your time for the services and goods you need, all without the exchange of money. “Time banking” (

And at, you can swap your time walking dogs or washing cars, for example.

They swap plants with friends and neighbors and at plant-swap meets (see

On the other side of the debate are cheapskates like Tim Cuddy. “Ninety-nine percent of coupons are for overpriced, overpackaged, overprocessed crap that you don’t need and isn’t a good value even with the coupon! Crap is crap, no matter how much you save with a coupon!”

Menu mug shots: I was surprised by the number of cheapskates who mentioned in passing that they keep a photo album of favorite recipes and meals they’ve cooked as a reminder and inspiration for future menus.

“Eat more soup”: One of the touchstone questions I like to ask cheapskates is, “If the economy totally falls apart or you have a personal financial emergency, what would you do?” The answer time and again: “We’d eat more soup!” In good times and bad, we cheapskates love our soup. It’s the economical, healthy, easy way to make a meal out of what you have and what you can afford.

BOILED OMELETS FOR A BARGAIN BRUNCH When entertaining, brunch is the occasion of choice for many cheapskates. Breakfast foods tend to cost less, with breads and dairy products as the star attractions rather than meats and alcohol.

Give everyone their own quart-size ziplock bag with their name written on it in permanent marker. Guests crack a couple of eggs into their bags, add a dash of milk, and choose their own omelet ingredients from a large selection displayed on a serving tray. The ingredients—bits of meat, shredded cheese, diced veggies—can literally be leftovers from the fridge, tiny portions of each, and the more bizarre the better. Pickled onions, celery tops, or capers, anyone? Seal each bag with no air trapped inside, shake it up good, and drop them all in a large pot of boiling water for fourteen minutes. You’ll be amazed at the perfect omelets that emerge, probably costing less than a buck apiece and healthfully prepared without butter or oil.

Two favorite slow cooking recipe websites of the cheapskate next door are: and

Check for fine wines at fine prices. The secret to their 20-to 40-percent discounts? As the name implies, they sell quality wines that have been in a little accident … like the label on the bottle was damaged in shipping or has been replaced with a new design. Cheers!

If there’s a new car sitting in your driveway, you probably can’t afford it. Are you parking your stupidity in the driveway for everyone to see? “People think that if they can make the monthly car payment, they can afford the car. People also think that having a monthly car payment is a fact of life,” Miser Adviser Carl Weiss told me, shaking his head with disbelief. And that’s just the mindset car salesmen are hoping that you’ll walk into the showroom with, because boy, do they have a deal for you.

“Keep a continuous list of clothes you need to buy. NEVER buy anything if it’s not on the list … and then only if it’s on sale.” —Miser Adviser Betty Jacob Once again, organization and premeditated shopping saves the cheapskate mucho dinero.

Buy an Entertainment Book ( for the area(s) you’ll be visiting for savings on travel, dining, and special attractions. See Chapter 8 for other savings tips on restaurant meals when you’re traveling, including discount-meal gift certificates from

Deeply discounted travel deals on sites like and

The world that are affiliated with the nonprofit organization Hostelling International ( Buy an annual membership for $28 ($18 for seniors, and free for kids under eighteen) and you’ll have access to special discounts on travel and at hostels in more than eighty countries, which charge a nightly fee of about 80 percent less than hotels in the same locations. Plus you’ll have use of the hostel’s kitchen if you want to save even more by cooking some of your own meals.


Link to book on Amazon: The ultimate Cheapskate’s road map to true riches – Jeff Yeager

Your Money The Missing Manual – J D Roth

Your money, the missing manual
Nobody cares more about your money than you do. the advice that others give you is almost always in their best interest—which may or may not be the same as your best interest. Don’t do what others tell you just because they’re compelling. Get advice from various folks (and books like this one), but in the end, make your own decisions.

Action beats inaction. It’s easy to put things off, but the sooner you start moving toward your goals, the easier they’ll be to reach.

To build wealth, you’ve got to spend less than you earn.

American culture is consumption-driven. the media teaches you to want the clothes and cars you see on TV and the watches and jewelry you see in magazine ads. Yet studies show that people who are materialistic tend to be less happy than those who aren’t. In other words, if you want to be content, you should own—and want—less Stuff.

Caught Up in the Rat Race typically, as your income increases, your lifestyle grows with it. When your boss gives you a raise, you want to reward yourself (you deserve it!), so you spend more. All that new Stuff costs money to buy, store, and maintain. Gradually, your lifestyle becomes more expensive so you have to work harder to earn more. You think that if only you got another raise, then you’d have Enough. But in all likelihood, you’d just repeat the process by spending even more. Psychologists call this vicious cycle the hedonic treadmill.

Is this spending aligned with my goals and values?

Idea: Checklist before buying something.

40% of happiness comes from intentional activity—the things you choose to do. Whereas circumstances happen to you, intentional activity happens when you act by doing things like exercising, pursuing meaningful goals, or keeping a gratitude journal.

It’s not how much you have that makes you happy or unhappy, but how much you want. If you want less, you’ll be happy with less. this isn’t a psychological game or New Age mumbo-jumbo, it’s fact: the lower your expectations, the easier they are to fulfill—and the happier you’ll be. that’s not to say you should lead an aimless life of poverty; quite the opposite, in fact. But most people confuse the means with the ends. they chase after money and Stuff in an attempt to feel fulfilled, but their choices are impulsive and random.