Taking Your First Steps With Confidence

About 10 years ago, I started speaking at an annual Millionaire's conference. I soon discovered that I was usually the only speaker at that conference who hadn't gone bankrupt. Everyone who spoke had been bankrupt at least once.

I've never been bankrupt. I didn't have a "good" story like that. And, there's nothing wrong with going bankrupt if its for the right reasons. If you're in business trying to make it and something happens - that's one reason. If you just spend more money than you make, if you've got all the latest and greatest CDs and Plasma TVs, you've seen all the movies, eaten at all the nice restaurants, play golf and go bankrupt, that's just stupid.

But, if you're trying to make something happen - you're leveraging your future, you've got it all on the line and it doesn't work out - that person is not a loser to me. That's someone who's trying. So, I'm not saying that bankrupt is a bad thing, although I'm not personally interested in doing it.

I had breakfast with a guy from Ohio recently going over tax strategies for business people. This is something that is really important to me. You want to implement strategies to get the money from the marketplace or from your business into your personal pocket as cheaply as possible.

Accountants won't help you with that. Accountants take the numbers you give them and put them in a little box and then they compute what the end result is - and that's what you pay. They don't give you financial advice. They don't know how to help you create a more profitable business. All they can do is tell you if your business is profitable based on the numbers you give them.

Earlier this year, a friend of mine talked me into starting a mentorship group. I told him I wasn't interested in just having a meeting, in just having a place to speak. I wanted it to be something I had never seen happening anywhere else - personal, hands-on coaching to help new investors take their first investing steps with confidence. It isn't free and it isn't cheap and its not for everybody - but maybe... Contact Kevin [at] DBmentorship.com if you have any questions.

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The Art Of The Deal - Case Study #1

I was talking with Israel recently. We had just finished negotiating a real estate deal - he's a real estate agent. And, to just sit and talk about negotiating a real estate deal is one thing. To actually be involved in a negotiation is another. Here's how he explained it to the group:

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"This place was a multi-unit and it was listed at $220,000. At Doug's suggestion, our initial offer was $174,000 with closing costs and 20 grand back. I'm looking at this and in my mind, its unbelievable - these people are going to laugh us out the door. But I just went along with it - whatever's gonna happen is gonna happen.

And, it was just an amazing process because it was so not typical of any other deals that I had helped negotiate. I looked it up last night and we ended up with around 9, possibly 10 contracts going back and forth with offers and counter offers before we finally got an accepted contract for substantially less than the original $220,000 asking price.

But, the whole process was not something I can easily explain - its all about locating the seller's bottom price. If that bottom price and terms are acceptable, do the deal - if not, be prepared to walk away. That takes time and patience. The way you told us to look at the numbers and what makes the investment profitable were totally different than I ever knew to look at.

It was a really good learning experience and I've been able to incorporate those principles with other people I'm working with to find investments. Now I know how to dig deeper to get the best price for my client - to make the investment work for them even better."

Israel Smith, Realtor

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For me, the worst thing that can happen to an investor is to have his first offer accepted. That happened to me once (and only once) when the Realtor I was working with at the time convinced me to increase my initial offer by $9,000. A day later the seller accepted. Ouch. Now, it was still a great deal and one of the best investments I've made, but it might have been that much better.

A lot of real estate gurus talk about the cookie cutter principle. They tell you keep on looking until you find a particular kind of deal and do that same deal over and over again. I would be passing up on a lot of potentially profitable deals if I did that.

Its all about being creative and making a deal work for both sides, especially when no one else has figured out how to make it work. That's when you've hit paydirt.

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Who Wants To Be A Millionaire? Part 4

The fourth major source of self-made Millionaires in America are sales people and sales consultants. Five percent of self-made Millionaires are sales people at the top of their field.

They never started their own businesses, they never went to college to get a professional degree, they just became good sales people. They learned how to sell their products or services and they were paid very well for their efforts. They held onto their money, they invested it.

So, those four groups account for 99% of all self-made Millionaires in America. The remaining 1% comprise the fifth category, which is everything else (e.g. lottery winners, legal settlements, professional sports players, rock stars, celebrities, etc.).

My goal was to find a job where I could eventually make six figures, and in a lot of sales jobs, you really can't. So when I started looking, the first thing I wanted to know was - who's the top person in this office and how much are they making? If their best employee was making $38,000 he wasn't going to be able to teach me how to make $500,000.

I found a good opportunity, went to work and had some success in sales, and then because they felt I had leadership ability they gave me a promotion and asked me to lead the team. When I just about thought I could handle that job, they did it to me again. With each promotion came additional incentives and well as increased salary.

But, what I know today is that the real key to becoming a Millionaire does not require you to make a big salary. The secret has always been to start setting some of your income aside to invest it. The more you can invest and the earlier you can invest it the greater your eventual return on that investment will be.

Therefore, anyone can become a Millionaire by applying that simple discipline. Today, I am more convinced than ever, that the path to "cash" Millionaire status is through Real Estate investment. If that is your goal, there are a hundred ways to get involved and get started.

But I can just about guarantee you that you won't succeed by trying to do it all by yourself. Attending seminars, gathering information and knowledge is a good idea. But getting involved with a group of like- minded investors will accelerate your success and reduce your risk of failure by letting your learn from the experiences of others.

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Who Wants To Be A Millionaire? Part 3

The third major source of self-made Millionaires in America is doctors, lawyers and other professionals. People who went to school for a long time, paid a lot of tuition and probably took out a lot of student loans. Around 5% of the self-made Millionaires in America come from this group.

To make this work, you have to be at the very top of your field. It takes many additional years of work to acquire the necessary reputation and connections to represent an OJ or to become Hollywood's most famous Plastic Surgeon. These days, many doctors find it hard to make ends meet. Their expenses are high and they have to fight insurance companies and the government for their income.

Some of the aptitude tests I took in High School said I should be a lawyer. I didn't want to go to school forever and I didn't know how I was going to pay for all that, but OK, let's check it out.

Back then, something like 38,000 lawyers were passing their bar exams every year and there were only about 15,000 jobs openings available to them. That's why you can often find lawyers working in sales and as accountants. If you're paying someone $100 to do your taxes for you at the corner tax service store, they might be a lawyer.

For most doctors and lawyers and other professionals, they are only making money when they are actually working. Income generation stops when they go on vacation or if they are unable to work for some reason. In effect, they are employees working for themselves.

So, I knew I was not going to become a Millionaire working in this group. I didn't want my income to be limited by just what I could do by myself, for myself. I found my niche in the group we'll talk about next time.

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Who Wants To Be A Millionaire? Part 2

The second major source of self-made Millionaires is Senior Executives. Fully 10% of self-made Millionaires in America are men and women who joined large corporations, worked in them for many years, worked hard and rose to the top with their seniority, stock options and profit-sharing.

Now, I do not believe that everyone is cut out to be self-employed. But everyone can use their time wisely. Everyone can become a better student of money, a better student of their job. I do believe that whatever we are going to do, we need to be successful at it.

Not everyone has the temperament to be self-employed - and if you're not going to be self-employed, and you know you're not, then you need to be the best employee you can. Do your job as if you DID own the business. Try to see your job from your employer's perspective.

And be faithful. That's something very difficult to do in America. The standards are so low. In my lifetime, I have watched the standard of the American worker deteriorate. I talk to self-employed people and small business owners all the time. They're happy if people just show up for work. Just showing up, is enough to put you ahead today in America.

People blow off work. They don't show up. They screw off when they get there. People are being promoted today that would have been fired 20 years ago.

It's not hard to succeed - because NOBODY'S TRYING. They think they are. They think they're owed a paycheck just because they rolled out of bed and made it to work.

Michael Eisner at Disney Corporation received a $126,000,000 bonus one year. Lee Iacocca was paid a $26,000,000 bonus in one year, and his company was failing. With bonuses like that, you can become a Millionaire and not own the Company. You can work for someone else with bonuses like that.

But to get there you have to become the chief problem solver for the Company and not be focused on how the Company can solve your problems.

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Who Wants To Be A Millionaire?

Let me tell you who the Millionaires are. There are basically five ways people become a Millionaire in America - a first generation Millionaire.

Unless your last name is Gates, Walton, Rockefeller, Kennedy, Hilton or something like that or if you don't have a trust fund that has you set up for the rest of your life just because you were born, you've got to do something to make it happen.

If you're serious about becoming wealthy, the number one way to become wealthy in America is by building your own business - 74% of self-made Millionaires in America - first generation Millionaires - did it in some way through their own businesses.

To eventually make you a Millionaire, your business must solve a small problem for a big bunch of people or a large problem for fewer people. The best business ideas are usually at one of these two extremes.

For instance, you could start out buying a single family home, fixing it up and renting it out for a small positive cash flow each month. In the current Real Estate market, that is not hard to do.

You have succeeded in solving a housing problem for one family. Over several years, that home will likely increase in value (if for no other reason than to keep up with inflation) and you could sell it someday for double what you paid for it, or more.

Now, instead of being content with one rental, you could make it your goal to buy and rent more homes and duplexes, maybe a four-unit. When you get that figured out, you could sell some of them for a down payment on a 50 unit apartment building - small problem, more people. You can see the pattern.

You can even combine the two extremes. By allowing other investors to get involved in your projects to avoid getting their hands dirty with the day to day details of finding, buying and managing Real Estate, you are solving a large problem for a few of them, while solving a small problem for a big bunch of renters.

So, the ultimate goal is to make your business a problem solver for as many people as possible. Money is the measure of your success and that money properly invested will be the foundation for setting up those trust funds for your children and your children's children, as well.

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Statistics and Stereotypes

Eighty percent of self-made millionaires in America started with nothing. Of those self-made millionaires, 80% of their kids blow the fortune. So, just looking at two generations of millionaires - one that started with nothing, became a millionaire, handed it off to their children, and they blew it. So where we start really isn't that important.

Actually, technically speaking, statistically speaking - in America, if you start with money, chances are you don't respect it enough to know how to keep it. In other countries its different. But in America, if you have money, chances are you're losing it right now. If you started broke, you might be able to accumulate some. That's how it works in America. Those are the statistics.

Here's a shocking statement - statistically speaking "Most stereo- types are right". If something like this is happening to 75% or 80% of a certain population group (e.g. millionaires), that stereotype is accurate. Now, for you to assume that because I'm in that category, I'm going to be one of the 80% who fail instead of the other 20% that succeed would be called prejudice.

The stereotype tells us what will happen to most people in a group, but it might not be accurate for any given individual. You follow me?

So, looking at the stereotypes gives us an idea of what we are going to be challenged with so we can prepare NOT to be like the stereotype - so you can be among that 1% that retires wealthy and not the 80% that are led where they don't want to go when they retire.

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Becoming Omnipresent

How would you like to be everywhere at once - not limited by time or space? - in other words, to be omnipresent. Though it seems impossible, it has always been within your grasp.

Some have done it with purpose and succeeded. Others have done it without expecting omnipresence because that's just who they were. Others have done it seeking praise and gained nothing but ridicule.

Of course, it doesn't happen overnight. It takes time. But there is something you can do every day, every week, every month, whenever the opportunity presents itself that will put you on the road to omnipresence.

It is a simple thing to do and yet one of the hardest things to do. It is not enough to just do it once. It must be done consistently, over time, with the right motives. It can be summed by just one word:

Give.

When I give, my gift can go all over the world. I might not be dishing out the soup, but I paid for the soup. I might not be building a house, I might not be there pounding the nails, but I paid for the nails. I paid for the wood. I paid for the person to pound the nails.

The more I give, the more omnipresent I become - unlimited by time and space, making a difference everywhere, all day, every day.

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Guidelines for "Lottery" Winners

Have you ever won the Lottery, sold your business, won the Big Jackpot, or received an unexpected inheritance? These situations have one thing in common for most people - they are unprepared for the windfall. They don't know what to do with the money.

Many times, their first impulse is to begin sharing it with friends and family members. They've never been so popular. Everybody knows their name. They are praised for every gift they make, for every car they buy and every debt they pay off. A new home for mom, exotic vacations with 17 of their best friends in Tahiti. You da Man!

Nothing wrong with doing those things. But, what trips up most "winners" is their timing - its "when" they do it that's the problem. Choosing the wrong "when" is what gets them into trouble.

The rich become richer because they avoid spending their capital. They seek to preserve their capital, to leverage their capital, to increase their capital. When they want to buy "stuff", they use some of the money their capital has produced - not the capital itself. The result is ever-increasing wealth.

So, don't buy mom a car with your winnings. Buy her a car a few months later using a bit of the interest money your winnings generated at the bank. That way you could buy her a car every month for the rest of her life, if you wanted to. Get the picture?

If you don't know how to handle it, put the money into the bank so it can at least generate some interest while you're finding the right advisers and mentors. Do not be in a hurry. You have one chance to get this right. Take your time.

Don't kill your golden goose by spending it. With the right planning and advice, you can succeed where others have failed miserably.

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The Most Powerful Force In The Universe

When I was a kid, my father worked at International Harvester. They were laying everybody off in the late '70s and those were the best jobs I knew of. I can remember thinking - "How am I ever going to have money to buy a house or a car? - I'm 16. In two years I'm going to be on my own - I'm going to be an adult."

There was no money to go to college then or anything like that. And nobody I would ask had an answer. Have you ever lived in a little town and everybody's all depressed? The economy's bad - people laid off and all that kind of stuff? You ask them for advice, you ask them how you're going to make it. They don't know - they don't even know how they're making it themselves. Right?

I can remember laying awake at night thinking "Man, what am I gonna do?" Whenever I would ask my family why they spent money for this thing or that, the standard answer was "None of yer damn business". That was the extent of my early financial training. Saving money was never high on the list.

In the book "The Richest Man In Babylon" it talks about paying yourself first, putting some money away for yourself first. If you can train yourself to save and/or invest 10 percent of your income and never touch it and allow it to start accumulating, it's remarkable what can happen.

Albert Einstein is reputed to have said "The most powerful force in the universe is Compound Interest". That force can work for you if you make it, or against you if you let it. There was a day when you lived on 90 percent of your current income. There was a day. So you can do it. You must do it.

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