Investing should be like a good daily checklist at a well-run Starbucks. Everday the workers some into Starbucks with a clear understanding of what needs to be done and then they do it. Is it exciting? Probably not. Is it thrilling? No. However, if all of the employees do their daily jobs the end result will be fresh coffee served in a clean environment that people love. There is not a chaos theory here. Their is a methodical system in place.
My friend draw up the plan and then work the plan. Sometimes as I travel around the country teaching entrepreneurship events I stop and wonder. Why is only three out of every hundred American humans wealthy? How can there seriously be people in our country who work every day at a job they generally dislike to retire broke. I don’t get it. Now here is the fun part.
You don’t have to come up with your plan. The plan has already been created for you and the plan already exists. Take a timeout and look around. Have you ever met rich people? Do you know any rich people? If you do, just ask them what they did and do that. If you don’t know any rich people just get ahold of a Donald Trump book and do what he said to do. Stop guessing. Stop trying to reinvent the wheel. Just use the tools that already exist.
My friend, the problem that most people run into is this. Following and executing plan can be boring. It’s not “sexy.” Because these “Get-Rich-Slow-and-Steady-Plans” are not sexy, people keep running around trying to find the next “Get-Rich-Quick-Plans.” People are out there trying to flip this or flip that property real quick. People are trying to develop an overnight MLM busines that no one wants. Peopl are out there trying to buy lottery tickets. People are not wanting to follow the long-term proven plan because it is just not very fun. As you real this, trust me it is much better to have a plan that is very simple than a plan that is very complex.
Essentially here is the plan.
1) You work hard at a job daily making sure that you over-deliver in all you do. You make yourself an irreplaceable asset to your company.
2) You form a business. While you are working hard to over-deliver at work you are looking for busines niche that is not being filled. You are looking for an area of poor service that you could improve and charge people to improve. You are looking for a franchise to buy or a business to start so that you can increase you income and decrease your tax liability.
3) You work hard to build duplicatable processes for every aspect of your business. You are very smart and so you are not focused on making huge profits now by doing all of the actual work. You are in it to win it long term and you are focused on building systems that you can manage, not systems that you can work in.
4) Your business begins producing more and more revenue. Because you are not a jack-ass you decide that you want to use the money that you are earning to invest instead of using the money that you earn to buy crap that you don’t need.
5) You use your great reputation and income to buy real estate. You aren’t looking to get rich quick, but you are looking to get very rich over the next 15 years. You realize that buying a home only requires a 10-20% deposit and so you save and save to earn that money. You use that money that you saved to put a down payment on an investment property.
6) You go out and find renter to rent your house and ultimately contribute towards paying off the house. Over the next 15 years you have numerous renters who pay you and who contribute to paying off your mortgage.
7) 20 years later you now own 8 houses debt free. Each house was paid off by various renters and now you are sitting on $2,000,000 of real estate that other people paid off for you. You borrowed money from the bank knowing that other people who pay it off for you. You feel good about life and you are debt free.
8) You have 8 houses that are paying you $1,000.00 per month each in rent. You could sell them, but then your passive income would stop. You could sell them and cash out, but you would have to pay a ton of taxes. So instead of just selling them, you decide to trade in your 8 houses for a nice commercial building that is worth around $3.2 million dollars, but you were able to get it for just a little under $2,000,000 of cash. Now you have $14,000 per month coming in and a networth of $3.2 million dollars. Life is good and life is boring. Every month you know that $14,000.00 of income is coming in and this is not dangerous enough for you.
9) Because your life is simply not exciting enough with all of this guaranteed income coming in, you decide that you need to get heavily involved in a men’s basketball league. The thrill of playing basketball is still not enough for you.
10) To add even more thrill to your life you go ahead and volunteer to coach your son’s football team. Your life is boring, but your life is good.
Now as you read this, I know that are a few of you out there that are super cynical about these ideas and this plan. Some of you reading this think that if this plan were so easy every one would be doing it. Although I can see some of the logic in this idea, I would like to point out that we all know that the key to losing weight is eating less calories than we burn. Why then are many Americans so fat?
The reason Americans are fat is the same reason Americans are poor. It’s because they simply do not ever take the time to draw up a plan that they will actually diligently execute. Thus, most Americans sit down with their local financial advisor (who is also not wealthy) to draw up a much more complex financial plan. This plan has a nice brochure with strong looking bull on it and fancy graphs. These plans even allow you to directly withdrawal funds from your account to make your financial dreams come true, and these plans are bogus. These plans do not even keep up with inflation.
Think about this my friend. In the 1970s you could buy a brand new car for $3,000. Now that same vehicle is $25,000. What happened? Inflation happened. Government diluted our value by 2/3. Did your money invested in these great mutual funds grow at this rate? No. No it did not. However, your financial advisor does have a nice looking brochure a newly leased luxury vehicle, so he must be legit.
- Clay Clark – U.S. SBA Entrepreneur of the Year – Business Coach – Cofounder of Fears
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