Hi, this is Stuart Zadel and welcome to part seven of our 8 part series as we look at the seven factors from the book “The Millionaire Next Door”. What separates the wealthy from the “not so” wealthy.
If this is the first time you’ve joined us, may I suggest you definitely go back and look at the past videos we’ve filmed because each video and each factor builds upon itself and I think you are going to need all seven to make it work in your favor, now if you’ve watched the last video you will recall what we’ve talked about, the ten factors if you will but the wealthy use when talking to their children about their money or how best to communicate it with them because they understand the dangers in giving children massive unearned wealth. And how they bring up their children and prepare them for the handover is very important. Now, if you’ve worked long and hard for your money and your children and you want that to last, I suggest you check that video out.
This lesson as I’ve said, seventh video of eight is that the affluent profession in targeting marketing opportunity is what they call finding your niche.
Now recently we have the famous train robot Mr.Biggs passed away in Brazil if you saw the media stories apparently regarding his coffin he had his flowers arranged in the order of two fingers salute to the authorities. Defiant to the end however, one of his famous quotes when he was interviewed, “Hey why do you rob banks?” He said, “Well, that’s where the money is”.
And the affluent understand this in talking about targeting market opportunities. If you want to do well in business or any investing, it’s a good idea, like Mr.Biggs to go where the money is. And that means, affluent people and affluent companies. Now you can target these things and do well and the affluent know this, so what does that mean, well you should target the affluent, absolutely! You should target the children and the grandchildren of the affluent. And even more valuable, you should target the widow and the widowers of the affluent. As a part of your investment strategy or business strategy or whatever you plan to do. Now in terms of specifically what this means the authors in the book go out on they eliminate names some certain industries or professions or whatever that they think would do very well. Now of course you can do well in any area, in any field, and it’s all relevant however they did find some trends through all their studies. So I am going to list some now up here on the board so you can see how this fits into you. Now of course right now you can say to me, but Stuart when it comes to spending money you said the affluent were frugal, frugal, and frugal. And that’s true, particularly of the self-made affluent of course taking into account the previous videos that we have recorded but you know what, these people are not frugal on certain products and services. Things like, professional advice, legal advice, accounting advice, health care, dental care, certain sorts of travel, when it comes to their children and grandchildren. And there is a whole a lot more, they are businesses, they have significant purchases of industrial products and services and vacationing. I am going to go through some now and you can check this out. So first and for most, they do say anything to do with, so I am going to say some, Finding your niche, so niche means areas to specifically concentrate on, they certainly say Law & Solicitors, that sort of thing but specifically, three key areas. One is income tax, the other one is a state plan, and the third one is immigration law for the wealthy. So, let me cover them. I read a survey or research report done by West Bank, one of Australia’s big four banks and it said the single biggest transfer of wealth in our history has begun. As the baby boom has moved has moved for its society they are now in retirement age they are handling now their own businesses, handling them down, selling many of them a part away, in fact depending on the lifestyle that they’ve lived and so this transition is massive. Now if you are over a profession that can help in that transition how best to handle the transition of those assets to the people depends on where they want it to go, in a tax effective manner you should do very well. Second thing is income tax, we’ve got governments drowning in an escapable debt all around the world and you can bet as they go down they are going to be looking for more money, which means more taxes and they are probably going target the affluent, the people that have it, of course you can’t get a blood out of a stone if poor people aren’t got it there is no point in getting more out of them. So, with that, if you can legally affluent and avoid increase taxes or make decisions to put them in a more advantageous situation again from that point you should do very well. The third thing is immigration, now one of our experts on states last year the number quoted the number of wealthy, wealthy Chinese that were leaving their country and just under forty millions of them extremely wealthy their desire destination was Australia. And so the key major of forty million wealthy, wealthy Chinese people are looking into immigrate to Australia right now, why? Because they are not so sure of what their government are going to be doing moving forward and if they get in trouble financially. And some don’t have the greatest history in being a compassionate so we say, with their citizen rights when it comes to money. So the wealthy worldwide are mobilizing, they are mobilized and they are moving now, they are moving their assets, outside the countries that are going down, many, many welcoming countries out there. So again, if you are going to help with this information you will do very, very well.
The next thing you can do very well is your Health and Dentistry. The wealthy do not skip when it comes to health and they are not confined to minimum government public stand of health and all that kind of stuff, pay private, they pay the best. Dentistry whole of stuff going on, their appearances are important to them, their teeth, cosmetic dentistry, and big part of life as well, moving forward. Now, I am going into under Medical care, I am going to quote form the book here, page 220, goes into dentist, cosmetic dentist, including bleach and bonding, invisible braces, slip issues, nape issues, corrective jaw surgery, plastic surgery, is big on their list. Dermatologist and skin conditions, Allergists, Psychologist, Psychiatrist, goes down to Chiropractic and other alternative health type people as well, huge areas as well.
The next part to talk about is what we call asset liquidators, so again any of the key assets of the wealthy have will be big, people that can help with man wealthy, they are in mirror rights, they are in forests, they are in farms, the affluent coin collection and stamp collections, If you are an appraiser or related to some of those fields, you are going to be in big demand and sure could do very well. Now, real estate is big, it will be bigger. There will be wealthy, they are downsizing, they are moving, their life styling, they are see changing, they are tree changing, all these sort of things. Their working lives are coming to an end, they want to do stuff. Now of course, they are also helping their children into property as well big and in fact it is actually interesting that they are getting their children into bigger mortgages than the children want because they are giving them bigger deposits to buy bigger houses. So again, anything to do with real estate, re modeling, renovating, and developing land is big. Design, Internal design, interior designers is what I am trying to say, thank you very much.
Okay great, so that’s a good idea to focus on as well, travel and vacationing, particularly when it comes to their children and grandchildren is a very big area as well, if you can provide experiences there for the family, you can do very well. I am going to throw one more, not listed in the book but I think it is huge and that is food. A specific sorts of food, the wealthy one with better health and they are wising up. The quality of food may not be the best so there’s an explosion going on now, have you noticed super foods, super herbs, coming in everywhere, super quality in vitamins, organics and of course restaurants in general. Now restaurants make a fortune, not even the health ones, just the standard ones do wealthy.
So here are some ideas, you might think, Stuart, I am not in a profession in one of those areas, no you don’t have to be, you can invest them through companies or stock markets, or joint ventures, a whole heap of things. But it is the principle you want to get. Now when it comes to investing of course, as Warren Buffet said, if you don’t understand the business and its product and services, Warren Buffet says, I advice, inactivity.
Hi! This is Stuart Zadel and welcome to Part 7 of our 8-Part Series as we look at the seven factors from The Millionaire Next Door. What separates the wealthy from the not so wealthy?
If this is the first time you’re joining us, may I suggest you definitely go back and look at all past videos we have filmed because for each video, each factor builds upon itself and the things you’re going to need all 7 to make it work in your favor.
Now, if you’ve watched the last video, you will recall that we’ve talked about the 10 factors if you will, but the wealthy use when talking to their children about their money and how best to communicate it with them because they understand the dangers in giving children massive unearned wealth and how they bring up their children and prepare them for the handover is very important.
Now, if you’ve worked long and you have your money and you have your children and you want that to last, I suggest you check that video out. This lesson, as I’ve said, video 7 of 8 is that the affluent proficient in targeting marketing opportunities or what they call, “finding your niche.”
Now, recently, we’ve had the famous train robber. Mr. Biggs passed away in Brazil. If you saw the media stories piling on his coffin, his flowers arranged in the old two-finger salute to the authorities defiant to the end. However, one of his famous quote when he was interviewed, “Hey, why do you rob banks?” He said, “Well, that’s where the money is.” And the affluent understand this. We’re talking about targeting market opportunities. If you want to do well in business or investing, it’s a good idea, like Mr. Biggs, to go where the money is. And that means affluent people and affluent companies.
Now, you can target these things and do well and the affluent know this. So, what does that mean? Well, you should target the affluent absolutely. You should target their children and their grandchildren of the affluent. And even more valuable, you should target the widow and the widowers of the affluent. As a part of your investment strategy or business strategy or whatever you plan to do.
Now, in terms of specifically what this means, the authors in the book ‘go out on a limb’ and they name some certain industries or professions or whatever they think will do very well. Now, of course you can do well in any area, in any field and it’s all relevant however, they did find some trends through all their studies. So, I’m going to list some of them now up here on the board and you can see how this fits into you. Now, of course right now you could say to me “but Stuart, when it comes to spending their money, you said the affluent were frugal.” And that’s true in terms of the self-made affluent, of course, taking into account of the previous videos that we have recorded.
But you know what? These people are not frugal on certain point, that’s in services. Things like professional advice, legal advice, accounting advice, health care, dental care, certain thought of travel when it comes to their children and grandchildren, and there’s a whole else more. They own businesses, they are significant purchases or industrial production services and vacation. I’m going to go through some now and you can check this out.
So, first and foremost, finding your niche. Niche means, areas to specifically concentrate on. They certainly say law and solicitors that sort of thing. But in specifically, three key areas. One is income tax, the other one estate planning and the third one is immigration law for the wealthy.
So, let me cover them. I read a survey or research report done by Westpac, one of Australia’s big 4 banks and it said, the single biggest transfer of wealth in our history has begun. As the baby boomers have moved through society, they are now at retirement age, they’re handing over their businesses, handing them down, selling them, many of them are passing away and in fact, depending on the lifestyle that they have lived and so this transition is massive.
Now, if you are over a profession that can help in that transition, how best to handle those transition of those assets to the people or dependents or where they want it to go in a tax effective manner, you should do very well. Second thing is income tax. Now, we’ve got governments drowning in inescapable debt all around the world and you can bet as they go down, they’re going to be looking for more money which means more taxes and they’re probably going to target the affluent, the people who have it. Of course, you can’t get blood out of the stone if poor people doesn’t have it and there is no point getting more out of them.
So, with that, if you can legally help the affluent avoid increase of taxes or make decisions that put them in a more advantageous situation, again, from that point of view, you should do very well.
The third thing is immigration. Now, one of our experts on stage last year quoted the number of wealthy Chinese that were leaving their country. And just under 40 million of them extremely wealthy, their desired destination was Australia. That’s 40 million wealthy Chinese people are looking to immigrate to Australia right now. Why? Because they’re not so sure what their government are going to be doing moving forward as they get in trouble financially and some of them don’t have the greatest history in being compassionate shall we say with their citizen’s right and when it comes to money. The wealthy make no doubt about that. The wealthy worldwide are mobilising, they’re mobilized and they are moving. They are moving their assets outside of countries that they are going down and there are many welcoming countries out there.
So, again, if you can help with these information, you can do very well. The next thing they can do very well is health and dentistry. The wealthy do not skim when it comes to health and they are not confined to the minimum government public standards of health and a lot sort of that stuff. They’ll pay private, they’ll pay the best. Dentistry, a whole lot of stuff going on, they’re retired, their appearances is important to them, their teeth, cosmetic dentistry, big part of life as well moving forward. Now, I’m already going to under medical care, I’m going to quote from the book here to page 220 on mine, goes into dentists, dentistry including bleach and bonding, veneers, invisible braces, sleep issues, nasal issues, corrective jaw surgery, plastic surgery is big on their list. Dermatologist and skin conditions, allergies, psychologists, psychiatrists, goes down to chiropractors and other alternative health type people as well. Huge areas as well.
The next part to talk about is what we call, “asset liquidators.” So again, any of the key assets that the wealthy have will be big. So, people that can help with – they’re wealthy, they own millwrights, they own forests, they own farms. The affluent owned coin collections and stamp collections, if you’re an appraiser or related to some of those fields, you’re going to be in big demand and should and could do very well. Now, real estate is big, always big and would be bigger. The wealthy, they’re downsizing, they’re moving, they’re life styling, they’re sea changing, they’re tree changing, all these sort of things. Now that their working lives are coming to an end, they want to do stuff. Now, of course they are also helping their children into properties as well which is big. And in fact, I thought it was interesting, they are actually getting their children into bigger mortgages than the children want because they’re giving them bigger deposits to buy bigger houses. So again, anything that has to do with real estate, remodeling, and renovating, developing land is big, design, interior design. So, that’s a good a good idea to focus on as well.
Travel and vacationing particularly when it comes to their children and grandchildren is a very big area as well. If you can provide experiences there for the family, you can do very well. I’m going to throw one more. It’s not listed on the book but I think it’s huge and that is food. A specific sorts of foods, the wealthy want better health and they’re wising up that the quality of the food we’re getting may not be the best. So, there is an explosion going on right now. Have you noticed in super foods? Super herbs, coming in everywhere, super quality and vitamins, organics and of course, restaurants in general. Now, top restaurants make a fortune. Not even the healthy ones just the standard ones do wealthy.
So, this is my idea. Now, you might think, Stuart, I’m not in the profession in one of those areas. You don’t have to be. You can invest in them through companies or stock markets or joint ventures and a whole heap of things but it’s the principle you want to get. Now, when it comes to investing of course, as Warren Buffett said, if you don’t understand the business and its products and services, Warren Buffett says, “I advise inactivity.”
Hi this is Stuart Zadel and I wanna welcome you to this video installment as we delve into The Millionaire Next Door and the seven habits that create the difference between millionaires and non- millionaires, or what we call Prodigious Accumulators of Wealth and Under Accumulators of Wealth. This should be an exciting episode for you. Now, may I suggest if you haven’t already, this is video six in an eight part series that you watch all the videos in their entirety because, each one builds upon the other. And it will be a shame to get to the first three or four, and not the remaining three or four or whatever it is. So, I highly encourage you to do that. Now, last time if you watched the video, you remember we looked at what’s called EOC. Economic Out-patient Care. That is, parents providing money in some form to their children, in all cases just about weakens those children. In all cases, they found that the more dollars children are gifted, the less dollars they will ever accumulate in their lifetime. And that’s kind of extended into this lesson, the next lesson- in that we’re talking about the chapter calls it Affirmative-Action Family Style. And, their children are economically successful or self-sufficient.
Now, most affluent families that have children naturally want to at some stage start distributing those assets and their estate to their children. Usually this is motivated by the tax treatment in that country when someone passes away. Often, there’s heavy estate taxes or death taxes, if you will, that motivate people to gift the money to their children before they pass away. Or, a substantial part to reduce that. That makes sense. The decision to gift the estate to reduce taxes makes complete sense. The challenging part is how to do it.
Now, this chapter explains they got some fantastic stories in there- that I recommend you get the book and read yourself. But the chapter explains that it’s easy when you got young children. So if you got three young children, and they’re all around the same ages, simple- you just say it goes three ways and you’re done. It gets much more difficult however when you’ve got adult children. So for example, you might have three adult children, one is married, one is single, one has got a job. And, they all got different situations. Some have kids, some don’t. Some have jobs, some don’t. Some owe a lot of money, some don’t. And this is where it gets really, really interesting.
So let me show you what the facts state. Three things from page 175 in my book. Three points that point out the status quo. Then, we’re going to get to ten rules that the successful, wealthy families use in employing this with their children and estate planning. So generally, this is how the situation is: parents with non-working daughters and temporarily-unemployed adult sons have a high propensity to provide these children with heavy doses of economic out-patient care. These children are also likely to receive a disproportionately large portion of their parent’s estates. Point two: the more economically successful offspring are likely to receive smaller levels of economic out-patient and inheritance. And finally, many of the most highly productive sons and daughters receive no wealth transfers whatsoever. And as I point out in the book, well that’s the reason why they are wealthy- because they weren’t weakened in the first place.
So there you have it! If you want your money protected and to grow as a parent, give it to your more financially successful children. They will grow it, and protect it. If you’re not concerned about that, then chances are, you’re going to give it to the people that need it the most; that have squandered the most; and have not earned it themselves at all. And that is the status quo. I find that really interesting, there are some phenomenal stories in here as I’ve said. But, I want to share with you: it gives some stories from their interviews. But then, it gives ten points. Now, I’m not going to get to them in depth, but I am going to read them out for you. These are the rules for affluent parents and productive children. Not one, not the other, but both combined.
Number 1 – Never tell your children that the parents are wealthy. I find that interesting, but smart.
Number 2 – No matter how wealthy you are, teach your children discipline and frugality. I think that’s fairly smart. They are going to be in charge of the money one day.
Number 3 – Ensure that your children won’t realize you’re affluent until after they have established a mature, disciplined and adult lifestyle and profession.
Number 4 – Minimize discussions of the items that each child or grandchild will inherit, or receive as gifts.
Number 5 – Never give cash, rather significant gifts to your adult children as part of a negotiation strategy.
Number 6 – Stay out of your adult children’s family business.
Number 7 – Don’t try to compete with your children.
Number 8 – Always remember that your children are individuals.
Number 9 – Emphasize your children’s achievements, no matter how small not simply just their symbols of success.
And Number 10 – Tell your children that there are a lot more things more valuable than money.
So with that, I wanna finish up and quote from the book here and read a bit that I think is really fantastic. It goes like this: good health, longevity, happiness, a loving family, self-reliance, five friends, (if you have five you’re a rich man), reputation, respect, integrity, honesty, and a history of achievements.
Money is the icing on the cake of life. You don’t ever have to cheat or steal, you don’t have to break the law, and you don’t have to cheat on your taxes. It’s easier to make money honestly, than dishonestly in this country. You’ll never exist in business if you rip people off. Life is in the long run. You can’t hide from adversity. You can’t hide your children from life’s ups and downs. But once you’ve achieved, do so by experiencing and conquering obstacles even from childhood days.
These are the ones who are never denied their right to face struggle and some adversity. Others were in reality, cheated. Those who attempted to shelter their children from every conceivable germ in society never really inoculated them from fear, worry, and the feeling of dependency. No, not at all.
Hi this is Stuart Zadel and I wanna welcome you, as we continue our journey into The Millionaire Next Door and the factors that separate the Prodigious Accumulators of Wealth and the Under Accumulators of Wealth, as referred to by research by Stanley and Danko. This is video Part 5 of an eight part series, and I highly recommend you check out the first parts, as each part of this video series builds on each other and you’re gonna need all seven factors to make it, and make it well in this lifetime.
Now, you will recall in the last video, we discovered the fundamental difference in the belief structure of those that are more financial, is that they believe that financial independence is far more important than displaying high social status.
This week, we’re gonna talk about what’s called Economic Outpatient Care. That is, receiving financial support from your parents. You see, what happens is when most people make it when they become Prodigious Accumulators of Wealth, and they have a family, they feel compelled, even obligated to provide financial support for those children.
I remember when I was in high school- one kid, their parents bought him a brand-new car. That was unheard of in my school. We though, holy smokes, he was so lucky! Well, I’m not so sure now that I read the research here. You see, the research shows that the more dollars you give your children, the fewer dollars they will accumulate. Conversely, the fewer dollars a child is given, the more dollars they will actually accumulate. You know the saying, “if you give a man a crutch, you give him a limp.” Well, I’d like to say: “if you give a person financial crutch, you will give them a financial limp.”
We have a large number of people now displaying a high socio-economic status. They are displaying it. But what you don’t realize is this is supported by Economic Outpatient Care. That is cash gifts from their parents. These people are living a complete façade. And it’s interesting: they even believe that their parent’s wealth already is their own wealth, which I find interesting. In fact, in over forty six percent of cases according to the book, Affluent Families- research based in the United States give their children more than fifteen thousand dollars per year, in cash gifts or the equivalent. Now, this might come in as stamp collections or coin collections, it might come in paying for their dental or medical expenses, it might be deposits for houses. There was a whole raft of stuff. Now, there is one case which we’ll get to in a moment. But I think it’s really interesting. The children when surveyed, grossly under-estimated the amount of money they were actually given in support from their parents. And when the parents were interviewed, turns out they gave them a lot more than the children ever reported, which I find really interesting.
So, in most cases these parents thought they were giving their child and they can now make up a leg in life. A kick-start, a help that they thought that they could ignite and that they would go on and be financially successful. And the truth is, that’s just not the case. In most cases, all they did was make these people, theses adults, economically dependent. Now, we’re not talking about down and out people. We’re talking about people that are actually doctors, and lawyers, and accountants, and they are high-class professionals anyway. And they are still being funded by their parents which I thought was interesting.
Now, the one caveat is the book does differentiate between parents providing for the financial education of their children. They often do pay for their higher education, be that in any form- courses, or even tertiary education. And many of these people go on to become self-sufficient, professionals in their own right, be that doctors, accountants, or lawyers, all that sort of stuff, and do go on and become successful. However, the research does report in 80 percent of cases, those children who did not receive one dollar or few dollars of economic out-patient care, in 80 percent of cases- they earn more and they are worth more than those that did, which I think is very interesting.
You know I have a family friend, Maryanne. Maryanne is at the second highest level in one of Australia’s major banks. And I asked Maryanne one time: “Maryanne, who is at the absolutely top levels of your banks?” And, I wasn’t surprised when she told me: “Stuart every one of them, come from a descent either Chinese, Indian, Sri Lankan, Pakistani, and every one of them have come from families generally of poverty. They certainly have come from countries where poverty is prevalent. Every one of them had a massive desire, a burning desire to create wealth and make good, because, they grew up in circumstances that were anything but.
Now it’s interesting, Andrew Carnegie, the one-time richest man in the world, who actually inspired Napoleon Hill write the all-time classic, you all know the book: Think and Grow Rich. Carnegie, knew the 504 richest people in the world that he knew very well, he said in all cases, every single one of them have totally wrecked their children by giving them massive unearned wealth. In fact, he was often quoted as saying: “The biggest burden you can bestow any young man at that time, was massive unearned wealth. I bet some of you still want to try it, don’t you? Well, it’s interesting, you know. I don’t wanna win a million dollars. I wanna make it. Why? Absolutely! First, you avoid the biggest burden according to Carnegie, that you could ever get bestowed on you. I think that alone is worthwhile of the advice of the richest man in the world. Second thing is, most of them blow it anyway. And the third thing is, if you make it my friends: one- you value it; two- you know how to make it and you know how to do it again; and if you don’t want to stop at one, you may want to earn two or three if you wanna accumulate more in this lifetime. It’s totally your choice. But, let me share you, the only security you have in this lifetime is up here, between your ears. It’s not in your bank balance, it’s not in your income, it’s not in your assets. The only security in this lifetime that will help you sleep well at night is up here, between your ears. You see, you could relocate to a foreign country, start over again tomorrow and make it again. In fact, I have a number of clients that were very wealthy from the Asian countries. Indonesia, for example I’m aware of one country, and the government, a dictatorship or they have a coup, and they seized all of the citizen’s assets and nationalized them. Those people overnight went from massive multi-millionaires to zero; relocated to Australia; multi-millionaire again, started with nothing, within just a couple of years. And this is often the case, I’m sure you’ve heard many of these such stories before. So again, the only security is up here between your ears.
Now, to finish this lesson, I wanna quote directly from the book, The Millionaire Next Door, on page 167 in my copy, where he says: “So the product of economic out-patient care, what happens when weakened children become adults? Well, they typically lack initiative. More often than not, they are economic under-achievers, but have a high propensity to spend. That’s why they need economic subsidies to maintain the standard of living they enjoy in their parent’s home. We’ll say it again: the more dollars adult children receive, the fewer dollars they accumulate. While those who are given fewer dollars, accumulate more.”
I wanna share with you a couple of other bits as well, in the closing of this book. And the couple of things that I thought were interesting was a couple of points they point out. So, point one: giving precipitates more consumption than saving and investing. So parents thought their kids are gonna do better or save and invest. They don’t. They spend it. Gift received is in general, never fully distinguished between their wealth and the wealth of their gift-giving parents. They were already banking on their parent’s money being their own. I find that really interesting. Gift-givers are significantly more dependent on credit than are non-receivers. At number four: receivers of gifts invest much less money than do non-receivers. You see, these people found out, it’s much easier to spend other people’s money than it is to spend self-generated money. You know what, I consider myself fortunate to have grown up in what you probably call a “middle-class” family in Australia where my father actually had two and sometimes three jobs most of his life, to support his family and his three children to make ends meet. My mum was supporting three children, worked permanent part-time for forty three years in her life. And you know what, by default, my parents taught me the pride of ownership follows pride of earningship. This is Stuart Zadel.
This is Stuart Zadel, I want to welcome you to this month’s video as we continue the journey into the seven critical factors that determine the difference between wealthy people (that is millionaires) which we are referring to as Prodigious Accumulator of Wealth or PAWs and non-millionaires or people that we call Under Accumulators of Wealth, that’s UAWs, as determined by the study in the great book, The Millionaire Next Door.
So first thing, I’d like to thank everyone that’s watching the videos and talking in person as I travel around the country and those that have been contributing into the conversation be either on Facebook or on the blog itself, and thanks for your participation there.
This is actually video number four in an eight-part series and I want to stress again that I highly recommend that you watch all the videos in sequence because each one builds upon the next one.
Now last time if you’ll recall, we discussed that one of the key differences in the third video (that was the second factor) was that it’s how you are spending your time that determines the result that you get. We discovered in fact that Prodigious Accumulators of Wealth (PAW’s) spend on average 83% more time each month managing, updating and planning, their financial independence.
Now, that’s almost double what the Under Accumulators of Wealth (UAW’s) spend. Now that in itself is a massive figure! But compound that almost double the amount of time spent each and every month over a lifetime, and I think you’ll understand we have massive differences in the wealthy and the non-wealthy or the poor in society. It’s not that one is lucky. They’ve got different habits, and over time those habits are magnified. We also investigated; it’s not how much money you make, it’s what you do with it that counts. So feel free to check out those videos below:
Today, we’re going to get to factor number three which I love, and that is simply stated this way: “Financial independence is more important to them than displaying high social status.” The whole chapter kicks off and talks a lot about cars.
Probably the single greatest wealth destroyer on the planet
Now, cars is certainly something that people display high social status with and I’m not going to get into all that because the chapter is quite lengthy, and you might want to get the book yourself and check it out. But, just to understand that the car is probably the single greatest wealth destroyer on the planet. Certainly behind the family home, (unless you’re into investment properties) it will probably be the second largest investment most people in western societies will ever make. But it’s also, one of the single (it is in my opinion) the single greatest wealth destroyer as well.
Think about it, a brand-new car drops in value 20-40% immediately you drive it off the showroom. It’s a usually non-tax deductible debt. The car is worth a lot less each year that goes on and it’s got significant running cost as well. Simply look at your latest registration, you’ll think: “Holy smokes! It costs so much just to get a car and keep the car on the road.” That’s aside from the fuel running the vehicle.
The book goes into how Prodigious Accumulators of Wealth buy their cars. I won’t go into it in detail as I said right now. But in general, they are buying stock standard everyday cars. Things like Fords and Holden’s, normal everyday mass-produced cars. The study is predominantly US-based, but of course that might be Toyotas and Hyundais or something out here as well. But they are not wasting their money displaying high social status with luxury European brands and the like of that. Some, a small percentage do all that sort of stuff but in general, that’s where it gets to.
Now in general, the Prodigious Accumulators of Wealth end up tending to be usually small business owners and have been for many years often, decades. Normal, everyday, boring businesses you will just see in the local suburbs where you live. This people are often Prodigious Accumulators of Wealth. Now, they are highly efficient in how they run their businesses and their lifestyle and they are almost allergic to displaying high social status.
Now, with the efficiency with we can see that they run their businesses and their household, with their solid incomes from businesses, to the stock, standard they have been producing incomes for decades, what that often means is they end up with excess surplus cash flow, and lots of it and here is what they do with their money: they don’t go spending it on high social status. What do they do with it? Number one, they probably invest it back into their business, growing the thing that creates the income and the cash flow in the first place. But they also invest it significantly often in commercial real estate, which is really interesting, and also general common good stocks. Things like big building companies, and banks and just good everyday solid stocks that produce goods and services for the people of the world. And over time, these people actually become what we call Super Prodigious Accumulators of Wealth. Often they have ten times the wealth ultimately of the average and everyday normal poor Prodigious Accumulators of Wealth. Now, there’s this interesting thing in the book that had.
I want to give you a story before, I want to give you two stories. So recently, I met with one of our clients that come to our events, invested in one of our programs and that’s had a great sort of an epiphany and result from coming to our events. Now this particular girl is starting in internet business. And she’s talking to me about where I can find angel investors. She’s got a business up to its launch phase, and is requiring one hundred and fifty thousand dollars worth of capital just to get it to the next stage, on an untried business model. Now, don’t get me wrong. She could end up being the next Facebook, the next Tweeter, the next whatever. I don’t know. But that’s certainly something where my money would never go near. Now here is where I find interesting: her father. Her family owns a normal everyday business. In this case, it is a well-known delicatessen in a major regional town, has done for decades. I don’t know for a fact, but I bet her father is not just a Prodigious Accumulator of Wealth; I would say he is a multi, multi-millionaire from the picture I’m feeling or getting from there. Now of course the parents have been in that business for decades, they are known to the local town very well and of course, they want to hand-pass or sell that business on to their children. But do the children want to know anything about that business? No. Absolutely nothing. Why? Well, predominantly because they want to live in the city where things are faster and you know, there’s more options and I would say more life and all that sort of stuff. Well, I guess that depends on what your view of life is. But of course, she’s off out there looking for an enormous launch capital to grow a business. Now, don’t get me wrong. That business might hit, it might take and they might do fantastically, and good luck to her. But you know what, young people are in general- they are not too smart, and they don’t get too much smarter as the years go on. What’s that old saying about: “If you suddenly knew an age-only could?” But they’re you know, to me she has a working startup to a key knowledge into an existing great business that has produced a PAW and is working right away from.
Now I have a similar story in my family. Not my immediate family but I have an uncle who is a very wealthy man. This gentleman, I didn’t spend much time with him. Once a year we’d see him at Christmas and this gentleman owned a petrol station. This petrol station was on a road in a town, I won’t mention the town. But this town was on the way to a famous landmark. You could not basically get to that landmark in New South Wales from the north that is, without going through this town. And he said to me; “Stuart, what’s the secret to wealth?” When I realized, they are coming for the fuel but then I could buy something for a dollar. Like a pack of chips or something, and I could sell it to him for two dollars and I could double my money. He had that server for ten, twenty, thirty maybe even forty years and made an absolute fortune. He really has his money buried all over his properties or back then he did own a lot of land around that town. In fact, he got wind that the department of main roads or whatever, was actually going to redirect the one road that went through his town, into another alternate route. What did my uncle do? My uncle went and bought up all the land around that route where he is going to relocate his service station. Now, of course he had three or four children. Now, did any one of them want to take over that service station? No. They all wanted to move to the city, have their jobs and do their own thing. Well, fair enough. But remember, once it produced a Prodigious Accumulator of Wealth, and I expect all the children and they are now all Under Accumulators of Wealth. They probably want to display high social status, you know they have all the right clothes and the handbags and the watches and probably the cars and all that sort of stuff. But, they have got nothing to show for it. And that’s why I find (while the music keeps playing) but my friends, I think the music is about to stop or wind down, and you’re going to need to look very seriously at your financial options in the near future.
Now here is another interesting thing that was in the book that I want to point out, here, well actually I’ll give you a side put: they talk about one of the super accumulators of wealth in there. And, this gentleman had supported and saved a lot of other businesses. He was a mentor to many other entrepreneurs and business owners in the community, and he would never lend money to people who had the “big hat, no cattle” syndrome. What does that mean? Well, the big hat is meant to symbolize that you have a lot of farm land and a lot of cattle. But they have none. So, they are displaying that they’re wealthy but they’ve got nothing to show for it. So I thought that was interesting.
But then the book went into the fact of who enjoys their work the most. And the Prodigious Accumulators of Wealth actually in general, they love their jobs, their work. They love their businesses. And, they work because they love it. And the Under Accumulators of Wealth work to support their spending habits. They have no thought, no plan for being financially independent. In fact, the Prodigious Accumulator of Wealth works or runs a business to establish financial independence, the Under Accumulator of Wealth often has high-paying jobs but they support their work to support for money, to support their high social status. Now once you get the nice car, then you’ve got to live in the right suburb, the more expensive housing.
You’ve got to wear the right clothes, buy all the right watches and shoes, and clothes, and handbags, and all the other stuff to keep up the façade that everyone thinks you are super successful. Know anyone like that? I bet you do. So, Prodigious Accumulators of Wealth want nothing to do with displaying high social status in general, moving forward. And you know what, once you’ve achieved ten or twenty million bucks, maybe you can splurge a little and do what you want and buy some nice things or whatever is easing out. But generally, these people don’t want a bar of it. So you know what, you’re going to decide. You really have to decide. Do you want to look rich, or do you want to be rich?
Life is already full of enough burdens as it is. Why do you want to add all these payments and maintenance and stuff to your life, and that a whole bunch of extras? You’re going to have to decide that as well. So this is Stuart, to your success!
If you would like to buy this book then Click Here.
Well, hi this is Stuart Zadel and I wanna welcome you, this is part three of an eight part series into the difference and seven factors and the difference between millionaires and non-millionaires or what we call Prodigious Accumulators of Wealth (PAW) versus Under Accumulators of Wealth (UAW) according to the authors Stanley and Danko, in this great book, The Millionaire Next Door, I recommend you get a copy and you check it out.
As I said this is part three of an eight part series, I recommend you check out all the parts and it will make more sense to see the whole thing in its entirety.
Now last week you may recall we talked about what Prodigious Accumulators of Wealth (PAW) are doing to be wealthy. The first factor was they’re living well within their means. Contrary to popular belief, these people are not out there buying designer label handbags, watches, cars, shoes, clothing, and expensive restaurants and meals. That’s reserved for people who’d rather look rich than be rich. What are they doing? They’re buying practical, well wearing, value for money items and clothing, and things that last. So now they only buy what they need too by the way, they’re not into impulse buying at all. So, to sum that up, the whole foundation is built on one word, which is the word “frugal.” So feel free to check out that video here.
Now today what I’m talking about is the second key factor and it is something that I’m always talking about it, if you’ve ever been to my live events. You’ll hear me at the very start saying: it’s how you’re spending your time that determines the results you get in business and in life. So factor number two is how they invest their time, their energy and their money.
Now, we’re gonna talk about a number of different things here so, pay attention.
Alright, first is Prodigious Accumulators of Wealth (PAW). How do they spend their time? Well, on average they‘re spending 8.4 hours a month on their wealth accumulation and investment strategies. Now contrast that with Under Accumulators of Wealth (UAW) that are spending only 4.6 hours a month. You know, that’s a difference (almost double) but that’s a difference of about 83 percent difference between the amount of time they are spending on their wealth accumulation and being financially free.
Despite both having the same goals, they say they both wanna be financially independent, they both wanna be financially free. But I guess action speaks much louder than words.
Now, I wanna bring this home and give you some context around this. You see, I’m in contact with many people around this great country frequently on a regular basis. I’ve got obviously thousands of customers around this country, I have hundreds of crew members around this country and I’m in touch with many of the top leaders in the fields in which we operate around this country on a very regular basis.
Now last night was kinda interesting. I made a phone call to a friend of mine, who had just invested a significant sum of money in one of our courses. And what was she doing when I rang? Well, she was watching a reality TV show, happen to be the X-Factor. Now I found that kinda interesting, She was torn between taking my call and watching that TV show.
Now, contrast that with a friend of mine I rang shortly after that last night. In the same city who has done the same course as this young lady same investment financially. What was he doing? Well, he was actually on the phone prospecting for new deals, and new houses. He was planning his work flow for today, and again prospecting for new deals, and he was knee deep in a renovation that he’s currently got going on. Incidentally, this gentleman has made in excess of half a million dollars in the past year with the exact same strategy as this girl.
I wonder why they are getting different results at this point in time. Now you might be asking what was I doing last night? Well, apart from ringing and staying in touch with some key people around this country, every night this week and last week I’ve been studying and reading up to midnight every single night. Plotting, planning and educating myself on the future of my business, optimizing my business and where its going in the near future. So I guess my question for you is: “What were you doing with your time and energy and money last night?” We’ll come back to that again shortly.
Now, there was another “big moment” what reading this book which I found interesting as well because, you know what, people say to me “Stuart, do you have any regrets in your life time?”. You know, in the studies of Octogenarians, that’s people that’s lived up to eight decades on the planet, eighty years plus, there’s three typical answers they give, in a regrettable things they would have done differently in life. One of them is they would have taken more risks. Now, that’s a different conversation, maybe we’ll do a video on that. But, may it has so much that I have regrets, but would I have done things differently? Absolutely! What I would have done, I wouldn’t have gone through to university. Now I actually finished High School then went on to university which I ultimately left to become an athlete and an entrepreneur which you can read my books if you wanna hear that story. But you know, if I could go back again, I would have left in year ten. I would have become a tradesman, personally for me I would have been a carpenter, I love working with wood. And I would have gone and become a builder. And that’s what I would have done. That would have sat much better with my heart, and my being, and my talents. But here’s the key thing I wanna bring home to you is this: is that Prodigious Accumulators of Wealth, aside from the fact that they predominantly run their own business, they are self-employed, what they do is they get out there early and earn income fast. Unlike Under Accumulators of Wealth, generally they put off their earnings for a long time to higher and tertiary education.
Now, this might be frying your brain right now. You’re thinking I know all the wealthy people, doctors, accountants, lawyers? all these smart people who went and studied for a long, long time. Look, in fact the authors of the book have the courage enough to share with you that why aren’t they wealthy! The very authors of the book are not wealthy. And they say why, because combined between them they have twenty years of tertiary education. They spent about ten years each at university. Not only the cost of that, you know in Australia you’ll have a HECS debt or whatever it’s called now or in your state, of thirty, forty, fifty thousand dollars you’ll be behind the eight ball before you even get out. Your four, five, in these guys’ case- ten years behind in earning capacity, before you can even catch up.
Do you know you can pay to that, guy or girl left in year ten, got a trade, and got into business, you can never ever catch them. If you understand the value of compound growth, if you understand the value of investing your time, energy and money planning for your financial future, they can never catch you, it is mathematically impossible. Unless of course they do something significantly entrepreneurial, or have a very, very, very long lifetime in which to catch up which we also know is not the case.
So I thought that’s a very interesting point that they did out there early and start accumulating early as they possibly can. Which goes contrary to what many people believe. In-fact just on that in the subject of doctors they spend a bit of time on that in the book. Only one in three doctors are what they call Prodigious Accumulators of Wealth. Fully, two-thirds of them are Under Accumulators of Wealth. Why? Because they are in a position where they have to impress customers, friends, neighbors, whatever and they live a lifestyle that’s high on expense but low on generating wealth.
Now, the next this is about planning and controlling. So, a couple of things is this: Prodigious Accumulators of Wealth, invest a minimum of fifteen percent of their pre-tax income into future investments. Compare that with Under Accumulators of Wealth these people spend more than what they earn!
Now the next thing is it was the Prodigious Accumulators of Wealth that are fiercely interested in where every dollar they spend goes. They want to know how much they and their families are spending, in the different areas of life. Things like food, clothing accommodation, cars, insurances, that sort of stuff. Whereas, Under Accumulators of Wealth, that’s the furthest thing from their mind. They do not wanna know where their money goes at all. I thought that was a real interesting point to come out of the book there as well.
Now let me be clear, PAWs are not stingy where and when it counts. They are strong investors in education, and they are strong investors in competent advisers in accounts and professionals. In fact, most of them may have found through referrals and referrals from other wealthy people. Which again, is a very interesting point on how they find their advisers moving forward.
Cars! Let’s talk about cars. Prodigious Accumulators of Wealth in general never buy a new car. Never! They know the value of a car plummets; the depreciation of a car is massive in the first three years. In fact, just driving a car out of the showroom will in fact drop its value to about thirty percent. These days, when you’ve got two, three, and five-year warranties on cars, a hundred thousand kilometers, you can buy a fantastic second-hand car. Now this is outrageous to the high-income earner that has no wealth. They’ve got to look the part, they’ve got to impress their friends, and they blow their high-income on premium items such as brand new cars.
And for the main part, Prodigious Accumulators of Wealth do not do this at all. Two more key points I wanna mention. The first, one is this: Under Accumulators of Wealth tends to be hereditary. These people actually make of their children dependent financially, and future Under Accumulators of Wealth. Compared to Prodigious Accumulators of Wealth, they in fact make strong independent children that can fend for themselves and move on through life in a functional way, which I thought was just massive.
And now, for the last point- I would like to share from the book itself and I want to talk further about time allocation. Now they asked these three questions to both the PAWs and the UAWs. And although PAWs agreed with the following statements, all the UAWs disagree with the following statements. Here’s the three statements:
I spend a lot of time planning my financial future.
Usually, I have sufficient time to handle my investments properly.
When it comes to my allocation of my time, I place the management of my own asset before my other activities.
My question: What are you spending your time, energy and money on right now?
Stuart Zadel, Australia’s Freshest Wealth Educator, this month continues to reveal how the large majority of millionaires out there are not always like the stereotype we have been led to believe as the research in the book “The Millionaire Next Door” explains.
Well, hi this is Stuart Zadel and I want to welcome you to this month’s educational video. Last month, we recall we spoke about the great book: “The Millionaire Next Door,” the enlightening findings of America’s millionaires. Now, these are people with a net worth of between One and Ten Million Dollars.
Now, I offer that to you up front, because I spoke to many people about that video during the month in my travels around the country and one gentleman said: “Stuart, what do you mean wealthy?” Well, in the book, they concentrated on survey and people between one and ten million dollars, 80% of those people were first-time millionaires, self-generated in their own lifetimes, and hence why the authors concentrated on this group. We’re not talking about the ultra-elite or the super wealthy, we’re talking about a means of wealth that most people could reasonably attain in their lifetime if they have the right information.
Last week I also gave you from the book- the formula to determine how wealthy you are right now and also the seven factors that they found that determines the difference between the wealthy and the not so wealthy.
Now, keep in mind this is Part 2 of an eight-part video series. If you didn’t check out the video last week, I’m going to encourage you to go and do that now or shortly because when all these eight pieces are together, you’ll get the whole picture and get a lot more traction, if you wanna change or improve things for you financially.
Now, last week I also asked you the question: “Do you know anyone that wants to look rich, rather than be rich?” In fact, most of society wants to look rich, rather than be rich. It’s easy to buy beautiful cars, on finance; it’s easy to buy beautiful clothes, on finance; it’s beautiful to wear and have the right labels and everything. You do know that these things are mostly done on expensive finance.
Now, here’s the thing- many of the world’s companies now earn more money on the finance they give you for their products than the finance themselves. The decade of “buy now, three years interest free” and all that sort of stuff. Yeah, well the fine print of the interest rates, like 16 and 18 percent and above, smashes a lot of people and they are making a fortune on the money and not the product, the product is long gone.
So, here is the thing: it’s not how much you earn. It’s what you do with it.We’ll get to that in a moment.
The other interesting thing that the authors of the book found in particular, was that their perceptions of who these wealthy were way misguided. In fact, in the group sessions and in the interviews they had, they got the finest caviar’s, three sorts of caviar, they got vintage champagne and what actually showed up was quite a shock to them. One gentleman, they called him Mr. Bud, walked in, and said: “Listen, none of these fancy stuff! He said: “I drink scotch, and beer; two types of beer: Budweiser, and free”. To this point, they called him Mr. Bud.
They quickly got the impression or the truth that their perception of who these wealthy would be, was completely different to the reality of it. Most of them were down-to-earth, business owners, who’d been in the same business for a long time, married to the same partner, quite what you’d call a “boring” story. But, what they certainly found out was that appearances mean very little.
I’ve got some personal stories about that, one just recently at an event in Brisbane in Australia, I had a gentleman turn up to that event. Now these, as you know, are business property seminars and he turns up in thongs and stubbies. Queensland is a bit warmer and somewhat the norm at times, but also after two days, this guy is larger than life. After two days, he walks up to me and says: “Stuart, I own a lot of land in a place that’s called Gladstone and I’m worth over a 180 Million dollars”. Now, appearances and reality can be two different things. There’s not a lot that shocks me or surprises me these days, but that certainly was interesting.
I want to give you another story. Many of you know that I used to go to the gym for 12 years. A gentleman there who was a very good car salesman, he was a top car salesman in his dealership (this was over fifteen years ago). He used to earn a hundred twenty thousand dollars, he confessed to me that year, he didn’t have a single cent to show for it. He’d gone to work for 52 weeks a year, as a top salesman, and didn’t have a cent left from a hundred and twenty thousand dollars. Now, this was a grown man, who later confessed to me that in fact, his money now goes to his mother, she banks it, he does not have access to his own bank accounts, and she gives him two hundred dollars a week in which to live on. Such poor where his habits financially.
Now contrast that with his receptionist. She was earning thirty five thousand dollars a year at that time, and she saved fifteen percent of her income week in, week out. At the end of the year, she had over five thousand dollars saved. And this gentleman who earned three times what she earned, didn’t have a cent to her name. After 12 months, she was closer towards wealth than he was. Remember, it’s not how much you earn; it’s what you do with it. A very important concept.
Now, if you’re going to be one of these wealthy, there’s a couple of extra kickers I think I’d like to impart with you right now. But I wanna share with you another question I asked one of my crew members lately and I said to her this question, I said quite off-guard, I said: “do you wanna get rich wealthy or do you wanna get rich fast or slow?” She goes: “Fast!” I said, no. She looks at me kind of funny and said: “Slow?” I said: “No.” She looks at me really kind of puzzled, then the penny drops, she goes: “Both?” And I said: “Yes! You wanna get rich both fast and slow”. That way, if you don’t make it fast, you’re still gonna get rich anyway, and we’re just gonna do it the slow way. Now, if you’re gonna do it the slow way, you’re gonna need to understand these first law that I’ve written up here. They live within their means. So there are seven factors. Factor number one are written up here, is that they live within their means. That means, they spend less than they earn.
Now, they went on and asked three extra questions that these millionaires, which I think are very insightful. They said to them: “Were your parents frugal?” Most of them said yes. They said to them: “Are you frugal?” Most of them said yes. And they said: “Is your spouse or life partner frugal?” Most of them said yes. So some of you may need to quite a look at your spouse or life partners with an answer to that question. If you’re going to make it, you probably need to answer yes to both of those questions. People need to be frugal, that is smart with their wealth. They need to live within their means.
Now, interesting thing with all these studies that I’ve seen and done about what attracts men and women to their prospective partners: always on the top five responses is: that they are smart with their money. There you go. It’s not the volume of money, it’s the fact that they are smart with their money. That is an aphrodisiac as well. So, that’s it for this week. Factor number one, they live within their means.
I’ll see you next month for the next lesson. Until then, have a great time. This is Stuart.
This is Stuart Zadel and welcome to this month’s educational video piece – how to determine how wealthy you are.
Let me start by asking you a question: “How many of you people out there know someone who would rather look rich than be rich?” Yup, I thought you might know a few. In fact, in my experience it’s most of the people out there. See, I want to point out front: it’s much easier to buy the right labels to look wealthy, that is to own the right clothing, own the right gadgets and gizmos, own the right accessories, drive the right cars, but all this has done is cause some very expensive finances. It’s very easy to look wealthy and a little bit different to being wealthy.
The truth is, most people out there today in Australia and around the world are living paycheck to paycheck. So, my question to people out there watching this, is: “If your income dried up tomorrow, how long could you afford to live?” and the truth is for most people it’s only about one to two months that they have enough cash reserves to see them through that period, before having to generate further income in some way.Let’s just be clear, that is not wealthy, regardless of how much stuff you own.
Last month, in my ‘book of the month’ I held out and showed you a great book called “The Millionaire Next Door”. This is a fantastic study of wealth of America’s millionaires by authors Thomas Stanley and William Danko and was published some time ago in the late 90’s, yet these guys have been studying it for ages and continue to update it today and not much has changed. It’s quite shocking, the information that’s revealed in this book and I believe liberating for people who choose to read it.
So, the question you really got to ask yourself is: “Do you really want to be wealthy and if so, are you prepared to do what the wealthy do?”
You see, success leaves clues, and if you will follow someone who has been successful, read their clues, and apply them, then maybe you can get the same results. In this book he points out that more than half of Americans after the age of 65, if they lived without Social Security (which is a dying thing) will absolutely be living in poverty. That’s quite shocking! After living your entire life and earning income all your life that most people end up in that boat.
Now, if you don’t want to be in that boat, if you do want to be one of the world’s most wealthy, there’s seven things that these guys have determined wealthy people do different to non-wealthy people and in a moment, I’m actually giving you a formula that you can work out where you sit right now in terms of wealth and how wealthy you actually are.
But right now, I’m gonna give you the seven pieces that determine the difference right now. So the seven factors, I’m gonna put them up here for you just very quickly.
Okay, so factor number one is that they live below their means. Let me ask you this question: “If someone was spending more money than what they earn, would giving them more money help them?” Of course not! They’ll just spend all that as well and they wouldn’t change.
If someone was in the habit of spending all the money they earn, would giving them more money necessarily help them? Absolutely not! They would be in the same category. So, what should a person do? A person should change a habit. They should:
Rule number 1: Learn to live within their means.
That is, whatever income you are having come into you in your bank account now, you should learn to live below that. This is one of the seven.
The second thing they do is this (and I’m always telling people this):
Rule number 2: How they are investing their time, their effort, and their money.
Very different to people who don’t accumulate wealth. Now, we’re gonna touch on all these now, and over the next seven videos, I’m actually gonna unpack each one of these into bite-sized chunks so that you can digest them and go ahead and take action on them as well. Of course, I recommend highly go and get the book.
Rule number 3: They rate financial independence as more important than social status.
It is very important that they are not worried about impressing their neighbors or friends or work colleagues. They understand the long-term gain of being wealthy well into their retirement and elderly years of life to look after themselves.
Rule number 4 (this one I find is really a classic): No parental financial support, indicated by the dollar sign.
So many people out there believe that their wealth is inherited. Now, the actual book, The Millionaire Next Door which I already showed you is the study of America’s wealthy in those in price brackets of between one and ten million price points.
So, why is that?
You see, one and a half million dollars of net worth isn’t that wealthy these days. We’ve been saying that for the last thirty years, and maybe the new metric is ten million. But, the reason they studied that is they reasoned the one to ten million dollar mark is easily attainable for anyone within their working life time.
Now they found 80% of these millionaires in America have all made it within their lifetime. They were not the beneficiaries of inheritance from their parents or what I call the lotto ticket winner of the lucky sperm bank. In fact, eighty percent of them all made it in their lifetime of their own effort which is really important to knock out a few misbeliefs there This one I find is really revealing…
Rule Number 5: Their children are financially independent.
Isn’t that a fascinating category to look at? Their children are financially independent. I guess they learned the habit of their parents and did change their habits in terms of money.
Rule Number 6: They are proficient in spotting market opportunities.
That is, they trust their own judgment. They have some of their own skill and wisdom and they apply it to the market. They are not necessarily relying on advisors, expertise or latest stock peak or property peak. They got their eyes and ears open, they’re on the ground, looking around and seeing what’s going on in society and based on that, they’re making their investment decision. Very important characteristic, looking forward to unpacking that for you.
Now the final one here is…
Rule Number 7: That they choose the right (in the book they say) occupation.
I’m gonna say vehicle and/or business as well.That one’s gonna be interesting as well. Whilst you can be wealthy in any area, it is true that some are better than others.
So that’s gonna be really exciting I think to unpack all of these when we get to them one by one. But the topic of the video, when I said you (from the start) that I’d show you a metric for how wealthy you are.
So, let’s just clear the board and then we’ll get to this right now. So … okay, alright now, I’m gonna go back to the book for this and I’m literally gonna take this from the book so that we can see who are these what we call prodigious accumulators of wealth.
Alright, so there is a formula. Here’s the formula, I’ll give you the formula, and then we’ll work through it. So the formula is this:
multiply your age (now there’s many metrics, I wanna point out but this is just one that you can work out right now to see where you’re sitting in this category)
So they say multiply your age by your income. Now this is your pre-tax realized income, from all sources, excluding any inheritance.Okay, very important that we get that one right.
Multiply your age by your pre-tax. Now this is your household income as well to work it out as a family unit.
Then what we want to do is we divide it by ten (we divide it by ten). This less any inheritance wealth is what your net worth should be.
So let’s do an example and I’ll show you what category you may fit into out of this.
So let’s say, someone is 40 years of age. Can we do that? Someone’s 40 years of age, we use round numbers to make it easy. Let’s say this person earns $65,000 a year. Let’s say they’ve got a $1,000 in interest a year, or some other source. Let’s say they’ve got maybe $2,000 in dividends coming in from shares, or for you it might be net cash flow from rent or something like that. And let’s say they just get $2,000 a year from their parents.
Let’s just say that: $2,000 so that’s another 5,000 there. So, all up, let’s say their pre-tax income is $70,000. So, their age, 40 times $70,000. So four sevens is a twenty eight. You’ll find that this equals $2,800,000. Now, of course, we divide it by (divide by what?) divide by ten. I’m glad you’re paying attention.
This person, at age should be worth $280,000.
Now this is just a general guide. This is really interesting. Obviously, it is age dependent, obviously, the longer you’ve been on the planet, the more income you’ve earned, the more opportunity you’ve had. In theory your wealth should be higher, which I love. It’s a great thing. Every year on the planet I think your wealth should be accumulating, if you manage it well.
So, $280,000, now here’s the thing, (if you earn $280,000) if your net worth is, if you were to sell everything up today and take away your liabilities from your assets, what is left, what is your net worth? At age forty on this income, this person should be worth $280,000. Now if you are north of $280,000 they call you a Prodigious Accumulator of Wealth symbolized by the letters (PAW). If you are around the $280,000 or slightly below, you are Average Accumulator of Wealth (AAW) and if you are below that, you are what’s called or in the lower quarter, you are Under Accumulator of Wealth (UAW). That means, you are a spend thrift. You live probably well above your means and don’t have much to show of it. You’re living high but that is absolutely not wealth. So very very important.
Now, to be well positioned as a Prodigious Accumulator of Wealth, which is probably where you want to be, they have found another rule of thumb, is that you will be worth two times that figure. So two times $280,000 – you’ll find it’s $560,000. If you were that age, 40 earning that income ($280,000) and you have net assets of $560,000 you would be well positioned in the Prodigious Accumulators of Wealth.
So there you go, you can go ahead and work that figure out for yourself and see how wealthy you are literally right now today and where you sit.Now, if you’re happy with that, congratulations! If you’re not, you just have to do something about it.
There’s seven things that the wealthy do different to the Under Accumulator of Wealth. And, we’re gonna cover them in the next seven videos. I look forward to sharing that with you.
So, I really need some help. Andrew, would you help me? Come on up here, my friend. I’m going to get Andrew, my crew member up here. And, I need your help as well. So could everybody please take the finger that they point with and hold it up in the air? (You can take that. You can just cup it in your hands and stay here.) Take the finger you point with and point it in the soft part of your throat. Great! In my hand I have an arrow. This is a real arrow. It’s not a trick arrow. It’s a wooden target arrow. It’s not a trick arrow. So, I just wanna (thud! thud! thud!) there’s no trick. So, I haven’t unofficially weakened the arrow or anything like that. Here’s what’s gonna happen in a moment: Andrew’s going to hold the back of that arrow, like so. Then, I’m gonna put the metal point of that arrow in the soft part of my throat, one of the most vulnerable parts of your body- where your finger is right now. And then, I’m gonna walk straight through that arrow, and walk straight into it.
What is the voice in your head say right now? “Don’t do it, it’s gonna hurt!” “Don’t try it!” Ahaha. Is there a volunteer? Well, maybe. Maybe. So the reason for this demonstration is I want you to tune in to this voice in your head. It’s not the arrow. It’s about the voice in your head. And I want you to listen to what this voice says. Does that make sense? Because what we were taught about sharp, pointy projectiles – don’t play with them, and certainly don’t point them at vulnerable parts of your body. All sorts of stuffs can happen. Okay. So, let’s just see if it’s a belief or it’s the truth or a fact.
Okay. So, you didn’t think I was actually gonna do it, did you? You think I’m nuts? Yeah, good idea. How many of you, if you haven’t seen this before – how many of you would not want to get off here and take my place? A few honest folk in the room. Okay, great. It’s dangerous. And it is, if you don’t know what you’re doing. But I want this to represent for you again, this weekend let this arrow represent what you think is impossible for you.
Maybe you think it’s impossible starting as a property entrepreneur. Maybe you think it’s impossible to start your own business. Maybe you think it’s impossible to quit work over time and be your own financier. Who knows what it is. I often point out; maybe it’s a conversation you’ve been putting off, that you know you need to have with someone. Whatever seems really difficult or impossible for you now – let this arrow represent that and let’s just see if that is truth, if it’s solid or if it’s just a belief.
So, we will do this for real now. Some of you are going pale already. Everybody take a deep breath, and relax. I do need your help. It’s a metaphysical thing. So I need your fingers back in there, helps strengthen mine. Alright, if this works, give Andrew a round of applause. If it doesn’t, Andrew can you take over? Good job, man!
Alright, don’t try this at home, kiddies.
Thank you. What does the voice in your head say now? “You can do it?” “It’s possible.” Often, people will say, it was fixed, it was rigged. Uhm, understand this weekend you’re gonna see some stuff that’s going to rattle your cage. Because, this voice represents the extremities of your belief structure that you don’t even know about. And, if you would tune in to this word that’s going on because you’re gonna have to challenge this belief structure everyday moving forward. It is the beliefs that keep us imprisoned. Nothing else. And we need to expand them. And we need to remember this so that in the future, you can test it and see if this is real or just a belief.
A lot of people believe a lot of stuff out there that just isn’t true. You should know that the Flat Earth Society still meets once a month in New York City.
Hi, this is Stuart Zadel and welcome. Today we’re going to wade into the deep waters of what many people believe to be the ultimate success technique – that is, the art and science of meditation. Now I’m going to attempt in 7 minutes or less to give you a great overview and insight into this deep, powerful, and ancient technique.
Now in life and investing, sometimes we need to slow down to speed up. Just like in the Australian game of rugby league, you have to go backwards with the ball in order to move forwards. In life and investing, you don’t need to slow down, what you may need to do is calm down. By far, by numbers and by time and duration the most preferred method by the world’s highest achievers to achieve this has been the practice of meditation. So with that, I’m also going to mention a word here – classical meditation. Because according to one of my great meditation teachers, Michael Rowland, Michael says that meditation has been misunderstood, hijacked, mislabeled and misappropriated over the centuries by various individuals and groups to the point of confusion where most people don’t really know what meditation is.
I thought we’d start there right now with what meditation is not. Whack it up here on the board and I’ll tell you what meditation is not. It is not affirmations. It is not visualisations. It’s not anything to do with music. It’s not anything to do with breathing. It’s not about stopping the mind, which many people believe it to be or a whole host and raft of other things that people believe meditation to be. This is a big “what it’s not”. That’s not to say that these aren’t beneficial in their own right and maybe a benefit to different people for different things, but they’re not classical meditation.
What exactly is meditation? Meditation is nothing but essentially one word and that is extended concentration. If you’re going to look at this word carefully, concentration is made up of two words. First word con, as in consciousness or to become aware, and the other word centra or centre. You put those two together and concentration is to become conscious of your centre.
Do you know, most people don’t even know who or what they really are. I’m reminded of the great animated film The Lion King. If you’ve seen that film, there’s a scene where that monkey has gone in search of Simba, the now adolescent lion that ran away and the lion is talking to the monkey and Simba says, “What do you know?” The monkey says something along these lines, “I know more than you think.” He said, “I know who you are.” He leans forward and he goes, “You’re Mufasa’s boy.” That was the lion king’s father. Now, just as in that, most people don’t know who or what they are. They actually misidentify themselves as their personality and nothing can actually be further from the actual truth. This is why meditation is such a fantastic, exciting, and actually never ending pursuit and journey into the self. But we only have 7 minutes so we’ll save that one and the rest of that for another time.
Let’s talk about meditation – who can do it? Well, the truth is – who can do it? The answer is anyone. I know that’s hard to see. Anyone of sound mind can do this. You don’t need to have fantastic intelligence. You don’t need to have a great income. You don’t need to have great confidence. Your color, creed, religion, is absolutely irrelevant. All that’s required is a basic understanding of the principles, a willingness to do it, and I guess ultimately an open mind, so anyone can practice the art of meditation.
Now I’d suggest when you get started, 5 to 7 minutes is a great place to start. Many people don’t stop thinking, they’re going to do hours and there’s all these people sitting in monasteries and stuff doing it for years of their lives. That’s the other great thing about meditation; you don’t need to go anywhere. You don’t even need to leave the house. It can be done in the privacy of your own home. You don’t need to go to a monastery, or a mountain, or an ocean, or anything like that. It doesn’t cost anything. There’s no special equipment you need. Now of course you need the right knowledge but other than that you don’t need any special equipment to get it done. It can be done anytime at your own convenience. What you do need to do is have the enthusiasm for it, to get started, and to do it on a regular basis. 5 to 7 minutes a day to start, I’m sure you could do that and I’m sure you’ll see results from as little as that but we’ll cover that more in a moment.
Why should I do it? What are the benefits? Well by far the biggest benefit and the reason that meditation has been brought out of the mysticism of the east into mainstream in the Western society has been for the release and reduction of stress. Doctors maintain that about 70% of the population suffers from a stress-related condition. There’s no doubt stress is very harmful to the physical body and the mind as well.
The first and major benefit here is that of stress reduction – would be the main reason most people do it. I’m going to give you a whole host of other reasons. I’m even going to write them down so that we can be aware of what those things are. With regular practice you’re going to increase or have, I believe, better sleep. You want more sleep, don’t you? We don’t get enough rest as it is, so certainly better sleep is one of them. You’re going to have more energy. You’re going to have more healing. It’s actually a force in life, a healing force. Many say the goal of meditation is to activate this healing force or what some may call shakti in India or Greece. Some may even refer to this healing force as your kundalini energy. Again we can go in that more in another time but certainly increased healing is that.
Now there’s some other stuff that people don’t take into account. Productivity can go up massively. Creativity can go up massively. Most are going to suggest things like intuition, awareness, communication. There’s also the higher states of mind, things like: joy, bliss and ecstasy, which are some things that people are searching for but often fulfill them in other ways that don’t sustain them. There’s a whole raft of benefits there why people would want to do meditation.
Now there’s only two more things that I want to share with you really is it’s how to get started. A couple of things, well I’m going to give you a little technique before we finish here that you can try out for yourself. First thing, meditation – it’s always done seated, with a straight back, that can be on the floor either wedged with a towel folded up or a straight back chair would be fine. We never do it lying down. Have a guess. Why don’t we do it lying down? Exactly, you’ll fall asleep in no time at all. It’s always done with the eyes closed. There are techniques to start with your eyes open or with your eyes half closed but true meditation is done with the eyes closed. Why is that? Well a lot of the body’s energy system energy is lost or produced, output, through the eyes. We’re attempting to take all of the body’s energy available systems and turn them internal to examine, dive deeply down into the contents of your mind. Straight back, eyes closed, and just breathing normally. You don’t need to do anything special with your breathing whatsoever. With that, I’m going to give you a technique then I’m going to tell you what to expect and we’ll recap, and you guys can take this away and see how you go. There’s a general basic technique. There’s about 4 or 5 techniques to get started. Everything else are a manifestation of these four techniques in classical yoga.
The technique I want to describe quickly for you is called “piercing the veil”. Piercing the veil is done seated with the eyes closed and what you do is you concentrate on what is called the mind space. The mind space is the point, if you were to touch between your eyebrows and this space when you close your eyes out into the distance. There’s a black space we call it the mind space. Gently close the eyes, breathe normal and concentrate on that space. What you’re not trying to do is go cross-eyed. You’re not trying to make the eyes look at this point. It’s just gently in front of you with the eyes relaxed. What’s going to happen is the mind is going to want to wander. You’re going to concentrate on this mind space and all things will come up to distract you. You just let them pass and come back to the mind space, just staring into that black mind space ahead. Just a side point here, we’re not trying to stop the mind, as I said here what meditation is not. It’s not achievable to do. It’s a biological thing. If you were to succeed in stopping the mind, you would be dead. Probably not a very effective success strategy moving forward for you.
Don’t worry about that. We actually aim to transcend the mind. This comes with practice and later techniques. You’re going to sit comfortably with your back straight, breathe normal, eyes closed, 5 to 7 minutes to start just looking into that mind space.
Now I’m going to tell you what to expect. Well it’s great to go into meditation with no expectation. It is a completely personal thing and everyone gets something different and experiences something different. There are some commonalities and I’ll share them with you now. By far one of the most common things to happen is people get tired. They start to yawn. They feel lethargy. As the body starts to free up its stress and energy systems, lethargy is one of the first things thrown off. Do not be surprised if you get very tired initially. Down the track, roaring energy will come back from this technique but just in the start.
People see colors. People see shapes. More often than not, your body will start to twitch. You’ll have an urge to scratch something, do something. If you do, just scratch it, just do it and just go back to that mind space with this technique.
There’s a whole host of other things, again don’t be too attached to any of it. Your job is to just go back to that mind space. The great thing to do is to have a stopwatch or a mobile phone on a countdown timer for the time you want to do it for and obviously the alarm will go off when you’re finished and you just get on with your day. I highly recommend doing it either early in the morning after rising, or later in the evening just before bed. It seems to have greater effects there for me and many, many people.
Let’s just summarise what we’ve done here. We’ve done what it’s not. It’s not any of these things although they’re valuable in themselves. Anyone can do it. Essentially, what is it? Its concentrations. It’s extended periods of concentration that is becoming conscious of your centre. The energy that powers your body and ultimately your life and the benefits are fairly plain there for all to see. All that’s left to do now is for you to practice.
I hope you enjoyed this. If you want to learn any more about it, of course you can go to our website Stuartzadel.com and under “Products”, we always have available the latest products or tools available to further your life and investment journey. Hope you’ve enjoyed this. Try it out. This is Stuart. To your success!