The Difference Between The Rich and the Poor

Quoting Myron Golden…”Rich people understand how
money works. Poor people only understand how to
work for money.” Continuing… “Most people don’t
understand any financial principles. They don’t
understand leverage. They don’t understand
residual income. They don’t understand passive
income.”

Einstein described compound interest as the “most
powerful force in the universe.”

As I see it, rich people know how to make their
money work FOR them. They also see the difference
between an expense and an investment.

Lets start with this – as you earn money, what
are you doing with it?

Most people take the money
they earn and spend most of it on things that can
not be termed as assets. Consumables, rent money,
phones, etc… are all things that have little or
no long term value. Some money is (hopefully)
saved…but where? In the mattress? The bank?
(Now-a-days there isn’t much of a difference!)
Since REAL inflation is around 10%, unless your
money is earning AT LEAST that, you’re falling
behind – that is, the money you have is losing
purchase power.

So, how does one INCREASE their purchase power?

I’ve learned to find investments that grow at a
faster rate than that of inflation. While there
are no guarantees, and there is risk; gold and
silver over the past 20 years have done VERY
well.

Of course, not all gold and silver investments
are the same…so get some counsel BEFORE you convert
your hard earned cash into commodities.

Another place the RICH go to “beat inflation” is
to invest in and/or build/grow businesses. A
business, in its perfect form produces income –
passively. That is, it money comes in every month
as the business operates. Some (and this is not
me) have opted to purchase a building that has
rental space (offices or apartments) – the cash
flow comes from the difference between monthly
mortgage and related expenses vs. rental income.
Hopefully, the rental income exceeds the
expenses!

And when it does, a passive income stream has
been created.

Some (and this DOES include me) opt to invest in
themselves. How? Start a “home based business”.
The start up costs are minimal. The tax benefits
are outstanding (deductions are available to
“home based business owners” that are not available for
those who work for a wage). Jim Rohn coined it by
saying “You can make a living while working for a
wage; you can make a fortune while building your
business” (forgive me if I paraphrased!)

I’m reminded of a recent event where I showed a
business to a woman in her 50’s who is clearly
struggling – waking up at 4:45am to go to work
and not returning from work until after 6pm. Living
with very little “extra” in her life and clearly
worried about MONEY. She reviewed the company and
its product – she LIKED IT and saw how it is
genuinely different from many other home based
businesses. (If you write me, I’ll tell you what
company it is.) BUT…when she saw it was about
$300 to get started, she said “I promised myself
I’d never spend money to do something again.”

Now what does that tell you?

It tells me that she is not viewing the start up
costs as an investment – not just in a business,
but in herself! Yes, it also tells me she has
been burned in the past – and I can understand and
appreciate that. But…learning from one’s
mistakes does not necessarily mean never
investing in a business again; it could mean gaining a
deeper understanding of the industry – one that
includes realizing that no where outside of
network marketing does your “sponsor” have a
vested interest in YOUR success. And…in my
experience IF you have done your homework and
have decided to affiliate with a reputable company
(there goes 99% of the home based industry!) that
offers a great, value packed product or service
that is not over hyped (there goes almost all of
the rest of it!) – yup, i’m very critical AND
very selective – the ONLY other variable is your
sponsor – the person who “signs you up.”

What do you need or should you require in a
sponsor? SUPPORT! For example, on this page –

take a look at my “ultimate video training series” (its “on the

house” for the asking – just opt-in on the right
side of my blog)…and if you’re already there –
just look to your right! (by now you may need to
scroll UP the page). The bottom line is this –
you want to insure that your sponsor is vested in
your success….and that they treat their
business…like a business.

When you look at thing THIS way, the $300 start
up cost is trivial when you consider the value of
the mentorship and support a good sponsor and a
good company will provide.

Of course, and this is something Harlan talks
about in the Mastery webinar…look for my post
on this topic…the next step is ACTION – sustained
action that even with some initial success, a
plateau WILL occur and THAT is what separates
“the men from the boys” – boys quit; men don’t. (No
gender bias please – its a phrase of speech!…so
the same is true for girls and women.)

I’ll close with this – are you a “deer in the
headlights” in this economy (i’d say that applies
to most as I view peoples behavior) – cutting
back left and right as gas prices rise; becoming
increasingly dependent upon a government that is
paying you in dollars that have less and less
purchasing power – and – may completely collapse
in the future OR are you thinking like the rich –
looking for opportunities; evaluating them
carefully; doing your due-diligence and insuring
that your dollars – whether few or many right
now, are working FOR you?

I’d love to hear back from you and if you want
someone who can EARN your trust – and someone you
can work with (and not just be a “yes”
man)…contact me.

Rich Dad Poor Dad

All the best,

Alan Sills
alan@alansills.com
561 676 1205
http://alansills.com


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