Business Advice From a Bathroom?
Who knew you could make bathroom graffiti into business advice?
Mike Michalowicz, the author of The Toilet Paper Entrepreneur , did just that! Today Mike is officially releasing The Toilet Paper Entrepreneur to the world! His book is all about growing a business without money , experience, or other “necessities” – because that’s how he launched all of his companies (two of which have sold for millions). Check it out at www.ToiletPaperEntrepreneur.com . I’ve talked with him, and he’s agreed to give my readers free shipping! Just enter "FREESHIP" when checking out at www.ToiletPaperEntrepreneur.com . Thanks Mike!
To kick off his book launch, Mike’s released several blog posts, one of which is called "The World’s Best Business Advice from Bathroom Graffiti Artists " that shows you what you can learn about business from what you thought was pointless bathroom graffiti! Definitely worth reading.
The 4 Types of People in the World of Business
Robert Kiyosaki, the international best-selling author of numerous books including Rich Dad Poor Dad and Increase Your Financial IQ , explains the four different types of people in the world of business as:
1. Employees
2. Self-employed/Small Business Owners/Specialists
3. Big Business Owners
4. Investors
Watch the video below for great financial training on each of these people directly from Robert. Once you are done with the video, I would highly recommend reading his second book Cashflow Quadrant for greater clarity on the advantages and disadvantages of being one or another of those people.
If You Feed Your Head Garbage, You’ll Live Life in the Dumps
What thoughts do you allow in your head? Are they positive or negative? Do your associations with friends give you value or harm your growth?
I’ve been around people before who are just plain negative or pessimistic. Most don’t realize it, but their negative thoughts over time lead me to want to run away. Have you ever felt that way?
These are the people that always have a reason or excuse as to why their life sucks. They whine, complain, or are otherwise generally moppy. They tell you what’s wrong with the world, and offer few, if any, solutions…or do anything to change their circumstances.
I believe it’s time to start asking the tough questions:
- Do you have friends that are bringing you up, or tearing you down?
- What do they have you reading?
- What do they have you listening to?
- What words do they have you speaking?
All of these are important. The difference between those who are successful and those that aren’t are habits and shifts in mindset.
Your Challenge
I challenge you to make a commitment that you will improve yourself. Put down the TV remote and pick up a good book, watch some good Youtube videos on leadership or personal development, or listen to an audio that will help you further your brain. The more work you do on you, the less you’ll have to worry about the stresses and pressures of life. Surround yourself with those that are encouraging you in the direction you want to go. If you are unsure of which direction that is, surround yourself with positive, upbeat, emotionally mature people who are willing to share their insights and knowledge with you.
Learn, grow, and adapt to the changing times. And most of all: be aware of what you feed your mind. You don’t want to end up in the dumps.
Quit Worrying About You: Serve More People
The way to wealth is to serve more people.
This can be done slowly or scaled by leveraging others time and talent.
Why is this so important to realize? Because many of us are selfish.
I’ll admit, I’ve been selfish myself. It’s part of human nature to want to survive and worry about ourselves, until we reach a point where we are not worried about the basic needs. See: Maslow’s Hierarchy of Needs
Once we have what we need, we can begin to work outside of ourselves and focus more on giving to others. This in turn leads to great life satisfaction and increased earnings over time.
Make sure that whatever you do in life is fulfilling so as not to have a hard heart or a weary soul. Your health is greatly affected by what you do and those you surround yourself with. There was an interesting article written about the health affects of different levels of affluence called Be As Healthy As the Wealthy . I think this article points to a significant issue that plagues many people: their chosen vocation doesn’t give them the overall life satisfaction that they need in order to remain healthy.
Health is about way more than money: it’s about having a sound mind, body, and spirit. The foundation for being able to develop these areas of your life is best laid when you aren’t so worried about money. This should be good motivation to find what it is you like, find a way to serve more people, and reap the financial rewards for doing so.
2 Financial Giants Go Down
This morning, Lehman Brothers (a 158 year old investment firm) filed for bankruptcy, and Merrill Lynch is selling itself to Bank of America. These two investment banks are number 2 and 3 out of the top 5 investment banks on Wall Street. The only two that remain are Goldman Sachs and Morgan Stanley.
It seems like the financial meltdown can’t get much worse.
While this may seem like financial Armageddon, there is a positive ray of light behind these events. First of all, it shows that the financial markets are finally dealing with bigger chunks of the bad debt that’s out there. Restructuring for the future is a necessary move and will lead to a stronger banking system on the other end.
To see an interview about the situation, watch this:
Fannie and Freddie: Tale of a Takeover
Fannie Mae and Freddie Mac, two of the nation’s largest companies that back mortgages, were taken over by the Fed as of Sunday 9/7/08. They provide funding for nearly three quarters of all new-home mortgages according to the Wall Street Journal . The government will provide nearly $200 billion dollars of capital to keep the two mortgage companies afloat.
What does this mean for your money?
Your dollar is going down in value…again. The more the government prints, the less yours is worth as they continue to add more supply to the market. Inflation will rise, and the those who are saving in low-yielding investments are having your wealth taken away. I hope the bailouts stop soon, we can’t afford this debt! For more on the story, see the Wall Street Journal article U.S. Seizes Morgage Giants. .
“My Wage”
This poem by Jessie B. Rittenhouse titled "My Wage" is something to think about when you wonder about what your financial life could be. This poem is featured in the popular book Think and Grow Rich by Napolean Hill. I would highly recommend this read for your personal development. This one book has changed many lives. Here is the poem:
My Wage
"I bargained with Life for a penny,
And Life would pay no more,
However I begged at evening
When I counted my scanty store.
For Life is a just employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.
I worked for a menial’s hire
Only to learn, dismayed,
That any way I had asked of Life,
Life would have willingly paid."
Sam Israel
Case Study
Sam Israel was the manager of a Hedge Fund called Bayou. Everything seemed to be going well for several years, until one day all the investors got a letter saying that he was closing up the firm and would be mailing them all a check in the mail. He cheated people out of nearly $300 million dollars.
Upon a background check, attorneys found his background to be questionable. He had been sued several times, and even was accused of doing drugs. This isn’t the kind of guy you want making decisions about your money.
He claimed in court that he was a bad fund manager, and tried to cover it up by getting more money into the fund, hoping to do better. Obviously this scheme could only work for so long.
How could this have happened if his books had to be audited?
The accounting firm that signed off on the company financial statements was a fake, set up by Sam to keep the scam going. The accounting firm had a phone number and even a real physical address, but nothing was there.
If you want to read the full story, read it here: Sam Israel Fraud
What can we learn from this?
- Always check up on anyone you invest with. Get background information and be sure to verify that the management team is solid before giving any money.
- Have your own accountant go through the numbers and call the company to verify.
- Don’t have a negative outlook on the world because of people like this, but be cautious. As the saying in real estate goes: trust, but verify.
The Rules of Money for Gen Y
The rules of money have changed over time. It used to be that you could go to school, get good grades, get a safe, secure job (with benefits), and retire on Social Security, a pension, and personal savings.
As Gen Y, we realize this isn’t the reality for us. Safe, secure jobs are as ancient as the Romans and we know there is no golden parachute waiting for us in retirement.
So what exactly is the reality we face? In order to understand what’s to come, we must understand what’s happening in the global economy. We can look at the future of money by understanding the timeline of events that have led us to where we are today.
Bottom line: There are new rules of money for our generation.
In order to understand the new rules, we must first understand the 3 Types of Income :
- Earned
- Highest tax bracket. Federal, State, and FICA taxes erase about 50% of your total wages.
- Earned by trading time for money. There are only so many hours in a day, so there is a limit on how much you can earn.
- Portfolio
- Middle tax bracket. Long-term capital gains and dividends are 15%.
- Earned by buying stocks, bonds, mutual funds, CD’s, REITs, Notes, and other securities.
- Passive
- Lowest tax bracket. Taxes can be as low as 0%.
- Earned through wise investments in real estate and royalties.
In our generation, working hard and getting a high-paying job will make you broke. You’ll be working for earned income and pay more in taxes.
Your Goal: To turn your earned income into passive and portfolio income as fast as possible. In an age of rising inflation, the dollar will continue to fall and the only items of value left will be those true assets that you have.
The New Rules of Money…a Timeline
The rules of money have changed. But how did we get here?
Here is a brief timeline of events that have led the U.S. to be in the financial position that it’s in, and how it’s affecting you.
1913: Federal Reserve Bank Established Federal Reserve History
- This non-government, non-U.S., privately held bank would now control the monetary system.
August 14, 1935: Social Security Act signed into law
- This is the greatest pyramid scheme ever created. The idea was to provide workers with pay to help offset the expense of old age. The age to get full benefits was 65 when the law was first passed; in 1961, an Amendment lowered the age to 62 to get partial benefits.
1943: Automatic Payroll Tax
- The Federal Government needed money to fund WWII. In order to raise money, a law was passed that allowed taxes to be taken directly out of employees paychecks. This ensured the government got paid first before any wages could be taken home and spent on other things.
1971: Gold Standard Abandoned
- Under President Nixon, the U.S. is taken off the gold standard. No longer is our money backed by anything of real value. It is now a currency , subject to the ups and downs of the marketplace. The only reason it still holds "value" is because we all believe that it does. This will continue as we all play musical chairs…and the person left standing when the music stops will be the one holding a bag with worthless cash.
Watch an interview with Congressman Ron Paul about the monetary situation in the U.S. as a result of this decision: Ron Paul Interviewed by Mike Maroney
1974: Establishment of the 401(k)
- Workers longer life spans began to weigh heavily on the balance sheets of companies. They could not keep financing the lives of people for 15 or more years beyond their retirement. The Employee Retirement Income Security Act (ERISA) was passed to handle this challenge. Workers were now responsible for their own retirement planning: there were no more pensions to bank on. The problem? No financial education in school. This low financial intelligence has lingered through today, as our parents gave many of us old, outdated advice on the subject of money.
- The problem with 401(k)’s is that they are administered by financial institutions that diversify your investments in mutual funds as a "safe" long-term investing strategy. The problem is, not only are your investments not safe (they are only "diversified" amongst one type of asset class: paper assets), but they are taxed at the highest rate: earned income. So when you get to your retirement day and you think you have a big nest egg: wave goodbye, cause the government needs it’s share of your pie.
Stay up-to-date on here and listen to the financial news to know of what new law changes and other policies are put in place that can affect your money.
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