Ted Nicholas Money Secrets
The Success Margin
Wednesday, November 19, 2008
Just returned from a hugely successful seminar tour
in Australia over an extended five-week period.
What a great time Bethany and I had! We even took
a three-day trip on a five-star gourmet train from
Sydney to Perth. It's called the Indian Pacific. On
the way we stopped for a few hours in interesting
places like Adelaide, Broken Hill and Kalgoorlie.
If you ever get a chance to experience this travel
adventure, especially if you love trains, don't miss
On the business scene, I was very surprised that
Australian entrepreneurs are completely tuned into
news about the U.S. economy and the fears of
recession. When the U.S. sneezes, the whole world
These are dangerous but exciting times.
I'm getting lots of subscriber questions from those
worried about their business and finances.
Let's take a hard look at what makes the world go
round. Money. Let's examine the money situation as
it applies to every first-world country, especially the
There are currently 8 million houses with negative
equity in the U.S. right now. Millions of home
owners owe more on their house than it's worth.
Everyone has been hit - the poor, rich and middle
class have all been severely affected. And it's
going to get worse before it gets better.
By Christmas 10 million people will be unemployed
in the U.S. The experts say over 2,000,000 people
in England will be without a job. Even undesirable
jobs are tough to find.
The big three auto makers, G.M, Ford and Chrysler,
are all facing bankruptcy.
Consumers have begun to reduce their standard of
living by cutting spending.
But as always, as an entrepreneur, because of the
many options open to you, you can survive and
even prosper during these times.
To succeed in this environment you've got to look
at the realities. And stop buying all the nonsense
so-called experts and the media are currently
Here is how I see it.
Every 20 years or so we experience a recession.
Recessions are therefore cyclical. And by their
nature temporary. This recession is worse than
most. But the medicine, the cure, the solution, is
In general consumers as well as most business
owners are tuning into and listening to the wrong
You don't have to follow the crowd. I've always
made far more money during recessions than so-
called good times. And so can you.
I'm going to provide, in a moment, some tough love.
I provide my suggestions on what action you can
and should take. But for many because the steps are
not easy, some may be a bitter pill to swallow.
Others will enjoy the process enormously.
When you pass through these times unscathed, you
will prosper like you never have before!
It's a fact while many are suffering, there are some
who are getting very rich. And you can be one of
Here are some survival strategies open to you:
** Debt **
You must become debt free as soon as possible.
There are lots of untruths told about money. Here is
the biggest money lie of all. You can spend your
way to wealth by taking on debt, according to many
people. English, European, Australian, Asian and
American consumers have accepted this myth.
This is, of course, ridiculous. The only long-range
beneficiaries of uncontrolled consumer spending are
banks and insurance companies. Consumers stay
broke while lenders get rich.
The only sure road to lasting wealth presently is the
same as it ever was. Via savings and investment.
To be able to save you must take immediate steps to
get out of debt. This includes paying off credit card
debt, car loans. And finally your mortgage.
Just imagine what life would be like for you without
car payments, credit card payments and mortgage
Finally, you will be in position to help like never
before your family, loved ones and favorite
Instead of being a debtor your whole life, you must
become debt free. This will move you towards
becoming a creditor. A much more advantageous
You also must learn to generate several new streams
What rich people know that poor people do not is
this. The best form of income is passive income.
Poor people exchange time for money. They live
paycheck to paycheck their whole lives.
Unlike poor people, rich people don't work for
money. Instead they invest their money and make it
work for them. Thus they collect various forms of
passive income. This includes rents, dividends and
The rich also recognize the very best form of
passive income is from royalties. The resultant
passive income from intellectual property is
completely unique. You do the work once and
collect royalties forever from books, newsletters,
special reports, software and inventions.
The most outstanding wealth-building vehicle of all
is a business of your own. Every self-made
millionaire and billionaire owns their own business.
The good news. It's easier, faster and costs less
today to become an entrepreneur while holding
down a job. You can start in your spare time while
keeping your day job. And you can build a business
working right out of your home.
During a recession some business categories
actually perform much better than in good times.
There may never be a better time to start a business
than right now.
But, as I've described, you must take steps to reduce
debt and expenses at once. Only then can you fully
cash in on all the opportunities that may be open to
Debt reducing actions include:
* Get rid of car payments. Sell your car. You are
not really impressing anybody. Buy a pre-owned
compact car. Of course, you will also use less
* Sell or refinance your house. Alternatively, if you
are "under water" talk with your bank now about a
moratorium on further payments for a period of
time. Or negotiate to refinance and reduce your
payments until you sell it
* Live rent free. Once you sell your house look for a
duplex. Negotiate a 90 day lease option on a one
year lease on a duplex home in a decent
neighborhood. Before you close the deal and move
in, find a renter who pays you enough to cover your
lease. You can accomplish this and spend very little
or no money
And because a place to live is one of life's
necessities there are always people who are
interested in renting
* Get rid of credit card debt. It's costing you as
much as 22 per cent or more in interest. This level
of interest will kill your finances. Cut up all credit
cards except one until you can completely pay it
off. If you can't pay cash, simply don't buy it
* Slash clothing costs. Discover the beauty and
creativity of shopping for beautiful clothes in thrift
and "second hand" shops
** Savings **
You must master the art of delayed gratification. To
become very wealthy, discover what has been
correctly deemed the "8th wonder of the world" -
compound interest. Save and invest 15 per cent
of your earnings from here on. I've been doing
this starting at age 20.
If you save just $1 a day from age 20 to age 60 you
could retire with $1,000,000 in cash.
Start a recession-proof business in your spare time.
Some of the most attractive are those that help
customers earn or save money. There are numerous
examples. They include information publishing,
fast-food restaurants, cafes, discount stores and
services. Others are mail order companies, bargain
shops, temporary help agencies, repair services,
discount realtors, discount stock brokers, thrift
shops, second owner shops, etc.
** Governments **
Don't make the mistake of fully trusting any
government on this planet. All work to perpetuate
their power, not protect your rights and freedom.
Employ a personal multi-flag system involving at
least three countries. (1) live in one county; (2) Set
up your business in a second country; (3) Keep your
money in a third country.
** Investment Advice **
Make sure your advisers are successful. Never take
investment advice from anyone unless they can
prove they are wealthy, or at least as rich as you.
And also have gotten rich by following their
recommendations to you.
Many investment advisers who I've questioned have
confessed to me their surprise that more clients
don't ask them questions about their own wealth.
Choose advisers carefully. Ninety percent of
investment advisers I've grilled have surprisingly
little to show as far as wealth is concerned. Indeed,
many are broke. Stop taking business advice from "broke"
people. This includes friends and relatives. When I
stopped doing this I immediately started becoming
much more successful and wealthy.
** The Best Investment **
The best investment you can ever make is in your
own real-world education. When you build your
knowledge it can never be taken away from you.
Invest in books, DVDs, CDs and seminars. I've
invested over $50,000 annually for many years in
my education. And it continues - life is a continuing
Remember, you can become an expert within three
years on any topic by reading just one hour a day.
You can become a world authority in 5 years.
** Skills **
Learn to sell. Effective selling may be the one skill
that practically guarantees you will get or keep a
job, especially during a recession.
Business is selling. You cannot make money unless
you master selling. This should be taught in school.
But it's not.
Instead of honoring the selling profession it is often
criticized and even "put down" by professors,
books, movies and plays, i.e., "Death of a
Salesman" by Arthur Miller, etc.
Contrary to common belief, effective selling is the
highest paid job in the world.
Even less well known is this. Selling using the
written word is far more lucrative than personal
sales. And copywriting is a learned not an inborn
Bottom line is this. You can learn how to become a
wealthy and highly sought after copywriter. Many
of my students earn $100,000, $250,000, $500,000
and more. Several are millionaires.
During tough times copywriters tend to be busier
during these times than ever. Why? To survive,
business owners must continue to bring in new
customers regardless of the economic situation.
As a professional copywriter you can write your
own paycheck. And be completely free to create
whatever lifestyle you choose.
Sales are, of course, the lifeblood of every business.
If you are working for a company and can prove
you can bring in sales through creating sales copy,
you will never be laid off or fired.
** The Most Important Investment Decision No
One Talks About **
In what currency do you do business?
The strength of the currency in which you keep
your investments is crucial to your economic health.
This includes shares, bonds, insurance annuities.
Yet few advisers ever bring it up. The reality? Most
have no clue or knowledge about its importance.
It's crucial to diversify the currencies amongst
several strong ones in which you hold investments.
The world's wealthiest people utilize currencies
such as the Swiss Franc, Australian Dollar,
Norwegian Kroner and the Euro.
Unfortunately, the U.S. dollar has been one of the
worlds weakest currencies especially during the last
few years. That's why the super wealthy such as
Buffet, Gates and Soros have moved their cash
completely out of U.S. dollars for at least three
years. I have not had a single investment denominated
in dollars for several years.
** The Bailout **
I oppose the bailout. Fannie Mae, Freddy Mac, IMG
and the "Big 3" auto companies got into bad shape
due to poor decisions and ineffective management
who have made numerous blunders.
Each of these companies needs to be completely
restructured. Not given billions of dollars to the
same or similar weak, ineffective management that
caused the problems. And the U.S. taxpayer is
going to have to pay every penny. To put these
same people who have destroyed their companies in
charge of billions makes no sense whatsoever.
That's like putting the fox in charge of the henhouse
and expecting a good result.
The solution? I personally don't think bankruptcy of
these entities is the end of the world. Just like the
airlines have done they could reorganize and
restructure. They could bring in new management.
And financing could be done on the free market.
The market should be allowed to work and cleanse
itself of ineffective companies and management.
Instead, simply by giving money to these poorly run
companies, the U.S. is tossing out the free market.
And not solving the basic problem in any way. All
these companies will have their hands out for more
money very soon.
This is a very dangerous road indeed. Free markets
are what has made the U.S. the envy of the world.
There is a proven system in the U.S. for companies
who need to reorganize. It's called Chapter 11
under the bankruptcy law.
What about consumers who are being foreclosed
upon? I don't wish them any more suffering. But
what has happened to individual responsibility?
To expect the government (meaning other
taxpayers) to bail homeowners out of a house whose
price and payments without a down payment they
could never afford, should not be the responsibility
of other taxpayers. Especially the more responsible
and frugal ones.
** Obama the U.S. President Elect and the
Democratic Congress **
As a libertarian I favor free markets, small
government, and maximum individual freedom.
The election of President Elect Obama was clearly a
vote not for him, but against the enormously
unpopular President Bush.
I am actually happy about the historic choice of
an African-American U.S. president. This will
inspire in many ways the African-Americans,
Latinos and other minorities in the U.S. and
throughout the world.
Finally, many racial barriers have been lowered.
However, I'm also concerned about the near future.
Not just for myself. But for my children, friends
and clients who live in the U.S. Right now the U.S.
needs lower taxes and smaller government. Obama seems
to favor higher taxes and bigger government. This
clearly is the wrong direction and won't work.
I can only hope and pray that once in office the new
president will be persuaded by taxpayers as well as
his advisers to reverse course on many big
I will share my thoughts and suggestions with
Obama. Whatever your views are, I hope you do the
same. Especially if you are an American citizen.
I trust your recession strategy will give your
business a success margin.
© Copyright MMVIII Ted Nicholas