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 it!
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 catches cold.
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 U.S.
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.
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Consumers have begun to reduce their standard of living by cutting spending.
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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 reporting.
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 evident.
In general consumers as well as most business owners are tuning into and listening to the wrong music.
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 them.
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 payments!
Finally, you will be in position to help like never before your family, loved ones and favorite charities.
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 position.
You also must learn to generate several new streams of income.
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 interest.
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 you.
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 expensive gasoline.
* 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 continuinglearning process.
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 skill.
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 threeyears. I have not had a single investment denominatedin 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 financial issues
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.