The Myths that Keep You Broke – 25 & 26

This is the thirteenth article in a series of articles revealing the Myths that Keep Your Broke. In these articles, I will uncover the many myths that too many people believe. These myths can prevent you from creating wealth and complete financial choice™. Let’s start destroying them. Myth #25: I Have to Work Hard for Money The myth for today that you have to work hard for money is closely associated with Myth 24, that hard work is supposed to pay more. And I explained value pays more than hard work. In this article, think of the quote from J. Paul Getty, who was one of the world’s richest men. In his book, he said he would rather have 1% of the effort from 100 men, than 100% of his own efforts. You can extrapolate this out to having 1% of the efforts of 1000 people being ten times what you would earn from 100% of your own efforts. It dawned on me that is what I created by accident with our apartment buildings. I have about 25 families that go out to work every day. Once per month, they share about 25% of their income with me (in the form of rent), and I don’t even have to supervise them. When I multiplied those two figures, I realized I am earning 625% of what might have been my own income. Yes, I have to pay loans and other expenses, but it still leaves plenty left over. If you are in a service business, you could receive 100% of your efforts. However, if you market your services effectively you could create more clients than you could handle on your own. You could pay others to take care of those clients, and take a percentage for the referrals. Just 25% of the fee from four other people doubles your income. This is what some coaches do: They market effectively; they create many clients; then refer the clients to a coach on their staff, and they get an override on each client. And if you are in any type of service business, you can be doing the same thing, from accounting, bookkeeping, computer repair, to software sales. What can you do to bring in more clients than you could handle on your own?Myth #26: Invest Instead of Save Many people believe they need to start investing right away, and that putting money in a savings account, or a money market account, is a waste of time. However, if you start investing before you start saving, what if you need money for something as simple as your car breaking down? Where will the repair money come from? Here is the point: The car never breaks down at the right time, or the water heater never breaks down at the right time. And you have several ways to take care of unexpected expenses: • You can use a credit card. Bad – if you make payments instead of paying the balance in full each month. • You can just write a check from your checking account. Easy – if the balance is large enough. • You can take the money from a “Spending Account” as I suggest in my Wealth On Any Income book. Good idea and easy. • If you started an investment account, you can sell off some investments and pay for the expense that way. More complicated. If the market is up, fine, you just give up some of your gains. If the market is down, that would be bad timing. And you cannot plan for the market to be up at the same time as your car or water heater breaks down. The point is: Life provides surprises. And to be ready you need to plan ahead. That is the purpose behind a “Spending Account”, which is nothing more than a savings account that you can get to whenever life sends you a surprise. This “Spending Account” will also prevent you from adding to any credit card balances if you carry any from month to month. To create this account, just set aside 5% of your income until you have a balance that would be equal to a few months of your income. Then you can stop and add that 5% to your investment account. To Your Prosperity, Rennie