MY FINANCIAL GUIDE TO SUCCESS
What You should have learned in School and at HomeBy Tim SmithAuthorHouse
Copyright © 2010 Tim Smith
All right reserved.ISBN: 978-1-4567-1075-0Contents
APPENDIX: Manual for Excel Spreadsheet "Cash Flow for Purchasing Real Estate".....................203
Chapter One
Change the Way You Think About Money/Wealth
As we all know money is an emotionally charged subject for most people. So much so that it is the major cause of divorce. The reason it is so emotional is because most people don't have control over themselves and their emotions so they do not have control over their money. They allow their emotions to rule their spending habits rather than use their common sense. This is the reason credit card spending has become out of hand for most people facing financial issues with large balances. The stress of not having enough money can cause medical issues as well. For some it is depression, heart problems from stress and malnutrition from the lack of nourishment. Let us face it where there is lack in the world there is crime in mass because it does not bring out the best in people. Just look at some places in Africa where aid in the form of food and other supplies is taken over by armed guerillas because of corruption. There are some hidden psychological imprinting that are learned by either family members or the surrounding environment a person is brought up in; school, neighborhood friends and their families, shows watched and books read. The above paragraph is the reason for the first section of this chapter.
Psychological Point of View
The first place that a child learns about handling money is through his/ her parents; usually following their same habits, good or bad. The different personalities that are learned are miserly, spendthrift, competitive and frugality. You know all these people and their personalities. The miserly is the cheap parent that was always pennywise and pound foolish. The spendthrift is the parent that always spent more than what their worth; the Smiths keeping up with the Jones'. Then you have the competitive parent whose motto is "play hard and work even harder" so you can play hard some more. These are the parents that more than likely have good salaries but they spend as much as they make. These people are what the authors Thomas Stanley & Danko call in their book "The Millionaire Next Door" the "Income Statement Affluent." They may have two homes but their entire salaries are used to uphold them and like gerbils on a wheel they have to keep running to keep up but there is no end in sight. Eventually, like the gerbil, they will get tired and either fall off or burn-out and jump off. Finally you have the frugal parents. These people are what Stanley and Danko called "The Balance Sheet Affluent." These people maybe like your parents that grew up in the depression years in America or they came from a poor country or they were brought up in a poor neighborhood. It is being brought up in these conditions that the frugal side emerges for some but not all people. These are stories that most people hear about growing up. Here is where the mindset of money has to be taught properly but unfortunately schools do not teach the proper handling and investing of money and depending on what type of parent you have you are at the mercy of your environment. This is not to say a person cannot climb out of this situation. It starts with your point of view of money and how you were educated about money.
There is another psychological view about money and that is what Tony Robbins teaches by using his "Pain and Pleasure" principle, which means you get pain from not having it and pleasure from having it. "Gee Toni tell us something we don't know." I kid with this last remark because he has other psychological slants such as live your life in abundance and give/tithe ten percent of your income to charity so you can train your brain that you have more than enough and the more you give you will receive tenfold. Where he and others like him such as Bob Proctor, Loral Langmeier and Rhonda Burn, the creator of the DVD named after her book "The Secret," where the two prior authors starred on, was taken from the ultimate success self-help book "Think and Grow Rich."
There is another psychological point of view that amazes me because I used to hear this all the time from my mother and obviously it resonated to her children. It is this idea that in order to be wealthy you have to be corrupt or a crook. Even TV and movies portray this with shows and other programs that focus on this subject of greed and thievery. Matter of fact CNBC has a program called "American Greed" that talks about corporate titans that created pyramid and ponzi schemes that robbed people via fraud. This is not the norm but it fits in with many people's constructs of what "Big Business" is all about. This is why I have written the next section where you have some homework. This next section will let you see where you fit in when it comes to these lies about money and hopefully change this point of view.
Write Down Your Fears About Having Money:
Get a piece of paper and write down all the fears you learned about having money and ask yourself honestly where you have learned them. Did you hear it from your parents, siblings, friends and their parents, school or environment; job, neighborhood or was it from the TV shows and movies that you watched. You can't believe how all these things listed above influence the subconscious level of your brain. Remember this bit of information that I heard Dave Ramsey refer to on one of his books as well as a psychology class I took at university that explains that if you repeat a lie often enough you will start believing that lie. This is true when you take into consideration religious cults that have you repeat a mantra over and over again. This is brain washing technique on a lower level and it is also what is used while administering hypnosis. Think of the P.O.W [Prisoner of War] when they get released from their captors. What is the first thing the government agencies such as the armed forces do; deprogram the P.O.W soldier. I heard about this study in my psychology class where they found out that the easily controlled P.O.W that did not have any goals in life were treated nicely by their captives and those that had goals their captors know they cannot easily control and manipulate were treated harshly to break them. They said that those that were treated nicely gave up on their life because they saw no way of getting out alive and so, some of them, they just laid in bed and pulled the covers over their head and died. They died even though they were not abused nor had any illness; they just gave up on ever being rescued.
Just to drive this point home there is another study in psychology where you have a control group and an unwitting subject that is unaware that he/ she is part of an experiment. They were all shown a flash card with a red parrot and another card with a green parrot. Every time the control group was shown a red parrot they were told to respond that it was a green parrot and when shown the green parrot, red. Sure enough every time the group privy to the information was shown the red parrot they would say it was green while the unwitting subject would say it was red and when shown the green parrot the control group gave the opposite color while the unwitting subject would say green. After a while the unwitting subject would look at the other people in the group as if they were nuts but eventually when done enough times the unwitting subject in order to not feel like he/she was left out of the group would eventually agree with the control group and call the red parrot green and the green parrot red. In business they call this "Group Think" where the boss is a prominent figure of the company and they go along with his decisions even if it is wrong because he is the boss, which can have a detrimental effect on the company and its bottom line. For example, Steve Jobs thinking that IBM was the enemy where they made a commercial that shown a bunch of head shaven subjects being brain washed into thinking that IBM is the only pc to have and this woman marathon runner runs into the room hurling a sledgehammer at the screen to break the eye contact of the brainwashed subjects. What Steve Jobs failed to realize is that it was Bill Gates and his Microsoft operating system that was the real enemy and he gave him a front row seat to what the company was doing. That is why when Apple Computers, Inc. woke up to this fact they went after Microsoft over their Windows operating system that was very similar to their Apple OS (operating system) desktop. Do you think that someone said that he was wrong about his view of IBM or do you think the employees just went along with his decision even though it was wrong? Think about it. This type of group think happens to occur often in corporations but it most of the time goes unchallenged. This is the reason for this section of the book. Do not be a part of the group think from those around you. As Dave Ramsey says in his book, "Don't listen to your poor relatives and friends that give you advice on money. Listen to rich people." Now put down this book and get a pen and paper and write down all the fears you have learned about having money or use the spaces provided below. I will list as many as I can here as examples. Maybe you have heard these fears before:
• If I have an abundance of money people will start to judge me. • If I have an abundance of money my friends won't want to hang out with me because they can't afford to do the things I can afford to do. • If I am generous with my money my friends may think I am trying to buy their favor or friendship or feel I will use this generosity as a way to sway them into doing something they don't want to do. In other words an ulterior motive. • If I have too much money I have to worry about the IRS. • If I have too much money I won't be as spiritual / Godly. • If I have too much money people may think I am looking down upon them as if judging them. • If I have an abundance of money people may think that I got that way by being a crook or I took advantage of people to get it.
Now it is time to place what you learned below:
• __________________________________________________________________ • __________________________________________________________________ • __________________________________________________________________ • __________________________________________________________________
What Beliefs Were You Taught About Money
This section deals with the beliefs that you were taught about money; mostly by your parents or relatives. I am sure you have heard all the quotes, clichéd phrases and misconstrued Bible teachings about money. Here is a list of those beliefs I have heard over the years and maybe you have too:
• You have to work hard for money
• Money is the root of all evil
• Money isn't everything
• Money can't buy you love
• It is easier for a camel to get through an eye of a needle than it is for a rich man to get into Heaven • A penny saved is a penny earned
• If you are rich and successful you have to worry about the mafia
• If you become wealthy you will become corrupt
• People with money must of tricked someone out of their money
• If you own a business you have to grease local politicians palms; graft
• You have to worry about someone robbing you
• You will judge other people by their social economic standing
• You will be less spiritual and become like an Ebenezer Scrooge
• Money will consume you and you won't have time for relationships
Now it is time to write the beliefs you heard while growing up:
• __________________________________________________________________ • __________________________________________________________________ • __________________________________________________________________ • __________________________________________________________________
These are just some of the beliefs that I have heard over the years. The very first one is the one I heard most often by my parents and others of their generation. The only problem is they misconstrued this saying and did not take it into its real context. They are from the days were you got a good paying job and believed if you worked hard you can become successful. They forgot that this nation, America, was based upon industrious people that either owned farms or their own businesses. The real truth to this saying is that you should work hard for your own business and making yourself wealthy instead of someone else. The second saying that money is the root of all evil is misleading. It should really say, "People that abuse the power of money is the root of all evil." Money itself is not evil it is the person that abuse it for illegal means that is evil.
This next saying I believe is dumb and that is "Money isn't everything." Money may not be everything but you still need money in order to live in the world we created for ourselves today. Converse to this statement is what I am about to say. There are still tribes that do not have any money and live free from all our structured restrictions but these once carefree tribes now have to worry about us encroaching upon their lives with deforestation. They do not need our financial help because their wealth is their freedom from our society. They live in huts in the rain forest and eat whatever the forest would provide and we want to ram our lifestyle down their throats of working 9am to 5pm. Their lifestyle is what most people wish they had; freedom to do as they please. To just be able to eat, sleep and have shelter from the elements. For them money is not necessary but for us money is necessary if you want to live their life. A life of ease and enjoyment and just work when you need to eat or because you want to and not because you have to. There are a couple of phrases that Tony Robbins stated on his program that I thought were very good: "When people say money isn't everything it usually means that they haven't been without it for too long." The other phrase is: "They just don't know where to shop." As far as the phrase "money can't buy you love" depends on what street corner you stand on ... Ha, ha. Pardon the mild joke. I agree that money can't buy you love but it does help to have it if you want to bring your date out to a movie that currently costs between $8-$12 dollars per person plus another $10 plus to buy popcorn and drinks. A night out at the movies is now about $40 dollars for a couple; which you can now buy two DVD's or a Blue-Ray HD movie. Try telling the one you love that you don't have the money to buy a house to have kids in and see if that significant other doesn't leg-it.
The next saying that it is easier for a camel to get through an eye of a needle than it is for a rich man to get into heaven is just one of many verses that people use to talk themselves into poverty. They forget the other stories and teachings about money in the Bible. One of which is where it talks about getting out of debt like the following: "My son, if you have put up security for your neighbor, if you have struck hands in pledge for another, 2if you have been trapped by what you said, ensnared by the words of your mouth, 3then do this, my son, to free yourself, since you have fallen into your neighbor's hands: Go and humble yourself; press your plea with your neighbor! 4Allow no sleep to your eyes, no slumber to your eyelids. 5Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler. 6Go to the ant, you sluggard; consider its ways and be wise! 7It has no commander, no overseer or ruler, 8yet it stores its provisions in summer and gathers its food at harvest. 9How long will you lie there, you sluggard? When will you get up from your sleep? 10A little sleep, a little slumber, a little folding of the hands to rest— 11and poverty will come on you like a bandit and scarcity like an armed man." This teaching from the Bible itself is a lesson about the use of credit card debt and co-signing for someone else's debt. It also brings up the subject of being your own boss by being industrious in the lesson of the ants not having any boss which work for themselves. There is also the Bible story of the five talents, which was a measure of silver back then. The master had three servants, which he gave talents. The first he gave three, the second two and the third one. The first came back and had doubled his master's talents to six and the master said "Well done," the second also doubled his two to four talents and the master once again said, "Well done." The last came back with the same one talent and the master was displeased and said, "You sir are a wicked and a slothful servant. Take away his talent and give it to the man with three." This story tells the reader that a person that puts his money to work hard for them will be given more. If a person is successful with their money people will seek that person out hoping that person can help them make more.
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Excerpted from MY FINANCIAL GUIDE TO SUCCESSby Tim Smith Copyright © 2010 by Tim Smith. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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