I’m asked all the time, especially during radio internet shows… “If you could do anything differently, what would it be?” And my normal response is… I wouldn’t do anything differently. I would not be in the situation I am today if I had done anything differently. My struggle is my story and it serves me. My good friend, Jan Johnson just had her third cancer surgery on Friday at the Mayo Clinic in Scottsdale, AZ. She is an amazing friend and business woman and each time we get together we have insightful conversations about life and business. I went to visit her in the hospital in Arizona yesterday and she said to me, “The further someone is from what they are meant to be doing, the more challenges they will experience.” My initial thought was, this is so true! And the challenges are meant to take us to what we are supposed to be doing as long as we are open to it!”
And this has always been my take. And because of this philosophy, I have always said, I have no regrets because I have found what I am supposed to be doing! But I have since learned that I do have ONE regret!
Jan is going to be fine but the last 10 years have brought her rounds of Chemo and multiple surgeries for a couple of different types of cancer. She was in good spirits and is now on the road to recovery.
There is one little thing that I didn’t do that has cost me millions of dollars over the course of my lifetime. And if I could impart this one thing on you, regardless of your age, it can change your life. The crazy thing is, I knew it in my 20’s, 30’s and even 40’s and I didn’t do it. And most likely you know it too. BUT KNOWING DOESNT MAKE A DIFFERENCE! It is so simple and it is probably the most expensive mistake that everyone makes. This one thing will change your life if you apply it and it takes no skill at all. I finally started doing it but didn’t start until I was in my 50’s!
Can you guess what it is? I will tell you that my net worth would be DOUBLE what it is today if I had just done this one little thing.
If I had simply put away 10% of my income into a simple conservative interest bearing account and then just left it alone, My net worth would be double what it is today. And It’s my biggest regret. Such a simple thing to do. It takes no skill and anyone can do it.
And if you don’t make much money as a network marketer, this can transform your future by just taking 10% of EVERY CHECK and putting it away over a long period of time… even if your network marketing check is just $100. Most people both inside and outside of network marketing spend every penny they make AND then they rack up the credit cards. And as the credit card balance gets higher and higher or if they have an emergency, they take every penny they have saved and pay down the balances.
Here’s what I recommend you do and here’s what I regret not doing. Put away 10% of EVERYTHING you make and DON’T TOUCH IT NO MATTER WHAT. You can have this done through your bank or investment company automatically so you don’t even see it. 5 years from now you will check on your balance and you will be BLOWN AWAY. This is a simple but powerful investment strategy that will change your financial life. You will feel a sense of security like you have never experienced.
There is an app out there that I don’t use and I don’t have any connection to called “Acorn” Acorn will round up every purchase you make to the nearest x amount and deposit the difference into an interest bearing account of your choosing. This is another way to accomplish the same thing. I think this is a brilliant strategy as well.
Don’t just brush this aside as another one of Jordan’s blogposts. Don’t evaluate this idea or try to figure out if it is a good idea. It IS a good idea. It’s the concept taught in “The Richest Man in Babylon”. If you haven’t read the book, I recommend it, but don’t wait until after you have read it to do this. It requires no knowledge at all. Just take immediate action. You have nothing to lose. The key is pay yourself first, and then don’t touch the money, “NO MATTER WHAT. Make the investment account holding this money sacred. It’s not for emergencies. It’s your legacy money.
Now here is a way you accelerate the money that goes into this account. Because you are putting away 10%, if the money you are making goes up, the money you are putting away goes up! If you make $100 this month, you put away $10. If you make $1000 this month you put away $100. And because of compounding interest, your money will grow and the growth will accelerate as you accumulate more and more of it!
Now you know what my #1 regret is!
Now let’s step back and talk about money MAKING.
In Beach Money, I tell a story about someone that desires to go from LA to New York. They choose to drive a moped for the journey. This is a bad vehicle for this journey! It would be a painful and uncomfortable trip! As an option they could drive a car which would be much more comfortable but it would be a very long ride and take a long time to get there! As an alternative they could jump into a high performance Gulfstream jet and be safe and sound in their hotel room in a matter of a few hours! The jet is a much better vehicle for this trip!
I feel so fortunate that while I was still fairly young I began to explore different financial vehicles and educated myself on the benefits and drawbacks of many of them. I have personal experience with a number of them as well. Believe it or not, some are better than others! However every one that I am going to mention is a perfectly legitimate option for creating additional income. I will say up front that I am biased. I prefer network marketing over all the others. I will tell you that up front. But I also come from a place of experience and education. Network marketing is not perfect. But neither are any of the other vehicles I’m about to mention.
Before I start to compare, I want to tell you a story about a huge lesson that I learned about the world of investing. This is a story most of you do not know. This is the culmination of 15 years of reading, learning and going to seminars and then another 20 years of actually investing in Real Estate. Real Estate, just like network marketing is something you must master to make money. I decided while in college that I wanted to become a Real Estate Investor. I started buying Real Estate investment books and audio programs. Over the course of the next 10 years I purchased about $10,000 in programs to learn how to invest in Real Estate BUT I NEVER INVESTED IN A SINGLE PIECE OF REAL ESTATE! I bought my first property in 1996 (with my network marketing income) for $20,000 with a partner and after we bought it we found out it had a huge cracked foundation that was unfixable. I lost my $20,000. My second property I lived in for 4 years I bought it for $150,000 and sold it 4 years later for $75,000. So far I had been in Real Estate for 14 years and lost $95,000. As I continued to grow my network marketing business over many years, I had more and more cash to invest. In 1998, I bought 3 investment homes (I financed them) for a total of $450,000 and had to fire-sale them for $325,000 when I found out I was seriously upside down on them and couldn’t get them to cash-flow with renters in them. So I lost another $125,000 bringing me to a total cash loss of $220,000 + the $10,000 I had invested in education for a total loss of $230,000 in 16 years.
Then I started reading Robert Kiyosaki books. He taught me to buy from the banks at wholesale prices when the market is down and fix them up, hold them and get renters under property management.
By the way, all of this was in the interest of gaining financial freedom!!
So I met some guys in Cleveland (that are doing network marketing by the way!) and have all become close personal friends and they were selling homes that they had acquired from the banks for $3000 each and then fixing them up and selling to investors for about $15,000 to $20,000 each. I started buying homes from them and I paid cash for 25 homes over the next 4 years. My cash flow was good and the property values were going up! I had invested about $500,000 with them. And eventually I had acquired additional homes in Grand Rapids, Milwaukee and the mountains of Arizona. I had 49 units and things were looking really good. But I found out that when you own 49 rentals, about once a week there is a MAJOR issue that the property manager can’t handle. Tough decisions need to be made and some of the decisions cost a lot of money. For example a tree on your property blows over and lands on the neighbors car. Or one of your tenants falls into a sewer on your property at 2am. Or your property goes vacant and the thugs break all the windows and steal the copper plumbing, appliances and fixtures. The list goes on and on. I still own rentals and I love my Real Estate business however when I weight the money and energy that goes into this business compared to network marketing, in my opinion, network marketing has it hands done for reasons I’m about to explain!
What is the point of all of this? Well, you can make big money in Real Estate Investing. There are huge risks and you must invest LOTS money. Learning from your mistakes sometimes means losing LOTS of money. You must master so many things to get good at it. You must partner with the right people and understand that the wrong partners can ruin you.
There are many ways to make money. Some require more risk than others. Some require lots of upfront capital. Most people don’t have the kind of money or resources necessary to succeed at traditional business nor do the have the staying power to lose money for many years before becoming profitable. Most business do not have a residual competent. The mainstream public promotes vehicles that only produce linear income. You will never hear a college professor or the press tout the benefits of residual income.
Stand on a busy street (well not in the street!!) in a commercial district where there are a lot of businesses. What do you see? Think about the people that took the risk to open these businesses. Do you realize that most don’t ever make money? Most of them close their doors within their first 5 years and lose everything. And most got involved because they wanted the freedom to own they own lives. The big joke is that they just bought themselves a prison. Ask or observe anyone that has signed up for this model. They have no freedom. In fact, the more successful they become, the less freedom they have! This is a fact.
People line up to invest $100,000 to $2 million or more to start a traditional business or franchise. Overhead can be $30,000 to $200,000 a month to start which includes leases, legal fees, product purchasing, utilities and payroll. And then they need to figure out how to get people in the door so that can have the sales to pay the $30,000 to $200,000 per month overhead! I am not making these numbers up. This is REAL LIFE! Breaking even is a dream for most entrepreneurs so that they don’t have to have their family and friends (that they borrowed money from to start the business) mad at them for the rest of their lives! And they pray they don’t get a lawsuit or break a government regulation in the first 10 years of business… because they know that this will most likely put them out of business!
Are you beginning to see why I love network marketing? You get to start it without taking out massive loans from banks, family and friends. You don’t adopt huge monthly expenses to run your business. You don’t have limits to what you can build. You have a residual component to the business that can pay you years into the future for the work you do today. You don’t have to purchase products each month and there is no capital investment. The risk is so low and the potential upside is so high. You can grow as big as you want to without hiring a single employee.
For the most part, the marketing is word of mouth so you don’t have to invest in expensive marketing campaigns like newspaper advertising, billboards, radio advertising, etc. (which can cost a company $3000 to $20,000 A MONTH!)
The parent company handles the product fulfillment, legal, payroll, research and development and even the technology platform.
Again, none of these options are perfect, but when I compare network marketing to a job, an advanced college degree, a franchise opportunity, building a traditional business or real estate investing, I feel network marketing has them all beat hands down. But you need to decide. It’s not for everyone. The way I view it is you are going to have to master something. Why not master something that has relatively low risk, a huge upside potential, residual income and minimal monthly expenses. In any business, marketing is a pre-requisite. Networking is the most valuable skill you can master for any business. Why not make money and master it at the same time.
Then invest 10% of what you make…