E ICH: The Ten Financial Laws of Prosperity

How to Be Rich | How to Get Rich | How can I Get Rich | Free PDF & eBook
BE RICH
The Ten Financial Laws of Prosperity
That Determine if You Are Rich, Poor, or Somewhere In Between.
By
Dan Dulin and Greg N. Weiler II

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Copyright 2012 Santa Maria Group, LLC. All rights reserved.

This abridged version of Be Rich: The Ten Financial Laws of Prosperity was intended to be shared
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The Ten Financial Laws of Prosperity, TaxiLoco, and BRAIN-work are trademarks of Santa
Maria Group, LLC.
Disclaimer, legal notice, and all-around dont blame us

statement.
We live in a litigious society and some people like to point the hairy finger of
blame for their poor choices at everyone but themselves. Therefore, you get our
standard disclaimer spiel with a twist.
This book is for educational purposes only. Read it, laugh, cry and enjoy
yourself. We make no guarantees that the information contained herein will
actually be able to help you. Because, lets face it, you might be happy with the
way your life is right now or dont want to do the real work it takes to make
lasting changes. Before attempting any technique or following
recommendations, ideas, instructions, rules, processes or any other bright idea
in this book, make sure you consult with a professional accountant, tax
advisor, financial advisor, insurance advisor, real estate advisor, and attorney.
All of the stories in this book, along with the people portrayed in them, are
fictional, except for the stories that the authors tell about themselves. Any
character that resembles a real person, living or dead, or anything resembling a
real event are pure coincidence. Phew!
Vs 10/24/2012
>> Get the most recent edition of the Be Rich Book and AUDIO version at www.BeRichBook.com <<
5
Special Thanks
Cover Design:
Ms. Roberta Schultz
Buenos Aires, Brazil
http://robertaschultz.daportfolio.com/
Consulting:
Mr. Paul Sammis
Phoenix, Arizona
The hours we spent in economic debate, discussions over world events, and
your friendship are missed. Rest in peace.
Mr. Gregory N. Weiler

San Juan Capistrano, California
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To David and Dain,
I was told, All roads lead to Rome, but I have learned that some circle the
mountain a few times before getting there. Have the courage to face your
personal challenges, be quick to correct your mistakes, and never take yourself
so seriously that you cannot laugh at your follies.
This book holds the key to a lifetime of financial abundance and the secret to
true wealth. Use this knowledge to take action with an unwavering belief that
you can accomplish your goals, and a magical transformation will occur. You
will be part of a small minority of people that can proudly say, I achieve.
With love,
Dad
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Table of Contents
BE RICH, NOT POOR 13

CHAPTER 1: THE SECRET INGREDIENTS 19
The First Financial Law of Prosperity ............................................................................ 21
Twelve Questions for the Gold........................................................................................... 22
The Secret Ingredients .......................................................................................................... 24
What You Think is What You Get ..................................................................................... 26
What Does Money Mean to You? ...................................................................................... 28
Positive Thinking and Luck ............................................................................................ 30
How Much Money Do You Want? ...................................................................................... 32
The Plan ....................................................................................................................................... 34
CHAPTER 2: THE FIRST FINANCIAL LESSON 39
The Second Financial Law of Prosperity ....................................................................... 40
Anyone Can Do It, but Few Will Try ................................................................................ 41
Modern Slavery ......................................................................................................................... 43
CHAPTER 3: MAKE MORE MONEY 48
The Third Financial Law of Prosperity........................................................................... 52
Get Into the Fast Lane .......................................................................................................... 54
Time Is A Limited Resource................................................................................................ 55
Knowledge Thats Richly Rewarded ................................................................................ 56
Two Ways to Make Money .................................................................................................... 58
The BRAIN-work Challenge ................................................................................................. 60
CHAPTER 4: GREED IS A MONSTER WITHIN 63
The Fourth Financial Law of Prosperity........................................................................ 65
The Lifestyle Trap and Human Need............................................................................... 67
The Lifestyle Fence ................................................................................................................ 70
The True Cost of Ownership ............................................................................................... 72
CHAPTER 5: YOUR THREE GIFTS 75
The Fifth Financial Law of Prosperity............................................................................ 78
Your Three Gifts ....................................................................................................................... 80
A Random Act of Kindness .................................................................................................. 82
The World Needs More Heroes ........................................................................................... 83
CHAPTER 6: A TWIST OF FATE 86
The Sixth Financial Law of Prosperity ........................................................................... 90
Your Emergency Fund ........................................................................................................... 91
Avoid Major Loss with Insurance ..................................................................................... 92
When You are Dead or Mentally Gone ............................................................................ 95
When Disaster Strikes ........................................................................................................... 96
CHAPTER 7: FINANCIAL SLAVERY 100
The Seventh Financial Law of Prosperity ................................................................... 103
Start Living Debt Free ......................................................................................................... 104
Credit In Our Society Is Like Heroin To a Junkie .................................................. 105
Another Way to Look at Debt ........................................................................................... 108
Negotiate Your Debt.............................................................................................................. 109
How To Eliminate Your Debts .......................................................................................... 109
CHAPTER 8: THE ART OF MAKING MONEY 113
The Eighth Financial Law of Prosperity ...................................................................... 114
Inflation- The Hidden Tax .................................................................................................. 117
Two Mules Teach the Art of Making Money ............................................................... 118
The Miracle of Compounding ........................................................................................... 120
The Golden Rules of Investing ......................................................................................... 121
CHAPTER 9: PROTECT YOUR MONEY 127
The Ninth Financial Law of Prosperity ........................................................................ 132
Base Hits .................................................................................................................................... 133
The Paradox of Modern Money ........................................................................................ 136
Business Cycle Risks and Currency Manipulation.................................................. 139
The Golden Rules of Protection ...................................................................................... 143
Chapter 10: HOME SWEET HOME 149
The Tenth Financial Law of Prosperity ........................................................................ 152
Intelligently Pay Off a Home Loan ............................................................................. 154
Think Correctly About Home Ownership .................................................................... 159
Turn Your Home into an Investment ....................................................................... 160
ADDITIONAL RESOURCES FOR YOU 165
BONUS Chapter: Making Millions in Real Estate 167

The Keys to Successful Real Estate Investment ..................................................... 168
Eight Ways to Invest in the Same Property ............................................................... 168
2013-2020 Forecast: The Decade of Economic Decline ....................................... 168
ACKNOWLEDGEMENTS & RECOMMENDED READING 173

ABOUT THE AUTHORS 177
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BE RICH, NOT POOR
The world is forever the same yet always changing. Forge and bend it to your
vision and you will find the stuff that makes dreams come true.
Today we celebrate your financial awakening. It starts the moment you believe
you can be rich and want to do something about it. Consider your awakening a
fork in the road. Down one road you will find a lifetime of financial
independence, while the other leads to a life of financial struggle and despair.
When you choose the road to financial independence, you take the route less
travelled. You will quickly separate yourself from the majority in this world who
are precariously close to financial ruin. Whether you are rich, poor, or
somewhere in between, the choice has always been up to you. Awaken and
enjoy a lifetime of financial independence.
Poverty weighs heavily on the human spirit. It robs you of your peace of mind,
limits your personal freedoms, and subjects you to one of the oldest forms of
discriminationthe discrimination against another based on their ability to pay.
Nonetheless, poverty is a choice. If you choose to believe you will be poor, you
have condemned yourself to poverty. If, however, you choose to believe you will
be rich, a world of opportunity is open to you.
There are two financial classes of people in this world: those who are financially
independent and those who are not. If you can quit your job, leave a business,
give up any outside financial assistance, and do almost nothing all day without
having to worry about maintaining your current lifestyle, then you are
financially independent to your standards. If you cant, then you have some
work to do.
Your ticket to ride the Money Train is in this book. You will learn The Ten
Financial Laws of Prosperity, the Art of Making Money, the Golden Rules, and
how to get started. By mastering the Laws, following the Rules, developing an
intelligent plan, and taking purposeful action, you can expect riches that exceed
your wildest dreams. If you are a little less committed to action but follow this
system, The Ten Financial Laws of Prosperity will still produce profound positive
financial results in your life. If, however, you are content working for others,
mistakenly believe that someone else will take care of you when you are old or
sick, and cling to a belief that riches are far beyond your grasp, then this book
will look good collecting dust on your nightstand.
Imagine what your life would be like if you didnt have to worry about money.
You could buy whatever you desire, retire at any time, travel anywhere, and
spend your days as you please. You could help the less fortunate, give to family
and friends, and be financially happy. This could be your future. The missing
pieces to your money puzzle and the answer to the question, How can I get rich
and STAY rich? are in this book.
This book is for anyone interested in becoming financially independent and

preserving wealth for life. Financial independence is the stage in life where your
money grows on its own and covers all of your lifestyle costs. It means you are
your own boss and agonizing over money is now optional (yes, for some people,
all the money in the world still isnt enough). Only by following The Ten
Financial Laws of Prosperity can you hope to accumulate and retain vast sums
of money. They are the rules to the get rich, stay rich game. Complete mastery
of the principles in this book will decrease the amount of time it takes to get
rich. Ignorance will make a lifetime of financial independence impossible. The
Financial Laws of Prosperity can be bent but never broken, because they are as
inescapable as the passage of time. It doesnt matter who you are or what you
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currently have. You will never experience a lifetime of financial independence

and true wealth without adhering to these Laws.
Financial independence is a lifestyle. Proclaiming yourself rich one day, and

proceeding to ignore The Ten Financial Laws of Prosperity will quickly drive you
to the poorhouse just as surely as gambling away all of your money at a Las
Vegas casino. To get rich and stay rich, you must constantly prove yourself to
be a good steward of money. Theres a huge difference between having money at
one point in your life and achieving a lifetime of financial independence.
Therefore, the achievement award for financial independence only gets handed
out after your death. Die rich and you get the awarddie poor and your funeral
costs will be one more burden you pass along to the ones you leave behind!
Poverty is both a mentality and a lifestyle. If you think poor, you will act poor.
This is evident with people who suddenly get a large amount of money (lottery
winners, inheritance, legal settlements, etc.), only to have it rapidly disappear
out of their lives. These people spend their money in such an unsustainable
fashion that they have nothing to show for it in a short period of time. They
identify with being poor and then act poor on a grand scale. As a general rule,
poor people spend all of their money; this, of course, is what makes them poor.
If you want to know real financial heartache, make a lot of money and then lose
it all. If you happen to make it back, you will never stray too far from The Ten
Financial Laws of Prosperity again.
We are all at different points in our financial journeys, but subject to the same
Ten Financial Laws. Countless athletes, actors, singers, business people,
entrepreneurs, lottery winners, recipients of large inheritances, and others have
skyrocketed to the top of the worlds financial Whos Who list only to go broke
and then disappear into the shadows of history. Despite what pop culture
teaches, there are NO shortcuts to becoming and staying rich. You must master
The Ten Financial Laws of Prosperity before you can enjoy a lifetime of financial
independence.
During your financial journey, you will always find someone richer than you.
This has nothing to do with fairness, trust funds, or a lucky roll of the cosmic
dice. What they have is theirs for a reason, and that reason may not be
apparent to you. What you think about people with true riches will determine
your own financial success, because your thoughts reveal your personal beliefs
about money. Negative beliefs will prevent you from becoming rich just as surely
as spending your days at home flopped on the sofa, watching television,
surfing the Internet, and playing video games.
Many people spend years wanting to be rich and wonder why they cant reach
this goal. They work hard for others and are disappointed when the rewards
they receive dont measure up to their expectations. These people have yet to
realize that as long as they answer to somebody, they will never make the
money they truly deserve. The trick to making a lot of money is to become self-
reliant. Only then can you break the chains of financial limitation imposed on
you by others.
Having an abundance of money is not true wealth or a measure of your total

happiness. To have true wealth in your life is to be rich in thought, friendship,
love, joy, spirituality, compassion, gratitude, and generosity. It has absolutely
nothing to do with the material possessions acquired with money. A life with an
abundance of money and lacking in sincere, fulfilling connections to other
people is a life saturated with loneliness and despair. The Fifth Financial Law of
Prosperity will teach you to Help Those in Need, but true wealth dwells in and
must come from your heart. No cause is greater and no deeds more worthy than
helping the needy. It is these selfless acts that define our own humanity and
add purpose to our lives. For many, this simple and rewarding concept will take
years to understand and longer still to act on, even though its an essential
component to the attainment of complete and total happiness.
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Everyones financial story is worth telling. This book tells the stories of people
who have struggled to reach financial independence and connects those stories
to the principles contained within these chapters. The people in these stories
are fictional, but the lessons imparted are timeless because they speak to
circumstances anyone could encounter in life.
I am no better than you and have made my fair share of mistakes. Ive
squandered money, been caught up in the lifestyle trap, taken foolish risks,
made bad decisions and, on occasion, had to worry about where my next meal
would come from. It took two major financial setbacks before I was willing to
change my whole approach to financial independence. Each setback was
painful. I collected debt and financial obligations that only added stress to my
life, sent my personal relationships into turmoil, and dragged me further from
my financial goals. But I embraced these setbacks and learned from them.
Within each, I found seeds of opportunity, seeds that eventually grew into the
idea for this book and provided me with the inspiration to create new
businesses.
What causes some people to become sustainably rich while the vast majority of
society continues to struggle financially? The answers are not so obvious, and
even the rich cant completely explain it. The purpose of this book is to bridge
that gap in knowledge and eliminate the guesswork. By the time you finish
reading, you will be able to answer this question and, more importantly, do
something about it in your own financial life.
At the end of this book, I have included a bonus chapter (paperback edition and
Kindle version only) on real estate investing titled: Making Millions in Real
Estate. This bonus section contains a number of techniques that real estate
investors use every single day to make money. Reading this section will not
immediately turn you into an expert real estate investor, because expertise in
anything comes from time, experience, and knowledge. Its purpose is to plant
the seed that anyone can invest in real estate and show you how its done.
Where you go from there is up to you.
There is no exclusivity on who gets to be rich. It all boils down to your beliefs
and your ability to execute a meaningful plan. Anyone can do it, but few will try.
Make the choice to incorporate The Ten Financial Laws of Prosperity into your
life and reap their rewards.
Riddle: In this world of mice and men, do you see the Lion?
(Would you like a hint? Look in the mirror.)

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CHAPTER 1: THE SECRET INGREDIENTS
Believe you can and discover a world of unlimited possibilities; believe you
cant and forever find none.
Jerry had been living on the streets of New York City for several months. He was
a tall, likable man in his mid-30s with dark hair and a deep tan. He was an Iraq
War veteran who bounced from one low-paying job to the next. Jerry was no
stranger to hardship, but tonight he was in the wrong place at the wrong time.
Two men had just run past him as he turned the corner onto an otherwise
deserted street when, suddenly, a snarling German Shepherd leapt toward his
face. Instinctively, he raised his arm to protect himself. The police dog latched
onto Jerry, dragging him to the ground. Sharp teeth ripped into his arm,
sending pain throughout his body.
Stop struggling! the police officer shouted at him. He then turned to the dog.
Release!
Jerry went limp as the dog let go of him. The officer leashed the animal and
radioed headquarters for Jerry to be rushed to the hospital.
Officer OMalley found Jerry wandering the streets a few days later. He had read
the hospital report and learned that the man his dog had mistakenly attacked
was homeless and between jobs. He felt compelled to help and made
arrangements for Jerry to stay at a local group home.
Living at the group home was hard for Jerry. He no longer slept on the streets,
but he had little privacy. He got a job as a taxi driver and started to spend his
spare time at the public library where he found solitude. The library changed
Jerry. He developed a thirst for knowledge and a love for reading. Books helped
him realize there was more to life and that he deserved better. He began to
believe in himself and made enough money from his job to move into a small
apartment.
Jerry got into the habit of saving a little from each paycheck, but it was hard to
make ends meet. He grew tired of struggling financially and made the conscious
decision to become rich. He didnt know how he would create his fortune but he
knew the answer was out there.
He took advantage of his job as a taxi driver to interview business people he

picked up as riders. He gathered their thoughts on success and talked to each
of them at length about how they made money. At the library and on the
Internet, he would diligently research any new idea and moneymaking concept
that interested him.
Time passed and Jerry began to notice that more of his passengers were using
smartphones. People raved about these gadgets. Jerry recognized the start of a
new trend and was determined to capitalize on the opportunity. He created a list
of different ways to make money from smartphones. A few of these ideas turned
into complete failures. Undeterred, he continued his search for a moneymaker.
Jerrys golden idea came to him after a near-miss accident with a bicyclist. A
biker swerved into oncoming traffic and Jerry nearly hit him. It was a seed of
inspiration. He went home that night and sketched out an idea for a
smartphone game he called TaxiLoco.
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Jerry spent the next few months refining the idea for TaxiLoco He hired a
programmer and graphic design artist using an outsourcing website, and soon
his game was ready. He posted a simple sign in the back of his taxi to market it.
The sign sparked the curiosity of a passenger who identified himself as a

freelance reporter. The reporter talked to Jerry about the development process
for his game. Jerry didnt give the conversation a second thought; it was only
one out of an entire day of conversations he had with riders. But one week later,
Jerrys game, TaxiLoco, was featured in an article in a prominent national
newspaper about emerging smartphone opportunities. Before he knew it, his
game went viral and Jerry became a very rich man, selling millions of copies.
The First Financial Law of Prosperity
The First Financial Law of Prosperity is You Must Believe. Only when you truly
believe that you can create financial abundance in your life will you intelligently
develop and follow a plan to produce the desired wealth.
Belief comes before money. The single most important thing needed to create
financial abundance is unwavering belief. Think you can do something and
there is room for doubt; know you can do something and harness the limitless
creative power of your mind to make it a reality. In practice, the exact formula
to be rich is 80% belief and 20% everything else. This means that once you truly
know you will be rich, youve taken the single most important step toward
achieving your goal. Belief is the foundation for creating a lifetime of financial
independence.
Summary of the Ten Financial Laws
Laws Action
1. You Must Believe Manage your beliefs, intelligently develop a plan,

and take purposeful action.
Twelve Questions for the Gold
In this book, there is a series of twelve questions that I ask you to write the
answers to. I know that many readers wont bother answering the questions,
will dismissively breeze through this book, and then wonder why their money
situation never improves. So why not go for the gold and answer the twelve
questions?
The questions are easy. They are designed to help you clarify your thinking
about what you really want financially. How can you achieve a goal if you dont
know what the goal is? Simply saying, I want to be rich or I want more
money, and then doing nothing to change your financial situation doesnt make
any sense. Look around. Billions of people take this exact approach. Invest the
time to answer the twelve questions. They will help you clarify your financial
goals and get you started down the path to complete financial independence.
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Why Rich, Not Poor?
Why do you want to be rich? The answer to this question will reveal your true
motivation to be rich. Some reasons are more motivating than others. Fill in
your answer:
I want to be rich because __________.
Does your answer inspire you or is it just a bunch of words?
Answers to this question will vary, but having material possessions, stacks of
cash, or being able to afford luxuries arent the real reasons why you want to be
rich. Once your basic needs for survivalfood, shelter, clothinghave been
met, what you are truly searching for is a feeling or a satisfaction of human
need that you think money will give you. In Chapter Four, we will discuss the
human needs for safety, love and belonging, to be valued, and to find purpose in
life. With a little reflection, youll find your reason for wanting to be rich.
You must have a compelling enough reason why you want to be rich if you are
going to have the proper drive to be rich. Your motivation to be rich is fueled by
your desire, or want, for this outcome. Do you have enough fuel, or desire, to
motivate you past any obstacle to become rich? Time will tell.
If you think money will solve all of your problems, you are going to be
disappointed. Money is only a catalyst for obtaining your material desires. It
cant eliminate all of your problems and make you truly happy. Your problems
are the challenges of life that push you to be better and make you grow as a
person, and you cannot truly be alive without them. Everyone thinks that
money will make them happy, but happiness is a feeling that comes from within
and has nothing to do with the size of your wallet. That being said, theres
nothing wrong with getting rich first and mulling over the finer points of
philosophy later!
The Secret Ingredients
You may have heard about the paradox of beliefwhether you think you can or
cant do something, you are right. Any reason you can invent or person you can
blame for not having financial abundance in your life is just a convenient
excuse. Excuses hold you back from getting what you want. Cast them aside to
open a world of opportunity. Your beliefs are the only real obstacle to becoming
rich and, more importantly, staying rich.
Why am I not rich?
Ask yourself this question, and if you want to be an overachiever, write down
the answer(s) to uncover the reasons holding you back. Review your answer(s)
to determine if:
You blame others or certain circumstances for your financial situation,
You feel as if you are lacking in some quality, trait, experience, or resource.
You may have some great reasons on your list, but do you really want to
sacrifice your financial independence for a handful of excuses? Rip up the list,
crinkle it into a little paper ball, and take the three-point shot with it into the
trash. Get all of that nonsense out of your head because its the wrong way to
think.
Belief in yourself and an unyielding determination to achieve a desired result

are the only resources you need to be rich. They are the secret ingredients
25
needed in the recipe to be rich and you already have them locked away inside of
you! Everything else stems from these two components. Belief comes before
money; so dont worry about how to create your financial independence. Know
that you will create your financial independence.
Begin by developing the unwavering belief that you will be rich and can achieve
your financial independence by working at this goal every day. When you believe
in something so strongly, you know with every fiber of your being that it will be
truethe object of your belief will appear in your life. This does not occur by
magic or trickery. You will make it happen. It is only through consistent and
cumulative daily action that larger goals can be achieved. Believe you can and
you willbelieve you cant and you wont.
Man often becomes what he believes himself to be. If I keep on

saying to myself that I cannot do a certain thing, it is possible
that I may end by really becoming incapable of doing it. On the
contrary, if I shall have the belief that I can do it, I shall surely
acquire the capacity to do it, even if I may not have it at the
beginning;
Mahatma Gandhi (1869-1948)
What You Think is What You Get
You are directly responsible for what you have in life. It is your very thoughts
that determine if you are rich, poor, or somewhere in betweenjust as surely as
they determined what time you got out of bed this morning. Your thoughts are
the foundation for your beliefs and a governor over the action you will take to
accomplish a goal.
A belief is what you think to be true. Its a collection of thoughts that help you
rapidly interpret and evaluate the world around you based on your experiences.
Beliefs can give instantaneous meaning to circumstances and events and are
designed to help you survive and prosper in your environment.
Everything you do in life originates from the process of thinking. This is

important because your thoughts motivate you and determine the actions you
will take to accomplish a goal. If you believe you can do something, you are
more likely to do it. The results or experiences generated from your actions
create more thoughts as feedback. This feedback can positively or negatively
reinforce your original belief.
Lets say, for example, that you have a belief that its GOOD to take the bus to
work. You take action and ride the bus. However, you get an undesirable result
because the bus was slow and made you twenty minutes late. Based on this
feedback, or new thought, your original belief about taking the bus to work has
been altered. You now believe taking the bus to work is BAD, because it will
make you late. This new distinction will affect all future decisions about taking
the bus to work. This continuous process of thought to belief, belief to action,
action to result, and finally back to thought is called the Thought-to-Result
Cycle.
27
Your brain is the perfect cause-and-effect feedback loop, much like audio
feedback from a speaker that gets louder and louder when an open microphone
is placed too close to it. Your dominant thoughts reverberate, get more intense,
and cause you to take appropriate action, even if this action is to do nothing. To
have an abundance of anything in your life, you must have the right dominant
thoughts looping in your brain because your thoughts motivate you. Once your
thoughts are aligned with your desired goals, they will compel you to act
accordingly.
Your dominant thoughts manifest themselves in your life for good and bad. For
instance, poverty thoughts produce poverty, hopeless thoughts produce
hopelessness, happy thoughts produce happiness, greedy thoughts produce
greediness, and loving thoughts produce love. The current state of your life is a
direct reflection of your dominant pattern of thinking, even if you are not
consciously aware of itbecause there is both a conscious and subconscious
level to thought. To effectively change anything in your life, you must first start
by correcting your own thinking.
The very process of thinking affects your motivation. Your dominant thoughts
shape your beliefs and govern the amount of action you will take to achieve a
desired result. The stronger your belief, the greater amount of time and effort
you will expend to achieve that result.
Everything you do and have in life is a direct reflection of your dominant pattern
of thinking. The only real enemy or ally to your success is your own thinking;
learn to control your thoughts or your thoughts will control you.
Sow a thought and you reap an action; sow an act and you reap
a habit; sow a habit and you reap a character; sow a character
and you reap a destiny.
Ralph Waldo Emerson (1803-1882)
What Does Money Mean to You?
You decide to meet a friend for lunch, and, on the way to the local restaurant,
you notice a magnificent mansion surrounded by acres of meticulously
manicured grounds. As you pass, you see the groundskeeper finishing his work
under the warm summer sun and several expensive cars parked in the
driveway. Posted on the ornately decorated gate is a signNow Hiring: Cook,
Maid, Chauffer. You recognize that an extremely rich person lives at the
mansion, and it doesnt take you long to start speculating about them.
STOP!
Take a few moments to consider some traits, characteristics, and the

personality of the mansions owner. What do you think about the amount of
money it would take to own a house like this? What do you think about the type
29
of help the mansions owner is seeking? Do you think this rich homeowner is a
good or bad person? If you had the money, would you live in a house like this?
Why or why not?
GO!
You continue on your way and meet your friend for lunch. During the meal you
tell her about the beautiful mansion. Before you can finish the story, your
friend excitedly interrupts you and explains shes met the mansions owner. She
tells you the owner:
Contributes large sums of money to help the less fortunate buy food, get job
training and obtain affordable housing
Is the benefactor of several orphanages that have a wonderful reputation for

finding homes for displaced children
Volunteers at a local animal shelter, nursing abused cats and dogs back to
health
Helped his former cook, maid, and chauffer start their own successful
businesses
What would you say about the mansions owner now? How many negative
thoughts did you originally have of the owner? Do you believe you deserve to
live in a beautiful house and have lots of money? If you dont think you are
worthy, take a few moments to consider the reasons why. Could these reasons
potentially hold you back from achieving your financial dreams?
This story was designed to probe your beliefs about money. Having money
doesnt automatically make you a good or bad person. Money doesnt create a
persons characterit only helps to reveal it. Money is an accelerator of your
ability to fulfill your material desires and cannot be categorized as good or
bad.
The way you think about money is important. Negative thoughts about money
will influence the amount of action you are willing to take to achieve your
financial independence. The only real enemy or ally to your financial success is
your own thinking. Your thoughts must be controlled. It is only through honest,
careful, and objective self-examination that you can reveal your negative
thinking about money.
To effectively change anything in your life, you must first start by correcting the
way you think about it. Once your money thoughts are congruent with your
financial desires, your thinking will motivate and drive you to reach your
financial goals.
Positive Thinking and Luck
Some people believe that desire and positive thinking alone can bring financial
abundance into your life. If this were true, we would all be rich and happy. But
greatness can only be achieved through significant effort. Desire and positive
thinking alone can do little to change your finances without the employment of
purposeful action. Thought, desire, and action are part of a larger system that
you will use to create a lifetime of financial independence.
Your thoughts are a relatively weak form of energy compared to the measurable
force used to create work. The physical act of moving a coffee cup across a
table, rather than just thinking about moving it, illustrates how directed
31
thought can combine with purposeful action to create a meaningful result. If

you had a belief that you couldnt move the cup because you thought it was
glued to the table, you might never have attempted to move it. This is a
testament to the power a belief has over your decision to take action.
Not all of your actions will yield intended results. Some actions create totally
random or unexpected circumstances, which can produce the phenomenon
known as opportunity or luck. There is a direct correlation between the
amount of purposeful action you take and the amount of opportunity or luck
you experience in life.
The benefits that opportunity or luck may bring you cant be calculated early in
your journey to financial independence. However, these benefits will have a
significant positive impact on your ability to achieve your goals. For instance,
lets say you have a great idea for a new whiz-bang product, but you have no
idea where to get the money you need to bring the product to market. You
decide to go to an entrepreneurial workshop given by local business
professionals. While at the workshop, you meet a businesswoman who is
excited about your idea and offers to bring your product to market. You never
would have met this woman if you had skipped the workshop, and you would
have missed this opportunity or lucky chance to bring your product to market.
Its important to emphasize that opportunity or luck only occurs when you act.
This is why its critically important to take purposeful action.
Desire and positive thinking can do little to help you accomplish your goals
without the use of purposeful action. Directed thought and action combine to
create measurable results. Some of these results create totally unexpected
opportunities, or lucky events, which can have a significant, positive impact on
your financial life. Its important to remember that opportunity, or luck, and
measurable results can only happen when you take action.
Greatness can only be achieved through significant effort.
How Much Money Do You Want?
If you were to ask the average person on the street what it would take for them
to be rich, they might respond with a lump sum dollar amount they think
makes a person rich. One million. Five million. Ten million. Whatever. The
average person doesnt think too much about what it takes to be rich for life, or
about the need for a steady income to continue paying for their lifestyle
expenses. All money gets spent over time; income is a steady inflow of cash
while lump sums are received once. A lump sum financial goal is a very
important part of becoming financially independent, but it should be a
calculated number based off of the income you need to support your lifestyle
and not a random guess.
A financial goal gives you a money target, provides clarity, and keeps you
focused. Your ultimate goal should be to obtain a lifetime of financial
independence. Complete financial independence means that you receive enough
income to maintain your standard of living, and provide for your future financial
needs without having to work for your money ever again. Most people work for
their money, trading their limited time for an income. But to be rich, money
must work for you by producing the income needed to support your lifestyle
without the sacrifice of your valuable time. What amount of money do you need
working for you to support your desired lifestyle?
Everyone has different financial needs. Without clearly defining what your
needs are, financial independence can be an elusive goal. Grab a pen and define
your long-term financial goal by completing these simple steps:
33
Step 1: How much money do you need to receive, on a yearly basis, to achieve
complete financial independence? I need $____________ per year.
Step 2: Divide the answer in Step 1 by a conservative interest rate. This is the
minimum rate of return you anticipate to receive on your money and can be
anywhere from 2% to 25%, depending on your risk tolerance. I prefer to use 10%
for this calculation, because its an easy number to work with and a decent rate
of return. The answer from Step 1, $____________, divided by the conservative
interest rate expressed as a decimal ______ (10% = 0.10), equals your long-term
financial goal amount of $___________________. For example, divide $500,000 in
income per year by 0.10, and you get a $5,000,000 financial goal.
PASSIVE INCOME INTEREST RATE = YOUR FINANCIAL GOAL
Step 3: How much time will you give yourself to reach your long-term goal and
amass the money needed in Step 2? _________ years.
Step 4: What will you do in order to receive some of the money you need to
contribute toward your long-term financial goal? Maybe you will be a great
doctor, entrepreneur, lawyer, teacher, police officer, engineer, fire fighter,
inventor, real estate investor, salesperson, yoga instructor, bartender, or
insurance agent. Maybe you will create and manufacture something brilliant.
Your possibilities are endless, but you must choose something to focus on that
will produce some sort of income to get you started. If you are already doing
something, thats fantastic. You already have a head start.
I will: _______________________________________ (If you are not sure what you will
do, keep reading and revisit this question later.)
At this point, you may doubt that you can achieve your long-term financial goal.
It can be daunting to wrap your mind around how to go from barely making
ends meet to having complete financial abundance. Remember, the First
Financial Law of Prosperity is You Must Believe. The formula to be rich is 80%
belief and 20% everything else. This means, once you truly know that you will
be rich, youve taken the single most important step toward achieving your goal.
A person who believes they can accomplish a task with absolute conviction and
takes purposeful action will always succeed. If you think you can do something,
you leave room for doubt; know you can do something and you will harness the
limitless creative power of your mind to make it a reality.
The Plan
When you truly believe you will be rich, you will develop and follow a plan to be
rich. Consider your plan a roadmap to your destination. Like all travel plans,
your exact route isnt cast in stone. You will encounter detours, hazards,
alternate routes, pit stops, and delays. Some of these encounters will bring you
closer to your destinationothers will take you out of your way. Only by
knowing your final destination can you determine if you are headed in the right
direction. Follow the steps below to create a simple plan.
Step 1: On a sheet of paper, copy the following sentences and fill in the blanks
with the information you gave in the previous sections exercise.
35
MY PLAN
1.My long-term financial goal is $___________, and I will achieve this goal by
_____________ (date).
2.I will earn some of the money that will contribute to this financial goal by
doing _________________ (what you are going to do to earn an income).
3.Whats my next step? ____________________
Step 2: Post your plan in a place where you will see it every morning.
Step 3: Each morning, ask yourself, Whats my next step? Once you have the
answer, you have your next task(s) that must be completed or worked on
TODAY.
Step 4: Always evaluate your plan and keep it simple. Whats working? What
needs to change? Are you going in the right direction? Do you need to add to the
plan? Do you need to learn a new skill or acquire a resource? If you are not
getting the results you desire, dont be afraid to adjust your plan and take a
different approach to accomplish your goals. Dont forget to update your plan
when you finish reading this book.
When you start working your plan, some of your actions will produce
opportunity or luck. Once you identify such an event, seek to exploit that
situation to your utmost benefit.
You dont need to create the worlds greatest plan to achieve financial success.
Dont worry about having the right job or making enough money. Your plan
is a starting point. It will evolve over time as you uncover new opportunities.
However, its critically important to have a written plan that clearly states your
financial goal and what you will do to earn some of the income that will
contribute to your long-term financial goal.
Most people wander through life and settle for what they get. These people are
unmistakable; you will come upon them drifting along lifes highway,
squandering their precious time and mired in their own dramas. Distinguish
yourself from the wanderers by having an intelligent, executable plan, which
will give you clear direction and purpose. Only settle for what you want from
life. Remember, no great achievement can be accomplished without the plan to
first make it happen.
A fool with a plan can outsmart a genius without one.

T. Boone Pickens, billionaire
37
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39
CHAPTER 2: THE FIRST FINANCIAL LESSON
Make a buck, spend a buck is the exact formula for poverty.
I was 8-years-old when I received my first financial lesson. My father and I were
driving home on a lonely Maryland highway one dreary winter day. I was staring
out the backseat window, listening to the cars wiper blades sputter and groan
to clear the freezing rain from the windshield. Most car rides with Dad were
spent in silence, though he would occasionally make an effort to explain some
life lesson that, once completed, typically left me more confused than
enlightened. Our talk about the birds and the bees, for instance, baffled me
for an entire decade.
Son, I want to talk to you about money, Dad announced. When you have a
job, you have to understand that you must save for the future by putting ten
percent of everything you make directly into your savings account. Once your
money is in the bank, you must never spend it. If you do this, youll be OK.
He asked me to repeat it back to him, and then my financial lesson was over.
Savings account, bank, money, job, and percentsmy head was spinning. Dad,
however, was satisfied with our little talk. So, I figured there was no sense in
adding to my confusion and didnt ask any questions. Unfortunately, the money
education I received from my father never got any better than that. Even though
he did his best to teach me what he knew, my father had little financial success
in his own life.
Dad worked hard and dreamed of a day when he could retire in comfort. He
learned too late in life that it takes more than hard work to become financially
independent. He tried to improve his financial situation by investing, but his
efforts yielded mixed results because he didnt fully understand the nature of
money. Like most people in this world, Dad relied on the recycled opinions of
the financial experts for investment advice and never bothered to learn any
real money management skills for himself. Dad eventually went into semi-
retirement and got to do what he loved most, but he could have done it years
sooner had he approached things differently.
Like any responsible parent, my father tried his best to educate me financially.
He gave me good advice, but he was never a rich man. Dad didnt realize his
struggles with money made more of an impression on me than his teachings.
And it was from his struggles that I learned the greatest lesson of them all
learn from the mistakes of others.
The Second Financial Law of Prosperity
The Second Financial Law of Prosperity is Save for The Future. Take at least
10% of your primary income and save it for future investment. The remainder of
your income will go toward your living expenses.
By strictly following the Second Financial Law of Prosperity, you will create a
supply of money that can eventually be put to work to generate investment
income. Your money, once invested, will create more money on its own and help
you reach your long-term financial goal. Investment is only possible, however, if
you have been disciplined enough to save your money. Always save 10% of your
earnings before you pay any debt or spend any of your money on living
expenses, necessities, and luxuries. Also, keep your savings separate from the
41
money you use to pay expenses, so it wont tempt you. Never, under any
circumstances, spend the money youve saved on anything but investment.
Laws Action

2. Save for The Future Save 10% of your primary income for future
investment.
Anyone Can Do It, but Few Will Try
People tend to spend everything they make regardless of how much they make.
As your income increases, so does your tendency to spend. The opposite is also
true. As your income decreases so does your spending. Use these natural
human tendencies to your advantage. When money is received, set aside at
least 10%, and your spending will adjust accordingly.
You can save 10% or more from your income no matter what your current
financial situation. For some, this will be hard to do. The simplest way to
accomplish this goal, however, is to simply do it. Most of what you buy doesnt
really serve your long-term interests or even give you much satisfaction. What
spending categories can you modify or eliminate? Meeting the 10% minimum
savings goal becomes easier each time you do it, because as you watch your
savings grow you will get greater satisfaction from knowing your money is
bringing you closer to complete financial independence.
The key to adhering to the Second Financial Law of Prosperity is to understand

your priorities. Do you want to have the freedom and security that money can
bring, or do you want to work forever trying to make ends meet? There are
plenty of things you can worry about in life. Why make money one of them?
The Second Financial Law of Prosperity is designed to help you improve your
future. By setting aside a portion of your income today, you lay the foundation
to achieve your long-term financial goal. In doing so, however, some of your
immediate desires must go temporarily unfulfilled. We all have an unlimited
number of wants and its impossible to satisfy them all. The intelligent rich
know there are limits to what their money can buy. To be rich and stay rich,
you must understand that spending all of your money is the fastest way to
poverty.
The Second Financial Law of Prosperity is a test of your readiness to receive

greater riches. If you consistently save a portion of your income and never
spend it, you will prove worthy of receiving more moneyslowly at first, then at
an ever-increasing pace, and from unexpected sources. If, however, you
continue spending everything, financial abundance will always elude you.
43
A man and his wife had the good fortune to possess a goose
which laid a golden egg every day. Lucky though they were,
they soon began to think they were not getting rich fast enough,
and, imagining the bird must be made of gold inside, they
decided to kill it in order to secure the whole store of precious
metal at once. But when they cut it open they found it was just
like any other goose. Thus, they neither got rich all at once, as
they had hoped, nor enjoyed any longer the daily addition to
their wealth;
Aesops Fables
Modern Slavery
Its in your long-term best interest to be rich. Anyone who relies on someone
else for their money is vulnerable to extreme financial disappointment. If you
are not self-reliant, you are swimming in troubled waters. People who get rich
and stay rich depend on themselvesthey make their own financial dreams
come true and so must you. Thought is the only real divider between the rich
and the poor. Thought used to be a personal affair, but by combining
psychology with traditional marketing, what you think is now greatly influenced
by modern advertising.
In our society, poverty is deliberately seeded and grown like crops of tomatoes
with people exposed to a constant message of entitlement. We are encouraged to
spend and live in excess, to constantly want more. This message is everywhere
and practically inescapable. From cradle to grave, twenty-four hours a day,
seven days a week, advertisements tell us, You want it, you deserve itnow go
and get it!
In the wake of this social conditioning is a widening gap between the rich and
the poor, with a middle class thats rapidly disappearing. The culprits behind
the message are a consortium of large businessesBig Business, as I like to
call themthat encourage people to stay in a perpetual state of
overconsumption. They have no interest in building a wealthy society, because
they wouldnt profit immediately from it. Their methods of control are debt,
psychology, and messages of entitlement designed to convince people to spend
beyond their means.
Billions of people worldwide are trapped in a state of financial slavery because

their expenses are greater than or equal to their income. These people are in a
perpetual state of financial angst because they must labor to make money and
struggle to pay their bills. After the bills are paid, theres typically nothing left
over for savings and investment. This spending pattern is why the poor only get
poorer.
The poor are Big Businesss army of working financial slaves, because they will
give their hard-earned money to everyone but themselves. Their spending is an
invisible chain of slavery around their necks. Their belief that they deserve and
are entitled to all the privileges money can buy without having the cash to pay
for them leads to debt and never-ending payments, which is nothing more than
a modern form of slavery or financial servitude.
45
The solution to financial slavery is personal responsibility. If you want to hold

someone accountable for your servitude, look no further than your closest
mirror. Free yourself by making the choice to follow the Second Financial Law of
Prosperity. Step up, take responsibility, and commit to real changealways
save a portion of your income before you pay your bills. If you want to be rich,
then start by exercising self-control. Change your mindset from What can I
spend? to How much can I save?
Rich and poor people think differently about money. The rich, or financially
independent, think in terms of financial creation, savings, and money growth; to
them, theres an abundance of money in the world and opportunity is
everywhere. The poor, or financially dependent, think in terms of getting paid,
paying bills, spending, and scarcity; to them, little opportunity exists in the
world and riches are available only to a privileged few. If you want to have a lot
of money in your life, adopt the mindset of the rich.
To experience a lifetime of financial independence, you must modify your

spending habits and change the way you think about money. The financially
independent save a portion of their income before they pay bills, and then invest
their savings to make more money. The order of money flow is importantsave
money first, not last.
Saving money is the one disciplined act that gives a person the resources
needed to begin the process of investment. Once your money has been invested
properly, it will begin to create more money on its own and will be a
contributing factor to the achievement of your long-term financial goal. The
successful investment of money is the reason the rich get richer, and its what
you must learn to do if you want to join them.
There will always be a class system of rich and poor in societyhaves and
have-nots. Its been this way for thousands of years. The system is fair
because anyone can change sidesno one has to be poor unless they choose to
be poor. To firmly set your feet on the road to riches, you must obey the Second
Financial Law of Prosperity and save at least 10% of your earnings. Stay
focused, and dont let anything sway you from this task.
47
The people who get rich and stay rich are self-reliantthey
make their own financial dreams come true.
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49
CHAPTER 3: MAKE MORE MONEY
If you are a bricklayer, be the best bricklayer in town. If you are a smart
bricklayer, get other people to lay the bricks for you in many towns.
Nancy was a young, single mother. She had gotten pregnant as a teenager and,
at her mothers insistence, married the childs father only to have him leave her
a few months later. She was intelligent and had planned on going to college
after finishing high school, but something always got in the way of that dream.
Nancy was struggling to pay her rent. She was living on her own and had a full-
time waitressing job. But every month it got harder to pay her bills. Desperate
to avoid eviction, she made an appointment to talk with the manager of her
apartment building.
Roxanne politely listened to Nancys hardship story, but was unmoved. She had
managed apartments for over thirty-four years, and every story was the same:
someone couldnt pay rent and wanted to make it the building owners problem.
Youve got to pay the rent or get out, Roxanne stated.
The severity of the situation was too much for Nancy. The calm resolve that she
displayed at the start of their meeting turned to panic as grim images of her
future flashed through her mind. The thought of living on the streets and losing
her daughter to the child protection authorities made her cry uncontrollably.
I dont have she started, but the words were lost in her sobs.
I dont have anywhere to go, she finally managed.
Roxanne attempted to remain unsympathetic, but the genuine emotional pain of

this young woman brought down her defenses. She reached for the box of tissue
on her desk and handed it to Nancy.
Look, she began, I dont know what you are willing to do to make some extra
money, but I need some part-time help cleaning vacant apartments. If you want
the work, its yours. But if you screw up, Im going to fire you and then evict
you. If this works out, you can pay me the rent after you get your first check.
Nancy agreed to take the job, and, within two weeks, she had enough money for
rent. A few months passed, and she settled into a routine of working long hours
at two jobs while still handling the responsibilities of raising her daughter on
her own. She yearned for her free time on the weekends and dreaded Mondays.
She was making ends meet and keeping her daughter happy. That was all that
mattered.
Roxanne soon approached Nancy and asked her to work on the weekends
renting apartments for her. Roxanne told Nancy that she believed this would be
a good opportunity to learn about property management as a career. Nancy had
developed a lot of respect for Roxanne over the last few months and didnt want
to disappoint her. Nancy agreed and found herself saddled with a third job.
With three jobs, Nancy became a scheduling whiz. Bills were easily paid, and
she only had time for what was important in her life. Within three months,
Nancy was making more money renting apartments on the weekend than she
made cleaning them during the week. Working three jobs and raising a child on
her own was difficult, though. So Nancy soon approached Roxanne to see if she
could give up her cleaning job.
51
Ill do you one better, Roxanne said. I just moved my full-time rental agent to
the assistant manager position. His old job is yours if you want it. Besides, you
can make the same money working this new job as you can with the other three
combined.
Nancy began working with Roxanne daily. With years of experience in property
management, Roxanne was a wealth of information and Nancy soaked it up like
a sponge. With Roxannes encouragement, she enrolled in property management
classes at a community college and with the local apartment association. Each
day, Nancy got better at her job. It wasnt long before she was promoted to
assistant manager and received another pay raise.
A few years passed and Nancy got an opportunity to become a manager at

another apartment community within the same company. With this new job
came another raise and more responsibility. By this time, she had earned a
degree in property management and was very capable of doing the job.
After five years, Nancy grew restless with her current level of success. She
began to wonder if there was something else beyond the standard 9-to-5 grind.
She had come a long way from near homelessness, but was no longer satisfied
and felt trapped by the same old routine. Nancy knew there had to be
something more to life. She was determined to find a path leading to an even
better future.
Nancy gave herself a five month goal to find something new. She continued to
educate herself by participating in property management workshops, reading,
and staying involved with her local apartment association. It was at one of these
association meetings that a new opportunity emerged. She met a real estate
investor who was having trouble renting apartments at one of his larger
properties, which was costing him a lot of money. Nancy offered to help this
man for free because she wanted the experience, but he insisted on paying her
in some fashion.
For the next few months, Nancy worked in her spare time to train the investors
staff and rent his vacant apartments. Once she was finished, the investor
handed her a $10,000 check for her consulting work. In that moment, she
found the inspiration she needed to start her own company. Nancys positive
beliefs, desire, and hard work paid off again with another new opportunity. She
was now in complete control of her financial future.
The Third Financial Law of Prosperity
The Third Financial Law of Prosperity is Make More Money. Create multiple
sources of income to help accelerate the wealth-creation process. 80% of the
money that you make from these other sources of income must be saved for
future investment. The remaining 20% can be used for other lifestyle expenses.
Multiple sources of income can take years off the time required to reach your
long-term financial goal. For some, additional income will be earned from
working extra jobs and other similar endeavors. For others, it comes from
starting a new successful business. Increase your ability to make money by
using your time wisely, learning new skills, and exploring new opportunities.
Your ultimate goal is to create a sustainable income without the need for your
physical labor and any significant ongoing investment of your personal time. To
accomplish this, however, you must be an efficient manager of your personal
resources.
53
Laws Action

investment.
3. Make More Money Create multiple sources of income and save 80%
of this extra money for future investment.
Get Into the Fast Lane
The infamous American bank robber, Willie Sutton, had it right when he said,
Go where the money is and go there often! Im not advocating bank robbery,
but merely pointing out that some things pay better than others.
It doesnt matter what is going on around you. Somebody, somewhere is making

buckets of money. You must find the people who are making lots of money, and
learn to do what they do. Copy them. Study their habits, read their
publications, and research the industries in which they are involved. Try your
best to meet them and, if you can, become friends. If you do get to meet with
them, make sure you are prepared and ask lots of questions, including:
1) If you had to do it all over again, where would you start?
2) What words of advice would you give to someone wanting to duplicate your
success?
3) Whats the best way to make money in todays business environment?
4) What were some of your biggest mistakes that delayed your success?
There are many roads to riches. Talk to the travelers who have already paved
their roads with gold, because the successes of others can be duplicated and
improved on. By learning successful moneymaking strategies from other people,
you can take years off your journey to become financially independent. Learn
how to make money without having to reinvent the wheel or waste valuable
resources on trial and error. Like a modern highway, the road to riches has
more than one lane, so shift gears and get into the moneymaking fast lane!
55
Time Is A Limited Resource
People will spend more time to entertain and distract themselves than they
would ever consider using to become financially independent. It takes a
significant time commitment and level of maturity to be rich. This is more than
most people are willing to give. How someone spends their time affects whether
or not they will become rich.
Do you find yourself talking on the phone, texting, emailing, surfing the
Internet, and playing video games when you should be doing other things? Im
not going to begrudge someone for distracting themselves when they could be
working toward their financial freedom. After all, our society needs its share of
financially poor laborers if its to function properly! People who willingly trade
their opportunity to become financially independent for a distraction are the
Rather Bes of the worldyou knowId rather be doing this or Id rather be
doing that.
Time is a limited resource. I understand that the dog needs to be walked, you
have to spend time with family, youve got plans for the weekend, your friends
need face time, youve got to squeeze in a round of golf, and you need some
personal time. We all have responsibilities and pleasures that occupy our time.
If, however, you intend to be rich, you must learn theres a time and place for
everything, and everything you do must be done smartly.
The passage of time can be a threat to the achievement of your financial

independence. Be judicious and guarded with your time because its the most
precious resource you have. Time is the currency of self-improvement and must
be spent wisely. Spend more time educating yourself and developing multiple
sources of income, and spend less time on things that trap you in your current
lifestyle.
Why invest hours of your day watching television and playing on the Internet,
when you can put your time currency into research, interviewing successful
people, and learning how to go from flat broke to financially independent? The
time you take away from the things you would rather be doing and give to the
things you should be doing to be rich, is a sacrifice you must make to reach
your financial goal. Your time is the most precious resource you have. Spend it
wisely.
Time is the currency of self-improvement.
Knowledge Thats Richly Rewarded
Your brain is your greatest wealth creation asset. You must fill it with
information that will help you to achieve your goals. If you want to make money,
you must develop and foster skills that are highly rewarded by society. Learn to
specialize.
A college education is an important part of this process, but not critical if you
are committed to self-education. Statistically speaking, college graduates make
more money, thanks, in part, to their demonstrated ability to set and achieve
long-term goals. This doesnt mean you should go to school, collect a plethora of
degrees, and burden yourself with mountains of debt on the mistaken belief
that multiple degrees will automatically make you rich. Education without
purpose can be a cleverly disguised distraction from the achievement of your
long-term financial goal. And lets face itsome college degrees have more value
to society than others.
Knowledge alone is no guarantee you will be rich. Look no further than your
typical school teacher and you will discover some of the most educated people
in this world are nowhere close to becoming financially independent. Teachers
57
are not richly rewarded by society for the job they do, so they must pursue
riches outside of the classroom if its important to them. Some teachers do get
rich, and they will tell you that knowledge was only a part of that process.
Knowledge by itself is not power. Its possibility. The power to become rich is
hidden within knowledge and can only be extracted when its combined with
intelligence and purposeful action. You must learn and then successfully
accomplish an endeavor that has a high value to society if you want to make
lots of money. Possessing a richly rewarded skill is the most common way, but
not the only way, to create your financial independence.
Whatever you decide to do, the learning process never stops. Successful people
constantly educate themselves. They read books, take classes, read trade and
financial publications, do research, attend seminars, listen to audio books,
learn from other successful people, and explore new ideas. You must
continually fill your brain with useful knowledge as well and apply it to societys
problems in a meaningful way.
Your best tool for creating riches is the grey matter between your ears. Again, a
college degree is not a prerequisite for financial independence. Bill Gates didnt
have a college degree before he founded Microsoft and went on to become one of
the richest men in the world. But he was highly educated and possessed
specialized knowledge. If you want to make an abundance of money, you must
become educated in something thats financially rewarding and then take
purposeful action.
Knowledge by itself is not power. Its possibility.
Two Ways to Make Money
There are only two ways to make money in this world: with your brain or your
brawn. Theres an immense difference between these two methods, because one
can be scaled while the other cannot. One has virtually unlimited income
potential, while the other is limited by personal involvement and time. The
single most important factor in determining which category a money-making
opportunity falls into is your involvement.
If you work somewhere that requires you to be present, you are working by
brawn. This means you are the critical element to the economic equation that
determines your income. And without your participation at some level, money
wont be received. Maybe you own the company, are salaried, get paid hourly,
receive a commission, or are an independent contractor. The one fatal flaw to
your business model is you. Theres just one you and only a certain number of
hours in a workday, which limits the things that can be accomplished. To get
better results, you push these limits by working harder and longer, but there
are still only 24 hours in a day. BRAWN-work has limitations that will drain
you both physically and emotionally, and could end up killing you. The total
number of hours you can work in a day is an absolute boundary to your
productivity and, therefore, limits the amount of money you can make.
Alternatively, if you have investments and a business that makes money but
requires little or none of your time to manage, you are working with your brain.
Like BRAWN-work, the acid test for BRAIN-work is the extent of your
involvement. Can you walk away from whatever you are doing for a few months
and not experience a significant drop in income? If so, this is a good indicator
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you are working with your brain. People engaged in BRAIN-work have removed
themselves as the critical part of their money-making system. They work
because they want to, not because they have to. True BRAIN-work is neither
physically nor emotionally draining.
BRAIN-work eliminates the boundaries on scale, allowing you to automate and

grow. For instance, after Ray Kroc bought McDonalds from the McDonald
brothers, he did not stand around cooking hamburgers for hungry customers
all day long. He perfected his Fast Food Business Model, and then he grew, or
scaled, his business from a handful of locations to over 32,000 restaurants
worldwide.
BRAIN-work and BRAWN-work are the only two ways to make money. The
money that can be made with BRAWN-work is limited by your personal
involvement and time. BRAIN-work has no such limits and can be scaled.
Intelligently scaling your system of moneymaking to massive proportions is the
difference between making a million dollars and a billion dollars. If you want to
be richand I mean roll-around-in-your-own-private-vault richyou need to
work using your brain and then scale up your successful moneymaking system.
The BRAIN-work Challenge
True BRAIN-work eludes most people, even though the rewards are well worth
the efforts required to create it. BRAIN-work is defined as a system of making
money that requires little or no ongoing involvement from you. It is a virtual
cash machine. It can make you money while you sleep. There are many ways to
create BRAIN-work; it can be as simple as having a series of passive
investments, a traditional business others manage for you, or an automated
Internet business that works for you around the clock.
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Remember that one product, idea, or design you have rolling around in your
head? You know, the one that always makes you think, This would be a great
idea if. Now, imagine sharing your idea with people in every corner of the
planet and then getting paid for it. Can you afford to pass on that prospect?
Everyone has an expertise or a moneymaking idea about something. What could
you do to make money utilizing BRAIN-work?
I challenge you to develop a BRAIN-work system of making money. If you

already have a BRAIN-work system of making money, create another. The key to
developing any successful business is to discover a need, void, or want in the
marketplace and then use your talents to satisfy it. Maybe you can invent
something useful, improve on an existing product, create a new process for
doing something, or sell a critical service. Is there something you do and know
about in your current BRAWN-work job that can be changed to BRAIN-work?
There are thousands of things that you could do, but I dont know isnt one of
them. If you approach this challenge with an open mind and take intelligent
action, you will find a BRAIN-work method of making money.
After youve generated a few ideas for BRAIN-work, your next step is research.
The answers to all the reasons why you cant complete this challenge and any
problems you encounter along the way are contained in a book, found on the
Internet, understood by someone else, and taught in a class. Find the solutions
you need to create your BRAIN-work.
Its critically important that you believe you can create BRAIN-work. If you get
stuck, find another way. If your BRAIN-work turns out to be a bad idea, find a
better idea. Whatever happens, you must not give up. Your success depends on
your idea, your determination, and your ability to execute a meaningful plan.
Scaling your system of moneymaking to massive proportions is
the difference between making a million dollars and a billion
dollars.
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CHAPTER 4: GREED IS A MONSTER WITHIN
To live life the hard way, work for your money, spend it all, and make no
provisions for the future.
Alexander was a greasy-haired, boisterous, fat man completely obsessed with

living the lifestyle of the rich and famous. A bachelor in his mid-50s, he was the
center of his own universe, and people seemed to shuffle in and out of his life
like the regular cadence of waves crashing upon a rocky shore. There was no
separating him from his vanity; it was his identity, and to be deprived of it
would be the loss of his sole purpose in life.
Alexander liked to be the center of attention. He traveled to exotic places and

sought to be seen at the trendiest spots in town. He bought the latest fashions,
the newest luxury automobiles, expensive jewelry, and other flashy status
symbols. To him, it was important to maintain the appearance of a lavish
lifestyle, because it was the tool he used to demonstrate his wealth and gain the
respect of others.
Even with all of the wonderful luxuries that surrounded Alexander, he was a
troubled and lonely man. The people in his life all shared his core values, and
his relationships with them were never wholly gratifying. He didnt realize his
vanity cost him what he needed mosttrue love and belonging with people who
really cared about him.
Alexander financed his lifestyle with the income he got from a series of
moneymaking schemes he offered to hapless investors. Money made, money
spentevery dollar he received was funneled back into his ever-growing
lifestyle. Only Alexander benefited from his business dealings, and his
generosity went as far as his own interests would allow. In his wake, he left
tangled wreckage from the hopes and dreams of the nave who had trusted him
with their money and were poorer for their experience.
Extravagant lifestyles are expensive and difficult to maintain. Eventually,

Alexanders income couldnt keep pace with his ballooning expenses. His credit
cards maxed out, banks refused to lend him money, and there was no one new
to pay into his investment ideas. His world started to crumble. He became
reflective about his financial hardship, but never seriously considered changing
his lifestyle. He needed more money and he needed it fast.
Alexander decided to create another type of investment, and told everyone he

knew that it would double their money every few weeks using the power of the
Internet. He produced charts and graphs to prove that his idea worked and
promoted it as the Magical Money Machine. A few people invested in this
magical machine and, for a while, it worked. Early investors doubled and even
tripled their money. As news of this magical machines success spread,
thousands of people lined up to invest with him.
His machine had saved him from financial ruin. He now had more money than
he knew what to do with, and he spent it on anything he fancied: a Beverly Hills
mansion, a yacht, vacation homes, and a private jet were just some of the
things he purchased. He was a playboy at the zenith of his popularity and the
toast of the town.
Alexander, however, had a secret. Like all of his past investment ideas, the
Magical Money Machine didnt really work. It was an elaborate hoax that he had
concocted out of desperation. It was nothing more than a Ponzi scheme,
paying early investors with the money received from later investors. He never
65
imagined that so many people would jump at the opportunity to invest with him
merely by promising them outlandish returns on their money. His machine had
appealed to their greed, and they couldnt resist such a fantastic opportunity to
satisfy it.
Alexanders money problems soon returned. His lifestyle expenses exceed his
income once more, and the Ponzi scheme was on the verge of collapse. He knew
it was only a matter of time before his investors figured out they had been
cheated.
The day came when Alexander simply vanished. Some people suspected foul
play while others thought that he went on an extended vacation and would
return shortly. At first, it didnt occur to anyone that he had skipped town with
the remainder of their money, but thats exactly what Alexander had done. He
was never seen or heard from again.
The Fourth Financial Law of Prosperity
The Fourth Financial Law of Prosperity is Live a Sustainable Lifestyle. Avoid the
lifestyle trap and maintain a sustainable standard of living that will help you
accomplish your long-term financial goal. You must first create a sustainable
source of income (discussed in Chapter Eight) before you can have a
sustainably affluent lifestyle.
Its important to consider the long-term effects of your buying decisions.

Everything you can buy, possess or control has a cost of ownership, which can
keep you from achieving your financial goal by saddling you with extra expenses
and costs. Accumulate assets that contribute to your financial goal, and avoid,
or quickly discard, items that burden you with high ownership costs. Having
possessions and privileges in your life doesnt automatically mean you have a
problem with your lifestyle. However, your lifestyle spending (housing, utilities,
food, clothing, charitable giving, dining out, entertainment, travel, fuel,
insurance, bills, taxes, etc.) must never be allowed to grow out of control and
exceed 90% of your total income.
The Ten Financial Laws of Prosperity are less about squeezing your personal
finances into one-size-fits-all percentages as they are about intelligently
managing expenditures while creating and protecting your wealth. Its
important to remember that the application and interpretation of these Laws
can vary with individual circumstances.
Laws Action
1. You Must Believe Manage your beliefs, intelligently develop a

plan, and take purposeful action.
investment.
4. Live a Sustainable Avoid the lifestyle trap, and recognize that the
Lifestyle things you buy can have unforeseen ownership
costs.
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The Lifestyle Trap and Human Need
A persons lifestyle, or the way they live, is a physical expression of their values
and beliefs. People often spend beyond their means in an attempt to achieve
their ideal lifestyle. Over time, more and more of a persons financial resources
go toward maintaining their lifestyle, leaving little money for anything else. This
behavior is known as a lifestyle trap, and unwittingly costs its victims their
financial independence.
A lifestyle trap diverts a persons attention away from the long-term effects of
their reckless money management, and focuses it on the immediate need to
sustain their current standard of living. What drives these lifestyle spending
decisions? Are new, more, different, and better, the only driving forces
behind the purchase of goods and services? Is keeping up with the Jones really
that important? As it turns out, there are psychological reasons for this type of
human behavior.
In his book Motivation and Personality, Abraham H. Maslow explains that all
humans attempt to meet a certain ranking, or hierarchy, of needs. He describes
five levels of human need and the relative order in which people will attempt to
satisfy those needs. According to Maslows theory, a person cannot satisfy needs
ranked higher on the hierarchy without first satisfying needs at the bottom.
This means that we will satisfy our basic needs for survival before we attempt to
do anything else. For example, it would be hard for you to pursue your need for
love and belonging if you were lost in the woods freezing to death. Below are
Maslows five categories of human need and the primary order in which they
can be satisfied:
1) Physiological: These basic human needs are necessary for our survival. They
include: air, water, food, shelter, clothing, and sleep. You cant survive without
meeting these needs, so they are first on the hierarchy, and the most important.
2) Safety: We all need to feel safe and secure in our environment. We cannot thrive
if we are afraid. Feelings of safety can come from physical health, law and order,
justice, financial wellbeing, and irrevocable human rights. When we feel safe in our
environment, we will pursue our next level of need.
3) Love and Belonging: Once a person has met their basic needs for survival and
safety needs, he or she will seek to have meaningful relationships with other
people. We are social beings with a need for love, belonging, and acceptance. These
needs can be met through friendship, family, intimate relationships and other
social interactions.
4) Esteem: Once a person feels love and belonging, he or she will seek to be valued
and accepted for the contributions they make to his or her peer groups and society.
Esteem needs can be met through personal and professional achievement,
volunteer work, receiving recognition, and gaining respect from others.
5) Self-Actualization: When a person has achieved all of their other needs on this
hierarchy, he or she will seek self-actualization, or the desire to find meaning and
fulfill his or her purpose in life. Everyone must discover how to bring meaning and
fulfillment to their lives with the talents they have been given. Without a purpose,
we become dissatisfied and lose our appreciation for life. You must find and fulfill
your purpose to discover how wonderful and satisfying life can truly be.
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Everything we do, whether a positive or negative behavior, is an attempt to meet

one or more of our five human needs. Sometimes, a person will get stuck trying
to meet one level of need and cannot progress to the next level. To understand
why people do the things they do, you must first understand what needs they
are trying to satisfy with a particular behavior. Money, for instance, can be used
to meet nearly all of your physiological needs (food, water, shelter, etc.), though
once you move beyond the basics needed for survival, you begin to use money
to meet your emotional and mental needs farther up the hierarchy. This is the
point where satisfying your human needs, spending money, and the desire to
live a certain lifestyle all collide.
How do you use money to meet your five needs? Human needs typically are
uncovered by the feelings associated with and the motivation behind a
purchase. For instance, if you trade in your perfectly good car for a newer model
to get respect from your friends, you are trying to satisfy your need for Esteem.
If you bought the car as a gift to win back your significant other, you are
seeking to satisfy your need for Love and Belonging.
When you are caught up in a lifestyle trap or have a spending problem, the
reason why has nothing to do with other people and everything to do with you.
Everything you spend money on is an attempt to meet one or more of your five
human needs. To break a cycle of needless spending, you must identify which of
these needs you are trying to satisfy with your purchases, and then consider
the long-term financial consequences of your actions. Is the short-term benefit
of your spending worth the ultimate sacrifice of your financial independence?
You must find and fulfill your purpose to discover how wonderful
and satisfying life can truly be.
The Lifestyle Fence
Society tends to measure prosperity by where a person lives, their profession,

and what they own. Theres also another measure of prosperity based on the
perceived quality of the material things that a person has in his life. If someone
were to drive up to an expensive high-class hotel in an economy car, rather
than a luxury automobile, many would expect the parking valet to inform the
driver that the employee entrance is at the rear of the building! Driving an
economy car in our society is not considered to be a sign of prosperity, but if
you drive a luxury automobile people automatically assume that you are rich.
Its this misconception of what it means to be rich that helps set up people for a
lifetime of financial failure.
We have been conditioned from an early age to believe wealth means material
possessions, and if we have the right stuff, we are rich. Not surprisingly, when
most people get money, they try to live up to this societal image by spending it
all onyou guessed itstuff. While it is undeniable that the rich have more
possessions and privileges simply because they have money, most people fail to
recognize what it really takes to become sustainably richhard work, creativity,
time, and discipline. So, naturally, when someone with this stereotypical belief
71
gets money, and has access to money in the form of credit, they spend it in an
effort to attain the appearance of wealth.
People, who use money and credit to fit in with societys stereotypes or images
of wealth, are pretenders and spenders. They will always struggle to maintain a
lifestyle they havent really earned. These people have yet to understand that
they must first create a sustainable source of income before they can have a
sustainably affluent lifestyle.
Theres no harm in looking over the lifestyle fence and saying, Gee, I wish I
owned that big house and luxury sports car. For some, this will be the defining
moment in which they change their approach to acquiring money and decide to
become financially independent. Most people, however, will continue chasing a
lifestyle they cant sustain over the long-term. They will never experience a
lifetime of financial independence, because they are clueless about what it really
takes to be sustainably rich.
Having possessions and privileges in your life doesnt necessarily mean you
have a problem with your lifestyle. The Ten Financial Laws of Prosperity allocate
up to 90% of your total income to be spent on your lifestyle, though your 90%
wont match someone elses 90% if you have different income levels. For
example, a person who makes a million dollars per year can spend nine
hundred thousand dollars of that income on their lifestyle. This allows them to
buy a lot more stuff than someone who only makes fifty thousand dollars per
year. Spending only becomes a problem if your expenses exceed your income
and you are not saving a meaningful amount for future investment.
The Ten Financial Laws of Prosperity work universally for everyone, but not
everyone is willing to do the work needed to achieve their financial
independence. When a person who is poor looks at the lifestyle of the rich, they
tend to see only the benefits of money and not the hard work, discipline, and
time it took to create the source of money that supports that particular lifestyle.
Anyone can be rich if they are willing to do the work required to accomplish this
goal. However, they must understand that they need to create a sustainable
source of income before they can have a sustainably affluent lifestyle.
The True Cost of Ownership
Have you ever stopped to consider the long-term effects of your buying
decisions? Price is what you initially pay for an item. But what you might not
realize is its true cost of ownership over time. Everything you can buy, possess,
and control has a cost of ownership. These costs can be obvious, like a monthly
service fee for your telephone, or something you never really considered before,
such as depreciation on your car, the amount of time it takes to maintain an
item, or the cost to feed and care for an animal.
A direct cost of ownership is any monetary cost directly attributable to an item

you own. The price you pay for something is a direct cost. Another direct cost is
depreciation, or an items loss of value over time due to its use and
obsolescence. Other direct costs include add-on sales, service fees, storage
costs, taxes, maintenance costs, loss from spoilage, fuel, and insurance
premiums.
An indirect cost of ownership is any nonmonetary cost attributable to an item

you own. Compared to direct costs, indirect costs are a little harder to spot.
Common indirect costs include the amount of unpaid time and physical effort
spent taking care of an item owned or in your control. Your unpaid time and
effort spent cleaning a fish bowl is an indirect cost of goldfish ownership.
Example: The ownership costs of a boat

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Direct Indirect
Price paid for the boat Time spent cleaning
Insurance Time spent maintaining
Maintenance Wear & tear on your tow vehicle
Docking fees Time spent in boating class
Fuel Time spent preparing for use
Registration fees Other?
Add-ons: lifejackets, boat hook,

rope, trailer, etc.
Depreciation (loss of value)
Storage fees
Other?
Everything you have in your life has a cost of ownership that can be measured
by the direct and indirect costs associated with it. Things with a high cost of
ownership make you poorer. Things that create more resources than they
consume make you richer. Anything that makes you richer and is a store of
value can be considered an asset. Assets create more resources than they
consume or have intrinsic value; therefore, the benefits of ownership should
always outweigh any associated ongoing cost. You must own and cultivate
resource-producing assets if you want to have a lifetime of financial
independence.
Ownership of anything can be debt and obligation in disguise. The vast majority
of people spend their money on things that have a high cost of ownership,
making it virtually impossible for them to become financially independent. They
accumulate possessions and services that constantly nibble at their wallets and
steal away valuable time that could have been better spent on more productive
endeavors. Avoiding the purchase of goods and services with a high cost of
ownership can minimize expense creep, or the growing financial burden of
expenditures over time. Always take the time to consider the true cost of
ownership for the things you want to buy and keep in your life. Accumulate
assets that support your financial goals, making you richer, and avoid, or
quickly discard, items that make you poorer.
You must learn to minimize your ownership costs before you can enjoy a
lifetime of financial independence. Consider buying used instead of new to
reduce the price you pay for an item, or rent it to avoid the long-term costs of
ownership entirely. Before you buy, ask yourself, Will this purchase make me
richer or poorer? Some would consider this sort of behavior to be cheap, frugal,
stingy, tight, and miserly, but, for the financially independent, this behavior is
intelligent and necessary.
Before you can be rich, you must stop acting poor and take a more enlightened
approach toward ownership. Minimize the negative effects of expense creep in
your life. Consider your true cost of ownership prior to making any purchases
with your money while keeping in mind that some costs are measured in time
and effort and may not be so obvious. Learn to accumulate assets that
contribute to your financial goals, and avoid or quickly get rid of items that
burden you with a high cost of ownership. Its important to understand how
certain purchases can help you reach your financial independence and others
will set you back. A moment of gratification and stroke of the ego that an
unwise purchase will give you is not equivalent to the satisfaction you would
receive if you were sustainably rich.
Dont let a financial crisis be your alarm clock. Live a sustainable

lifestyle.
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CHAPTER 5: YOUR THREE GIFTS
A person with a golden heart can do more good rich than they could ever imagine
poor.
It was in the name of God and the Bibles Ten Commandments that the rebel
group known as the Lords Resistance Army (LRA) poured out of the hills and
descended on a small village in northern Uganda like a plague of locusts. The
sun was beginning to rise as the LRAs child soldiers set about their unholy
work of setting ablaze the thatched roofs on the mudbrick huts and murdering
their inhabitants.
The village was taken completely by surprise. Their able-bodied men had left the
day before to defend a neighboring community, leaving their women, children,
and elderly behind to fend for themselves.
Abraham, a skinny 8-year-old boy with dark, wiry hair, was left in charge of the
family during his fathers absence. He was the first to wake at the smell of
smoke filling the hut, and he quickly roused his mother, who gasped in horror
at the sight of the spreading fire. She scooped up Abrahams baby brother and
younger sister, then shuttled her family out of the burning structure.
They entered into chaos created by the LRA. Terrified screams and cries could
be heard above the laughter and excitement of the child soldiers as they enjoyed
their wicked fun. Thick, acrid smoke billowed from the blazing huts, which
made it difficult for Abraham to see and breathe. The entire village was in
motion. Confused smoky shadows ran wildly about. His family raced through
the village, and took cover behind whatever they could find to avoid detection by
the child soldiers. They were almost out of the village when Abrahams baby
brother, frightened, started to cry, alerting the young marauders to the escape.
Four soldiers wielding machetes and clubs took pursuit and eventually
captured Abrahams mother and baby brother. Two of the soldiers continued
after Abraham and his sister, while the other pair stayed behind and
bludgeoned their helpless captives to death like seal pups in a bloody harvest.
The pursuing soldiers were faster and gained on them. There was no time to
think, but Abraham had to do something or he and his sister would both be
caught.
Keep running! I will find you! Abraham shouted to his sister.
He turned to face his attackers. Outnumbered and unarmed, it wasnt much of

a fight. Abraham was quickly clubbed to the ground, but his sister managed to
escape.
Once all life had been extinguished at the village, Abraham and the other
abducted children were marched to the LRAs base camp, where they learned
that they, too, would serve in the Lords Resistance Army.
And so it was. Captured boys were made into soldiers, and girls were used as
sex slaves. All manner of civility, self-respect, and youthful innocence was
ripped from them. In time, they were turned into killers, wild animals feeding on
the carcass of a once moral society in one murderous spree after another. Their
actions orchestrated by men convinced of their own self-righteousness by acting
in the name of God.
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Samantha Garcia, a 34-year-old American volunteer, was working in Lira,

Uganda, to rebuild an orphanage. She came from a society with little
understanding of the devastations of war, cultural hopelessness, abject poverty,
and widespread hunger. When she learned about the plight of the Ugandan
people, however, she felt compelled to help. Samantha was moved by the
suffering of others, and she felt an inner calling to help these distant strangers
in need. She ignored her peers who told her not to go, that it was too
dangerous, and that she couldnt make a difference. Samantha knew she had to
do something.
That particular something came as a program designed to help rehabilitate

Ugandas child soldiers by teaching them construction skills. Two decades of
bloody civil war had come to an end, and the children who were conditioned to a
life of violence and destruction had nowhere to turn and needed to learn
productive skills if they were to successfully rejoin society. Volunteers were
asked to work with the children, rebuilding structures destroyed during the
war. This is where Samantha met Abraham.
Samantha worked alongside Abraham for many days. During this time, she
gained his trust and they talked at length. She learned that Abraham and his
sister were orphans living on the outskirts of town. Their house had a dirt floor
and was nothing more than a shanty made from scavenged materials. They
survived by stealing food from the market and received aid from Christian
missionaries. As his story unfolded, Samantha realized what an incredibly hard
life this boy had. Nothing she had ever dealt with compared to the suffering
endured by him and others who have had their lives shattered by the realities of
war.
Abraham also took an interest in Samantha. He enjoyed hearing of her life in

America; he was especially eager to learn about the different subjects American
students studied in school; he marveled at the wonders of snow skiing, action
movies, and rock concerts. Their connection deepened daily. By the end of her
stay, Abraham was no longer a statistic or another face among the millions
affected by the brutalities of warhe was a real person who needed help. His
story had become part of Samanthas life, and his pain had touched her.
Samanthas time in Uganda passed quickly, and soon, she bid farewell to her
young friend. She made many sacrifices to be a volunteer, but was glad to
finally be going home. However, during the long flight back to the United States,
Samantha was haunted by one reoccurring thought: You can do more to help.
Eight months later, Samantha, her family, and friends stood in the airport
waiting area for arriving international passengers. Led by an airline employee,
Abraham and his sister crossed the U.S. Customs checkpoint exit.
Abraham, upon seeing Samantha, ran to her, took her by the hand and started
to cry. Samantha embraced him for a long moment and said, Abraham, I would
like to introduce you to some good friends of mine and your new family.
Samantha would always remember the exact moment when she was inspired to
do more to help. The source of inspiration is never as important as its effect.
What matters most is that one person took the time to help another in need
and, in doing so, made the world a better place for us all.
The Fifth Financial Law of Prosperity
The Fifth Financial Law of Prosperity is Help Those In Need. Give the gifts of
money, time, and forgiveness to those in need. The simple act of giving provides
purpose, a sense of accomplishment, and adds meaning to life. No cause is
greater and no deeds more worthy than assisting the needy.
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A life spent without knowing the joys of giving is a life half-lived. To be rich
doesnt solely imply acquiring an abundance of material and financial wealth. A
person can be rich financially and poor in giving, or they can be poor financially
and rich in giving. But in the end, such a person could have done more to help
both themselves and others. The Ten Financial Laws of Prosperity teach
balanceto be rich financially and to be rich in giving. Achieving this balance in
ones life is the only way to find the thing that matters mosta fulfilling
happiness that nurtures the soul and is the source of true wealth.
Laws Action

investment.
costs.
5. Help Those In Need Give the gifts of money, time, and forgiveness to
the needy.
Your Three Gifts
There are three gifts you can give that will make our world a better place for
generations to come. The simple act of giving provides purpose and adds a
sense of accomplishment to your life. Giving is a personal choice to help the
suffering. It is a sign that you are a person who does not dwell solely in the
microcosm of the self and are sensitive to the needs of others.
Everyone has three gifts that they can give to the needy. The amount you give
depends on your own individual sense of generosity and the resources you have
available to you. No matter what is happening in your life, you can always
choose to give these three gifts:
1) The Gift of Money: For every dollar of personal income you receive,
immediately give a portion of it away. This is part of your lifestyle expense. Try to
give 10% or whatever you can afford to worthy causes. Find causes you believe
in and allocate your funds accordingly. Many people have difficulty giving away
their money; however, monetary donations are essential for procuring resources
for the needy such as food, medicine, housing, clothing, and education.
Volunteers at a soup kitchen can do little to feed the hungry if someone else
didnt first donate the money to buy the food and pay the rent and utility bills for
the kitchen facility. Remember, poverty is always hardest on the poor and your
financial donations can make a huge difference in their lives.
2) The Gift of Time: Time is your most precious possession because it is

limited. Your time volunteered to charitable causes as a worker, mentor, and
teacher can make a dramatic difference in the lives of others. What can you do
with your time and talents that would help someone in need? What valuable
skill could you teach to help people decrease their dependence on others? Try to
donate two or more hours a week to charitable projects. Remember to have some
fun while helping others, and dont be afraid to get your hands dirty.
3) The Gift of Forgiveness: Forgiveness may not seem like your traditional tool
for developing riches, because unlike money and time, it cant be measured. Yet,
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the effects of forgiveness on your quality of life are profound. The simple act of
forgiveness heals by relieving us from the burdens that obstruct our enjoyment
of life. Forgiveness enables us to rebuild, strengthen, and enjoy our relationships
with other people.
To have true wealth, you must forgive both yourself and others. Forgiveness
enables us to move beyond hurtful events by breaking the chains of anger, hurt,
guilt, and resentment that bind us to those events. Forgiveness is a conscious
decision to acknowledge and let go of an event. It doesnt mean you have to like
and condone an event, only that you will no longer dwell on and harbor ill
feelings about it. There is power, strength, and freedom in the act of forgiveness.
Forgiveness heals, allowing meaningful love to exist, and helps you to develop
and maintain deep, gratifying relationships with other people.
Give just for the sake of giving. Selfless giving occurs when there is no
expectation of recognition and reward for your actions. The simple act of giving
is, in itself, the greatest reward you could ever hope to receive. It enriches the
soul and contributes to your long-term happiness. To give selflessly is to give
without the expectation of recognition and reward; however, this doesnt mean
you cannot accept return gifts. Gratitude, a gift from the heart, is one of the
most common return gifts you will receive. When a hungry man gives sincere
thanks to another who gave him food, hes bestowing a return gift of gratitude.
Theres no harm in receiving a persons gratitude and accepting other
unsolicited tokens of appreciation. Accept all reasonable heartfelt gifts to
perpetuate and expand the giving process. When appropriate, ask people to
repay your gifts by giving to others in need. This can cause a single gift from
you to be multiplied many times over.
No cause is greater and deed more worthy than giving to the needy. The act of
giving adds meaning and purpose to life. Make the choice to help the needy and
start giving your three gifts today.
A Random Act of Kindness
One of the most rewarding forms of giving is a random act of kindness, because
its immediate and unexpected. I was introduced to this one day when I ordered
a cup of coffee at a local coffee house and reached for my wallet, only to be told
by the cashier that there was no charge. A gentleman on my left then handed
the cashier money, and I got a free coffee! I thanked the man profusely and tried
to repay him. He politely refused and told me if I really wanted to thank him, he
would appreciate it if I performed a random act of kindness for someone else. I
agreed and have been hooked on this form of giving ever since.
Try it. Im sure you will agree being kind to others is very rewarding. Here are
some ideas to get you started:
1) Say hello, wave, and smile at people you dont know.
2) Buy a stranger a meal or a cup of coffee.
3) If you are approached by someone begging for money to buy food in front of a
grocery store, bring them into the store, give them a hand basket, and tell them
to fill it with food. Once they are done, pay for their groceries.
4) Give a bottle of water and a sandwich to a homeless person without them

asking.
5) Smile, look at, and listen to the next beggar or homeless person who talks to
you. They have a genuine need for help. Some people are lonely and only want a
few minutes of conversation to make them feel human again.
6) Be courteous and friendly to other drivers on the road.
7) Visit a retirement home. Listen to the stories that the elderly will tellyou
may learn something.
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8) Help the needy with the skills you use in your everyday professional life.
Every now and again, you can afford to cut someone a break or work for free.
The World Needs More Heroes
A few years ago in a crowded upscale movie theater, an irate hulk of a man was
about to make good on his promise to take apart an elderly couple, because
they had politely asked him to stop talking to his girlfriend during the movie. I
couldnt believe what I was seeing. Two defenseless people were about to be
beaten up in front of 233 onlookers and not one person was going to lift a finger
to stop it.
Tensions rose in the theater as the angry man grabbed the old couple by their
shirts. I could no longer sit and watch this happen. My heart raced with fear as
I stood up and said in my toughest voice, Youll be going through me first!
The man looked at me in disbelief. You got it, pal! he snarled back.
He let go of the elderly couple and angrily climbed the theater steps to the row
where I was standing.
It was at that moment I realized, that in order to play the hero, you must also
accept the consequences of your actions. And I was about to be mauled by a
grizzly of a man for an elderly couple I didnt even know.
Before any punches were thrown, another voice boomed through the dark movie
theater, but this voice was gravelly, deep, and carried like the sound of a lion
roaring on the open savannah.
NO. I AM FIRST!
This new challenger stopped the aggressive man in his tracks. The angry man
told us both to go to hell and returned to his seat, and then he and his
girlfriend quickly left the movie theater. Needless to say, I was very relieved at
the final outcome.
Would the physical beating that I could have taken for two frail and defenseless
strangers have been worth it?
Yes.
There are a few defining moments in life when a person can choose to
demonstrate remarkable character by rising to meet an extraordinary challenge,
or shrink from that challenge and be forced to live with the stains of shame and
regret. We all have challenges in life. How we choose to meet these challenges
reveals our true character.
Working with the poor, feeding the hungry, promoting peace, supporting human
rights, helping a stranger in needwhat cause will you stand up for? What will
lifes challenges reveal about your character? Do you have the courage to Help
Those In Need and do the right thing when circumstances call on you to act?
The world needs more heroeswe must all answer the call.
To those who are quick to wield the sword, I say let your first
blow fall upon your own breast, and cleave from your heart all
ignorance, malice, and discontent. Snip the puppeteers strings
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and then you will know if you should extend your hand in
reconciliation or pierce an enemy with your unforgiving steel.
-Dan Dulin, Author
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Chapter 6: A Twist of Fate

There is no accounting for lifes randomnessyou can be the king of the hill
one day, and the next, find yourself rolling down it.
Stick out your tongue and say ahhh, Dr. Baker said to his 5-year-old patient,
who sat fidgeting on the paper-covered examination table.
Ahh-hhh, the boy mimicked, his tongue extending over his lower lip.
The doctor placed a wooden tongue depressor into the boys mouth.
Whats your favorite flavor? he asked, studying the back of the childs throat.
G-ww-ape, the boy struggled to say.
Dr. Baker promptly switched the tongue depressor for a grape lollipop, bringing
a big grin to his young patients face. After a few minutes of discussing his
diagnosis with the boys mother, the doctor left the exam room and was off to
see his next patient.
Samuel Baker was a prominent African-American doctor who graduated with

honors from Harvard Medical School in 1968. He rose above the challenges and
obstacles erected by the prejudices of others to successfully pursue his dream
of opening his own medical practice in Chicago. He had a passion for helping
people and felt blessed that he could do the work he loved so much.
Even though his practice was located in a big city, he considered himself a
simple country doctor, making a point to know as much as he could about
each patient. Accomplishing such a feat took time and often put him behind
schedule, but it was this quality that made him truly exceptional at what he
did.
Dr. Baker was a family man with two beautiful children and a devoted wife.
Balancing the rigors of a thriving medical practice with the demands of a busy
home life proved challenging at times, but he managed. Occasionally, his duties
at the practice would force him to miss dinner with the family, and his wife was
always quick to remind him about his responsibilities as a father and husband.
He didnt mind these rare spats however, because he knew she loved him and
all would be forgiven.
The doctors life wasnt perfect and he, like most people, had financial worries.
He had medical school loans; there were costs involved with running his
growing practice, car payments, household expenses, and the mortgage on his
house, and other concerns. Lately, he had been troubled with the prospect of
putting his children through college, and his youngest son had expressed an
interest in becoming a doctor himself. He knew that he needed to start planning
for the future.
Busy days turned into busy weeks, months rolled into years, and Dr. Baker
made little progress with his financial planning. There was always something
getting in the way: patient emergencies, medical conferences, managing the
practice, and handling the pressing responsibilities of family life. The stress of it
all began to get to him, and he could feel a familiar pressure building in his
chest.
Relax, he told himself. Breathe.
It wasnt enough.
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The doctors funeral was a few days later. No one suspected that such a
promising life would be cut short so suddenly by heart disease. Tears and fond
memories were shared at his memorial service. Everyone agreed the doctor was
a fine man and wondered what would become of his grieving widow and the
children now that he was gone.
The money ran out a couple months later, and Dr. Bakers widow was forced to
sell their home in the suburbs and move into a small apartment in the city,
where steady work was easier to find. Times were hard, and most of their
dreams were put on hold. The widow worked two jobs, and her oldest child took
a part-time position to help out. The youngest child learned to live without a lot
of things and spent hours alone every day waiting for his mom to come home.
Years passed. Dr. Bakers youngest son graduated from high school and wished
his father couldve been there to see him finish with honors. He had a plan to
follow in his fathers footsteps and become a doctor himself, but he had no idea
where he would get the money to pay for medical school. He kept his fathers old
stethoscope on his desk for inspiration. To him, it was a symbol of
accomplishment, real proof that dreams become reality with belief,
determination, and purposeful action.
Thirteen years later, with no advantage other than a burning desire to

accomplish his goal, Samuel Baker, Junior, became the second doctor in his
family. His achievement was a triumph over many hardships, and he knew that
somewhere, somehow, he had made his father very happy.
The Sixth Financial Law of Prosperity
The Sixth Financial Law of Prosperity is Be Prepared. Maintain insurance, have

an emergency fund, keep a will, and prepare for both natural and manmade
disasters. There is an element of randomness to life that cannot be controlled,
but must be prepared for.
Few things in life are certain, and you never know when a twist of fate will
throw misfortune your way. Being caught unprepared puts your health, wealth,
family, and even your life in jeopardy. Theres an element of chance to life about
which you can do very little. Preparedness is the only way to protect whats
important to you.
Laws Action

investment.
costs.
the needy.
6. Be Prepared Maintain insurance, have an emergency fund,

keep a will, and prepare for both natural and
manmade disasters.
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Your Emergency Fund
Everyone needs an emergency fund. An emergency fund is a cash reserve that

can be used for unexpected and unavoidable expenses. What if you lose your
job, your car breaks down, the roof starts to leak, or you have a medical
emergency? Instead of using a credit card, borrowing money, or not taking care
of the problem at all, you can rely on your emergency fund.
The amount of your emergency fund and the speed in which you create it will
vary by your individual financial circumstances. As you make more money, you
must also increase the amount of your emergency fund. Initially, your fund
must be the equivalent of one months living expenses saved in cash and,
eventually, increased to at least a years worth of living expenses.
Having a years worth of cash lying around the house makes a lot of people
nervous. Where and how you keep your emergency fund is your choice.
However, its crucial that your emergency fund is kept safe, you can get to it
when needed, and its saved in cash and liquid (easily convertible into cash)
assets.
Start your emergency fund with the money you have saved for investment (The
Second and Third Financial Laws). In fact, your emergency fund is so important
that you shouldnt invest or accelerate the repayment of debt until you have
saved at least one months worth of living expenses. Once you have established
your emergency fund, dont take any investment risks with this money, or
spend it on anything but an absolute emergency.
Preparedness is the only way to protect whats important to you.
Avoid Major Loss with Insurance
Loss is a certainty of lifeonly the amount and its timing are unpredictable.
Major losses can be disastrous to your financial independence, so you must
prepare for any catastrophic loss that would be extremely difficult for you to
recover from. Do this by using insurance to reduce your financial risk.
Approximately 10% of your total income (this is part of your lifestyle expense)
should be allocated to purchase different kinds of insurance protection
appropriate for your particular situation and stage of life. Your actual allocation
could be more or less depending on the amount of money you make and other
life circumstances. Here are several types of insurance protections that you
should consider:
Disability Insurance: Pays your personal expenses for a predetermined period of

time in the event you become disabled by serious illness or injury, and can no
longer work.
Property Insurance: Pays you if you have a loss on your personal property. The
most common property insurance policies are homeowners, automobile, and
rental. Whether you rent or own your home, you should always have property
insurance. Make sure your coverage includes the full replacement value of the
things that are most important to you, such as jewelry, firearms, and artwork.
Flood Insurance: Pays you if your property is damaged or destroyed by flood.

Flood insurance is a form of property insurance, but most property insurance
policies exclude flood insurance. If you live in an area susceptible to flooding, you
may have to purchase this type of coverage separately from your other property
insurance policies. Never assume your insurance policies cover floods. Always ask
your insurance agent if you are covered for flooding, and get their answer in
writing.
Life Insurance: Pays your family and other named person(s) a preset amount of
money if you die. Anyone with a family should have life insurance. Thinking about
93
your own death isnt any fun, but at least youll know your loved ones will be taken
care of when you are dead and pushing daisies. One clever wealth strategy is to
keep enough life insurance coverage to pay for all of the estate taxes (often called
the government Death Tax) charged on your property when you die so your
property essentially transfers to your heir(s) tax-free. Talk to your attorney and tax
advisor for more details about this type of strategy.
Medical Insurance: Pays a portion of your medical expenses if you are sick or
injured and need medical care. You should consider coverage for both your
physical health, long-term care (medical and non-medical expenses resulting from
chronic illness, injury, and old age), and dental.
Personal Liability Umbrella Insurance: Helps protect you from liability claims
made against you by others for harm done to them and their property. This type of
insurance is important because a lawsuit could be financially devastating and force
you into bankruptcy.
Pet Bite Rider Insurance: If you are a pet owner, make sure your insurance
policy covers you in the event your pet decides to bite your local postman,
houseguest, or the creepy neighbor kid next door. If youre not covered, you must
add a rider, or add-on, to your current policy because you never know when Spot,
the familys mild-mannered pet, will have a bad day and get you into a lawsuit!
Insurance can be expensive. If you cant afford the insurance coverage you
need, consider having a high deductible on your policies. High deductibles tend
to save you money by lowering the cost of the insurance coverage, but raise
your out-of-pocket costs should you need to file a claim.
Example: The insurance premium for $0 annual deductible deluxe

medical insurance policy for a family of two is $1,200 per month. That
same policy with a $10,000 annual deductible is $300 per month. A high
deductible saves you $900 per month, or $10,800 per year. This is a
better deal if you dont get sick a lot.
Make sure you have enough money in your savings or emergency fund to cover
your deductible in the event you need to file a claim against your policy.
Always work with a professional insurance agent. Make sure you talk to two or
more experienced, reputable insurance agents before you buy any insurance
product. A good agent will be a tremendous help in determining the coverage
you need and customizing policies to fit your budget. Dont forget to check your
agents references, and the ratings on the insurance company that will be
providing your coverage.
Good Advice: Always buy insurance coverage through an experienced,

licensed, reputable insurance agent. Buying discount insurance coverage
directly over the Internet is probably the best way to get cheated.
Insurance policies are complex, and contain many legal nuances the
average person wont understand. Many people have purchased cheaper
coverage only to have their legitimate claims denied by their insurer.
When it comes to insurance, always work with a professional agent, and
never switch from a fiscally sound and reputable insurance company to a
discount insurance carrier just to save a few dollars.
95
When You are Dead or Mentally Gone
Most people die without a will, and they make no provisions for their long-term
care if they were to become mentally or physically incapacitated. Many falsely
believe that their property will automatically go to a family member or trusted
friend, and that decisions for their long-term care will be made by close family
members too. Without a written will, however, anything can be challenged and
disputed by others in court.
Sooner or later we all must die. Morbid? Definitely. However, if you would like to
leave this world with a little peace of mind, properly plan your estate. If you
were to die or become incapacitated, do you know with one hundred percent
certainty the answers to these questions?
1) Who gets your property?
2) What three people (in ranking order) would you like to become the legal
guardian of your children? Do these candidates have enough resources to
properly take care of your children?
3) If you could no longer make your own medical decisions, what type of care
would you want? Who do you want making these decisions for you?
4) If you could no longer make your own financial decisions, what three people
(in ranking order) would you trust to manage your finances? Would these
candidates keep your best financial interests in mind?
Every adult should have a legal will that clearly states who gets their property
and cares for their children. The will should also contain provisions for your
long-term financial and medical care in the event that you become
incapacitated. Consult with an attorney who specializes in estate planning to
determine what would work best for you and to prepare a proper will.
When Disaster Strikes
The Sixth Financial Law of Prosperity is more than a safeguard for your
financial wealth; its a mandate to minimize the effects of outside influences on
your health and safety. There is no point achieving your goals only to lose your
life in some foreseeable cataclysm that caught you unprepared. We are under
constant threat from both natural and manmade disasters. Everyone should be
prepared for two emergency situations: fleeing your home with very little notice
and temporarily surviving in your home with no access to outside services.
No matter where you live, you are vulnerable to earthquakes, floods, storms,
wildfires, mudslides, pandemics or some other form of disaster that could
change your life in an instant. Here are some of the more infamous natural
disasters that have affected others:
1) In December 2004, an undersea earthquake caused a major tsunami to crash

into landmasses bordering the Indian Ocean. Over 200,000 people died. It took
weeks to effectively mount an international relief effort, and hundreds of
thousands of people were left homeless.
2) In August 2005, Hurricane Katrina slammed into Louisiana. By the time the
storm had passed and authorities could rescue all of the trapped and stranded
people, approximately 1,800 human lives had been lost. It took weeks to
effectively provide relief services to the entire affected area and thousands of
people were left homeless.
97
3) In May 2007, an F5 tornado killed 10 people and destroyed the city of

Greensburg, Kansas. Relief services were onsite almost immediately, but many
people were left homeless and had few resources to fall back on.
4) In January 2010, a massive earthquake struck Haiti, killing approximately

200,000 people. It took weeks to mount an international relief effort, and
hundreds of thousands of people were left homeless.
If Mother Nature wasnt bad enough, people also lend their own stupidity to the
fray. The case for future manmade disasters is strongly rooted in a rich history
of industrial accidents, social and civil unrest, economic collapses, depressions,
wars, armed conflicts, genocide, terrorism, revolution, liberations, and other
euphemisms used to describe mankinds destruction of life, the environment,
and property. The sheer number and scope of manmade disasters is absolutely
staggering. Some infamous examples are:
1) The Great Depression of the 1930s was caused by bank and investor greed,
but prolonged by the poor economic policies of the U.S. government and Federal
Reserve. Tens of millions of people were plunged into poverty for more than a
decade. Many who gambled on Wall Street went broke. Hunger and hopelessness
were widespread.
2) Adolph Hitler rose to power in 1933 by riding a wave of German social and
economic discontent. He placed the blame for the countrys woes on the
international and Jewish communities, and he promised that he would do
something about it. People who were targeted for persecution and fled, survived
with their lives; those that stayed, perished. By the time Hitler was stopped, he
had plunged the world into war, murdered more than 5 million people, and
displaced millions more.
3) In 1945, the United States, in an effort to force an end to the war with Japan,
dropped two nuclear bombs, one each on Hiroshima and Nagasaki, killing
approximately 200,000 people. Radioactive material was blown into the
stratosphere where it was carried worldwide. Many people living on the
perimeter of the blast zones were forced to flee their homes.
4) In 1984, an explosion at a Union Carbide chemical plant in Bhopal, India,

sent a plume of lethal chemicals into the air. An estimated 15,000 people died
and another 550,000 were injured.
5) In 1986, an explosion at the Chernobyl nuclear power plant sent clouds of

radioactive material across Europe, Russia, and into the stratosphere, where it
was carried worldwide. Hundreds of thousands of people were affected by
radiation and approximately 4,000 died.
You must prepare for any natural disaster common to your location, and
anticipate what you would do for different manmade disasters. Anyone whos
been in a prolonged emergency situation, like a blizzard or severe storm, knows
that the first thing to disappear from the shelves of local stores is food,
batteries, and bottled water. The degree of your preparedness will vary by the
anticipated emergency. However, two key things you should have on your
preparation list are at least a 30-day stockpile of food, including any
medications you may need, water, and a Gotta-Go bag containing three days
worth of necessities, packed and easily accessible just in case you are forced to
flee your home. Also, keep insurance information, important medical records,
and financial records in a place where you can quickly find them. Additionally,
a portion of your wealth should be portable and readily accessible in case
theres no electricity, Internet service or working ATM near you. Cash along with
gold and silver coins make an excellent choice.
How prepared are you for a disaster? Can you flee your home with only five
minutes notice, without access to your credit cards and bank account, and
survive comfortably for three days living outside? Can you turn off the
electricity, water, and gas to your home and shelter-in-place for a week without
going outside? Try it, and you will discover how prepared you really are.
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Many people consider this type of preparation to be extreme. However, history

has proven time and again that disasters do happen. The Ten Financial Laws of
Prosperity are about creating a lifetime of financial independence. There is no
point achieving your goals only to let some sort of disaster destroy everything
youve worked so hard for and prematurely take your life. The effect of what you
prepare for can be minimized; the effects of what you dont prepare for can be
catastrophic. Both natural and manmade disasters can strike anywhere at any
time. Be prepared.
The effect of what you prepare for can be minimized;

the effects of what you dont prepare for can be catastrophic.
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CHAPTER 7: FINANCIAL SLAVERY
The fastest way to get out of debt is to make more money, and spend less than
you make.
Robert worked as a shift supervisor at an automobile parts manufacturing

company in Detroit, Michigan. The position afforded him a good living and great
benefits. He had been with the company for a little over twenty-one years and
was a model employee.
Robert had always worked hard for what he had in his life. He was a family man
with a wife and three kids. He played it safe when it came to his personal
finances. He saved his money and never really liked having debt. Robert,
however, believed large purchases required the use of debt and that using credit
cards was OK as long as he eventually paid them off. So he borrowed money to
buy new cars, a boat, family vacations, and his house, weighing each major
purchase against his ability to make his monthly payments.
One day, while sitting in the companys lunchroom, Robert watched a story on
the local TV news about the national economy. Banks were no longer making
loans, credit was scarce, and the number of people dealing with a job loss was
growing at an astronomical rate. These troubles seemed a world away to Robert,
but he still gave silent thanks for his employment and returned to work.
It wasnt long before the worsening economy affected Roberts company. People
stopped buying cars, and most of their manufacturing lines came to a halt. Half
of the companys workforce was let go. Robert survived the first round of cuts by
sacrificing some work hours and taking a reduction in pay. To make ends meet,
he started to rely on his credit cards and dipped heavily into his savings to
support his family. He even took a part-time job, but his financial problems only
grew.
A few months passed, and the company he had spent years of his life working
for decided to move the manufacturing portion of its business overseas where
labor costs were much less. They closed their Detroit plant and filed
bankruptcy, cheating employees of promised benefits, terminating retirees
pensions, and nullifying union agreements. Robert joined millions of others who
were unemployed with a family to feed and bills to pay.
Robert was under a tremendous amount of financial pressure, and it was hard
for him to think about anything else.
How is this fair? he wondered. Im a good person and a hard workerthis

isnt supposed to happen to me.
Things only got worse for Robert. He and his wife bickered frequently about
their finances while the telephone rang constantly with bill collectors
demanding payment. Past-due notices turned into shutoff notices and only the
essentials got paid. He could no longer sleep. At night, he would sneak out of
bed to hide in the bathroom and cry. He would jump at the sound of a car door
slamming outside his house, and he hid from the mailman who always seemed
to deliver bad news.
Robert was seriously depressed. The threats, demands, and the legal bullying
from the debt collectors were too much. He was willing to give everything away
to stop the intimidation and mental anguish. Robert filed for bankruptcy to end
the harassment. The courts now decided what debts would be paid and Robert
had to start over again financially.
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Robert realized too late that debt is a financial trap. It can make a person feel
like a caged wild animal, desperate for freedom but helplessly locked behind
steel bars. It destroys peace of mind, creates anxiety, and hurts personal
relationships. It taxes your health and robs from your quality of life. Debt
creeps up on youinnocent purchases made today can grow into mountains of
interest and fees tomorrow. Debt is a threat to your financial independence and
must be avoided.
Robert finally recognized that in order to get what he wanted from life, he had to
create it for himself. He had allowed his financial security to become dependent
on the promises of others. When those promises were broken, his entire life
crumbled. Unfortunately, many people find themselves in the same financial
trap as Robert. They dont realize, until its too late, that promises can be
broken, and a lifetime of financial security can only be achieved through self-
reliance.
The Seventh Financial Law of Prosperity
The Seventh Financial Law of Prosperity is Live Debt Free. Avoid debt in your
personal financial life and pay cash for everything. If you are in debt, try to
allocate 20% or more of your total income toward paying off existing debt.
Debt is a claim against your future income and property. Its financial
enslavement because both you and your money are working for someone else. It
makes everything you buy more expensive. If you are currently in debt, you
need to make immediate adjustments to your lifestyle spending. This could be
as simple as eliminating financial obligations and allocating more of your
income toward paying off existing debt, or it could require you to make
sweeping changes in your spending habits. Either way, overcoming debt
requires personal sacrifice, but it will ultimately yield your financial freedom.
Laws Action

investment.
costs.
the needy.

manmade disasters.
7. Live Debt Free Buy with cash. Use 20% or more of total income
to pay off debts.
Start Living Debt Free
A life without debt is one of the greatest gifts you can give yourself. Its freedom!
All debt has a repayment risk and can severely hinder your progress toward
financial independence. If you have a debt problem, you are living out of
balance with The Ten Financial Laws of Prosperity. The best way to kick a debt
addiction is to just do it. Follow these four simple steps to start living debt free
today:
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Step 1: Personally resolve to add no more debt, starting right now.
Step 2: Cut up your credit cards, and become your own personal banker. Use a
debit card for emergencies only. You might think it impossible to live without
credit cards, but those cards represent the mental wall separating you from
living with the burden of debt and living debt free.
Step 3: Pay cash for everything. As your money disappears from your wallet,
you will be reminded to manage your spending. When you run out of cash, you
have reached your spending limit. If you go hungry for a few days, you will learn
very quickly how to budget your money.
Step 4: Accelerate the process of debt repayment. Negotiate lower interest rates
with your creditors and seek third-party help if necessary. Research this subject
further by reading a few books on debt reduction and taking a class or two.
Credit In Our Society Is Like Heroin To a Junkie
Its amazing how many people actually believe credit, or debt, and credit scores
are important. The sheer number of people who have been conditioned to believe
their credit score defines who they are and that it really means something is
staggering. This conditioning is so strong that people can get deeply offended
when they think their credit has been tainted by the least little thing. The belief
that credit score and the amount of credit one possesses are what determines a
persons value to society is a lie.
Credit reporting and credit, or debt, are tools used by Big Business to
maximize the amount of money that they can extract from the poorer majority of
society. Debt is deliberately created to keep people buying and paying interest
on things that they normally would not have purchased once they were out of
cash money. Interest is the extra amount you pay to borrow money and makes
the things you buy more expensive. In other words, debt is intentionally
designed to keep you spending beyond your means, working to pay your
creditors, and poorforever.
Billions of dollars are spent on advertising to get you to identify with and use
credit. Advertisers tell us that anybody who is somebody uses credit and so
should you. After all, credit is important and, when you use it, you are
important, too. Psychologically, this is a very powerful message and a great way
to control you.
Oops! I just let the cat-out-of-the-bag. Yes, you have been conditioned from an
early age to accept and identify with credit. If advertisers have done their job
properly, you will even defend your need for credit. Still have your doubts? Tell
me then, Whats in your wallet? Most people automatically answer, Capital
One Visa.
Credit in our society is like heroin to a junkieweve gotta have our fix or we
go crazy. As soon as our dealer, or creditor, threatens to cut us off, we panic
for fear of going into spending withdrawal. The depth of this conditioning on the
consumer psyche is tremendous. Big Business can even use credit reporting as
its own private justice system to bully a credit-addicted populace into
obedience. Many people will do almost anything to protect their credit report. If
you are obeying The Ten Financial Laws of Prosperity, however, concerns over
credit reports and scores begin to fade as your wealth increases and your debts
are eliminated. The financially independent, and those following The Ten
Financial Laws of Prosperity, dont really care about credit. I realized this when I
went into my bank and asked them to reverse a series of low-balance service
charges imposed on an account I was trying to close. The bank had unfairly
overdrawn the account with their fees and penalties, and wanted me to pay. The
bank manager told me she couldnt waive the charges because it was against
107
bank policy. I asked what would happen if I didnt pay the charges. She
informed me with a smug smile that it would reflect negatively on my credit
report. I pondered this for a few moments, then told her those consequences
were acceptable. The bank manager was shocked because I wouldnt be bullied
by her threat. Credit reports no longer have any power over me because I pay
cash for everything and refuse to borrow money. What power do they hold over
you?
Break free of the credit report hypnosis. Think differently. Credit and credit
reporting are devices that encourage and enable people to live beyond their
means. Loans, payments, easy payments, pay later, same as cash,
layaway, and advances all mean the same thingdebt. And debt is financial
slavery because you are working to pay someone else. You dont need credit to
buy thingsyou need cash. When your cash runs out, you are done buying. If
you need to buy something expensive, save your money first and then buy it.
Anyone with debt can reach a tipping point where they owe more than what
they can repay. And like a house built from playing cards, everything comes
tumbling down in ruin. Theres absolutely nothing in this world that you can
buy with credit that a stack of cash cant buy for less. If you aspire to Live Debt
Free, does it really matter what your credit score is? Is the instant gratification
of obtaining something now with borrowed money, rather than later with cash,
really worth the extra cost? The irony of incorporating The Ten Financial Laws
of Prosperity into your life is that once you do, your credit report and score
improve dramatically, and Big Business will practically throw credit at you.
Resist the temptation, because sheep get fleeced and its time to leave the flock.
Big Business has spent a lot of money trying to condition you to accept and
identify with credit. Do you believe your credit score defines you? Does your
credit score make you better than others? Do you believe credit is an important
part of your life? Some people are very defensive of their need for credit and can
make terrific arguments to support their position (home buying is the most
common objection and this topic is covered extensively in Chapter Ten, so keep
reading). Listen to what I am really saying. Living debt free does not mean you
have to live credit free. You can have all the credit you want, just avoid the debt
tsunami that could come from its use. This is a very important distinction,
because anyone using credit to buy goods and services that doesnt have the
ability to immediately pay their debt in cash is living beyond his or her means.
Think about it.
Another Way to Look at Debt
It can be difficult to move from the instant gratification of buying something on

credit and racking up debt, to the delayed rewards of paying in cash. Often, its
helpful to look at debt from another perspective to understand the benefits of
buying something only when you have the cash to pay for it.
Example: Lets say you are interested in a new mountain bike that costs $500.
You could buy it now using a credit card, or you could wait to pay for it with
cash. You decide to pay for it with a credit card, and you are charged $200 in
interest by your credit card company before you pay off the debt. Using credit
increased the cost of the bike from $500 to $700.
If you work at a job making $15 per hour after taxes, it would take you 46
working hours to pay for your bicycle. Alternatively, had you waited to buy your
bicycle with cash, you would have worked just 33 hours.
In this example, paying for the bike in cash saved you from working thirteen
extra hours for your credit card company. When you pay with cash, your
moneys purchasing power is working for you. If you use credit, both you and
your money are working for someone else.
109
Negotiate Your Debt
If you are heavily in debt, you may want to consider negotiating with your
creditors to reduce your principal balances and interest rates. Research this
subject and consider talking to a credit counselor, nonprofit debt-consolidation
company, or your legal advisor. In many cases, your debt can be dramatically
reduced, saving you years of working to repay it.
Dont feel guilty, ashamed, or embarrassed for attempting to negotiate your

debt. Its not a question of honor, ethics, morals, or pride if you have a
legitimate problem and you are trying to solve that problem through
negotiationits only business. Every good businessperson understands the
concept of counterparty risk, better known as the chance that someone
involved in a transaction or agreement cannot uphold their end of the deal.
Maybe its time for you to think like a good business person when it comes to
your personal finances. If you have a debt problem, you must immediately
educate yourself, get help, and thoroughly understand your options. One last
thing: good business practices dont include lying, fraud or misrepresentation,
because any short-term gain from these activities will have long-term negative
consequences in your life. The repayment of all debt is negotiableyou just may
not like the final terms.
How To Eliminate Your Debts
Develop a strategy to eliminate your debts, but keep in mind that all debt
should not be treated equal. Some debts will cost you more money than others.
Here are three good ways to quickly pay off debt:
1) Repay your debt faster than what your creditor expects.
2) Negotiate a reduction in your debt and interest rate.
3) A combination of the above.
You must intelligently employ a strategy to repay your debt. Pay at least 20% of
your total income toward your existing debts. This payment is part of your
lifestyle expense until you are debt free. When paying off multiple debts, always
pay more money to the debt with the highest interest rate first because the
higher the interest rate, the greater amount of money you pay to that debt over
time. Repaying debts with higher interest rates faster than those with lower
interest rates saves you money and allows you to repay all of your debts in less
time.
Example: You make $3,000 per month from your primary job and have a car
loan and a credit card bill that must be paid off. You have $600 per month, or
20% of your income, that can go toward this goal. Your car loan has a balance of
$4,000 at 6% interest per year with a monthly payment of $290. Your credit card
has a balance of $7,500 at 21% interest per year and a minimum monthly
payment of $206.
After paying the combined minimum payments of $496 for both the car and
credit card, you have $104 remaining in your budget of $600. The extra $104
should be used to repay your credit card because it has the highest interest rate.
Paying the credit cards minimum payment, plus an extra $104 every month,
will save you over $10,000 in interest and completely pay off this debt in 32
months.
Once your credit card is paid off, apply the $310 (remember, this is the credit
cards $206 minimum payment plus the extra $104) you were paying on the
credit card toward your car loan. Pay the $290 minimum monthly payment on
the car loan plus the old credit card payment of $310 for a combined payment of
$600.
111
Repeat this process until all your debts are paid.
Consider accelerating the repayment of your debt by using the money you save
for investment. You may recall reading how the money you save for investment
(The Second and Third Financial Laws of Prosperity) should only be used for
investments, but being saddled with debt makes it almost impossible to reach
your long-term financial goals. Using the money you have saved in this manner
can be considered an investment in your financial future. In order to make your
financial dreams a reality you must tear down the debt barriers that prevent
you from reaching your goal and keep you in a state of servitude.
Example: You take home $3,000 per month from your primary job. Under
normal circumstances, you should use $600 per month, or 20%, to pay off debt
and save 10%, or $300, for future investment. In order to accelerate the
repayment of debt, however, you could combine those amounts to use 30% of
your income, or $900, to pay off debt.
Your credit card has a balance of $7,500 at 21% interest annually, and a
minimum payment of $206. If you only made the minimum payment, it would
take over 26 years to repay, and you will have paid $12,500 in interest. By
increasing the payment from $206 to $900, you will repay the debt in 10 months
and will have paid less than $700 in interest.
Before you repay any debt, make sure you understand the terms under which
you borrowed the money. Some debts cant be repaid faster than what was first
agreed to when you initially borrowed the money. If you have any doubts and
questions about your debts, seek professional advice.
If you are in debt, both you and your money are working for someone else.
Resolve to set yourself free.
113
CHAPTER 8: THE ART OF MAKING MONEY
Money multiplies under the right conditions and disappears with others.
Again, it will be like a man going on a long journey, who called

his servants and entrusted his property to them. To one he gave
five talents of money [bags of gold], to another two talents, and
to another one talent, each according to his ability. Then he
went on his journey.
The man who received the five talents went at once and put his
money to work and gained five more. So also, the one with the
two talents gained two more. But the servant who received one
talent went off, dug a hole in the ground and hid his master's
money.
After a long time the master of those servants returned and

settled accounts with them. The man who had received five
talents of money brought another five. Master, he said, you
entrusted me with five talents. See, I have gained five more. His
master replied, Well done, good and faithful servant! You have
been faithful with a few things; I will put you in charge of many
things. Come and share your master's happiness!
The man with the two talents of money also came. Master, he
said, you entrusted me with two talents. See, I have gained two
more. His master replied, Well done, good and faithful servant!
You have been faithful with a few things; I will put you in
charge of many things. Come and share your master's
happiness!
And then the man who had received the one talent of money
came. Master, he said, I knew that you are a hard man,
harvesting where you have not sown and gathering where you
have not scattered seed. So I was afraid and went out and hid
your money in the ground. See, here is what belongs to you.
His master replied, You wicked, lazy servant! So, you knew that
I harvest where I have not sown and gather where I have not
scattered seed? Well then, you should have put my money on
deposit with the bankers, so that when I returned I would have
received it back with interest. Take the talent from him and give
it to the one who has the ten talents. For everyone who has will
be given more and will have an abundance. Whoever does not
have, even what he has will be taken from him. And throw that
worthless servant outside into the darkness where there will be
weeping and gnashing of teeth.; (Holy Bible, Matthew 25:14-30
NIV)
The Eighth Financial Law of Prosperity
The Eighth Financial Law of Prosperity is Make Money Work for You. Your
money must always be working for you by earning a return and producing an
income. Invest your money wisely so that the total amount of money you have
grows exponentially over time.
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Far too many people work for their money, trading their limited time for a
meager paycheck that supports their lifestyle. To be financially independent,
however, your money must work for you by producing the income required to
support your lifestyle and, eventually, eliminating your need to work.
You must save and invest a portion of everything you earn until you reach the
point where the income received from your investments supports your lifestyle,
and the value of those investments continues to grow.
All investments carry an element of risk that must be both managed and
rewarded with an appropriate return. Investing for future price appreciation
(increase in value) alone is similar to gambling. For example, your investment
goes up in value, you win, and if it drops, you lose. Investing for a combination
of both price appreciation and income gives you some protection, because the
money you invested produces more money, also known as cash flow,
separately from the value of the investment. Therefore, if the value of the
investment drops, you would still receive the income, or cash flow, from the
investment.
Money never sits idle; its either creating more money or losing value.
Understand what your money is invested in; make sure its generating an
acceptable return and is reinvested for exponential growth, a process known as
compounding. Your ultimate goal is to have a series of tangible investments
that produce an income large enough to completely support your lifestyle while
the value of those investments and income produced continues to grow over
time.
Laws Action

investment.
costs.
the needy.

manmade disasters.
to pay off debts.
8. Make Money Work Invest your money wisely so that the total
for You amount of money you have grows exponentially
over time.
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Inflation- The Hidden Tax
It seems reasonable that the value of a dollar today would stay the same as the
value of a dollar tomorrow, but thats not the case. Money, in a modern
economy, loses its value over time in a process called inflation. With inflation,
the amount of money under your mattress stays the same, but it buys less stuff
with the passage of time. Time changes money.
Inflation is measured by the rising cost of goods and services in an economy.

Inflation makes everything you buy more expensive, so the value of your money
decreases. A dollar buys four apples today but only three apples tomorrow. A
dollar is still a dollar, but in terms of what you get for your money, inflation ate
one apple!
Inflation is created when a government adds more money to its economy than
whats needed for that economy to function properly. There are a number of
ways a government can do this, but the process is generally described as
printing money. When a government adds money to its economy, it typically
does so to fund its own spending. This means the government needs more
money than what it has received from its citizens in the form of taxes and has
decided to make up the shortage by creating new money. This deliberate act
creates inflation and decreases the value of all the money in that economy.
Inflation is a hidden government tax paid in the form of rising prices. It

disproportionately affects the poor, working class, and people who save but
dont invest wisely. To be rich, you must minimize the effects of inflation on
your lifestyle and shelter your money from it. Given that inflation decreases the
value of money over time, you must put your money to work earning a return
greater than your countrys real inflation rate. This figure would include the
price changes of food and energy.
Example: If your money is in a bank savings account paying 3%
interest per year and the real national inflation rate is 4.5% per year,
your money is losing 1.5% of its buying power each year (3% interest
rate minus the 4.5% inflation rate equals a 1.5% loss). If, instead, you
invested your money at a 4.5% interest rate, you break even and your
money retains its value. Breaking even on your investments isnt a
path to riches. In this example, you could only hope to grow your
money if you invested it at a rate higher than the 4.5% inflation rate.
Money is made or lost with time. Your money is working for you only if its
invested at a rate of return greater than the real inflation rate reported in your
country during the same period of time your money was invested. Learn what
the real inflation rate is in your country and invest accordingly.
There are three kinds of lies: lies, damned lies and statistics.
Mark Twain (1835-1910)
Two Mules Teach the Art of Making Money
It was early morning in the high desert region of New Mexico. The sun was
starting to peek above the horizon; its golden rays lit up a magnificent sky filled
with purple-hued clouds that floated toward the Sangre de Cristo Mountains.
The fall air was crisp, and daybreak chased away the last silvery stains of frost
left on the ground from the cold night before.
An old wooden wagon creaked and groaned as a pair of dusty mules pulled it
toward a distant pasture, part of a beautiful 2,584-acre cattle ranch. Driving
the wagon was a weathered ranch hand named Joseph, who quietly hummed to
119
himself as the ranch owner and his wealthy friends rode in the back, excitedly
talking about their morning quail hunt.
The subject of the conversation quickly changed, as it does with successful

people, to the art of making money; and everyone in the group had something to
say.
When it was his turn to comment, the rancher crossed his arms and leaned
back on the wagon and said, Well, boys, these two mules are money-making
experts. He paused to let the absurdity of his statement gain the full attention
of the group and then broke the silence.
Tell em, Joseph.
Joseph smiled from his perch at the front of the wagon and replied in a
southern drawl, Yes, sir-r-r! Listen up, cause Im gonna have these mules
teach you everything you need to know bout making money.
He raised the leather reins high in the air and, with a firm downward shake,
popped them over the backs of the mules while shouting, Giddy-up, Cash and
Flow-w-w!
After the group got a good laugh and quieted down, Joseph continued, Jus like
this here wagon needs mules to pull it, youre gonna need cash flow from your
investments for them to take you where you wanna go too!
Money must be put to work earning a return and producing an income.
The Miracle of Compounding
The Miracle of Compounding is the process by which your money grows

exponentially over time. The amount of growth depends on the length of time
your money stays in an investment, the interest rate, and how often interest is
calculated. Time changes money, allowing it to multiply with wise investment.
Compounding, or exponentially growing your money over time, is a key
component in the formula for creating a lifetime of financial independence.
Which would you rather havea million dollars today or one penny doubled
every day for 30 days? Give up? Look at the following chart:
In this example of compounding, a single penny invested at an interest rate of

100%, calculated daily for 30 days, gives you more than five million three
hundred thousand dollars!
To be rich, you need to invest your money wisely and get it doubling in the
shortest amount of time possible. Different interest rates, or rates of return, will
double your money at different speeds. The Rule of 72 will help you estimate
the time it takes to double your money at a given interest rate. To use The Rule
of 72, divide the interest rate (expressed without the percent sign) into 72 to get
the time period it will take to double your money. For example, an interest rate
121
of 12.3% per MONTH will double your money in approximately 5.9 MONTHS
(7212.3=5.9). An interest rate of 10.5% per YEAR will double your money in
about 6.9 YEARS (7210.5=6.9).
The miracle of compounding is its ability to transform small amounts of money

into larger sums over time. To decrease the amount of time needed to double
your money, seek investments with higher returns while being mindful that
higher returns can have higher risks. Compounding your money through
successful investment is critically important to the achievement of your
financial goal. Remember, time changes money and when money is wisely
invested, it grows exponentially.
The Golden Rules of Investing
There are many different investments in this world and what might work for you
could be totally wrong for someone else. It is beyond the scope of this book to
cover every single investment idea that exists today, but there are a set of rules
which can help you make better investment decisions.
The Golden Rules of Investing are a set of basic investment principles that were
developed to assist you with the identification of opportunities and avoid
common investment pitfalls. While The Golden Rules of Investing speak to good
old-fashioned common sense, they are often ignored, skipped, and forgotten in
the quest to make money. Memorize them and post them on your bathroom
mirror. One day you will thank me.
Rule #1 Learn from others. I was once told that a pioneer was the guy with all
of the arrows in his back. He paid a heavy price for his discoveries,
profiting handsomely in some instances and losing everything in
others. Learn from people who are making money with proven
methods before you risk your hard-earned money on the latest craze.
Financially educate yourself. Know what you are doing before you do
it. A tried-and-true method of making money is better than a sad-
but-true story of losing it.
Rule #2 Get your timing right. Timing is the difference between making money
and losing money in any investment. All investments rise and fall in
value. Know where your potential investment stands in relation to its
relevant market and business cycle (business cycles risks are
discussed in Chapter Nine) before you invest. Theres always a good
time and a bad time for making an investment.
Rule #3 Never spend your investment principal. Your investment principal is

the cash money you use to make an investment. Once an investment
matures, you typically get your money back for a period of time
before you find another investment. During this period, resist the
temptation to spend any of your investment principal on your
lifestyle. Remember, your investment principal is the fuel for your
personal money machine which will continually produce cash for you
once you start it. The more money you invest, the greater your
potential cash flows and returns. You can, however, reward yourself
and spend 20% of your profits on your lifestyle. The remaining 80%
of your profits must be reinvested for the compounding process to
work effectively.
Rule #4 Invest for appreciation and income (also known as, cash flow). The
lifeblood of any successful business and investment is the cash it
produces. Buy and cultivate tangible investments that can appreciate
in value and create income. Things that produce cash will always
have a value. Investing in noncash-producing assets you believe will
appreciate in value is speculation. A small amount of speculative
123
investing is normal, but keeping tangible investments that produce

money at regular intervals is the key to lasting riches.
Rule #5 Avoid overconfidence. The confidence you develop from earlier

investment successes can lead to carelessness, causing you to skip
critical steps in the investment investigation process. It takes true
genius to make money in both up and down markets. Stay humble,
check your ego at the door, and dont get sloppy with your due
diligence.
Rule #6 Know your exit. Plan your exit before you invest. If your investment
strategy is to create cash flow and appreciation for two years, then
buying a ten year certificate of deposit wont help you meet your goal,
because you get your money back eight years too late. Knowing what
factors will trigger your exit from an investment forces you to think
about the viability of that investment to meet your financial
objectives. Once the parameters for your exit have been established,
follow your plan and never be afraid to take a profit or minimize a
loss. All investments must come to an end, so write your ending
before every beginning.
Rule #7 Read everything. Whats in writing is there for a reason. Read and
understand the ramifications of everything you agree to and
participate in. If you dont understand what you are reading, dont
agree to it.
Rule #8 Get it in writing. Get all of the details (who, what, when, where, why,
and how) on paper before you move forward on any investment
opportunity. Never rely on verbal agreements, handshake deals, and
unclear details because those are the easiest ways to get cheated.
Rule #9 Trust must be continually earned. There are plenty of people in this
world willing to take advantage of you for your money. Never do
business with people of questionable character. Remember, first
impressions tend to be correct impressions. Is your inner voice telling
you something isnt right? Listen to your intuition. Check up on and
evaluate the performance of your trusted advisors regularly. Always
know what your moneys doing, and NEVER place it all under the
control of a single person or company. When it comes to your money,
trust must be continually earned and never freely given.
Rule #10 Maintain control. Never buy and invest in things you cant control.
When you have control, you make the decisions that shape your
investments future. When someone else makes the decisions, they
have control over your investments future and, therefore, your
money.
Rule #11 Stick with what you know. We all develop an investment expertise in
something. It might be investing in businesses, stocks, or real estate.
Whatever your investment expertise, exploit it to the fullest and avoid
jumping from one investment type to the next. When you do invest in
something new, start small, do your homework, read books, take
classes, and seek professional guidance from someone you can trust
until you have achieved mastery of the new investment vehicle.
Rule #12 Work with professionals. Its impossible to be an expert in everything

and, sooner or later, you will need outside help. Only work with
professionals who are experts in their field. Professionals are
knowledgeable, licensed, sought after, teach their trade, write books,
and have a loyal following. Having the right professionals on your
team increases your probability of success.
125
Rule #13 Negotiate everything. A little give and take is a natural part of life, so
why should investing be any different? Ask for a better deal and dont
automatically give up when someone says no.
Rule #14 Do your own homework. Never rely solely on the recommendations,
investigations, and research done by other people to determine the
viability of any potential investment. Accept nothing as fact unless
you have independently verified it. Hire your own experts. Ask lots of
questions including my personal favorites: Who benefits? and How
could this go wrong? Once your questions have been answered, you
can make the appropriate investment decision. Its never the
questions that you ask that cost you moneyits the ones you fail to
ask that will get you every time!
Rule #15 Beware the sword of leverage. Borrowed money, or leverage, is an

investment magnifier. It is a tool used to increase the financial
returns from an investment. Leverage, or debt, in your investment life
is not the same as debt in your personal life, even though it still has
its risks. Leverage is a sword that cuts both ways, because it can
magnify both investment gains and losses. Positive leverage occurs
when the profits made from the investment are greater than the
interest paid on the money borrowed. Negative leverage occurs when
the interest paid on the money borrowed exceeds the profits made
from the investment.
Money never sits idle; its either creating more money or losing its value.
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127
CHAPTER 9: PROTECT YOUR MONEY
Opportunity knocks loudly for a fool with money.
The sun was shining on the sea,
Shining with all his might:
He did his very best to make
The billows smooth and bright
And this was odd, because it was
The middle of the night.
The moon was shining sulkily,
Because she thought the sun
Had got no business to be there
After the day was done
"It's very rude of him," she said,
"To come and spoil the fun!"
The sea was wet as wet could be,
The sands were dry as dry.
You could not see a cloud, because
No cloud was in the sky:
No birds were flying over head
There were no birds to fly.
The Walrus and the Carpenter
Were walking close at hand;
They wept like anything to see
Such quantities of sand:
"If this were only cleared away,"
They said, "it would be grand!"
"If seven maids with seven mops
Swept it for half a year,
Do you suppose," the Walrus said,
"That they could get it clear?"
"I doubt it," said the Carpenter,
And shed a bitter tear.
"O Oysters, come and walk with us!"
The Walrus did beseech.
"A pleasant walk, a pleasant talk,
Along the briny beach:
We cannot do with more than four,
To give a hand to each."
The eldest Oyster looked at him.
But never a word he said:
The eldest Oyster winked his eye,
And shook his heavy head
Meaning to say he did not choose

129
To leave the oyster-bed.
But four young oysters hurried up,
All eager for the treat:
Their coats were brushed, their faces washed,
Their shoes were clean and neat
And this was odd, because, you know,
They hadn't any feet.
Four other Oysters followed them,
And yet another four;
And thick and fast they came at last,
And more, and more, and more
All hopping through the frothy waves,
And scrambling to the shore.
The Walrus and the Carpenter
Walked on a mile or so,
And then they rested on a rock
Conveniently low:
And all the little Oysters stood
And waited in a row.
"The time has come," the Walrus said,
"To talk of many things:
Of shoesand shipsand sealing-wax
Of cabbagesand kings
And why the sea is boiling hot
And whether pigs have wings."
"But wait a bit," the Oysters cried,
"Before we have our chat;
For some of us are out of breath,
And all of us are fat!"
"No hurry!" said the Carpenter.
They thanked him much for that.
"A loaf of bread," the Walrus said,
"Is what we chiefly need:
Pepper and vinegar besides
Are very good indeed
Now if you're ready Oysters dear,
We can begin to feed."
"But not on us!" the Oysters cried,
Turning a little blue,
"After such kindness, that would be
A dismal thing to do!"
"The night is fine," the Walrus said
"Do you admire the view?
"It was so kind of you to come!
And you are very nice!"
The Carpenter said nothing but
"Cut us another slice:

131
I wish you were not quite so deaf
I've had to ask you twice!"
"It seems a shame," the Walrus said,
"To play them such a trick,
After we've brought them out so far,
And made them trot so quick!"
The Carpenter said nothing but
"The butter's spread too thick!"
"I weep for you," the Walrus said.
"I deeply sympathize."
With sobs and tears he sorted out
Those of the largest size.
Holding his pocket handkerchief
Before his streaming eyes.
"O Oysters," said the Carpenter.
"You've had a pleasant run!
Shall we be trotting home again?"
But answer came there none
And that was scarcely odd, because
They'd eaten every one. ;
-Through the Looking-Glass and What

Alice Found There by Lewis Carroll
The Ninth Financial Law of Prosperity
The Ninth Financial Law of Prosperity is Protect Your Money from Loss. Never
risk your money on unwise investments and completely entrust another person
with the responsibility to manage it. Decrease your risk of loss by having
diversified investments, constantly improving your financial education, gauging
your business cycle risks, and working with reputable professionals.
Sooner or later, everybody loses money investing. However, wise investors

understand and heed the old saying, the return OF principal is more important
than the return ON principal. All investments have their associated risks. If
you dont fully understand what those risks are, then youre not ready to invest.
You must learn to become a proficient manager of investment risk. You can
minimize, but never wholly eliminate risk. Remember, you are responsible for
your moneys well-being, because its you who must live with the consequences
of its loss.
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Laws Action

investment.
costs.
the needy.

manmade disasters.
to pay off debts.
over time.
9. Protect Your Money Never risk your money on unwise investments

from Loss or completely entrust another person to manage
it.
Base Hits
I was 11-years-old and standing at the edge of a cornfield on Kent Island

overlooking the Chesapeake Bay. It was a sweltering summer afternoon, and the
neighborhood kids had gathered to play baseball with Mr. Parker, my best
friends father, who had taken on the dual roles of coach and umpire. Baseball
was a very popular pastime for the local kids, but I was secretly embarrassed
because I was the only one in my neighborhood who didnt know how to play.
While the other kids skillfully hit the ball and ran bases, I stayed in the outfield.
My lack of participation didnt go unnoticed by Mr. Parker, who in short order,
had me in the makeshift batters box with a bat in hand, instructing me to keep
my eye on the ball and swing when I was ready.
The first pitch came whistling by me at chest height, smacking into the
catchers glove with a resounding thwop!
Strike one! someone yelled.
I stood paralyzed, wondering what had just happened, and the rest of the kids
erupted in laughter.
Dont worry about that one, Danny-boy! Mr. Parker shouted from his vantage
point halfway between home plate and third base. But you might want to swing
the bat next time.
Determined to earn the respect of my friends, I swung at the very next pitch in a
hard, arching motion that made me look more like a golfer than a baseball
player. I missed the ball by a mile. The uncontrolled awkwardness of my swing
spun me around, and I lost my balance and stumbled to the ground.
Strike two!
My friends burst into laughter once again.
Mr. Parker was bewildered. He jogged in and pulled me aside for some personal
coaching.
What are you doing? he asked.

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Well, everyone else was hitting the ball far and high in the air, so I thought Id
fix my swing to do the same, I explained.
Dont worry about hitting the ball into the air, Mr. Parker said, resting his
hand on my shoulder. Your only concern is to hit the ball just enough to get on
first base. Base hits are what its all about. Hitting fly balls and home runs
comes with practice.
Encouraged, I stepped back into the batters box and hefted the bat to my
shoulder. The pitcher threw the ball in a perfect pitch toward home plate. I
swung. The aluminum bat collided with the ball.
Ting!
The ball leapt from the bat and took one hard bounce into the dirt halfway
between the pitcher and me. He scrambled to chase the ball. I ran toward first
base making contact with the bag while the rest of the kids cheered for me.
See? What did I tell you? Mr. Parker shouted to me from across the field. Now
go from base to base until you score, but dont do anything stupid.
Following those instructions, I soon scored my first run. From that point
forward, every time I got up to bat, I kept one thing in mind: Home runs come
with practice, but base hits are what its all about.
As I got older, I realized this simple philosophy was true for many things in life,
including the accumulation of wealth. Everyone dreams of hitting a financial
home run and making lots of money by taking a big risk; thats our greed
tempting the fool within. Many people find out too late that big risks come with
big losses and severe disappointments. Wise investors have learned that base
hits, or growing ones wealth with a series of reasonable investments producing
predictable returns, are better than a single risky investment with a high
return. Grow your money gradually by building on prior investment successes,
and avoid the temptation of a single risky investment.
Greed tempts the fool within.
The Paradox of Modern Money
Most people want money, but many do not understand what money really is
and the role it plays in the financial system. Modern money is a paradoxit has
value and is worthless at the same time. Its true value comes only from your
perception of its worth in the system where its exchanged for goods and
services.
Your countrys financial system needs you to believe your money has value. To
understand why, you must realize modern money, called fiat money, is merely
a mechanism of exchange and a unit of accounting represented by government
controlled currency. Modern money has nothing to do with anything of intrinsic
value like gold bars and silver coins. Its value is only a shared belief. As long as
you and other people believe your paper money has value, its valuable.
A currencys issuing government and central bank control the printing and
supply of money. Today, however, commercial banks create and distribute most
of the money in our economy through a process called fractional-reserve
banking. The paper money in your wallet is government money, and the loan
you have on your car and house is bank-created money. Bank money always
takes the form of loans and it is regulated by the government and its central
bank. The creation process of bank money essentially works like this:
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1) The governments central bank creates $1,000 from ink and paper,
and then gives this money to Dan. He deposits the $1,000 into his bank.
The bank lends $850 to Sam so he can buy a car. The bank reports that
they have $1,000 on deposit that Dan can withdraw at any time, and a
loan to Sam for $850. The total money in the financial system went from
$1,000 to $1,850.
2) Mary sells a car to Sam and deposits the $850 she got from him into a
different bank. Marys bank then lends $722.50 to Fred so he can buy a
boat. This bank reports that they have $850 on deposit that Mary can
withdraw at any time, and a loan to Fred for $722.50. The total money in
the financial system is now $3,422.50.
3) Michelle sells a boat to Fred and deposits the $722.50 she got from
him into a different bank. Michelles bank then lends $614.12 to Larry so
he can remodel his bathroom. This bank reports that they have $722.50
on deposit that Michelle can withdraw at any time, and a loan to Larry for
$614.12. The total money in the financial system has now grown to
$4,759.12.
Total Reserve Amount Money

Transaction Depositor Deposits @ 15% Loaned Supply
1 Dan $1,000.00 $150.00 $850.00 $1,850.00
2 Mary $850.00 $127.50 $722.50 $3,422.50
3 Michelle $722.50 $108.38 $614.13 $4,759.12
TOTAL $2,572.50 $2,186.62
In the example above, the banks took $1,000 in government money and created
an additional $2,186.62 from it in the form of loans, or bank money. And, the
total money supply grew to $4,759.12. Debt is money in our modern economy.
This lending and money creation will continue until the original $1,000 cant be
split anymore. If Dan, Mary, and Michelle decided to withdraw their money from
the bank in the form of paper money, or cash, a bank could borrow the physical
money needed to cover the amount of withdrawal from the governments central
bank.
Modern money is easily controlled by its issuing government and central bank.
The supply of money can be increased, potentially lowering moneys value. The
supply could also be decreased, potentially raising its value. In times of
financial turmoil, a government can even implement capital controls and
restrict people from accessing their cash at banks; this protects the financial
system, but hurts the people who need their money to live and pay bills.
Modern money has its risks. Its a terrible store of value and a threat to your
long-term financial independence. You must learn to protect your wealth from
your countrys financial system. Instead of keeping all of your money in cash
and on deposit at a bank, diversify into tangible assets with intrinsic value such
as quality income-producing real estate, ownership in companies that produce
highly sought after commodities, and precious metals like gold and silver.
Modern money is a mechanism of exchange and unit of accountingit has no

intrinsic value. If you and others believe that the money you are using has
value, then it is valuable. An economy can only function properly if the people
participating in that economy believe that their money is worth something.
Banks need to multiply the governments money and distribute it throughout
the economy by making loans, while the majority of the population must
continually borrow, spend, and pay interest on that money. If the government,
banks, and general population fail to do their part, the economy suffers. This
has created a system of financial servitude from which most people will never
escape, and an environment in which you must learn to both navigate and
profit.
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Business Cycle Risks and Currency Manipulation
A government has a tremendous amount of control over its currency, banking

system, and economy. In most of the developed world, the money supply, or
currency (paper money) used in modern economies, is controlled by the issuing
governments central bank, or monetary authority. Traditionally, a central
banks role is to oversee a countrys money supply, regulate its commercial
banking system, and issue the official government currency. These inherent
duties also give a central bank the ability to influence their countrys business
cycles, or periods of economic expansion and contraction. When a government
and its central bank attempt to influence their countrys business cycle, it can
have a dramatic impact on your financial independence.
A business cycle is the reoccurring expansion and contraction of an economy.

The current state of your countrys economy is important to you, because when
things are going well, its easier to make money and live. When things are going
poorly, its easy to lose money and harder to live. Generally, if business is good
and jobs are plentiful, the economy is expanding; if businesses are struggling
and jobs are hard to find, the economy is contracting. This may also be known
as a recession or, depending on the severity of the situation, a depression. It is
natural for all economies to have their ups and downs.
Central banks and governments alike prefer that their economies expand
moderately. Their citizens are happy, businesses thrive, tax revenues increase,
and there are plenty of jobs. In short, life is good. However, economies dont
expand forever and, sooner or later, they must undergo a period of contraction.
Think of this as an unavoidable cleansing process that clears away
inefficiencies, poorly run businesses, misallocation of capital, and
malinvestment in an economy so it can begin to expand again. This is very
much like weeding and clearing out dead growth from a garden so that new
fruits and vegetables can be grown.
To control the severity of the inevitable business cycle contraction, central
banks and governments use their powers to intervene by doing any number of
things from adjusting interest rates to changing policies and creating new laws.
When their interventions work, their economies start growing again. However,
sometimes this meddling has the opposite effect and can produce harsh
economic consequences. In order to financially protect yourself from these
consequences, you must learn to recognize and defend against four main
business cycle risks:
Deflation Deflation occurs when there is not enough money and credit
circulating in a countrys economy for that economy to function properly.
People spend less on goods and services, so prices fall. Deflation increases
the value of your money so you can buy more with it.
Initially, falling prices might seem like a good idea because lower prices
benefit the poor, people on fixed incomes, and those who save their
money. However, prolonged deflation devastates an economy by killing the
demand for goods and services, causing companies to cut jobs, and
forcing others out-of-business. When people are unemployed and have no
money to spend, lower prices are no comfort. It also becomes harder for
people to repay debts which jeopardize the solvency of banks and other
moneylenders. This further fuels the deflationary spiral and prolongs a
countrys economic woes.
Many assets such as real estate, precious metals, and stocks can lose
value during periods of deflation and hurt investors. One way to hedge
against the effects of deflation is to keep your wealth in paper money.
Once deflation has subsided, use your cash to scoop up undervalued
assets to make handsome profits once prices increase.
High Inflation Inflation occurs when there is too much money

circulating in a countrys economy for that economy to function properly
(mild inflation is normal, high inflation is not.) Prices rise, so people are
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forced to spend more on goods and services. Inflation decreases the value
of your money so you can buy less with it.
Rising prices penalize the poor, people who live on fixed incomes, and
those who save their money but dont invest it wisely. Prolonged high
inflation can devastate an economy by eroding the savings and capital
needed for future investment in that economy, and destroys the
purchasing power of peoples wages.
Certain assets like quality stocks, commodities, and precious metals can
gain value during periods of high inflation. Protect your wealth from the
effects of inflation by putting it to work earning a return greater than the
real national inflation rate.
Hyperinflation Hyperinflation occurs when there is too much money

circulating in a countrys economy for that economy to function properly.
And the people using it lose faith in and reject that money. Hyperinflation
rapidly decreases the value of a countrys currency, making it worth
significantly less because the prices of goods are skyrocketing higher.
People using a failing currency will buy anything to avoid getting stuck
with paper money thats quickly becoming worthless. This increases the
demand for goods and sends prices much higher. A meteoric rise in prices
penalizes just about everyone, but is hardest on the poor, people on fixed
incomes, and those who have diligently saved their money and have no
tangible assets.
You must learn to protect your financial wealth against hyperinflation.

Tangible assets with intrinsic value like gold and silver are a traditional
safe haven for investors during times of economic uncertainty.
Hyperinflation is rare, but devastating to an economy and, if you are not
prepared, your financial independence. Once hyperinflation has subsided,
scoop up undervalued assets to make handsome profits when the
economy stabilizes.
Stagflation Stagflation is a mixture of the worst characteristics from

both inflation and deflation. An economy suffers from poor economic
growth, high unemployment, deflation of asset prices, and inflation in the
cost of consumer goods. It is caused by a saturation of bad economic
policies by both a central bank and its government. Prices on food,
energy, and other essentials rise, while prices of certain assets can fall.
The poor, people who save, people on fixed incomes, and those who invest
money are all penalized. Be both opportunistic and vigilant with your
money during periods of stagflation.
Governments can also manipulate their currencies directly. They can change
the rules under which they honor their currency and pay back their debts.
Currency manipulation is a VERY real threat to your financial independence if
your wealth is stored in the currency, or paper money, being manipulated. For
instance, in 1933 the United States was still trying to emerge from the Great
Depression, a period of economic contraction and deflation. In an effort to
stimulate the economy using government intervention, President Roosevelt
declared private ownership of gold to be illegal, imposing stiff fines and prison
time for anyone violating this order. This forced US citizens who had gold, which
was legal tender at the time, to exchange their tangible bullion for paper dollars
at a rate of $20.67 per ounce. One year later, the US government increased the
dollar-to-gold exchange rate to $35 per ounce, which decreased the real value of
the dollar against the value of gold by approximately 40%. This deliberate act of
manipulation cheated every person who held and got paid in dollars of nearly
half of their moneys value. It wasnt until 1974 that US citizens could once
again own gold.
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Government manipulation of paper money and business cycle risks pose a

significant threat to your long-term financial independence. Modern money is
an unreliable store of value because it can be easily controlled by the issuing
government. If you want to be rich for life, learn to anticipate and protect your
financial wealth from both currency manipulation and the inevitable business
cycle risks that you will encounter in life. Remember, people must always satisfy
their basic human needs no matter what direction the economic wind is blowing.
Educate yourself, be vigilant, and invest accordingly.
Modern money is worth only what someone else is willing to give you for it.
The Golden Rules of Protection
The Golden Rules of Protection are a set of important safety guidelines for
investment that will help you identify risks and minimize the loss of money.
Much like the Golden Rules of Investment in the previous chapter, the Golden
Rules of Protection speak to good old-fashioned common sense, which means
that they are typically ignored, skipped and forgotten during the investment
process. Memorize these rules and apply them in your daily investment
activities.
Rule #1 Diversify your wealth. Spread your wealth across different

investment categories and develop multiple income streams. If one of
your investments becomes impaired or lost, you are protected by
having other investments. Separate your investments by placing
them into different ownership entities you control like limited-liability
companies (LLCs), corporations, and trusts which will help to protect
you against third-party claims that may arise from your investment
activities. Talk to your favorite attorney, financial advisor, and
accountant for more information.
Rule #2 Control your fear and greed. The fear of loss and greed for more are
curses on sound investment decision-making. Whether you are
emotionally determined to make more money from an investment or
worried about minimizing a loss, rational judgment becomes clouded
and you can fail to use good common sense. Recognize and avoid
making investment decisions that are motivated by your fear and
greed, as they will only cost you money.
Rule #3 Never grow a problem. Take care of small problems before they turn
into large ones, because large problems have a way of turning into
expensive lessons.
Rule #4 Keep a friends and family policy. You are not the personal
investment banker to your friends and family. Only lend money to
friends and family if you consider the loan to be a gift that will never
be repaid. Losing a close relationship over money is a steep price to
pay for being someones temporary financial savior. As Shakespeare
said, Neither a borrower nor a lender be; for loan oft loses both itself
and friend.
Rule #5 Give no guarantees. Every investment and business endeavor has the
potential to lose money. Never, never, NEVER provide a personal
guarantee on anything that will give somebody else a financial claim
against you and your property. Investments that require a personal
guarantee can cost you your entire investment plus much more.
Rule #6 Never go-for-broke. Going for broke often leaves you broke. We have
all been inspired by the stories of people who have become fabulously
wealthy after they bet everything they had on the hope they would
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strike it rich on a particular investment or company. These are the

lucky few, because countless others have lost everything by taking
similar gambles. If your money plan involves go-for-broke investing,
stop to consider what the poorhouse looks like, because thats where
youre headed!
Rule #7 Avoid the partnership quagmire. Most partnerships are formed when
the person with the business idea needs money, lacks the confidence
to go it alone, and doesnt want to work as hard as they should.
Partnerships slow the decision-making process and can create
tension between participants. This leads to the destruction of the
partnership and the potential loss of money. Always remember, if you
have at least a 51% interest in a partnership, you are in control. If
you have a 50/50 partnership, you have a bureaucracy. If you have a
49% or less interest, you have a job that makes your partner your
boss.
Rule #8 Never turn a moneymaker into a money loser. Dont be afraid to take
your profits on an investment. What goes up in value also comes
down in value. And, more often than not, the difference between
profit and loss is timing. There will always be a fine line between
profit and greed; define the line, and never let your greed turn a
money-making investment into a loser.
Rule #9 Cut your losses. Once you begin to lose money in an investment,
theres typically no way to determine if you will continue to lose
money or make your money back over time. Once a loss has reached
20% of the value of your investment, do what you must to salvage the
remainder of your money to prevent an even greater loss. Dont let
fear, denial, or hope cloud your judgment and compound a loss.
Remember, a 50% loss will require a 100% gain to make up.
Rule #10 Never rush. Rushing always leads to mistakes. If something seems
odd or out of place, or if you think you are getting quickly pushed
into something, dont be afraid to pass on an opportunity. Good deals
come along regularly; replacing the money you have lost on a failed
investment will take considerably longer.
Rule #11 Hedge against loss. A hedge is a separate investment made to protect
another investment against a major loss. Think of a hedge as
insurance protection for your investments. For example, if you invest
your money in the stock market, but are worried about the potential
for a market crash, you could hedge your stock investments by
buying puts, or the right to sell your stock at predetermined prices.
If the market crashes and the price of your stocks go down, the value
of the puts will rise, offsetting your loss. Alternatively, if you are
worried about your government printing ridiculous amounts of
money and diluting its real value in the economy, you could buy
tangible precious metals, such as gold bullion and silver coins. Most
investment risks can be hedged with proper planning, but, like an
insurance policy, hedges can have a cost.
Rule #12 Never play in a rigged game. Casinos exist because the overall odds
of winning bets are stacked in their favor. This means more people
lose money in a casino than ever win. Putting your money in any
opportunity that has an unpredictable outcome and a high
probability of loss is gambling, not investing. Never invest in any
opportunity that is manipulated, controlled, and subject to the
undue influence of another because, like a casino, the odds of you
winning are not in your favor.
Rule #13 Know your counterparty risk. Counterparties are the other
participants in a business transaction. Anything you do that involves
another person, company, institution, entity, organization, or
government has counterparty risk. All business dealings have a
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counterparty that must fulfill certain agreed on obligations as part of

the transaction. Your counterparty risk is the chance that the other
participant(s) wont keep their end of the deal. Counterparties can be
obvious, like the salesman who is selling you a used car, and not so
obvious, like the stock exchange that is facilitating a sale of stock to
you at an agreed on price. You automatically anticipate the
possibility that the used car salesman might cheat you, but what
might surprise you is the possibility that the stock exchange might
cheat you, too.
Rule #14 Minimize tax. Taxes are a societal reality. Learn to legally delay,
minimize, and eliminate the amount of taxes you pay on both your
income and investment activities. Your goal is to keep as much of
your money working for you as possible. By delaying the payment of
tax, you gain the benefit of having a portion of your money
compounding and producing even more money for you when it
otherwise would have been lost to taxes. For example, you owe $30
tax on $100 you made investing. If you paid the tax today you would
have only $70 to reinvest; if you legally deferred the payment of the
tax, you could reinvest the entire $100. Talk to a qualified tax
advisor, research this subject, and take a class on legally minimizing
your taxes.
Rule #15 Lend money for tangible collateral. Only lend money when tangible
assets are the collateral for your loan. Make sure your loan collateral
is worth more than the amount of money that you are lending. Never
surrender your right to the collateral until the money you are owed
has been fully repaid. When lending money for extended periods of
time, consider having a gold clause in your lending agreement to
protect you against high inflation and currency risks. Make sure all
of your lending agreements are in writing and your attorney reviews
them prior to any loan being made.
A fool and his money are soon parted.

Thomas Tusser (1524-1580)
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Chapter 10: HOME SWEET HOME
Fewer pleasures are greater than being royalty in your own castle.
Thomas stared out his kitchen window at his neighbors as they attempted to
back a brand-new motor home into the side yard of their house.
Times must be good, he said to himself.
Much had changed in the old Phoenix neighborhood since he had moved there
13 years ago. Very few of the original homeowners were left; most retired and
moved away. Many of the new owners remodeled their houses, trading the
1950s style and charm for a more modern look. As the neighborhood changed,
so did the class of people wanting to live there, and they paid prices for homes
that seemed outrageous to Thomas only a few years before.
Thomas continued to watch his neighbors, Darren and Lydia, as they stopped to
bicker with each other. Amused and sensing an opportunity to hassle them,
Thomas slipped on a pair of flip-flops and made his way out the front door.
How was I supposed to know you couldnt see? Lydia said defensively. You
told me to make sure you didnt hit the house!
Come on, babe. Whatd you think would happen? Darren replied.
Howdy, neighbors! Thomas said, interrupting the argument as he approached.
I came over to tell you that youre about to back over your lawnmower, but
from the looks of it, I think Im too late.
He chuckled and nodded in the direction of the lawnmower, now crushed under
the large black tires of the motor home.
Mr. Comedian, youre so hilarious. Darren said.
He was still visibly irritated with his wife.
Did you come over here just to annoy me or what?
Hey, nice camper! Did you guys rob a bank or something? Thomas said,
abruptly changing the subject.
Do you like it? Lydia chimed in. We just picked it up from the dealership. We
got a great deal refinancing the house, and now weve got this little beauty!
Two years passed. Life got harder for most people. Day after day, news agencies
reported on the Great Recession, the rising ranks of the unemployed, and
families losing their homes to foreclosure. Everyone had a story about a friend
or loved one who struggled financially.
Thomass neighborhood underwent another change. Hard times had fallen on

many. Some of his friends had been forced into downsizing while others spent
their days searching for work. Formerly neat and tidy houses now stood
overgrown with weeds and were left in disrepair. Cul-de-sacs that once served
as playgrounds for the neighborhood children had fallen silent, and signs
advertising, For Sale Bank Owned homes were everywhere.
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Thomas looked from his kitchen window and saw Darren and Lydia hastily
loading a moving truck. It saddened him to see them go, and he didnt want to
miss the opportunity to say goodbye. He put on his shoes and headed out the
front door toward them.
Lydia saw Thomas coming and walked around to the front of the moving truck
to meet him.
We lost the house, Lydia explained. Tears filled her eyes and ran down her
cheeks.
Weve lost everything she continued, sobbing.
Thomas struggled for the right words, any words that would comfort her, but he
had none.
Lydia, I I dont know what to say, he stammered.
A rolling rumble followed by a loud bang came from the back of the moving
truck as Darren closed and locked the cargo door. A few moments later, he
joined them at the front of the truck.
I guess Lydia told you what happened Darren said, trying to maintain control
over the emotion in his voice. Well see you around sometime, OK?
They shook hands and said their goodbyes. Thomas never saw or heard from
Darren and Lydia again.
The Tenth Financial Law of Prosperity
The Tenth Financial Law of Prosperity is Own Your Home. Own your home and
enjoy the security and peace of mind this blessing will provide you. If you
borrowed money to buy your home, you must intelligently pay off the loan early.
Everyone needs shelter. You can rent, own, squat, or live with others, but we all
must fulfill this most basic human need. Many people cant afford to buy a
home for cash, so they must borrow the money needed to buy it. Borrowing
money to buy a home is consistent with The Ten Financial Laws of Prosperity
(and is an exception to the Law: Live Debt Free) because we all need shelter and,
depending on an individuals financial circumstances, must pay a portion of our
income to obtain it.
The amount of money you spend to own or rent a place to live is part of your
lifestyle expenses. Try to spend no more than 30% of your total income on
housing and work to own your home free-and-clear. Although it can be done,
spending more than 30% of your total income makes it difficult to adhere to the
other Financial Laws of Prosperity, and could impede your progress toward
financial independence. If you borrowed the money to buy your home,
intelligently pay off your loan early. Once you own your home without debt, you
can use the portion of your income that was going toward your house payment
for other lifestyle expenses or add this money to your savings for future
investment.
Your home is the castle from which you will rule your financial empire and the
cornerstone to your financial independence. Never do anything to risk its loss.
Protect your home by maintaining insurance coverage that is adequate and
customary for your propertys value and location. Own your home and enjoy the
security and peace of mind this blessing will provide.
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Laws Action

investment.
costs.
the needy.

manmade disasters.
to pay off debts.
over time.
9. Protect Your Money Never risk your money on unwise investments

from Loss or completely entrust another person to manage
it.
10. Own Your Home Own your home without debt. Intelligently repay
the loan used to buy your home early and never
risk its loss.
Intelligently Pay Off a Home Loan
Paying off your home loan early can save you hundreds of thousands of dollars
in interest and years of payments. Some financial experts can make strong
arguments against repaying your home loan early but nothing can trump the
simple truth that all debt has a repayment risk. It is this repayment risk, no
matter how small, that can cost you your home and potentially send you into a
financial tailspin. Having no debt on your home eliminates this risk. You must
intelligently work to own your home free-and-clear while being mindful of how
the business cycle (discussed in the previous chapter) can impact your decision
to prepay your home loan.
People who have made a lot of money and then gone broke will tell you they
wish that they had paid off their home loan when they had the chance. Learn
from their mistakes. You can afford to be aggressive in some areas of your
financial life, but it pays to be conservative in others. Obey the Tenth Financial
Law of Prosperity and implement a strategy to own your home free-and-clear
today.
In the United States, most home loans are fully amortizing, meaning a portion
of every payment goes toward both the interest and principal until the loan is
paid off. During the first years of the loan, most of the payment is applied to the
lenders interest, while a disproportionately smaller amount goes toward the
repayment of the amount borrowed. During the final years of the loan, the
opposite is true.
Example: You borrow $300,000 to buy your home at an 8% interest rate

and have a loan that is fully amortized over 30 years. Your payment
(principal and interest) is $2,201 every month, or $26,412 per year.
155
At the end of the first year, you will:
Have paid $23,909 in interest.
Have paid only $2,506 toward the loans principal.
Still owe $297,493.
By the end of the 30th year you will:
Have paid $492,470 in interest.
Have paid $300,000 toward the principal.
Have made $792,470 in total payments (on a $300,000 loan).
Have successfully repaid your loan.
There is no magic to repaying your home loan early. The quicker you repay the
amount borrowed, the less you end up paying in interest. Here are some
popular techniques that can help you expedite repayment of your loan:
Extra Payments Making extra payments is perhaps the easiest method

you can use to pay off your home loan early. Make at least one extra
payment to your loans principal balance each year, and you will
dramatically decrease the amount of interest paid over the life of the loan
and the time it takes to pay off the loan.
Extra Payment Comparison
($300,000 loan, 8% interest rate with 30-year amortization)
Normal Monthly Payments Extra Payment Per Year
Monthly Payment: $2,201 Monthly Payment: $2,201
Extra Payment: $2,201/year
Total Interest: $492,470 Total Interest: $349,389
Years to Pay off: 30 Years to Pay off: 22
INTEREST SAVINGS: $143,081
Biweekly Payments Payments made every two weeks. To calculate a

biweekly payment, divide the normal monthly payment by 2, and then
pay that amount every two weeks. This is not the same as twice a month.
There are 52 weeks in the year, so you will end up making 26 biweekly
payments, which works out to one additional monthly payment per year.
Making biweekly payments is basically the same as making one extra
payment per year but with a lot more aggravation.
Biweekly Payment Comparison
($300,000 loan, 8% interest rate with 30-year amortization)
Normal Monthly Payments Biweekly Payments
Monthly Payment: $2,201 Biweekly Payment: $1,101
Refinance: Interest rates vary over time and with economic conditions. If
interest rates drop at least 1% below your current loans interest rate, you
should consider refinancing your loan to the new rate if the fees and new
loan terms make financial sense. Once you have your new loan and lower
payment, pay the old payment amount on your new loan with the
difference going to pay down the principal balance.
Interest Rate Reduction Comparison

157
Old Loan Payments New Loan Payments

(8% interest rate)
(7% interest rate)
Extra Payment: $205/month
15-Year Amortization: Changing the amortization period of your loan

from 30 years to 15 years or less will dramatically reduce the amount of
interest paid and the time it takes to pay off the loan. The drawback to a
15-year amortization period is a higher monthly payment. One way to
maintain flexibility in your monthly payment is to keep your 30-year
amortized loan but make payments as if you were on a 15-year amortized
loan. By doing this, you maintain the ability to pay a lower payment if you
happen to be pinched for cash in any particular month.
Amortization Period Comparison
(8% interest rate)
Monthly Payments Monthly Payments
(30-year amortization) (15-year amortization)
Total Interest: $492,470 Total Interest: $216,051.23
Remember, theres no secret formula to repaying a home loan early. Simply pay
back the principal balance owed on the loan sooner than what your lender
expects it to be paid. The easiest way to accomplish this is by making extra
payments toward the principal balance of your loan every year. If you have
multiple loans on your home, pay the additional payments to the loan with the
highest interest rate first.
Before you prepay on your loan, verify that the loan does not have a prepayment
penalty and other restrictions that would prevent you from doing so. All of the
extra money you pay needs to go toward your loans principal balance. Its
absolutely critical you verify that all payments are applied to your loan
correctly. There have been many cases where lenders have failed to properly
allocate additional principal payments on the loan, instead electing to prepay
interest or hold the payment without applying them at all.
Before you prepay any debt, you should consider what future business cycle
risks are anticipated in your countrys economy and how those risks could
impact you. If, for example, you expect a tremendous amount of inflation (prices
increase so the value of your money decreases) it might benefit you to wait and
repay your fixed interest rate loans with inflated money. Alternatively, if you
expect deflation (prices decrease so the value of your money increases) you
might want to save your money and buy a completely new house! If you are not
certain about what to do and you see an economic storm coming, maybe the
best course of action is to increase your emergency fund and hedge against risk
(again, discussed in previous chapters).
Most people cannot afford to buy a home for cash so they must use borrowed
money. All debt has a repayment risk, no matter how small, that could
jeopardize your financial independence. Intelligently pay off your home loan
early by repaying the principal you borrowed faster than agreed. Before
accelerating the payment of any debt, make sure you can do so without penalty
by reading your loan agreement and consider the impact of any business cycle
risks that are anticipated in your countrys economy.
159
Think Correctly About Home Ownership
A home is just thata home. It satisfies your physiological and inescapable

human need for shelter. There is a lot of bad thinking being shared in our
society about certain financial aspects of homeownership. Below are some of the
more popular but incorrect ideas that you may stumble across:
Tax Advantage: In the United States, one of the biggest arguments for
keeping a loan on a home is the perceived tax advantage received from
paying interest to a lender. As of 2012, you can still deduct the interest
paid on your home loan from your calculated income that you pay taxes
on. If, for example, you are in a 25% tax bracket (this means 25% of
everything you earn goes to the government), you must spend one dollar
in interest on your home loan to save twenty-five cents on your income
taxes. Many people dont realize its much better to save the whole dollar
of interest and pay the twenty-five cents in tax on their incomes because
they come out ahead by seventy-five cents. Besides, the government can
always change its mind about the home loan interest tax deduction and
take it away. You should own your home free-and-clear, and let your
professional tax advisor worry about your taxes.
Your Biggest Asset: Technically, your single-family home can be

considered an asset if it has positive equity, meaning that it can be sold
for more than what you owe on it. However, to the financially
independent, a home is just a home because it does not generate any
income. Your personal residence has a high cost of ownershiprepairs,
taxes, insurance, etc.and makes a poor long-term investment compared
to other opportunities that can give you both cash flow and appreciation.
If you consider your home a place to live, and think of an investment as
something that pays you an income, you will be one step further from the
poorhouse!
Home Equity Must be Put to Work: This popular fiction is another way
of saying you should keep a loan on your home, and spend your equity on
whatever suits your fancy. Never treat your home as a piggybank to be
raided whenever the mood strikes you. Your homes equity is not the
same as savings and an emergency fund. Intelligently pay off your home
and forget about borrowing against it.
When you think correctly about your single-family home you understand that
your personal residence is not an investment, tax haven, bargaining chip or
piggybank. A home is a place to live. It satisfies your human need for shelter
and gives you security and peace of mind. Think correctly about your home and
never risk it for a chance to sleep in the streets.
Turn Your Home into an Investment
Turning your home into an investment is a great way to jumpstart the wealth-
building process. This technique is especially useful for people just beginning
their financial journey or those who have fallen behind in their retirement
planning. A home becomes an investment when other people rent a portion, or
all of it, from you and the income you receive from that rental covers your
ongoing direct costs of ownership.
Your goal is to buy and move into your own multi-unit rental property to help
you minimize your living expenses by sharing the propertys costs of ownership
(loan payments, repairs, taxes, insurance, etc.) with your tenants. You will then
pay off the loan used to buy the property as fast as possible. Once you own your
rental property free-and-clear, you will have an asset that will pay you a
significant monthly income for as long as you own it.
161
In the United States, apartment properties with four units or fewer make the
best candidates for this technique because they are easy to finance. The entire
process is very similar to buying a single-family home and is fairly
straightforward. Whatever type of property you buy, make sure you can
continue to comfortably afford making the loan payments if most of your
tenants move out for some period of time.
Example: You want to buy a four-plex. You have a small down payment
and your take-home pay is $45,000 per year. You make the choice not to
spend more than 30% of your income on housing, so you are limited to a
maximum monthly loan payment of $1,150 ($45,000 30% = $13,500;
$13,500 12 months = $1,150 per month). The rents from your soon-to-
be-acquired four-plex, however, can also count toward your income,
allowing you to get more property for your money. For comparison, lets
pretend that both houses and four-plexes are selling for the same price.
Your monthly payments would look like this:
House Four-Plex
Your take-home income $45,000 $45,000
Max. monthly payment $1,125 $1,125
Purchase price $150,000 $150,000
Loan amount after 10% down $135,000 $135,000
Payment (6% int., 30-yr. fixed) $810 $810
Property taxes & insurance $175 $250
MONTHLY PAYMENT (PITI) $985 $1,060
In this example, the payments are a little higher on the four-plex, because the
taxes and insurance cost more. The house, however, doesnt get the financial
benefit of collecting rents, which makes a significant difference in how much of
your own money you must use to pay back the loan on the property. In other
words, if you owned the four-plex, you would use your tenants rent money to
help repay your property loan.
House Four-plex
Tenant rents w/vacancy NONE $1,173
Less: operating expenses NONE ($550)
Equals: net income NONE $623
Less: monthly loan payment ($985) ($1,060)
Equals: your monthly cost $985 $437
If you owned the four-plex, continued to make the entire monthly loan payment
of $1,060 from your personal income, and used the $623 the property generated
in income as an additional monthly payment to your lender, it would
dramatically reduce the amount of time it takes to repay the loan. In this
scenario, it would only take 11 years to pay off the loan you used to buy the
four-plex (remember, it would still take 30 years to pay off the house). Once the
property is paid off, your home has turned into an investment that pays you a
monthly income and allows you to live for free. How different would your
financial life be if you didnt have to pay rent or make a house payment? How
different would your financial life be if you used this technique multiple times,
moving from four-plex to four-plex while using the income from each paid
property to pay off the loan on your most recent purchase?
Living in your own rental property isnt for everybody. You will have to put up
with your tenants idiosyncrasies, sacrifice some privacy, and deal with their
163
problems and complaints. You might have to take a property management class
or two. You may even have to plunge a few toilets and do many of the repairs
yourself to get the numbers to work for you. Is this really so bad? How long
would it take you to save the equivalent value of your rental property by simply
following the Second Financial Law of Prosperity and saving only 10% of your
income? Giving up a traditional home and living in your own rental property
with tenants could yield significant long-term financial benefits. Consider this
option carefully before you rule it out for the pretty little house with the white
picket fence. All self-made millionaires can tell you stories of self-sacrifice. Now
that its your turn to be rich, what will you sacrifice?
Mediocrity is perhaps the greatest social epidemic of our time.
***
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hours to write. If you enjoyed the read, please repay
us for our hard work by sending it to someone else.
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ADDITIONAL RESOURCES FOR YOU
1) Please check our website at www.BeRichBook.com for free updates of this

book and other goodies.
2) Children have a hard time understanding certain financial concepts like

debt, assets, and expenses. We created a fun and simple card game (ages
8 and up) to teach our kids about the perils of debt and the winning
wealth strategy of owning assets. You can get a copy of NET WORTH: The
FUN Money Game! at www.Amazon.com. Supplies of this game are
limited.
167
BONUS Chapter: Making Millions in Real Estate

A great idea is nothing without a plan and the purposeful action to make it
happen.
**The bonus chapter is available in the paperback edition and

Kindle version only. We had to create two versions of this
book to satisfy certain distributor requirements. **
There are literally thousands of ways you can invest your money. I am an
advocate for multi-family real estate investment, because you dont have to be a
rocket scientist or need a ton of money to participate. Anyone willing to make
the effort to learn about real estate can be successful. Real estate is the only
investment category where professional and amateur investors are on a
relatively level playing field. There are no expensive database programs, black-
box trading systems or elite Wall Street trading firms that can give anyone the
upper hand.
Every property is unique and must be researched carefully to determine its

investment potential. This takes time and patience. These factors can work to
your favor because they hinder other investors and make great real estate
investments possible. As with any investment, there are risks. But, unlike the
stock market, you will never have to worry about a company CEO cooking the
books to make their quarterly earnings estimates, insider trading, flash
crashes, or computer algorithms reducing the value of your property to nothing.
From a small multi-unit rental property to large multimillion-dollar apartment
communities, there are opportunities available in commercial real estate for all
levels of investors and in any market condition. Some of the wealthiest people in
the world will tell you that real estate played an important role in making them
rich. Theres no right or wrong answer when it comes to determining what type
of investment is right for you, because it is, after all, your money.
Falling in Love with Real Estate
The Keys to Successful Real Estate Investment
Eight Ways to Invest in the Same Property
2013-2020 Forecast: The Decade of Economic Decline
The Inflation Myth and Real Estate

169
All great journeys start with an idea and the determination to

do something that has not yet been personally accomplished.
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173
ACKNOWLEDGEMENTS & RECOMMENDED READING
As a man Thinketh, by James Allen
This book highlights the importance of proper thinking to achieve your desired
outcomes. The quality of your life originates from thought and, therefore, it
must be controlled.
Rich Dad, Poor Dad, by Robert T. Kiyosaki with Sharon L. Lechter
The story of what Robert Kiyosaki learned about money from both his rich Dad
and poor Dad. The authors have some wonderful ideas about both assets and
liabilities. Robert is also a highly respected financial teacher who conducts
workshops and classes around the country.
THE LITTLE BOOK of ECONOMICS, by Greg Ip
A simple crash course in how economics work in our modern world. A must
read for anyone who wants to have a better understanding of economics and the
role it plays in our everyday lives.
The Richest Man In Babylon, by George S. Clason
This timeless classic covers many important life and financial lessons in the
form of a parable. It was an inspirational source for many of the Financial Laws
of Prosperity and other ideas throughout.
Think and Grow Rich, by Napoleon Hill
An original study in what it takes to be rich and successful. This was another
inspirational source of ideas for this book.
Unleashing The Idea Virus, by Seth Godin
The idea is the virus. Need I say more?
Unlimited Power: The New Science Of Personal Achievement, by Anthony

Robbins
Mr. Robbins is a masterful coach who can help you to be your best. He is also a
sought after teacher and speaker. All of his books, workshops, and courses are
highly recommended. Thanks Coach!
175
Who Moved My Cheese?, by Spencer Johnson, MD
This is a simple story that highlights the importance of adaption, evolution, and
change.
177
179
ABOUT THE AUTHORS
Dan Dulin
Dan graduated from Arizona State University in 1992 with a

Bachelor of Science degree. Following graduation, Dan
managed commercial property and served as the Director of
Multifamily Operations for Sevo Miller Inc, a sizeable,
successful commercial brokerage and property management
firm based in Denver, Colorado. During his leadership
tenure, he was responsible for the financial operation of over
13,000 multi-family units across eight states, which represented well over a half-billion
dollars in investment real estate.
Dan joined a national commercial real estate brokerage company in 2000, where he
has earned numerous achievement awards. A professional in his field, Dan has
authored numerous articles and books on both Commercial Real Estate Technology,
and Investments. Additionally, he has taught and lectured thousands of people
worldwide via live Internet presentations and seminars.
Dan supports and is active in many community outreach and charitable organizations.
He is passionate about helping the needy, promoting education, and advocating for a
wealthy society.
Greg Weiler
Greg Weiler is the co-author of Be Rich, The Ten Financial Laws of Prosperity. On
graduating from college, he gained management experience in a number of different
industries before specializing in finance. His familiarity in fields from teaching to
management, aided in the development of this book. Weiler currently lives in Los
Angeles and, when he isnt writing, spends his time hunting for his next real estate
opportunity.

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Dan Dulin and Greg N. Weiler II

*** Please Share this book! ***

Experience the Be Rich

Copyright 2012 Santa Maria Group, LLC. All rights reserved.

Disclaimer, legal notice, and all-around dont blame us

Mr. Gregory N. Weiler

To David and Dain,

BE RICH, NOT POOR 13

ADDITIONAL RESOURCES FOR YOU 165

BONUS Chapter: Making Millions in Real Estate 167

ACKNOWLEDGEMENTS & RECOMMENDED READING 173

BE RICH, NOT POOR

This book is for anyone interested in becoming financially independent and

currently have. You will never experience a lifetime of financial independence

Financial independence is a lifestyle. Proclaiming yourself rich one day, and

Having an abundance of money is not true wealth or a measure of your total

(Would you like a hint? Look in the mirror.)

CHAPTER 1: THE SECRET INGREDIENTS

He took advantage of his job as a taxi driver to interview business people he

The sign sparked the curiosity of a passenger who identified himself as a

The First Financial Law of Prosperity

Summary of the Ten Financial Laws

1. You Must Believe Manage your beliefs, intelligently develop a plan,

Twelve Questions for the Gold

Why Rich, Not Poor?

I want to be rich because __________.

Does your answer inspire you or is it just a bunch of words?

The Secret Ingredients

Why am I not rich?

You blame others or certain circumstances for your financial situation,

Belief in yourself and an unyielding determination to achieve a desired result

Man often becomes what he believes himself to be. If I keep on

Mahatma Gandhi (1869-1948)

Everything you do in life originates from the process of thinking. This is

Ralph Waldo Emerson (1803-1882)

What Does Money Mean to You?

Take a few moments to consider some traits, characteristics, and the

Is the benefactor of several orphanages that have a wonderful reputation for

Positive Thinking and Luck

thought can combine with purposeful action to create a meaningful result. If

How Much Money Do You Want?

PASSIVE INCOME INTEREST RATE = YOUR FINANCIAL GOAL

3.Whats my next step? ____________________

A fool with a plan can outsmart a genius without one.

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Download the AUDIO BOOK

CHAPTER 2: THE FIRST FINANCIAL LESSON

Make a buck, spend a buck is the exact formula for poverty.

The Second Financial Law of Prosperity

Summary of the Ten Financial Laws

1. You Must Believe Manage your beliefs, intelligently develop a plan,

Anyone Can Do It, but Few Will Try

The key to adhering to the Second Financial Law of Prosperity is to understand

The Second Financial Law of Prosperity is a test of your readiness to receive

Billions of people worldwide are trapped in a state of financial slavery because

The solution to financial slavery is personal responsibility. If you want to hold

To experience a lifetime of financial independence, you must modify your

Experience this book

Download the AUDIO BOOK

CHAPTER 3: MAKE MORE MONEY

Youve got to pay the rent or get out, Roxanne stated.

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