You Can Become the Millionaire Next Door! Dear Reader: ‘One hundred years ago, it was virtually im- possible for the average person to become a rillioaire. Take a look at these lifestyle statistics atthe turn ofthe 20th century In 1900, the average wage inthis country was 220 an hour. The average worker camed be- ‘tween $200 and $400 a year, well below the pov- erty line atthe time. Only 6% of all Americans had graduated from high school. Life expect- ancy was 47 years old. Only 14% of the homes hhad a bathtub. There were 8,000 cars in the United States and only 144 miles of paved roads Until WWI, the average American family spent 80% of their income on the basic necessities of food, shelter, and clothing Ina word, 100 years ago, there were basically two economic classes: The rich. And the res Only one in 10 families was upper class of ‘middle class, Which means that in 1900, 90% ‘of the people in the U.S. would have been elas: sified as poor.ee Middle Clas Stil Living Paychock toPaycheck Flash forward 100 years to 2001 ‘The median family income today is $47,000. ‘There are more cars in this county than people ‘Most families own at least two TVs, Life ex: pectaney is 75. Today, average people have more isposable income... more leisure time... and ‘more career options than ever before. Yet most of the nation’s 72 million families are sill living ftom paycheck to paycheck. Take away equity inthe family home, ears, and fut- niture, and the average family has zero assets ZERO! While family income is up, so is family {debt and hours spent working What's wrong with this picture? ‘Are You Plugged intothe Wrong System? What's wrong is that too many people have bought into the wrong plan. They're plugged into the wrong system. And they lack a funda- mental understanding of how wealth is created andaceumulated, 1'm going to make a bold statement that may shock you. But it is absolutely, unequivocally true, Ready? ‘The simple, usvarnished truth is that today, becoming a millionaire isa matter of choice, not chance! That's right — today/virtually anyone earning ‘middle class income oan become a mil- Tionaire. Impossible? Not at all. Actually, it's really quite simple. If you want to become a millionaire today, allyou need to dois follow these three steps 1) Understand how wealth is created and accumulated 2) Copycat proven systems of wealth creation, 3) Beconsistentovertime That's it — thats all it takes for average people to accumulate a million dollars in assets: Understanding. Copying. And consistency. What YouWillLeam in This Book In this book you will learn proven strategies that average people can follow to ereate tue finan cial freedom for themselves and their families ‘These strategies are simple to follow and time tested, And they have created millions of mile lionaites over the last SO years! Folks, becoming a millionaire is no longer a matter of good fortune. Or good luck. I's merely a matter of learning and following proven strategies for wealth creation. In the words of the best-selling book, The Millionaire Next Door, " The large majority of millionaires are not the descen. -s of the Rockefellers or Vanderbilts. More si. 80% are ordinary people who have accumilaied their ‘wealthinone generation “Think about that — "More than 80% [of mil Jionaires) are ordinary people." This statistic proves what I said earlier — today; becoming a Iillionaire isa matter ofehoice, not chance!My goat in iting The Parable ofthe Pipeline isto teach you the strategies the wealthy have used for centuries to create and accumulate ‘wealth. These strategies were once reserved for only the privileged few. Even ifyou knew these ‘strategies back in 1900, most likely you wouldn't hhave had the cash or the contacts to take advan- tage of them. Thats not the case today ‘Today, by virtue of improved technology. ‘an increase in middle elass wages... and an inno- vative business model I call "e-compounding” virtually any middle class person with a high school education or above can leverage their money, time, and relationships to create per sonal and financial freedom. By following the strategies outlined in this book, you, to, ean become the millionaire next oor Welcome othe neighborhood! Yours Truly, a tg a oe NSE a THE PARABLE OF THE PIPELINE‘The Parableotthe Pipeline How Anyone Can Build a Pipeline of Ongoing ‘Residual Income inthe New Economy! Copyright2001 by Burke Hedges & Steve Price Allright reserved under International and Pan- ‘American copyright conventions. Written permis: | sion musthe secured from the publisher tose or "eproduceany patof ths book, either in rit, | Video, audio, or digitally viathe Internet, excep for brief quotations inreviewsandartcles, Printed inthe United States of Americe First Editon January 2001 ISBN: 1.891279.05-x Publishedby INT Publishing Tampa, FL Cover design: CherryDesign Layout Bayou Graphics Re print Meridien Marketing RSA2001 DEDICATION ‘To everyone who has the wisdom to become a pipeline builder. and the willingness to share that wisdom with others.ec ‘ACKNOWLEDGMENT Discipline, determination, focus, and ps- tience are the words that come to mind when I think of Dr. Steve Price, who was the backbone to the successful completion ofthis manuscript. Steve, you're extremely talented and relentless in seeing a project through from beginning to end. I appreciate you, and in my eyes, you're truly "Priceless" Tm forever President of INTI Publishing. Katherine is a leader extraordinaire, and her input and atten- tion to the details throughout the creation and development ofthis book were invaluable. T want to thank Donna Morrison forthe out- standing job she did in creating the easy-to-read layout. Donna, you're always a pleasure to work with A great big thanks to Liz Cherry and her ere- ative team for their wonderful cover design, Cherry Design hit a home run in conveying the awesome power of residual income, ‘Any acknowledgment I make would not be complete without thanking everyone at Team INT: Sandce Lorenzen makes INTI operations run like @ Swiss clock; Dee Garrand designed and oversees five of the best websites in- the industry; Cindy Hodge notonly runs the ware- house efficiently, she does it witha smile on her face and laughter in her voice; Jewel Parago, CFO, isacomputer expert and accounting whiz.rolled into one (what would we do without you, evel?) Lastly, I want to thank my father for stress- ing tome when Iwas a teenager that in life, pipelines are my lifelines. Thanks for your pa- tience and timeless wisdom, Dad, BOOKS BY BURKE HEDGES Who Stole the American Dream? You Can't Steal Second with Your Footon First! You, Ine. ‘Copyeat Marketing 101 Readand Grow ich Dream-Biz.comLesson | Lesson2: Lesson’: Lesson Lesson 5; Lesson6; CONTENTS INTRODUCTION ‘The Parable of the Pipeline 9 ‘PART | We Live ina Bucket-Carrying World ‘Who Are You? —a Bucket Cartier? OraPipeline Builder? 19 WeLiveina Bucket-Carrying World 25 PART 2-——_—__——— Your Pipelines Are Your Lifelines The Powerof the Pipeline 39 Leverage: The Power Behind the Pipeline 49 Money Leverage: The Palm Beach Pipeline 37 Time Leverage: The People’s Pipeline rc PART 3 Lesson: Lesson’: Pipeline. ‘The Ultimate Pipeline e-compounding: The Ultimate Pipeline. 83 Do YouPrefer the 50. Year Plan’, Orthe S-Year Plan? 97 CONCLUSION. The Parable ofthe IIFROM‘THE DESK OF BURKE HEDGES. Your Pipelines Are Your Lifelines! But I can still remember our early evening chess games like they were yesterday T remember helping my father set up the ‘chess board on the Verandah of our beach house overlooking the Pacific Ocean off the coast of Ecuador. remember watching the waves breaking against the white sand beach, T remember the fragrance of,hibiseus floa- tingonthesaltwatermist. remember Watching the oft yellow sun sink below the stel-gray horizon. Wed play chess until dark. My father would talk, [would liste, "Never take anything for granted," I remem- ‘ber him saying many times as he gazed at the horizon, I been 25 years since my father passed away.FromPrinceto Pauperin One Day “Never take anything for granted.” My father was referring 10 1959, the year Castro took over Cuba. Prior tothe revolution, Imy father was one of the richest men in Cuba According to an article in Time magazine, my father was worth more than $20 million (which Would calculate to at least $200 million in today’s dollars), He owned 12 different busi nesses, including cotton mills, retail stores, a textile mill, a chemical-manufaeturing plant, and commercial realestate ‘When Castro took over, my parents escaped to Jamaica with just the clothes on their backs My fathers businesses and bank accounts were onfiseated for what the communists called "crimesagainstthe people * My fathers only "erime” was being success- ful. and then taking that success for granted mn hindsight, he should have moved some of his assets out of the country. He took it for granted that Castro would never be able to overthrow the government. My father was wrong. And it cost him his fortune Premonition ofPipelines My father did his best to rebuild his dynasty But a bad economy and a bad heart conspired to prevent his comeback. He wasn't bitter in his final days. He was just disappointed that he had ninoutof ime, So as we played chess, my father did his best to teach me the key principles that enabled him to amass a small fortune while he was still in hiss, ‘My father often lectured me on the impor- tance of owning your own businesses. Owner- ship meant independence and control. AS far as my father was concemed, the more businesses yyouhad, the better. “Your pipelines are your lifelines" be would sy. | took my father’s lessons to heart. | opened ry first business when I was only 25 years old ‘Today l own several fast-growing businesses. Ironically, one of my companies, Equibore, is a pipeline business — literally Equibore in- stalls the underground conduit that “Old Economy” uilty companies use to house their gas and water pipelines. "New Economy’ telecom companies use the conduit for their fiber ‘optic cables, the pipelines of the future. ichDad His Rich Dag My ater was a big believer in divessifieaion Thats why most of his 12 diferent businesses serein diferent indies “If you've only got one pipeline, then you've nly got one lifeline” hed sy ashe captured fone of my chess pics. "The more pipelines uve got the beer Pte months ago came scrost.an ado ape by Robert Kiyosaki tied, What My Rich Dad Taught Me About Investing. Kiyos tells betStory about two young men who were hired to eliver water from a lake to their village a mile away. One of the young men used buckets to carry the water. The other young man built a Pipeline. Over the long run, he young man who built the pipeline fared far better” than the bucket carrer Kiyosaki audio reminded me ofthe lessons iy father taught me 25 years ago. That evening | went home and jotted down 10 pages of notes for a new book explaining the parallel between Pipelines and lifelines and urging readers to diversify their income streams by building both short-term and long-term pipelines led the book, The Parable ofthe Pipeline. ‘Three months later T handed my publisher the manuseript to the book you're holding in yourhands Bulding Your Own Pipelines Over the years I've taken my fathers advice and built several profitable pipelines. I don't own 12 businesses like he did. And I'm not worth $820million yet. Butl'm working onit, Pipelines are designed to take the worry out ‘of people's lives by putting profits into their pockets. But most ofall, pipelines are designed to give people personal and financial freedom. and lifelong security, Inshort, pipelines are lifelines. My father had his lifelines taken from him by a dictwor. And be never recovered Pape in at cout ae Bestod — wel never fave our Iflines taken fom us by 2 ditator Only wecanakstheliftinestfom uses, Tow? Bynot taking tentative tobi hem! Take a lesson fom my fuer —don take it for granted tat tomorow il be jost the same tstoday Because two! She only secant ithe sey of pipe tne unge you to sa billing your ppeties today. ao that youl have your bflines amor.INTRODUCTION The Parable of the Pipeline 180, valleyincentral aly NCE UPON A TIME LONG, LONG AGO, two ambitious young cousins sed Pablo and Bruno lived side by side ina small alin village ‘The young men were best buddies. ‘And big dreamers. They would talk endlessly about how some day, some way, they would become the richest ‘men in the village. They were both bright and hard working. All they needed was an oppor- tunity, ‘One day that opportunity arrived. The vill tage decided to hire two men to carry water from a nearby river to a cistem in the town square. The job went o Pablo and Bruno, Each man grabbed two buckets and headed to the river. By the end of the day, they had filled the town eisternto the brim. The villageclder paid them one penny for each bucket of water, "This is our dream come true!” shouted Brno, "Tean't believe ow good fortune," ‘ButPablo wasn't so sure. His back ached and his hands were blistered from carrying the heavy buckels. He dreaded getting up and going to work the next mom= ing. He Vowed to think of a better way of get ting the water from therivertothe village. 600 Pablo, the Pipeline Man "Bruno, I have a plan," Pablo said the next morning as they grabbed their buckets and headed for the river. "Instead of lugging buckets bback and forth for pennies a day, let's build pipeline from the river tothe village.” Bruno stopped dead in his tracks, "pipeline! Whoever heard of such a thing?” Bruno shouted, "We've got a great job, Pablo. ean cairy 100 buckets a day. Ata penny a bucket, that's a dollar a day! I'm rich! By the end of the week, I can buy a new pai of shoes By the end of the month, a cow. By the end of six months, ean build a new hut. We have the best job in town, We have weekends off and two deeks' paid vacation every year. We're set for life! Get out of here with your pipeline But Pablo was not easily discouraged. He patiently explained the pipeline plan to his best Friend. Pablo would work part of the day carry- ing buckets and then part of the day and week tends building his pipeline. He knew it would be hard work digging a ditch in the rocky soil. Because he was paid by the bucket, he knew his income would drop at first. He also knew it would take a year, possibly two, before his pipe- line would start to pay big dividends. But Pablo believed inhisdream, and he went to work ([Pitine in broress () Bruno and the rest of the villagers began mocking Pablo, calling him "Pablo the Pipe- line Man." Bruno, who was earning almost ‘twice as much money’as Pablo, flaunted his new purchases, He bought a donkey outfited with ‘new leather saddle, which he kept parked out- side his new two-story hut. He bought flashy clothes and fancy meals at the inn. The villag- ers called him Mr. Bruno, and they cheered When he bought rounds at the tavem and laughed loudly athis jokes. ‘Small Actions Equal Big Results While Bruno lay in his hammock om evenings and weekends, Pablo kept digging his pipeline. ‘The first few months Pablo didnt have much to show for his efforts, The work was hard —even harder than Bruno's because Pablo was working evenings and weekends, 00. But Pablo kept reminding himself that tomorrow's dreams are built on today's sacri= fices. Day by day hedug, aninchatatime. “Inch by inch i's a cinch” he chanted to him= self as he swung his pickax into the rocky soi Inches «med into one foot... then 10 fet... then 20... 100, "Shori-term pain equals long-term gain, "he re- ‘minded himself as he stumbled into his humble hhut exhausted from another day's work. He ‘measured his success by setting and meeting his daily goals, knowing that, over time, the results ‘would farexceedhis efforts, "Keep your eyes onthe prize, "he repeated over \overas he drifted offto sleepaccompanied by the sounds oflaughter from the village tavern, "Keep your eyes onthe prize...” ® ThePrize = ‘The Tables AreTurned Days tured into months. One day Pablo real- ized his pipeline was halfway finished, which ‘meant he only had to walk half as far to fill up his buckets! Pablo used the extra time to work ‘on his pipeline. The completion date was ad= vancing faster and faster. ne During his rest breaks, Pablo watched his old fiend Bruno lug buckets. Bruno’ shoulders were more stooped than ever. He was hunched in pain, his steps slowed by the daily grind. Bruno was angry and sullen, resenting the fact that he was doomed to carry buckets, day in and day out, forthe rest ofhislife +e began spending less time in his hammock and more time in the tavern, When the tavern’ patrons saw Bruno coming, they'd whisper, "Here comes Bruno the Bucket Man," and they'd gigele when the town drunk mimicked Brings stooped posture and shullling gait. Bruno didn't buy rounds or tell jokes anymore, preferring to sit alone in a dark comer sur rounded by empty botles. Finally, Pablo's big day arrived — the pipe line was’ complete! The villagers crowded around as the water gushed from the pipeline into the village cistern! Now that the village had a steady supply of fresh water, people from the surrounding countryside moved into the village, and it grew and prospered yes ye QRS Once the pipeline was complete, Pablo did't have to cary buckets anymore. The water flowed whether -he worked or not. It lowed while he ae. It flowed while he slept. I flowed fon the weekends while he played. The more Bethe water flowed into the village, the more the ‘money flowed int Pablo's pockets! Pablo the Pipeline Man became known as Pablo the Miracle Maker. Politicians lauded him for his vision and begged him to run for ‘mayor. But Pablo understood that what he had ‘accomplished wasn't a miracle. It was merely the first stage of a bg, big dream. You see, Pablo +had plans that reached far beyond his village. Pablo planned to build pipelines all over the. ee Sey cl RecrultingHis FriendtoHelp ‘The pipeline drove Bruno the Bucket Man out ‘of business, and it pained Pablo to see his old friend begging for free drinks in the tavern. So, Pablo arranged ameeting with Bruno, "Bruno, I've come here to ask you for your help." Bruno straightened his stooped shoulders, and his dark eyes narrowed to a squint. "Don't ‘mock me," Bruno hissed T haven't come here to gloat," said Pablo. "ve come here to offer you a great business opportunity. It ook me more than two years before my first pipeline was complete. But I've Teamed a lot during those two yean! I know ‘what tools to use. Where tordig. How to lay the pipe. [ kept notes as I went along, and Te developed a system that will allow me to build ‘another pipeline... and then another... and an other. "I could build a pipeline a year by myself But that would not be the best use of my time. What I plan to do is to teach you and others how to build a pipeline... and then have you teach others... and have each of them teach oth- cers... until there isa pipeline to every village in the region... then a pipeline to every village in the country... and eventually, a pipeline 10 ev xy village in the world! "Just think," Pablo continued, "we could make a small percentage of every gallon of wa- ter that goes through those pipelines, The more water that flows through the pipelines, the more ‘money that wil flow into our pockets. The pipe- line F built isn't the end of a dream. I's only the beginning!” ‘Bruno finally saw the Big Picture. He smiled and extended his callused hand to his old friend. ‘They shook hands... and then hugged like long- lostfriends Pipeline Dreams ina Bucke-Carying World Years passed. Pablo and Bruno had long since retired, Their worldwide pipeline business was still pumping millions of dollars a year into their bank accounts, Sometimes on their trips through the countryside, Pablo and Bruno would pass young men carrying water buckets —15—‘The childhood friends would pull over and tell the young men their story and offer to help them build theit own pipeline. A few would listen and jump at the opportunity to start a pipeline business. But sadly, most bucket car- riers would hastily dismiss the notion ofa pipe- Tine. Pablo and Bruno heard the same excuses overandover. don'thave the time." "My friend told me be knew a friend of a fiend who tried to build a pipeline and failed.” "Only the ones who get in early make money conpipelines. "Ive carried buckets all my life. TI stick ‘with what know." "L know some people who lost money in a pipeline scam. Notme." It made Pablo and Bruno sad that so many people lacked vision ‘But both men resigned themselves to the fact that they lived in a bucketcarcying world... and that only a small percentage of people dared to dream pipeline dreams. PARTI We Live ina Bucket-Carrying WorldLESSON ONE Who Are You—a Bucket Carrier? Ora Pipeline Builder? “Bruno, Thaveaplan," Pablo saidthe ‘next moringasthey grabbed their buck- cts and leaded fr the river. "Instead of Ign buckets back and forth for pennies day, let’ build a pipeline fom the river tothevillage” Bruno topped dead inhis tracks. “A Pipeline! Whoever heardofsucha thing?!" Bruno shouted, “from The Parable ofthe Pipeline hho are you’... A bucket carrier? Or a pipeline builder? Do you get pid only when you show up ‘and do the work, like Bruno the Bucket Carrier? ‘Or do you de the work once and then get paid over and over again, like Pablo the Pipeline Builder? If you're like most people, you're working the bucket-carrying plan. 1 call it the "Time-for Money Trap. Youknow the dil —1-Onehowr's workesuals one hour p. ‘ne oaths work equals one montis pay. ‘ne years wrk equine yeas pe Sound familiar? : beans = Time-for-Money Trap The problem with bucket canying stat he money sops when the bucket caning stops Which means the eonsep of "eee jo ora "dream job" isan ison. The inherent dane gerof caring bicketss that he incomes te Dora instead ofongoing TF'Bruo woke up one morning with «sist back and couldnt get out ‘of bed, ow much smoney wouldbecamn ht dy? Zero! No work, no money The same goes fr any bucket-canying ob Conc bcket carer have nsed up tect sk days and vacation days if they eat condi tovcary buckets, they wont contin fo gel pavebeck Period Q® ‘No Buckets =No Pay Dentist Can't Carry Buckets Anymore Here's a real-life example, My previous dentist ~20— ‘was the best dentist Ive ever had. She was a complete professional —a great chairside man- ner. Great personality. Grea technician — every visit was virally pain free. Plus, she loved What she did, and she set her own hours (her office was open only three days a week so she ‘could spend fourday weekends with her fam- ily), ‘She pulled down more than $100,000 a year Working three days a week in a job she loved, This was a bucketcartier’s dream job if there ‘One problem, Before the age of 40, she de- veloped arthritis in her hands and couldnt work anymore, Today she teaches at a local univer: sity earning one-thid of the income she earned as a dentist Through no fault of her own, her dream job disappeared, ‘Now do you see why I say there's no such thing as a secure bucketarrying job? Can you seehow vulnerable bucket carvers are? ‘The problem with the Time-for-Money Trap is that if you can't trade the time, you don't get themoney! Pablo the Pipeline Man recognized the limi tations of bucket carrying early on — and be set out to create a system, whereby he eould eon tinue to gel paid whether he put in more time ornot Pablo understood that there's no security in bucket carrying. He understood that @ pipeline isyourlifeline a1What Would Happen to You if You Couldn't Putinthe Time? What about you — what would you do if your income stopped tomorrow? ‘What would happen you gotlaid of? ‘What would happen if you got sick or dis- abled and couldn't carry those buckets any’ ‘What ifa medical emergency ate up your sav ings? ‘What ifyour nest egg evaporated overnight? Ifyour income stopped tomorrow, how long could you pay the morgage? .. make your car payments? ot pay far yourkid's schooling? ‘Six months? Three months? Three weeks! Your Nest Egg ‘months? Smonihs? ~ 3weeks? BA se If disaster strikes, do you have a lifeline that, would protect you and your family? Or are you gambling that bucket carrying will continue uninterrupted for as long as you need the in- ‘Whether you push a broom... push paper: or push a profession, you're still trading one unitoftime for one unit of money. ‘Where'sthe seeurity in that? —2- tines Pay While YouPlay ‘AsPablosid, "here mute abeter wa!" Foytnately.theeis clea pipeline — ongoing idl n= cone coe tat ees coming a whet atin be te rn. The only yf bal Pe etLany sto do what Pablo did — build elie whleyouresileayngbuekes! ines oe fetnes toeause they emale people to escape the TimeforMoney Trp. eRe you bull a pipeline, you do the work ree boryouget paid overandoveragan Ppalges reopen 24/7368. Which means ripe can pay You while you sleep. Or while Pray OF while. youre reed. Or while 4 Pana dsaled and cant work, OF Saving emergencies "Tats power frei income Tai Tay your pipelines oe your flies! Pipelines =Lifelines Residual Income aLESSONTWO. We Live ina Bucket-Carrying World “We've gota great job, Pablo, I can carry 100 buckets a day. Ata penny a bucket, hat'sa dollar a day. Im rich! By the end f the week, I ean buy a new pair of shoes. 3 the end ofthe month, a cow. By the fod of six months, I can buy a new hut Ye have the best job in town. We have weekends off and two weeks’ paid vacation) very year. We're set fr lifel Get out of phere with your pipeline. — from The Pa ble of the Pipeline A doctor driving his four-year-old daughter to daycare left his stethoscope on the car seat. The daughter reached over and started to play withit. "My daughter wants to follow in my footsteps," the doctor thought to himself. "This is the proudest moment of my life." ‘The child arranged the stethoscope around her neck and held the sensor in front of her like microphone, —25—"Welcome to McDonald's. May I ie. you onder?” This cute story illustrates why we gravitate to bucket-carrying jobs — i's called ‘monkey see, monkey do.” The lite girl had been to MeDonald's so often that she missok the stethoscope for a headset and copycattlthe way theerpioyces talked to customers Like the litle girl, most people mistake bucket carrying for pipeline building We ob- serve that 99% of the people carry busets. So ‘we naturally assume that bucket carryig isthe ‘only way to get what we wantin life Bucket Carriers vs Pipeline Bulers ‘That's why Bruno had such a tagh time understanding the power of pipelines~ Pablo ‘was the first pipeline builder Bruno ex: knew! Bruno rejected pipelines because tey were different. To Bruno, pipelines were unpven. To Bruno, pipelines were radical and risky. ‘The vast majority of people thnk lieBruno, ‘We grow up surrounded by broke buckscariers, so we figure thats the way of the wal. Itre- ‘minds me ofthe bumpersticker I saw retly 100,000 lemmings can'tbe wrong! People think the same about busit ear ying-100 million bucket carrlers can'wrong! Well, yes, they can 26 Lemming Mentality ying into Bucket Carrying Lei’ face it — there are alot more bucket carri- ersinthis world than there are pipeline builders. Why? ‘Because bucket carrying isthe mode! that our parents followed and the one they taught us t0 follow. The bucket-carrying model tells you that in a bucket-carrying world, here's what you hhave todo o get ahead: ‘Go to school and lear how to carry buckets Work really hard. Ear the right to cary big- ager buckets. Resign from Bucket Company A to work for Bucket Company B, which lets you carry even bigger buckets. Work longer hours 0 you can carry more buckets. Put the kids through bucket-carrying college. Change ca reers from carrying metal buckets... © carrying plastic buckets. to carrying digital buckets Dream of the day you ean retire from bucket carrying. Until then, carry those buckets. Carry those buckets ‘What do all those bucket carriers earn for theirefforts? Surprisingly litle According to Parade magazine's annual "What People Earn" survey, the average worker 27in America cams $28,500 a year. Subtract al- ros 20% fortes, aid that leaves $22,500 t0 Let's face it — $22,500 takeshome pay isn't ‘enough money to cover the basic needs for a family of four. Which means the vast majority ofpeople are desperate formore money! Bucket Carriers’ Average Pay =$28,500 Bucketson Parade So what do bucket carers do when they need more money? Becatse they have a bucket car Tying ments, they come up witha bucket Canying sluon if you need more money. Youve goto cary more bucks “TM get a second ob carrying bucets nthe evenings and weekends? Daddy Bucket Carter, “0 “I can go back tothe bucket carving job 1 had before the kis were bor,” says Momny Bicker Carrer "The Kids can get bucke-carying jobs afer school and inthe Sunmer® the buck crying Paenisanounce ‘Atha whathey do. Theres? Today, North Americans work the longest out in the world, even more than the works absessed Japanese. 1s the erm-more-money by carrying moresbckes plan rking? ae Inaword,"NO!" Here re thecold, hard facts: + Consumer debt is at a record high, House hold debt in the U.S. has more than qua rupledin the last 17 years. The average household today has 98 of debt for every dollar of disposable income. + The proportion of women working to sup port their families more than doubled over the past 20 years, from 19% in 1980 to 46% today. + More and more people are taking second and third mortgages on their single big: sestasset—their homes —to pay bills. + Personal bankruptcies have increased ev- ery year to 14 million in the year 2000 — even though the economy is booming! Hello-o-0-o! What's wrong with this picture? ‘The Fallacy of Carrying Bigger Buckets Bucket carriers reason that bigger buckets mean bigger paychecks. So bucket carriers tell them- selvesthateverything would be okay ifthey could just getajob carrying bigger buckets. Bucket carriers are forever wondering how ‘much other bucket carters eam. The US. Bu- eau of Labor Statistics keeps track ofthe hourly wages of hundreds of different occupations, How does yourhourly wage compare to other jobs? 2Hourly Wage (rom US, Bureau of Labor Statistics) Occupation Hourly Wage Fast-food cook, $629 Gas tation attendant. $734 Janitor S844 Retail salesperson $9.12 Seoretary $1186 Roofers. $1363 Carmechanie. $1397 ‘Truck driver. S$ 1408 Firefighter, S$ 1563 Mailcarier. $1639 Loan office. $2005 Computerprogrammer...... $25.67 Chemical engineer $2044 Physicist $3323 Lawyers $3649 Dentist $4440 Physicians, surgeons $49.05 ‘Assuming most people get paid for 40 hours a ‘week (even though they probably work at least 50 hours a week... or morel} and get two weeks! paid vacation each year, her's the annual in come for five ofthe above occupations: ‘Annual Income 1.Cook $13,083 2. Retail salesperson. $ 18970 3. Mailarier 5 34091 4. Lawyer $ 75,899 S Physician $102024 Now, if you were a cook... or a retal sales- person... or a mail carrier, you might look atthe annual income of a lawyer or physician and think, "Wows, iT made that kind of money every year, 1 be financially freet No more lying ‘awake atnight worrying about paying the bills!" Bucket Carriers‘ ncome aQ8 ‘rue the physician's bucket isa lot bigger than a cook's bucket — about 10 times bigger! But that doesn't mean the physician is financially in- dependent. He's just as dependent on his bucket- ‘carrying jobas the cook othe mail carrier Why? Simple — professionals make more than the average worker. But they spend more! Truth is, the doctors or lawyers making six fig- ures a year are spending most of their income to suppor theilavish lifestyles. 31Just compare an average worker's expenses to professional's ‘The average worker drives a $5,000 used car ‘The doctororlawyer drives a$45,000 Les The average worker sends their kids to free public school. The doctor or lawyer pay's for private school ‘The average worker owns a $75,000 home. ‘The doctor orlawyer owns a $350,000 home, ‘The average worker eats at Pizza Hut once a week. The doctor or lawyer eals out ice a week at ritzy restaurants. ‘The average worker cant afford to take a v cation. The doctor or lawyer takes the family skling in Vail every year. ‘The average worker plays golf at a public course. The doctor or lawyer belongs to an ex pensive country club..ortwo, Yougetthe picture People envy doctors and lawyers and accoun- tants because they get to cary huge buckets True, the physician's bucket may be 10 times bigger than the cook’s. But the physician spends 10 times more, so they both end up in the same predicament — living paycheck to paycheck! oct's Doctor's Income ‘Outgo 58 oo Buckets Eventually DryUp Thomas J. Stanley and William D. Danko, au- thors ofthe bestseller The Millionaire Next Door, observed that eamying big buckets is not the same as creating wealth. The authors came t0 this realization by surveying people who lived in upscale neighborhoods, assuming that people ‘who drove expensive cars and lived in expen: sivehomes were wealthy OOPS! — wrong assumption! Stanley and Danko came to this startling conclusion about ‘wealth creation: "Most people have it all wrong about wealth in America. Wealth it not the same at income. Ifyou make a good income each ‘year and spend ital, you are not getting ‘wealthion You are just living high, Wealth is what you accumulate, no? what you spend. "How do you become wealthy? Here, too, most people have it wrong. Iti ele dom luck or inheritance or advanced de- ‘grees or even intelligence that enables ‘people to amass fortunes. Wealth is more ‘the result ofaifestyle of hard work, perse- verance, planning, and, most of al self- discipline.” In other words, buckets, no matter how big they are, will eventually dry up. Pipelines, on the other hand, are self-sustaining. But pipe lines require a sacrifice. Pipelines don't buildthemselves. You have to take the time and make theefforto build them Eventually All Buckets Dry Up oo 3 ee Problem Everybody would love to increase the size of their bucket. No one's going to turn down an annual raise or a better job with more pay. If bucket carrying is your only souree of income, then T say carry the biggest bucket you can, That'sonly common sense. ‘But the fact remains that carrying buckets is never going to make you financially free. Car~ ying buckets will never make yout family safe and secure—no matterhow big your buckets! why? Because as long as you carry buckets, you hhave to show up and do the work in order to get paid, The day you stop carrying buckets, that's theday the money stops coming in! ‘Illness or Injury + Layofts + Retirement ‘Many a bucket carrier has gone from the aS “millionaire next door to the " bankrupt guy next door" because he neglected to build pipe- Tines while he was carrying buckets. When his bucket dried up, sodihis lifestyle “Pipelines are your lifelines” ny father used tosay, “Are you beginning to see why?LESSON THREE The Power of the Pipeline But Pablo was not easily discouraged. He patiently explained his pipeline plan to his best friend. Pablo would work part of the day carrying buckets and then part of the day and weekends building hispipeline. He knew it would be hard Work digeing a litch in the rocky soil. He also knew it Would take a year, possibly two, before his| pipeline would startto pay big dividends. But Pablo believed in his dream, and he went to work, _from The Parable ofthe Pipeline Ts isthe tale of two polar opposites — a big-time baseball player and small town elementary schoolteacher. They couldn't be more different — one was ‘2 young man and one was an elderly woman One was paid millions a year and the other never ‘earned more than $10,000. One lived his life in the spotlight. The other lived her life in a small town in Massachusetts, But these were only small differences com- pared to the personal and financial choices each ‘made. Yousee, one ofthe people you're going <3to read about built pipelines and retired « multi nillionaire. The other stayed a bucket carrier and, as I write this, is teetering on the brink of bankruptcy ‘The stories are about two very different people, but that’s not what's important, What's Important is the choices they made and the les- sons you can learn from those choices. After you hear these two tales, it should be crystal lear why building pipelines isthe only way to create true security and rue financial freedom. Qe ‘The Ballad of the Ball Player Let's begin with the tale ofthe famous baseball player. Over the years, this talented athlete has ‘made some bad choices, both personally. and financially, His persona] choices have led to a broken ‘marriage, alcohol abuse, and drug addiction ‘Thats bad enough. But his financial choices hhave been just as bad, for he's also broke. I'm sure you've heard of this athlete. He's been in the spotlight foralmost20 yearsnow. His name is Darryl Strawberry, His story is cautionary tale for what you should NOT do ‘notderto achieve financial freedom, Darryl Strawberry has begn playing profes- —40— sional baseball for almost half of his life. The 38-year-old outfielder broke into the major Teagues when he was still a teenager and was immediately hailed as the "next Ted Williams Strawberry has made a fortune during his c@- reer — somewhere between $2 and $5 million a year. And tha’ just from playing baseball. Add ‘another couple million a year from endorsements, personal appearances, speeches, and autograph signings, and he's eared $50 to $100 million be- forehis 40th birthday. Strawberries Don't Field Forever ‘A guy making that kind of money has tobe set for liferight? ‘Wrong. According to a local newspaper report, sawberry hiss no income or savings to sup- port his current wite, Charisse, and their three children. ‘S100 million and no: a thing to show for it ‘Whathappened? He spent : ‘pensive houses. Expensive cars. Expen- sive lawyers to defend his run-ins with the law Expensive divorce. Expensive drug and aleo- holrehabiltaionelinies. ‘As I write this, Stawberry has been sus- pended from playing. bascball. Which means hhe has no income coming in, The only thing still coming in are the bills. And they come in day afterday, month after month, as steady as 4therain ina monsoon, Big Bigger Tncome Out-go How to Become the Millionaire Next Door ‘The second tale has a much different ending. I's the tale of a small town teacher named Margaret ODonnell, and it proves that you don't have to carry big buckets in order to build big pipelines. Ms. Donnell taught school for more than 50 years, When she retired inher 70s, she was mak- ing around $8,500 a year. When she died at age 100, she left almost $2 million to 10 different chari- ties, including her church, schools she attended, and aBoy Scout oop. How could a woman earning less than $10,000 f year accumulate a small fortune? Simple. She built a long-term investment pipeline by making regular monthly investmentsin quality stocks and allowing them to compound over time. Building Long-Term Pipelines Socks, Bonde iheinens + Ep rescee thieneame Petre tape eyed ee ie ker Bob Wolanske. "The first time T met her, she threw three papers on my desk and said, 'What oe should I do with these dogs? stocks that weren'tdoing well. ‘Over the next 20 years, Margaret's portfolio bloomed to include a collection of blue chip stocks, ta-exempt bonds, and utility stocks that She held until her death. She rarely touched any of her investments, enabling her retirement pipeline to grow year after yearafter year. referring to some ‘Small Sacifices, BigResuts ow; in case youre thinking that Margaret was fe of those. penny-pinching. spinsirs who clipped coupons and saved used ea haps, youd evmrong. She ate ou fen with frends. Drove laemodel Buick. And frequently flew f0 Europe toenjoy long vacations, Se int deny Hr the pleas of i But she ao showed discipline and resaint in fer spending Ad she saved and invested each Svevery month even increment ‘Yousce Margret wa the classic example of a longicmn pipeline bilder. She started sa dng and investing inher ealy 20s And she con fved ight up unl er deah at age 100 (4 Youll lar in dhe coming chapters, pipelines ow biggrandbigger overtime). Growing Your Pipelines cela | 8Like Pablo, pipeline builders may not have ‘much to show for their efforts during the first, few days or even years. But consistent, disciplined efforts over time can transform small contributions into huge dividends, Pipelines Keep Pumping After Buckets Run Dry Now do you understand what I mean when [ talk about the power of the pipeline? Darryl Strawberry has carried a huge bucket for years And what does he have to show for it today? Nothing butboxes of cancelled checks? Strawberry has had 20 years to build pipe- lines. 1f he had taken just 10% of his earings ‘and put the money io work by building an investment pipeline in the stock market, he could've had a lifeline worth between $20 mil- lion and $100 million by now, Buthedida't ‘Missed Opportunity No Pipeline Means No Residual Income Strawberry assumed his big bucket would never dry up. Wrong assumption. Buckets don't automatically replenish themsélves, no. matter hhow big they are. That's because’ the bucket carrierhasto lug the bucket to getitrefille. a When he stops lugging — ether through Ieiement. oles ony. or burnout the ck staying Pipelines, on the other hand, Keep pumping profit long afer baskets rim That rile Rovds uc for big books cai, st asi does for small bucket carirs As Tsids ot the Sze ofthe bucket that counts People with big buckets tend to be big spenders The Key 1 financial redom so adopt a pipeline Buiing meniaiy “and then 1. pu your pipeline Plan inaction! Big Bucket Mode! O-f-s ‘The Smallerthe Bucket, the Bigger the Need fora Pipeline Eaming a lot of money doesnt guarantee finan- cial independence. Only pipelines can do that. If you don't adopt a pipeline strategy, your ‘bucket wll eventually dry up! T tell you the story of Daryl Strawberry to ‘exaggerate a point — namely, ia bucket as big as Daryl Strawberry’s can dry up, what about yours? ‘Think about it, Swawberry lived from pay- check to paycheck. What about you? 4s—Strawberry acted as if his bucketcarrying ‘days would neverend, What about you? Strawberry foolishly spent money and wasted time when he could have been using it wisely to bid alifeline Whatabout you? ‘What About You? a Sure, Strawberry made some bad choices that cost him a lot of money. But his worst financial choice was his failure to build. pipelines. That's unforgivable! What was he thinking? ‘Margaret O'Donnell, on the other hand, had the wisdom to build pipelines while she was still cearrying buckets, When her bucket-carrying days came to an end, her pipelines kept pump- ingand the cash kept flowing, Its YourTurn to Choose Now I ask you, which financial situation would you rather be in — Darryl Strawberry’s? Or ‘Margaret Donnell's? If the answer is Marga ret ODonnel', then you need to start build ing yourpipelinesrightaway!—« Pipelines are lifelines because they're self: sustaining. They may need priming from time —46— to time, And repairs. Perhaps even rebuilding But pipelines can keep pumping profits year af teryear. Your Choice A-c— "for choices, not chance, determine your destiny. Both Darryl Strawberry and Margaret ‘ODonnell had a choice. Daryl Strawberry chose buckets. Margaret O Donnell chose pipelines. ‘They made their choices, Nowit'syourtumto choose, a7LESSON FOUR Leverage: The Power Behind the Pipeline “Once the pipeline was complete, Pablo dida't have to camry buckets anymore.The ‘water flowed whether he worked or no. I flowed while he ate. It flowed while he| slept. It flowed on the weekends while he| played. The more the water flowed into the Village, the more the money flowed into Pablo'spocketst ‘— from The Par Lx. is an awesome concept — a civilization-altering concept Infact, without leverage, you wouldn't be holding thisbook ight now! ‘Letme explain, In 1440, a young German entrepreneur named Johannes Gutenberg convened a Wine press into the world’s first commercial printing press. He printed 180 copies ofthe Gutenberg Bible andsold {hemall withina few days. Gutenber’s printing press was an immediate suecess. Within decades, printing presseshad ble ofthe —49—sprung up all over Europe. By the mid-1600s, there were eight million printed books circuat ing in Europe, which was 10 times the numberof ‘books that had been produced during the previ- ‘ousthousands ofyears combined! Books by Bucket Carriers vs. Publishing byPipeline Builders ‘The Gutenberg press shatiered the books-by: bbucket-carriers paradigm. Prior to Gutenberg, ‘books were hand-copied by scribes and monks ne hand-witen bok could ake years produce and were so expensive that only royal ‘ould afford them, ee ‘Gutenberg changed all that. With the print- ing press, the prnte set the movable type once. ‘and then could easily produce thousands of exact, copies. The printing press leveraged the printer's time and money, thereby dramatically increasing productivity. . Inthe books-by-bucket-cariers model, there's ssone-to-one ratio between efforts andresults One hour's effort produces one hour's result If it took one seribe one day to hand copy one page then it ‘would have taken him 100 days to turn out 100 pages. TEnterthepprint- Books by Hand Mode! ingpress— the pipeine-building model. Let'ssayit tooka 16theentury printerone day 10 —s0— set the type for one page, so that by the end ofthe ‘day, he would have produced just one printer's proof copy. But look what happened inday two: The —— into work and pressed100 cop- ies! Inother swords, printer 7 couldpproduce intwodays J whatitwould hhave taken the serie 100days. to produce, Tha'the power of leverage! Tn the pipeline-building model, the ratio between effort and result is no longer 1:1. When ve use leverages the effort remains the same, but the result ean be 100 times greater. 1,000 times (greater. .oreven millions of times greater! wo Kinds of Leverage: Time and Money “The root word for leverage —lever—comestrom an old French word meaning "to make lightes” which is an apt description of the power of leverage. Byemployinga lever, abigloadcan be ‘made so light that a child couldeasily moveit,‘When we apply the principle of leverage to time and money, the same thing happens —~ the resultsare compounded For example, in the case of I leveraging time, one hour's effort can result in 100 hous of peo duction. One week's work can result in ‘one year's production 400 eure result In the case of leveraging money, each dollar invested overtime can compound unt it prowsto ‘many times theinital investment SS $100Result $1 Investment Classic Examples of Leverage The ening press i an example of how people cean leverage their time,, money, and efforts Leverage shatters the equation of one unit of time for one unit of money. Leverage allows people to work smarter, not harder, and it's the ower behindevery pipeline —2— Leveraging Hiring employees is a classic example of how people can leverage their time, Lets say You want to open a restaurant. It would be impossible for you to act as the host... waiter... chef.. dishwasher... and book Keeper and sill run a profitable business. You can only be in one place at a time, so you hire people to perform certain tasks, If you pay your 10-person staff an average of $10 per hour, you'e paying out $100 an hour in wages, If your restaurant takes in an aver- age of $1,000 per hour in revenue, the differ- ence afterexpenses goes into your pocket Leveraging Time in.a Small Business Leveraging Money: A classic example of le- veraging money is investing in the stock mar- ket. No doubt you've heard of Warren Buffett. He's a living legend on Wall Street fand the second or third richest man in the world, He built his fortune the old-fashioned ‘way — he leveraged other people's money and made himself and his investors ich in the process How rich? Check this out If you had in- ‘vested $10,000 in Buffets Berkshire SoeHathaway stock back in 1965 and left it there to grow Year after year, by 1998 your invest ‘ment would have been’worth — hang on to your hat — $51 million! Wow! How would ‘Youliketoown that pipeline?! Thirty-five years ago, one share of Berk: shire Hathaway stock cost only $19. By the nd of 1998. that single share was worth about $70,000. Which means that you could have leveraged $300 investment in 1965 into $1 ‘million today! Unbelievabie! Leveraging $ in Betishite Hathaway 8] Stmition Result — Stok Investment Pipelines Ana Worth Bullding Now do you understand the power of leverage? Berkshire Hathaway stock is living proof that with leverage, the resus are disproportionate ‘othe effort! ‘Think about it — how much effort would it have taken to accumulate $300 back in 1968? ‘Two or three days! work... maybe a week's work atthe most. Just imagine — once the $300 was invested, you wouldnt have tq do any: more ‘work because your pipeline was already bil a ‘Te only ote wk soi a wo di check the sock pres inthe newspaper every now a hen eek youself — wouldnt it be great if you could turn $300 into $1 milion without having lift finger? vo" Can yeu sec how the wise use of leverage can multiply a tle money ora Ide time a Bou sandtimesover? Does it make sense find 9 mechanism ‘whereby you could leverage $1 into $1002... of bnehourinto 100 hours? : ‘Would it be gest to do the work once an letleveragedotherest Folks if Jou lik to enjoy the benefits of Jeverage, then you need to. do. what pipeline builders such as Pablo and Warren Buffet did ~ find a mechanism fo Teerage your tine and money tday..and en abigrevardiomorrosLESSON FIVE Money Leverags The Palm Beach Pipeline “Just think,” Pablo continued, "We could make a small percentage of every gallon of water that goes through those pipelines. The more water that flows through the pipelines, the more money that will flow info our pockets. The pipeline I built isn't the end of a dream, Msonly the beginning! —from The Parable of she Pipeline cegend has it that one of the ancient em= perors of China fell in love with a new {gamecaled "chess." The emperor decided to reward the game's creator. He summoned the inventor to the royal palace and announced to the court that the inventor would be granted one wish "I am honored, Your Highness,” the inven- tor muttered humbly. "My wish is that you sgrantmeone grainofrice.” as"ust one grain of rice?” the startled emperor asked "Well, just one grain for the frst square of the chessboard,” the inventor said. "Then ing to two grainir the second square... fo grains forthe third square... and so on until th. Single grain has been doubled for the entire ebeseLoard. That smy simple wish.” ‘The emperor was well pleased. “I have been given such a wonderful game at such a cheap price." he thought to himself. "My ancestors have smiled uponme today. "I is done!" the emperor cried. "Bring out the chess board and let everyone here witness ouragreement.” The court gathered around the chess board. A kitchen servant produced a one-pound bag of fice and handed it to the inventor, who stniled ashe opened the bag. "L suggest you return to the kitchen for a larger bag." the inventor said to the servant, The court laughed loudly, mistaking his com- ‘ment for sarcasm. Then the inventor began placing the grains of rice onthe board, doubling the numberof grainsas he went: © [06 [82 Jo i] ‘The onlookers laughed and nudged each ‘other as the first row of eight squares was filled 1.2.4. 8.- 16x. 32. 64. 128 grains of tice Bui the giggles soon gave way to gasps by the middle of the second row, for small piles of rice soon doubled to small bags of rice... which doubled to medium-sized bags of rice... which doubled again big bags ofrice. EEE) By the end of the second row, the emperor knew he had made a huge mistake. The grains ‘owed to the inventor totaled 32,768 — and there were 48 squares remaining! ‘The emperor stopped the game and called in the land's wisest mathematicians. They tossed the beads oftheir abacuses and made hasty markings fn slate boards, After much fussing, the mathe ‘maematicians reached a unanimous conclusion; ‘A grain of rice doubled for every square on the 64-square chess-board would calculate to 18 milion rillion grains of rice —a quantity equal to allthe ice in the world multiplied by 10! ‘The emperor halted the demonstration and ‘made the inventor an offer he couldnt refuse — ifthe emperor were released from his word, the inventor would receive acountry estate with hun- oedreds of acres of fertile rice fields. The inventor gladly accepted. Everyone toasted the inventor and congratulated him on his wisdom and clever: ness And he happily retired to his estate, enjoy- ing many, many years in splendid comfort. The Doubling Concept: Eighth Wonder ofthe World The story of the emperor and the inventor teaches us the power of the doubling concept This concept has been around since the first bank paid the first wealthy merchant interest ‘ona deposit, soit’ time-tested and proven, The inventor and the emperor’smathemai- cians may have been the first people to recog nize the power of duplication, but they certainly ‘weren't the lat. Centuries later another famous ‘mathematician ‘named Albert Einstein recog: nized the awesome power of duplication, o “compounding,” as it's sometimes referred to, callingitthe eighth wonder of te world." The doubling concept has become such 2 ‘comer stone of wealth creation that I eal it "the Palm Beach Pipeline,” named after the ritzy city in Florida where hundreds of the world’ rich est heirs own sprawling estates overlooking the Allantic Ocean, ‘The rich people in Palm Beach don't have to work for money. They make money work for them How? They invest large amounts of inherited ‘money in pipelines that churn out huge profits ‘yearinand year ou, whether the investors work —60— Palm Beach Pipelines are fueled by the dou- bling concept, which means the lcky heirs ean ‘enjoy a fabulous lifestyle... while they get richer in the process! That's what I call having your ‘cake andeatingit, 00. ‘The Rule of 72:The Rule of the Rich To better understand how rich people get richer, let’stake a look at "The Rule of 72." a mind-bog- sling wealth-building concept that the world’s top investment brokers teach their rich clients. The Rule of 72isasimple formula for calculating how ‘many years it would take for an investment to double, Here'sthe way it works. Deutsing Concept or Rule of 72 9 Ootemine he aru restate nyo ewosman 2bhce entre olor 72 Simerenteman.moertyeon taka oryour For example, let's say an heiress invests $100,000 ina stock that pays an annual ren of 10% per year. Heres the Rule of 72 in ction: Rule of 72 in Action Sten 100000 oigralivesrnert Stop 210% oneura eas Sep 8:72 Ged by 10~ 7.2 yoo" Foyt $100,000 woud bacern $200.00 12 oor] If the heiress didnt spend the profits or her aprinciple, the original investment of $100,000 ‘would double to $200,000 in 72 years... to $400,000 in 14.4 years... to $800,000 in 21.6 years. and $1.6 million in 28.8 years... and on land on. As you can see, the longer the money is allowed to compound, the bigger the size of the pipeline By leveraging the power of compounding, people who inherit million-dollar fortunes can live like royalty and still leave an even bigger fortune for their childrent ‘The magic of compounding isthe reason that thousands of heirs named Kennedy... DuPont Firestone... Ford... Rockefeller. and Getty can continue to live a life of lncury without their for tunes drying up. In effect, their bucket never runs dry because the pipeline keeps pumping year af- ter year, for decades, or in the case of the Rothschild heirs in Europe, for more than to centuries! Fortunately, pipelines built by leveraging money aren't reserved just fortich people. Averagepeople can take advantage of the doubling concept, 100, as we leamed from the story about Margaret ODonnell, a low-paid school teacher who amassed several milion dollars by leveraging her ‘money inthe stock market, So, how do average people leverage their ‘money tocreatealong-term pipeline? ‘The best way to answer that iso tell you about ‘8 powerful little book called Kids and Money by —o— Michael J, Searls. Actually, the book could be titled People and Money, because the principles ‘outlined by Searls apply fo young and old alike ‘Seats, a former power broker on Wall Street and father of four, ecommends a simple system to teach kidstomanage their money more respon: parents get three plastic jars and label jar one "spend & give," jar two "save, and jer three "invest." When parents give their children ther allowance for the week, they divide the money equally into the three ars. Kids & Money System A & Spend&Give Save invest ‘The “spend and give jar is for immediate spending — bubble gum, baseball cards, etc. Its also money to be used for tithing and charity. ‘The “save" jar is for spending on bigger ticket items, such asanew CD or video game ‘The “invest” jar differs from the first two in that its not for spending. Ever. Searls calls this jar". the most important component, because if Wwe don't have something to put away fora rainy tay, the threat of debt will alwayshover above our heads ‘Adults who are serious about building long: term investment pipelines need to stat manag: aing their money according to a three-jar system, But instead of putting their money into jars, they should putitinto bank and brokerage accounts. ‘Adutts & Money System, Spend Gre Sane (Monthy Fagen) Maer Expenses) ‘arp sy cao “fool owing “espe ‘ ‘eon me Pay Yourselt First! The key to leveraging yourmoney like richpeople 4 ist "pay yours fs" by making eels sonthly coniutons ino investment acer andthe leaving the money to compound The best way To fund your invesenent pipe: lines sto take some money out of your ingore bucket each month and deposi itino your sng, o Building a Long-Term Pipeline. aes \Gfem=y 64 How Average People Become Millionaires ‘Too bad we weren't able to choose rich parents —then we wouldn't have to worry about "forced savings plans” and automatic payroll dedu tions But the truth is, the vast majority of million- aires in_ this country didnt inherit their for- tunes. Statisties show that four out of five nillionaires never inherited more than $10,000. But what they did do was copy the investment strategies of the Rockefellers and the Kennedys. Tn a wordy self-made millionaire leveraged ther smaney to build their own Palm Beach Pipelines! How? By using the "three jar system" — in- stead of spending every dime they make, they pot aside a big chunk of their income inthe "in- vestja." and let itcompound year after year. ‘Typically, millionaires save 15% to 20% of their gross income and invest it wisely in asset- building pipelines, such as stocks, bonds, closely-held businesses, rental property, com= ‘mercial realestate, pension funds, andthe like. ‘That's why most millionaires don't hit the rillion-dollar mark until they're in thei SOs or 60s — it can take decades before compoun- ding really kicks into high gear. Ten thousand dollars at 10% doubles 19 $20,000 after seven ‘years... tin SO years it will double seven times, ‘Which aleulatesto almost $1.3 million! —6s—Power of Compounding $10,000 10% Interest Yours | 7 2 sole ‘Halcoo| 20K Yank | G0x | T6OK] 320K] CaOK |S It You Dont Have the Money, What Do YouHave toteverage? ‘Wouldn'tit be areacrsheamillionaire? You can, you know. And you dont have to win the lottery to doit ‘The Millionaire's Club used to be a very ex- clusive club, You had to be bom into the right family. Goto the right schools. ‘That’ not the ease anymore. Today, average people can join the Millionaire's Club, too. It's ‘open to anyone with the discipline to invest a regular portion of their income and let it eom- pound overtime. But let's face it — not everyone has the pa~ tiene to spend 40 or SO years building their retirement pipeline, And not everyone has the money to build a Palm Beach Pipeline over night. ‘Wouldnt it be great if there were a 5-year pipeline plan whereby average people could ere ate ongoing residual income without having to investasmall fortune? ‘Well, there isa 5-year pipeline plan available. Best ofall, you don't need lots of money o build thispipeline. Because instead of build 66 — this pipeline. Because instead of leveraging your money. youTeverage your ime! 6The People's Pipeline While Bruno lay in his hammock on ‘evenings and weekends, Pablo kept digging. his pipeline. The first few months, Pablo didnt have much to show for his efforts ‘The work was hard — even harder than Bruno's because Pablo was working eve- nings and weekends, to. But Pablo kept reminding himself that tomorrow's dreams are built on today's sac- rifles. Day by day he dug, an inch ata time. from The Parable ofthe Pipeline Inere’s an old Appalachian expression that sums up the difference between money le~ verageand time leverage. It goes ike this There are two ways to get to the top ofa giant ‘oak ree, Youcan ston an acornand wait. Or you canclimb it ‘When people leverage their money over de- cades to build pipelines, they're choosing to sit 6‘on an acorn and wait, I call this the "50-Vear Pipeline Plan.” This is what compounding is all about — waiting patiently while your money doubles again and again over the years. ‘There's no question that the 0-Year Pipe- Tine Plan works. Remember how Margaret ‘ODonnell's pipeline transformed her from a ‘underpaid teacher toa multi-millionire?!!! Like Margaret O'Donnell, Tm also a big be- liever in building long-term pipelines. Over the years, I've leveraged a portion of my income to ‘build "Palm Beach Pipelines’ in everything from pension funds... to stock market accounts, to IRAs... to real estate. Ifs called diversifica- tion, Is called building lifelines. 50-Year Pipeline Plan ©CDs&TBills © Social Security © Pension Funds © 401 (k) © Stocks & Bonds © IRAS © YourHome © Real state But m also abig believer inclimbing oak nees! Tall climbing oak trees the "5-Year Pipeline Plan." It accomplishes the same goal as the 50- ‘Year Pipeline Plan—financial independence and security. But i only takes 10% ofthe time! That's why I've spent time, money, and ef- {ort in building several fast-growing businesses, Instead of having to wait SO years to get to the top of the tee, I can build a business that gets sme there in wot five yeas. —10— 5-Year Pipeline Plan independent Bulnens Owner() @ ‘Time Levels the Playing Feld a fee ol ems Sa a hats ‘why I call time leverage the "People woepem a os Si pat feeure, oe ane Bia me ne ap ager ee) =nButas were all el ava tats othe case Whe it comes Yo money, hie an i Sane Peone as fo wiser on in a moths. Some with plate spe te noting bat el con tanb Fast ot Bathe ong, ite® don all ta every dy Wh $1,440 in urban attra Afr hats a dire ter We DO ah exe dy with 440 mins inoue @hfours aay times Ominaee sata Sine eal get ke : ; Sane aout of tne, the lorncebitusn people ae is chek 0 abhi sa pope wh ae hay Gilly fee how they use ther of 13440 minutes! Y mats Acai Persona/ Time Account Youve Got More Time Than You Think Some people put off building their Because "ight now isa bad time for ae what — right now is a bad fo ‘e : dine for every body Were all sessed" Were all busy, Wore Buting out fies and dealing with une mergencies. Theresa word forthese bad ~n— Iscalled ifet le waste ther ives waiting forthe to do x, y, or z. Well, theyll die ‘waiting, because there's no such thing as a per- fect time. If someone told you he'd give you $1 million if you'd sit in a comer and knit for two ‘hours every day fora year, you'd find the time toknit, wouldn'tyou? 1 wouldnt matter if your son broke his arm on the playground or your car wouldn't start after work. Rather than forfeit $1 million, you'd find the time to knit for two hours, perfect time cor no perfect time, Humorist Art Buchwald put itthis way: "Whether it's the best of times or the worst oftimes, its the only time we gat.” Saaly, most people take time for granted, es- especially small amounts of time. We've been conditioned to measure time in days and weeks and years, instead of minutes and hours. We ‘work 9 to 5, Monday through Friday. We plan ‘our lives according to & monthly calendar. We celebrate our birthdays and anniversaries once ayear But the amazing thing about time is how a few minutes here and there every day can add up to huge chunks of time! For'example, did You know how much total time the average per son spends eating during their lifetimes? Would you guess a year? Two years? The answer is six years! Isn*t that amazing? Here are some other short daily tasks that add up to huge blocks of time: —nTotal Time We Spend on Smait Dally Tasks During Our Lifetime Syeas. rating inne yea. leaninghouse 3years rearing meals year. feyngtoretur phone cals year ‘Searching formiplaced tems Stmonsopeningjuak mail months tinged igs By my tally, thats close to 22 years out of {your lifetime! Which goes to prove that 15 min= utes here... half an hour there... two hours there. .can add up to huge blocks of time! ‘AFewHours Can Tum into.a Few Months Just think for a moment what we could accom- plish in our lives if we used a eouple hours each evening and on the weekends to do something purposeful, like building a pipeline. If you set aside two hours each workday — lets say one jn the morning before work and one in the evening — and three more hours on both Sat- urday and Sunday, you could add 16 hours of productive timea week to yourschedule! ‘Sixteen hours a week over 50 weeks a year comes to 800 extra hours a year... which ealeu- lates to 100 eight-hour days... or three months and 10 days ofextracight-hour workdayseach ane year! Andall you had todo was set aside a couple Sf hours day to get three extra months of pro- ‘ductive time each year. Amazing, isn't? Productive Free Time (hoursiay) x(545)3)=10houn/werk GhoursSereSun)ehoursweck Chante) ee ‘walenatine: housveck Time ls Money ‘Now, 'm going to let you in ona lite seeret — tsing free time productively is one of the keys to wiry successful people have more, do more. fand get more in life! Do you think Bill Gates ‘comes home at 5:00 PM every day and watches Seven hours of TV like the average American smaledoes? [don't think so ‘A recent article in the Wall Street Journal states that the top 10% of eamers in North ‘America work an average of 52 hours a week, ‘whereas those in the bottom 10% of eamers ‘work only 45 hoursa week. "Not only do the top 10%-ers work longer — they work smarter! In other words, they don't trade their ime for dollars. You won't walk into a con ‘venience store and see Michael Jordan behind the Counter selling customers lottery tickets and (Quarts of beer Successful people in every line of ‘york valve their ime, and they seck every oppor~ tunity toleverage thei time! aeWaste Not, Want Not People often ask me why they should take the time and effort to build pipelines when things tare going so well right at the moment. They tell you they deserve to relax after a hard day at the office. They reward themselves by leaning back in the La-Z-Boy recliner and watching TV until bedtime “Life is good," they tell me. "Got a good job. Got a few bucks in the bank. Kids are doing ‘Wellin school, No need to rock the boat." That's when I tell them that there's no bet- ter time to build your pipeline than when things fare going great. Why? Because when the tide ‘ums, itmay be too late! Then [tell them this old joke: A man was fon, the 30th floor of a fancy hotel overlooking ‘Central Park in Manhattan, He pulled back the shades and threw open the window to enjoy the view. As he leaned out the window, he was stared to seea man falling past his room. How youdoing” he asked the falling man. "Fine —so far" came the reply The point is that there are lots of bucket carriers in this world who are doing fine — so far But they can't stay ina free-fall forever. As long. as people trade time for dollars, there's no safety ret in their lives. Why? Because when they cant putin the time due to illness... or injury. cor layoff, their paychecks will stop. For bucket carriers, no paycheck means no security! i —16— Financial Secutty =p No Paycheck = No Security ‘The Fable ot the Ant and the Grasshopper [As I write this, consumer confidence is high. Unemployment is low. Incomes are rising. Home sales are at record highs. Car sles are booming Lotsaf people are fine — sofa. "But we ean fll into the tap of mistaking "so far" for" forever.” Everybody knows that life goes in eyeles, So does the economy. Right now the business cyele is nearing its zenith. Your personal lifecycle may be atanal-time high, to. ‘But what goes up, must come down. And when people start coming dovn, some of them are go- Ing to erash into some hard realities: Layo (Career changes. Credit eard debt. Medical emer sgencies, Nursing home care for elderly parents ‘Smart people understand thatthe best ime to feather their nest is while business is booming ‘Smart people erect safety nets before a recession starts, not during! That's why I tell people that today is the best time to build ther pipelines, not ‘when the economy hits the skids I's lke the fable of the ant andthe grasshop- per. The ant was a pipeline builder. He spent part of his summer days storing away grain for the coming winter, Heenjoyed the summer, to. =nBut he had the wisdom to spend some of his time building hispipeline ‘The grasshopper, on the other hand, was a bucket cartier. He spent all of his money as soon as he got it and wasted all of hs time playing in the sunshine. He ignored the coming winter. When the cold winter came, he had no pipeline inplace, And he starved to death Pay Me Now... OrPay Me Later! Do you remember the famous advertising slogan, "Pay me now...or payme later?” The same goes for building pipelines. You can "pay a litle now" by investing some of your time and money to build ‘your pipelines today... or you can "pay a lt later by struggling to survive on a small Social Seeu- ity check when you'ein your sand 70, Just think — if your pipelines are in place, instead ofhaving to pay late...you ll get paid later ‘Whataconcept! PayNowPlan PayLaterPlan vs, ==] Invesimens of ‘smal, month Social time & money, Secutly check Time Leverage: The People's Pipeline ‘Remember—timelevelsthe playing field! We all DO NOT have the Same amount of money to leverage —8 Butweall DOhave the same amountof time! By leveraging some of your leisure time wisely, you ean build pipeline that will continue topay foryears! ‘Were lucky to be living in an age when vit- tually anyone can leverage their time to build pipelines, That hasntalwaysbeen the case. ‘At the tum of the 20th century, only the very rich had the luxury of leveraging thei time. In 1890, the vast majority of people worked 10 hhours a day as laboures, They were too busy tuyingto stay alive to think about leverage. But today more people have more free time than ever before in history. And time is the ‘great equalize! Time enables the litle guy to compete with the big boys. Rich people don't get 48 hours a day while poor people get 12. ‘They both get equal amounts of time 24 hours ‘aday, 7 daysa week, 365 daysayeat ‘The Greatest Time-Leveraging Toolin History ‘Today, pipelines are no longer the province of the rich. Anyone with a little time... and a lot of drive... ean leverage their time to build a "people's pipeline" in two to five years that will flow for years—orevendecades! In fact, we have right at our fingertips the greatest time-leveraging tool in the history of the world! This time-leveraging tool has ere- fated more millionaires in less time than any other single invention in history Teall this amazing tool the “e-pipelne,” and 19Is the ultimate tool for time leverage. You probably know the e-pipeline by a different name — a name that is flashed across newsps- perheadlines and TV sereens 24 hours day. ‘Thatname? ‘The Internet PART 3 Greatest Time-Leveraging Too in History The Ultimate Pipeline‘he Internet isthe future — and the future is now? In this chapter I'l show you how you can take advantage of the greatest leveraging, tool in history — the Intemet — to create a pipeline of ‘ongoing residual income that you can buildin two ‘ofive years, insteadof SO years! ‘The Internet Revolution Is Just Beginning ‘The Internet Age is revolutionizing the world, that's forsure, Jack Welch, CEO of General Electric, told the wall street journal that the Internet was the {greatest change in business in his lifetime-and Welch wasborn in 1936! ‘Andy Grove, the Chairman of Intl, was even ‘more direct in his assessment: "Ia five years, every company will bean Internet company —-o they won'thea company atall." tsa Wired, Wired World After All ‘What makes the Interne pipeline so powerful? ‘Wel, think for a moment what the Internet really is — it millions of people all over the lobe... each connected via a computer or cell Phone... able to instantly communicate, with oF sell to -cach other 24/7/365.. all forthe price ‘ofalocal telephone cal Itsmind-boggling! ‘The Internet is as fast as the speed of light, costs afew dollars a day to use. s always on ‘has limitless applications... and interconnects the world. Oh— and 100 million people were wired to the Web in less than half the time it took to build the Brooklyn Bridge. By 2003, more than ‘one billion people will be online... purchasing $1 tillion of products and services via e-com That'snothype— that'saglobal revolution The Intemet tourPC —TheGlobe 1 Btn People Oli ecommove=SI Tilo year ‘The Problem with the Internet ‘The Inet italy revolutionary — but its far frompertet in fac, the Internet has a problem. A BIG PROBLEM! he nme igs seg sa i st weikness— i's 10 big fo crowed. Too tonfasng, Too competitive, Too hewesh, Where de you shop? How do you buy? Who do you inate Tes overwhelming! According theexpers, e-commerce sitesare facing rec apr callages ‘hey nedmoreta 2) They need more sales 5) They ned more repeat sins, —as—The internet Needs Loyal Customers In a nutshell, most e , most e-commerce sites ae us ing foreistomers loyal customers. By “loyal cine ean epi who ave eo fiom an ecommerce site week alr week sndmonthafermonth seas fons in aie "WE hear alt of alk bout how many" about how many "hits" a. website gets. But hits dont bing in revenue Hie eta mbes of aig co ies ee ing tthe kal hopping al They she mal exes, not Sop. Tey so nent of shi Oe i wah Sve hy amp in tard go spe Likewise, hits on 8 webs . website are just people going cu for elon te ner His cont Brn in even Sse ign evens An heath ost commer sts ae hating Why? Because a most sites, shoppers have no env o make wk shmop Chas Tet es ave no yay fms thou oferng the fest pie han tee lowes pice than they. ae about building long-term relationships! - Intemet's Bigger Problem ee oad oo 1 PARABLE OF THE PIPELINE Relationshipstothe Rescue! ‘what's the secret to creating customer loyalty inthe Intemet Age? Relationships. Establishing teal, rock-solid, long-term se- lationships with real people (as opposed to ir tech relationships with “eyeballs” and "hits”) {S what will separate the successful e-commerce sites fom the has-beens. "You see, the hicech of the Internet needs the itouch of person-to-person relationships. As John Naisbitt observed 20 years ago, "The mo Hnitech we have, the more hictouch we nes wets why today, more than ever, people seek dat and need the warmth of the human touch Te counterbalance the cold environment of dot comsand digits. "Think for a moment — did you choose the ast movie you saw from a website's banner ad? Heal, Most likely a friend or co-worker rec~ fommended the movie. Same goes for your fa- Jonite websites — most likely they were recom- vormjed by someone you knew and trusted, as ‘pposed to your falling fora slick TV commer- Culorelicking onarotating banner ad ‘Truth is, word-of-mouth recommendations rave always been the most effective form of ad- eNising, That's especially tre today. You see, Jeople lke dealing with people. People tist Ped value hi-touch relationships. Don't you AAs ‘elationships solve the Internet's biggest problem —alackofloyal customers. —s7-Thatswbereyoucomein, You recommend enmend products and services all gaye fe A ele shop nd ey based on your reconmendatons, Wo ‘tbe great to get paid for it? ae ‘Youcan Du ing yous Smead lant yo inc ll sams eons riven ommerce sites, while creating a pipe Tincofongoingesidalincone foryourelt™ is 8 wn The amma teat mare loyal estore. And yo get pai fore fommending products and services you se nd on ; Tcalitthe Ukimateiptn. And it's just waiting to be tapped... BY YOU! Uttimate Pipeline e-commerce wins youwin YouTolk..heyTech the company's e-commerce ie. In ret for ‘your teferrals aed ade es ‘The e-commerce company's role isto "tech" {He PARABLE OF INE PIPELINE — they provide the website... take the online or Gen” dhip the products... process the credit detys.- and handle the accounting. In return for Saying out referral fees, the company gets loyal eapmers who return totbesite again and again. sean azid it's a win/win! The company solves its biggest problem — lack of loyal customers aes build a pipeline of ongoing Fesidual it~ come. "You talk. They tech, Its simple—beiliantly simple! ‘With the Utimate Pipeline you dont need any special skills, You do what you do every day = Se alk to people! You help people cut shrough ee cutter ofthe Intermet...and you get paid for How much ean you earn from your Ultimate pipeline? Thats up to you. The sky's the limit ‘The more people in your rererral network, the bigger your residual pipeline. Ta fact, its not igeennon for people to receive residual income ‘fom tens of thousands of referrals... even hun dreds of thousands of referrals! ‘How could one individual personally recom, mend products 10 tens of thousands of people? "That's impossible!” youmay say Not if you use the magic of compounding! As you willsoon see, Einstein had good reason to call {mpouriding"the eighth wonder ofthe world e-Compounding: The Ultimate Pipeline Doyouremember he earlier story about the 39Chinese emperor and the inventor of chess? ‘The inventor only wanted one grain of rice for his compensation, but he wanted it doubled for tach square on the chess board. The total ended 'up being 10 times more rice than there was in the entire world! The story illustrates the amaz~ ing power of compounding, also known as the doutaag concep, Just imagine for a moment what would hep- pen if you took the concept of compounding and somehow combined it with e-commerce ‘Theresult would be"e-compounding.* Power of Compounding sera) nk [ax |x | ax exsax] Just think of the potential of e-compound- ing — the exponential growth of compounding combined with the reach and speed of the Intemet. WOW! ‘Well, thats why Teall e-compounding the Ul- ‘imate Pipeline — you get paid to compound Your time and relationships via the Internet! ust think, with e-compounding, you can get the results of the Palm Beach Pipeline without hav- ing oinvesta fortune . Instead of leveraging your money, you lever- age your time and relationships to build your own Ultimate Pipeline! Now its time to find outhow: Leveraging the Uttimate Pipeline e-compounding ‘@-Compounding Math: (1+1)12 = BOOM! Doyouthinkit's possible to find just one person each month o join you in your new e-coumpound “ing business? Justone partner who's interested in more financial security. more freedom... more recognition,,. and more happiness? .. One good personamonth— that’sallittakes. e-compounding MONTH 1 You / YourPartner 1 ‘Once you pariner with that new person, you become his of her coach You teach him how to form affiliate partnerships with his friends and acquaintances, while you partner with a second person. So, by the end of month two, you would 91have two file panes; means your frst Parner has lo brought snow paso ino our affiliate network. - e-compounding MONTH 2 You YourParineri «+ Yourpartner2 TheirPariner* Now youhavea groupoffour—youandthree thers, isnt that correct? (You ean build your e- compounding network faster by partnering with ‘morepeople each month, butlet's assume youtake theslowandsteady course.) ‘Then you keep repeating the process. By the end ofthe frst year, You would ave personally Parinred with 12 people — one new person each ‘month, And let’ assume that each one of them bas partnered with oe ew person each month, swell ‘Thisis where the magic of compounding kicks in, By the end of 12 months, your network could compound 4,096 fiiatedindependent busi- e-compounding —MONTH12__ You LZTIEOT OD Ste. 1ZSTTCT OD ote. —2- (Now, here's the really exciting part — the e- ‘commerce company pay’ you a percentage of the sales volume of your entre affiliate network. If ‘you have 4,000 people buying an average of $100 ‘worth of produets each month, the total prod- uct volume is $400,000 — A MONTH! If your e-biz partner pays you | % to 3% ofthat volume, you'd beearning $4,000 0 $12,000 amontht e-compounding hasan] ener ‘Now do yousee why Icalle-compounding the ‘Ubimate Pipeline? It combines the exponential growth of compounding with the convenience land the each of e-commerce. Not only docs the Ultimate Pipeline eep pumping out profits, but, like Pablo, you grow your pipeline by leveraging your time instead of yourmoney! No Special skillsRequired The beauty of e-compounding is that you dostt ‘need a lot of money to get stated. It only takes months or afew years to build, as opposed to de- ‘eades, And you don't need any special skills. You just do what you do every day — talk to people! ‘You help people cut through the confusion and clutter ofthe Intemet — and you get paid fori! If ayoucan alk... nd pointandclick...thenyou an leverage your time and your relationships to build the Ultimate Pipeline ‘The Ulimate Pipeline ets us lear from the Palm Beach Pipeline people — we eopy the con ‘cept of compounding. But instead of coumpound ing our money, we compound our time and rela- tionships. As a result, we can get the results of ‘Palm Beach Pipeline at a fraction ofthe money —andina faction of thetime! ‘That's why hundreds of thousands of aver- tage people all over the world are busy building Ultimate Pipelines — they can enjoy’ the same benefits the rich enjoy with their Palm Beach Pipelines, but instead of having to leverage ton of money, they leverage thei time! Instead ‘of having to Wait SO years to receive the ben= efits of their pipeline, they can start enjoying profitsinmonths! Wsano-brainer! 2 Types of Leverage oo He Investments e-coumpounding New Business Model fora New Millennium Gary Hamel, author of the bestseller Leading the Revolution, Says that in a hi-tech world, "Only those companies that are capable of creating in- «dusty evolutions will prosper in the New oa Economy." Hamel argues that today, compa nies will compete not in products and services ‘but in the ability to devise ideas for innovative businesses “He goes on to say that creating better busi- ress concepts is nothing new. Henry Ford's breakthrough concept was to make a car that any working man could afford. Ford originally built one car to fit everyone's needs — "You can have any color Model T you want so long a is black," was Ford's response to request for more variety. ‘Alfred Sloan at General Motors improved on Ford's concept, He understood that the cus- tomer is king, and he sought ways to meet indi- vidual needs and tastes. ‘Sloan's now-famous slogan was "A cat for every purpose and purse." Because of Sloan's better business concept, GM vaulted past Ford, Today GM is the biggest rev- ‘enue-producing company in the world New and Improved Mode! Like GM, e-compounding is an improvement fon the original e-commerce concept, a better ‘way of attracting new customers and fostering their loyalty. E-compounding reminds me of ‘The Family Circus cartoon where five-year-old Dolly explains to her younger brother where butterflies come from "Butterflies are new and improved catepi ars," she says Well, e-compounding is new and improved 9scommerce! Without word-of-mouth market- ing... eferal fees... and the power of compound. ing, e-commerce would never have broken out ofitseacoon, e-commerce @-compounding Sic dace raat ooo oe sto ese cee Sah See an sie lanes ee Which Uttimate Pipeine Do you Prefer? ‘=e [o'G) & — 96 — LESSON EIGHT Do You Prefer the 50-Year Plan Or the Five-Year Plan? [Sai mos bucket carers woul has] | ily dismiss the notion of a pipeline. Pablo} | and Bruno heard the sume excises over and) | It made Pablo and Bruno sad that so) many people lacked vision | / ity peF tom The Parable ofthe Pipeline] ‘ere’ an old joke that teaches two impor- tant lessons about pipelines: A man named Joe worked for years in a low-paying job he hated. But Joe was deter. rmined to retire rich, So he scrimped and saved every penny he could and worked nights and ‘weekends in a second job to fuel his investment pipeline After 50 years, his disciptine and sucrifice paid off. He was finally financially free! Joe decided that now that he was 70 years old, he was going to live it up! He decided it ‘was time to indulge his life-long dream of scuba 7diving all over the world, Joe spent thousands fof his hard-eamed dollars on lessons and div ing equipment. He flew first class to Hawaii, here head reserved asuiteat the Ritz Carton. ‘The next day he headed out to dive Hawaii's ‘most beautiful ref. His dream had finally come true! He felt a sense of pride as he suited up in his expensive equipment — custom-made wet suit.. specially built aluminum oxygen tanks. German-engineered underwater cameras... Wa- ter-proof pen and underwater pad for writing notes. Joe was ready Joe savored every moment as he swam down toward the rainbow-colored coral reef. He pho- tographed ths exotic fish as he descended. His first dive was everything he had dreamed about He had spent tens of thousands of dollars on hisnew hobby, butitwas worthevery penny! This was worth the Wail” Joe said to him self" This is perfect!” Suddenly, Joe was shocked to see a man swimming 10 feet below him wearing only swimming trunks. Joe furiously scribbled a message on his notepad. Then he flippered down to the man and tapped him on the should- er. Joe seowled as he handed the man the notepad with this message: "T spent thousands of dollars on scuba diving equipment, and here you are in just your _svimming suit. What gives?” The man grabbed the pad and wrote,” drowning! — 98 I'm ‘drowning! Lotsot People Are Drowning The fist lesson we lem om this joke is that things arent alvays what they seem! Joe thought the guy vas enjosing a leisurely dive. But eth was much diffrent —the guy was droning : a “Appearances canbe deceiving when comes to tmonces foo. People. who wear Rolex etches and designer clothes apps tobe f Tancially independent — but many of them ere Ghovmingindebt When ‘Thomas 1. Staley. and. Wiliam . Danko the authors of The Mitinaire Next Door Stand researching ther bok, they sought i {Ertews with people who hada net worth of tilion dallas orate. Assuming that the Shes people ved in the most expensive Houses, tne ators surveyed people in upscale neighborhoods crossthe count, Bu the aubors soon discovered dat many opie living in big bomes and diving expen- Tec cars ha accumlted much wealth. Wh? Because they were spending, thir money fo suport lavish iesyes instead of pang 8 portonoftasdetobulldppelines Stanley and Danko adopted a folksy Texas sy- 9ing to describe these mege-onsumes: Big Ha, ‘No Cattle.” The cowboy metaphor ints ap tly Vivid picture, doesn’tit? ee ag Hot No Came YO Eh ® & The Power of the 50-Year Pipeline Plan I es a a Sitka ie oe Zoemtataet Te ene oe Mane yi ace Sac rer wee independent, "0 Become 8 = ne res mi toy Sea ste roe Se at Pe Toned 9 —100— How to Accumulate $1 million by Age 65] ‘Assuming 812% ann inerest rat ‘Saring Daly Mosy Yexty Yes Taber ‘Aue Sovings Sevings Savings oBUMISI Mion 2 $357 S10 $1304 coseme 35 S135 SMS S42 yeu 45 SRO $LIST. $1347 205ea 55 S812 84709 $6984 NDyexn ‘Its amazing to lear that it’ easy to become @ nillionaie if you stat building your long-term pipeline early enough. Virtually anybody living above the poverty line cando it! Allanyone needs todo isto invest $3.57 day, every day, ina mutual fund returning 12% inter est, and let it compound for 40 years. Instant mil- lionaire! (Wel, maybe not "instant” — but defi nitely amillonaire!) ‘Think ofitthis way —one outofthree Ameri= ceans smokes cigarettes. In Florida, a pack of eiga- rettes costs about $3.57. If every person who smoked quit at age 25 and invested their cigarette ‘money in the market and let it compound for 40, ‘years, one-third of Americans would be million- aires by the time they turned 651 Isn't that amazing? Don't you wish someone =Ihad pointed that out to you when you were 25 ‘years old? Even at 35 and 45, i's still possible for the average household to build million- aice pipeline. But people who wait until they're 5S to start saving for retirement are facing a steep mountain, thats for sure! ‘The Biggest Risks NOT Investing in the Market Many people still think its too risky to invest in the stock market. And, yes, some stocks go down, And sometimes the entire market goes down, asitdid inthe crash of 1929. But all ofthe wizards on Wall Street say that overtime, investing in the stock market is the fasiest and surest way to build a profit-pump- ing pipeline. The facts support the experts: During the 200-plus years the New York Stock Exchange has been in business, stocks have aver- ‘aged going up two out of every three days, Since WWI, the stock market has gone up 71-fold, de- spitenine recessions during that SS-year span. According to Jeremy Siegel's book Stocks /or ‘the Long Ruin, inthe 195 years from 18020 1997, « dollar invested in gold would have grown t0 just $11.17. That same dollar invested in stocks ‘would have compounded to $7.5. millioa!! 1997 1802 1 PARABLE OF THE PIPELINE at building a SO-yar pipetine oe ee aout Mos people tae eer soe iplines ender const have sir bome is one longterm pipelin Sia Secure yet ante. Unfornat soci pany people siopaLthesewopipelines Most People’s 50Year Pipeline Pian So Scars @ "Their Home smart pepo the eer han catine 1 Sat Sena! Tonge pistes uot wap ens ls RAS eof ie ae eet ones eee re available to anyone with "pede old hem pipelines, and th {he good sense and smartPeople’s 50-Year Pipeline Pian 40100) JRAs waity & © Social Security © Realakstate 8 ° ® © Theirhome CDs&T-Bills Pension Funds Stocks & Bonds 2 atc. Downside tothe S0-YearPlan | Okay. [just told you the good news about th —103—So-year pipeline plan — vimally every work ing family can build milion-dllar pipenc itthey sta saving monly and allowing thelr invesinets to compoundover tine Bul te bal news isa most people wan to xj the benefits af pipeline ony —nsead ofkavingtowait20.. 30.40. orevenS0 years Tradmi tI wat to enjoy the finer things in life today, not alfa century down the road! Yes, blleve in building longterm pipelines T have seve under constuction. But he th is, 7d rather spend money tan save iT ke the things money ean buy. T expect you fel the same way, 0. Trenjoy a reat meal in first-class restau like taking my family on ski vacations and cruises — we've eeaed some of ou best meno- ‘es ding vacations Hove se one carinterion ike diving big Mereedesmore than asa ae : alto we my cl pone ay sine of he ay, not jst evenings and wekens when the ralesare cheaper. hen “And ater spend $20 going waht move as soon as ifs out ater than wang tee ono anette backs e's the bole Hine: Longterm pipelines eesti fr pope wh wan 0 8 wortysfee ieiemest. ‘Thats why everyone Goadbausves Butlts get eal do Yau relly wantto wait 108 1 PARABLE OF THE PPELINE 50 year to enjoy the benefits ofa pipeline? Not sieht willing to make sacrifices to build my Ttirement pipeline. But I don't want to have 10 five like a monk for SO years in order to do itt ‘want to live my dreams right now while tim stil young and the kids are at home. t don't ‘ant to Wait until Tm 65 or 70 to start living Ry dreams — like the seuba diver inthe open- ngstory. I'm sure you fel the same Have Your Cake and atl, Too! ‘As Isai earlier, «long-term pipeline should be ar east one of the pipelines you build. But not ‘he only pipeline you build. Justas you shouldn't putall your eggs in one basket, you shouldn't put Ellyour profits none pipeline. ‘Well with the 5-year pipeine plan, you can not only diversify your portfolio of pipelines, but you can dream big dreams and start living them Yiaht away, instead of when youre in your 60s or ‘Hos, Youcan have yourcake and eatit, too! “Think about it — wouldnt you rather be f- nancally free in five years instead of 50 years? ‘Ofcourse you would. Who wouldnt? ‘That's why I recommend youbuild your 5 year pipeline while youre building your 50-year Pipe- Tines! 2 Types of Pipelines Long-Term & _ Short-Term — 105‘The Ultimate Pipeline — e-compounding— an be builtin two to five years, instead of 30, and it can start pumping profits within months instead of decades. You can start building your Ultimate Pipeline part-time, in the evenings and Weekends, until gradually, it pumps enough profits for youto begin building it full ume! Jvst think — the Ultimate Pipeline can get You tothe top of the oak tre ina faction ofthe time that it would take a 50-year pipeline. And best of all, you don't have t0 save or invest a truck-load of money to build your 5-year pipe- line! All you need to do is leverage your time and yourfelationships! e-compounding ve for Today... Plan forTomorrow Years ago my father gave me some great advice He said, “Live for today, plan for tomorrow. " Tve never forgotten those words, and I repeat ‘hem regularly tomy fourchildren, Building a S-year pipeline while you're build- ar pipeline empowers you to fol- fathers sage advice, You see, the Ultimate Pipeline plan — the 5 year pipeline — enables you to live for today 106 ‘because you can start enjoying the fruits of your Jabor within months! The 50-year pipeline plan, fon the other hand, allows you to plan for tomorrow. That's why I advise people to build both long-term and short-term pipelines! Pipelines Are Your Lifelines yt © Osecurty® Freedom Happiness Control When my fier advise ne ve fo day, plan fr trorrovr® what be was ell 5a- ing was “Pipelines are yur lifsines. So besome 2 pipeline bude nota bucket caer Greatadvce, Da. Greatadvie 107‘CONCLUSION The Parable of the Ultimate Pipeline Year 2001, Silicon Valley, USA NCE UPON A TIME VERY, VERY RE- JCENTLY, two ambitious young cousins ‘named Paul and Bruce worked side by sides middle managers for ister Intemational, ‘multi-national conglomerate that owned electric and water utilities all over the world ‘The young men were bestbuddies, And big dreamers. They would talk about how some day, some way, they would become totally financially free They were both bright and hard working. All they needed was an opportunity.

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