Tuesday, January 15, 2008

I Have a Millionaire Mind

So I finished listening to the audio book version of The Millionaire Mindset by T. Harv Eker. I would have liked it better if I didn't feel like Eker was yelling at me. I think he's just trying to be emphatic and wake you up and make you pay attention "as if your life depended on it." But when you are tired from working and battling traffic, it gets annoying. Okay, I found it annoying. SORT OF LIKE SOMEONE TYPING IN ALL CAPS ALL THE TIME.

Having said that I would still highly recommend the book and plan to listen to the third CD again tomorrow. I felt that it included ideas for immediate changes in one's life that are worth trying. Here is probably the most dramatic, controversial suggestion. Eker recommends putting 10% of your post-tax income into a 'financial freedom' account and putting 10% into a play-and-have-fun account. He said in seminars people say, "well I can't do that, I'm already borrowing money to pay my bills" and he advises "borrow more to set up the account, so that you can immediately begin to manage money even if it's only a dollar."

Eker even comments that many experts would disagree with that particular piece of advice. Obviously the simple math would say -- if I am borrowing money and paying 10% interest, I should only borrow it, if I am confident that my financial freedom account will have a return on investment of greater than 10%. Now, let me clarify, Eker says the rules of the financial freedom account are - it's a savings account that you only make withdrawals from in order to invest in methods of creating passive income. One thing that occurred to me is that if you are borrowing at 10% to put into this account, then that gives you an extra incentive to be sure that your financial freedom account DOES return more than 10% interest.

When I began listening to The Millionaire Mindset, I didn't actually think I had one. After all, my resolution is to pay off all debts and have a few thousand left in my bank account. But, the third CD clarifiies (and actually, this IS the standard definition) a Millionaire is someone whose net worth is a million dollars or more. If I really look at my goal, which only covers 2008, my net worth at the end of that would include the full value of my house (between $200K and $300K), cars (okay no big bucks there) and business ventures. No, that won't be a million dollars, but... it will probably be one third of the way there and one of the reasons that I want to be free of current debts is to make it easier for future investments, such as buying a rental property, so.... could I see myself with a net worth of a million dollars in a few years? Yes. You were right Harv. I have a millionaire mind. (I actually enjoyed the part of the audiobook where each declaration is done with your hand on your heart and followed by touching your head and proclaiming 'I have a millionaire mind.') It's kind of fun and an easy way stay engaged.

I'm going to write about Eker's suggestion that you set aside 10% of your post-tax income for a play account tomorrow after I listen to the 3rd CD again.

1 comment:

Kimsta said...

Hi there, that sounds like an interesting book. I might get a copy for myself. (I am on a quest to become a millionaire within 10 years - by 2018)

Have you heard of the book by James Allen called "As A Man Thinketh"? It's a very well known little book that basically says we control our destiny and can achieve anything we set our mind too. I recommend it to you.