Quote:
“It isn’t materialistic to have nice things. It is materialists to think nice things will make you happy.”
This is kind of long, but read it. Or at least read the last section.
What Poster Is On Your Wall
When you were little, did you have a poster of a Lamborghini on your wall or a Honda Civic?
When you were little, did your future house have an olympic sized pool or a 20ft pool?
Only 2% of people save enough money to retire at the age of 65. IE - 98% of people fail at saving for retirement. Retirement is decided by your income, not by your age, but too many of us are programmed to think “I’ll retire when I am 65.” If that is so, then why do you think the old lady at Wal-Mart is door greeting 40 hours a week and standing on a plastic pad so her back won’t hurt? It damn sure isn’t because she loves people.
I want my Jaguar KX-150S my yearly 2 month vacation in europe, a paintball field, and my own army of Dance Dance Revolution Arcade Machines. I’m not going to make you a business offer. I’m simply telling you this is what I’ve learned…
Is Lil’ Bowow Smarter than you
Is Lil’ Bowwow smarter than you? How about the members of N’Sync, Jessica Simpson, Tom Cruise, or Bill Gates? Do you think any of them have an alarm clock? If they do, do they set it? We’ve seen Jessica Simpson on TV, therefore we know for a fact she is too dumb to set an alarm clock (setting alarm clocks isn’t why Nick married her, though the reason does take place in beds or a limo if you have the money to own one).
Do any of them have to set an alarm clock for 7am, drag their ass out of bed, go to work for 8 hours, listen to their bosses drone on about mission statements, sit in a padded cubicle, then come home, eat dinner, pay their bills, go to bed, and repeat the process. Doubtfully.
The Difference
Here is the difference: They know more about money than you do, which is why they have lots more of it. I would like to state one thing now: I am aware these people work hard. But you work as hard too, don’t you? Money isn’t happiness, but we all agree that money gives you more options than not having money. Lets talk about how you make money.
Your life will imitate those you are around because you learn both good and bad things from them. If you want to be able to spend a weekend or a month in paris, or drive a mercedes, or seven of them, or have 10 homes around the world, then you have to learn from people who do. If you want to be a Ninja hang out with Ninjas. If you want to be a Porn star… well, you have to get an operation for that.
A lot of people are business majors. How many of their professors do you think are millionaires or have successfully run their own businesses? Very few if any at all. You’d be shocked if you asked the professors. A business professor is most likely going to know nothing about making money. Lets look at millionaires…
Trading Time
People earn money by trading time for money. No matter how hard you work, you are limited to 24 hours in a day. 14 hours if you allow 8 hours of sleeping and 2 hours of getting ready and commuting. We (those of us who aren’t millionares), work an average 40 hour week, which gives us 2000 work hours a year. At $6.50 an hour that is $13,000 dollars year. Lets say your dream car is a Lamborhini Murcielago, or you want to buy a new house, which costs $273,000. It would take you 21 years to earn that car or house, if you didn’t spend money on anything else.
Make money from Last Year
Do you get paid for the work you did in the past? No, but Tom Cruise does. The way you get paid is called Linear Income. In January you start off with $0. Each month you get paid, and in December you’ve collected your $10,500 or $120,00 or whatever your salary is. The next year comes and you start over again at zero. You don’t get new income based on your work the year before. Maybe you get a raise. The aveage raise is 1% of your income. Yearly inflation is about 4% annually.
Tom Cruise made Top Gun in 1986 - he still gets money off it everytime it is shown on TV or someone buys it. Bill Gates makes money today from a business he started in the 1980’s. Jessica Simpson made a CD and it will make her money for the rest of her life. This is called Residual income. Ray Kroc makes money off a business called McDonalds.
If you miss work, you don’t get paid for the day. If Bill Gates misses work, he gets paid even more than he did the day before. Wouldn’t that be nice? That is the difference. Thanks to residual income, most millionaires will make more money not showing up to work ever again than you will by showing up to work for the rest of your life (and your kids, their kids, their kids, and their kids).
“An order of Kroc-Nuggets, please.”
The key is duplication of a successful process. In these cases you duplicate the amount of time you get paid for in a day. Not by adding hours to the day, but by duplicating the work done in 24 hours. The two most common ways of doing this are by getting people to invest in your company (and then making it successful, which is incredibly hard), or by franchising, invented by Ray Kroc, which has a much higher success rate.
In the 1950’s Ray Kroc bought the name McDonalds (you wouldn’t eat a Kroc burger, would you?) from the McDonalds brothers and moved the business to Chicago. At the time it only sold burgers, french fries, and shakes. After doing well for a while, Ray Kroc opened a second one. But when he was at Store 1, the productivity at Store 2 dropped, and vice versa, this is because we all work harder when the boss is around. So he invented franchising, which put an owner working in every store (if you own a mcdonalds you are required to work there a certain number of hours in order to keep productivity up).
He sold Store #2 and told the owner “I’ll show you everything I did to be successful, and in return you keep 98% of the profits, and I’ll keep 2%.” Now, this may sound dumb for Ray, but it works out great. Why? He only has to teach that owner 1 time, and from that point on Ray will make money as long as the McDonalds is open. Ever seen a McDonalds shut down? Maybe, but that is a rare exception. Basically, he will make money off it forever.
Henry Ford is famous for saying “I’d rather of 1% of 100 men than 100% of 1 man.”
To make things even easier, Ray setup a Supply Base, Golden State Foods, and a Knowledge Base,
Hamburger University. You cannot own a McDonalds unless you attend HU (and have a couple million dollars in liquid assets). If you own a McDonalds and need anything at all, you make one phone call to Gold State Foods. They provide everything. If you have a business question you call Hamburger University. Every franchise is based on this model (supply base + knowledge base + residual profit).
McDonalds, when drawn, looks like this…
(except there should be 30,000 little circles coming off Mr. Kroc. I don’t have time or the post-notes to draw that. Yea, it looks a lot like the beginning of a pyramid.)
How many times can Ray teach someone to run a McDonalds this way? At the time of his death 8,000 McDonalds were open, and today there are over 30,000. For the rest of this, let us assume he is alive. Either way, he or his family gets 2% profit from each of those. If each store is open a minimum of 10 hours a day, he gets paid for working 300,000 hours a day. Can you do that? That is the equivalent of working 10 hours a day, 5 days a week, for 150 years.
At $1 a day per McDonalds, that is $30,000 in one day. (2.3 years of work at $6.50 an hour)
At $10 a day per McDonalds, that is $300,000 in one day. (23 years of work at $6.50 an hour)
In reality, he makes $100 per McDonalds before lunch. Buy 12:00pm,
At $100 by breakfast McDonalds, that is $3,000,000. (230 years of work at $6.50 an hour)
Final Thought
Bill Gates’ wealth: $40,000,000,000.
If Your wealth is: $500,000:
His wealth is 8,000,000% more than yours.
Your wealth is 0.00125% of his.
His house cost: $40,000,000
If Your house cost: $250,000
His house cost 16,000% more than what you spent on yours.
Your house cost 0.625% of what he spent on his.
He spent .00001% of his worth on that house.
You spent 50% of your worth on that house.
If your house was 1/1000 of your wealth, then Bill wouldd have spent $500 on his house equivalent. You spent significantly more then he did percent wise.
If that isn’t motivation, what is?
