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The Wealth Lifestyle

December 13th, 2009 Joe 2 comments

The Wealth Lifestyle is the term I use for the new wave of rich and happy people who are following their dreams and getting rich.  You see many people have things backwards.  Many people think that you get rich and then you get freedom from a bad lifestyle.  The fact is you can get rich and hate your life and be stuck!  Many people do exactly this every single day.  So the goal of the week is to pin point what makes you happy. This is just a simple list.  The Top 10 things that make you happy.  These things can have no business approach or money making angle whatsoever.  I just want to know what are the top 10 things in your life that make you happy.  Not in any particular order.  For the sake of sanity all 10 things are equal on the happiness meter. Sidebar, I also want to know what you do currently do to support yourself.  Leave this information in the Comments Section below.  It should look something like this:

Average Joe Millionaire – Investor, Entrepreneur, Writer, Teacher
1. Family
2. Friends
3. Art
4. Water Sports
5. Teaching
6. Learning
7. Adventure – Preferably outside
8. Snow Sports
9. Investing
10. Writing

As you can see a few of the things that make me happy are included in what I do for a living.  That is because I am Living The Wealth Lifestyle.  You may not have anything that matches up.  That is okay.  Once you understand what makes you happy, you can start applying pushing towards The Wealth Lifestyle.

If you have a choice wouldn’t you rather get rich doing something you love?

Leave your happiness list below.

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Get Rich Working For Someone Else

September 7th, 2009 Joe No comments

Once you make the decision you are going to become rich, usually you already have a job working for someone else.  I have found with my experiences that it is easier to keep that job and get rich doing something during your off time, like evenings and weekends.  I have known people who decide one day they hate their job and they are going to quit and get rich doing ________(fill in the blank).  This approach never works.  The reason why it never works is because when you have no money you are desperate and other people are repelled by desperation and dont want to work with desperate people.  The advise I give is to follow the Millionaire School guide and find something that makes you happy.  For some people that is baking, photography, gardening, painting, building, or any thing that makes you happy.  Anything can be organized for profit.  Then find a way to do this activity in your free time for profit.  Once you start making money you can start to consider quitting your job or cutting your hours back.  You will find that money comes faster this way.  Money comes faster because you are not desperate and people will like that you are working so hard to pursue your dreams.  People love those stories so tell it to as many people as possible.  Many people will support you just because they want to see you succeed.

The other reason money comes faster when you are doing this in your free time is that you have more money to put into your venture.  If you continue to work you will get a steady paycheck and be able to fund your venture better.  I know most paychecks are spread thin already but it is a fact that you will have more cash flow if you keep your job.

Get rich working for someone else, and you will have more control over your life in the long run.

Getting Rich 101 a Millionaire School

September 4th, 2009 Joe No comments

So far we have covered a huge amount of information I thought it would be a good idea to do a quick recap.

1. Be Happy- Rarely do people get rich doing things they hate.  You are much more likely to get rich doing something you feel passionate about.

2. Financial education is priceless.  The saying goes “Insanity is doing the same thing over and over and expecting different results.”  If you are not making financial progress educate yourself and change your actions to get different reactions.

3. Debt is not always bad.  Bad debt holds you down, good debt puts cash in your pocket.

4. Protect your money.  No matter how much you have keeping track of exactly where it is and where its going is crucial.

5.  Two dollars is all it takes to start building your wealth.  See article for more information.

Protect Your Money

August 27th, 2009 Joe No comments

These days in the headlines we hear about recession, and depression. It seems everyday that you hear about someone scamming people or ripping them off. There are really more ways to lose your money than there are fish in the sea. Money can be there one minute and gone the next. I was recently reading the article here on the New York Times talking about the fall of some of the nations super wealthy. The part of the article that interested me the most was about John McAfee the mastermind behind McAfee Security Software. His wealth was at one point over $100 Million Dollars, due to the free fall of real estate and wall street he is down to $4 Million. That is a 96% fall. You here this story all the time. You even hear this story in good financial times. _____ lost all his/ her money in a matter of seconds after he worked his whole life building his wealth.  This brings me to my point. Protecting the money you have is step two of getting rich and staying rich. You do not want to spend your time building your wealth just to lose it to a scammer or market downturn. To avoid having your name associated with a story like this you want to make sure you are educating yourself about the investments you are making. There were many people screaming at the top of their lungs that we were growing too fast in the real estate sector. In fact there are stories of guys making millions because they knew the fall was coming and they invested in a way to take advantage of a fall.  Many people put their trust in “financial experts” to invest their money.  This unfortunately is not always a good option.  I am not saying that their are no good financial advisors or money managers out there, I am just saying that if you are getting advice from one make sure to thoroughly investigate the advice given.  The days are gone where you can put a percent of your paycheck in a diversified portfolio and expect decent returns.  It is important to work and educate yourself about your investments on your own.  John McAfee made $100 million dollars investing in a business he knew inside and out.  Many people get complacent once they have made a little money.  They put their money into investments and relax.  Insert story here.

Protect your hard work through educating yourself on your investments.  Always have investments that are on the ultra safe side.  I keep about 30%-40% of my net worth in ultra safe investments.  This way I know that if everything else goes to zero I still have a third of my money.
Education is the reason I started writing here. I want to hash out information and ideas with you, as well as share anything I have that might benefit you. In the mean time I would love to hear from you in the form of questions comments and information you would like to see discussed here on Average Joe Millionaire. I have a back log 50 posts long so stay tuned, I am writing as often as possible. Better yet subscribe to the blog! That way you get updates when I post.

Be Happy

July 7th, 2009 Joe No comments

The first step in the series getting rich 101 is to be happy and feel good.  Most of the millionaires I know and have had the pleasure to meet did not get rich doing something they did not like.  So whatever you are doing you must feel good and be happy doing it.  Sometimes this is just a mind set. Everyone has a bad day or two.  Getting rich is a process for most of us.  This sometimes takes convincing yourself that you are on the right track.  I have jumped into an investment before and then later thought I may have made a mistake.  I had to sit down and clam my own nerves.

Lesson One: If you want to get rich you must be doing something you are happy doing.

I once mentored a guy named Tom.  Tom was a coal miner.  Tom was making around $70,000 a year driving a truck at a coal mine.  Tom came to me one day and asked if I would help him invest his money.  He told me he was not happy working for the mine and wanted to get out.  I asked him what “get out” meant for him.  Did it mean he wanted to quit asap?  Did it mean he wanted to retire early?  I needed to know Toms goals before I could take him anywhere.  Toms answer was that he wanted out of the mine as soon as possible.  He did not want to spend another day there.  So I told him I would look at his financial statement and we could devise a plan.

Toms financial statement was better than many I have seen. Since he had been working at the mine he was making more money that the average person. He had been saving his money in two places one a savings account and two an IRA. He had around $100,000 in the IRA and about $400,000 in his savings. Tom was doing very well for a guy in his mid thirties. Tom had no real assets other than cash and no real liabilities other than a vehicle loan for $19 @ 0% interest.

Looking at this information I thought to myself that Tom had enough money to do something but he did not have enough to fail. My general rule is that if you do not have at least 2 million dollars you do not have enough money to fail. This means that Tom and I had to choose his exit plan wisely. It took me a few weeks and a few more interviews with Tom but I eventually put together an exit plan for Tom. The plan looked like this.

The Plan
Tom was thirty six, his retirement goal was he wanted to retire at age fifty five with an income of ten thousand dollars a month. Tom also wanted to have large bills like a mortgage. Toms last retirement goal was that he wanted to have a large nest egg of cash to fall back on if anything happened. I suggested he have between $500,000 and a million dollars as a goal for his nest egg. Some of you may be thinking this sounds like a pipe dream or a long shot. When I sat down with Tom I thought this was completely in line with where he could go.

With the goals must come an actual plan for making money. I had located a few options for Tom he decided on buying a business and a 4-plex. For all you numbers people the deal looked like this.
Tom and I found a local Laundry business that was for sale for an asking price of $300,000 and generated $85,000 a year. Tom purchased that business for $275,000 this included the property. Tom also purchased a recently build 4-plex. The building had an asking price of $300,000 and generated $57,000 a year. Tom and I negotiated the building down to $269,000. I suggested to Tom that he purchase the business with his savings and put $100,000 down on the 4-plex and get a mortgage for 10 years. This would make his payment around $22,800 a year bringing his net income from the property to around $28,500 a year plus his net income of $85,000 a year from the laundry for a total of $113,500 a year. This income was just under 10,000 a month and that is Toms goal. However Tom also had the goal of the savings. He currently has $25,000 left in savings and $100,000 in his IRA. I suggested he save $40,000 a year for the next 15 years. I know that he could get an average interest rate of at least 5% over 15 years. This would give Tom a nest egg of around 1.1 million in 15 years. By that time his 4-plex would be paid off and that would increase his income to $136,000 a year or $11,358 a month.
Goal 1 to make $10,000 a month during retirement ACHIEVED
Goal 2 to have a nest egg of $500,000-$1,000,000 by age 55 ACHIEVED
Goal 3 Retire by age 55, Tom quit from the coal mine within three months of meeting with me. He increased his monthly income by about $3,500. His retirement goal will be met 4 years early and he will be able to retire by age 51.

Tom may even retire earlier if he decides to sell the properties and that around $2,000,000 cash is enough for him to retire on. Tom did work about 20 hours a week keeping the business and property clean when he first quit the mine. It has been about 8 years and Tom is hiring a management company to care for the 4-plex and just send him his check every month. He says he can sacrifice that 10% for the freedom. This cut his work hours to about 10 a week he thinks that is the perfect amount for a retirement job. Oh yeah his is doing everything as if he is retired by age 44, he will not change one thing from age 44 to retirement. Seems to me he retired at age 44.

Tom took the first step of realizing he could not be happy continuing on at the coal mine. He was lucky enough to have a great savings so he was able to quit. However the first step was knowing he was not happy and finding a plan to get to a place where he could be happy.