MoneySeeker3000

Is wealth easy for the millionaires?

2010-09-30T09:37:00.000+01:00

A recent This Is Money article revealed that Britain is currently home to 280,000 millionaires. What is very interesting about this is that most of these people are actually multi-millionaires. Britain is home to about 60 million people in total, so only around 1% of the people are in this millionaire category.

This shows how difficult and rare it is to become truly rich, and why one must be dedicated to the cause. Most millionaires became that way by practising habits most other people cannot be bothered to do. There are countless stories of millionaires who have lost a million but then made their money back and more, such as Peter Jones, Donald Trump, etc, so this proves that getting rich cannot simply be about getting lucky. If you practice these skills you might not become a millionaire but you will still be much wealthier than you were otherwise.

I have the privilege of knowing one of these British millionaires, a certain Mr Piper, and I have had the chance to observe his habits and beliefs over 4 years so far, to see what makes him rich. He has no qualifications and does not own a business or have connections but he still managed to become a multi-millionaire. He saves and invests his money, and works hard to cut his costs everywhere. He is very independent and has built up a property fortune of around £3m. I was at his house last week and he told me that whenever he tries to give advice to friends about how to become wealthy they just say to him "well, you got lucky" or "you were gifted your wealth". These statements are so untrue as he started with nothing.

Every time I visit Mr Piper he is always working on about 4 different things. He maintains all his properties himself, and always tell me that if he needs to do a new skill which he's never done before, he'll just learn it. There is never any doubting or quitting with him. I've noticed that every time I visit him he gets me to do some 'menial' manual labour job or another such as carrying planks of wood. He's done this so consistently over the years that I now realise that he is purposefully testing me, or training me in some way. I think he's showing me how work gets done and how he does it, and that the only way to do it is to take action immediately. I've known Mr Piper for years and after all this time he still takes lots of daily action on his goals, he still tries to save money, he still looks for cheap deals on eBay, he still does all of his manual labour work on his properties himself, he is still a multi-millionaire. He remains a great example of the millionaires portrayed in the book: "The Millionaire Next Door" by Thomas Stanley.

I thought of a recent Budgets Are Sexy blog article I read, where the author J.Money tells of how his readers think that just because he now has more money than he had before, it must have come easily to him. Most people think wealth is something to do with luck. They then use this excuse to degrade other peoples success by accusing them of getting lucky. That way they can justify not putting in any effort themselves to gain wealth.

In the book Think Big by Donald Trump (which I am re-reading), on page 15 he says "to be successful you have to separate yourself from 98 percent of the rest of the world....there is a formula, a recipe for success that the top 2 percent live by..". This basically confirms that the vast majority of people in the world are not rich/wealthy because they do not do what the successful people do. Instead they take the easy way out with no budgeting no hard work, no sacrifice, no forward planning, etc.

Only a few people in every country in the world are rich and the majority are poor. If you want to separate yourself from poverty, do what the rich do. Wealth did not come easily for most of them. They worked hard for it, and are still working hard but it gets easier over time as you learn and practise the skills consistently.

Is anyone really 'poor' in the west?

2010-09-27T04:50:00.000+01:00

These days, who is really 'poor' in western countries? I recently marveled at how many of my "broke" friends had the iPhone, which is one of the most expensive phones on the market. So many people in western countries actually have an easy time getting access to credit and loans. I thought about it and realized that these so called "broke" friends actually live quite a comfortable high-consumption life, with widescreen televisions, nice cars, expensive luxury holidays, fine clothes, and every latest gadget. Even though they are living paycheck to paycheck, and are usually in debt. If they truly go broke, the government will pick up the tab with lots of benefits. Nobody in Western countries is dirt poor to the point of starvation as the benefits system will take care of them.

A recent This Is Money article says many banks are just going to write off the thousands of pounds of credit card debt which UK consumers owe. This sometimes makes me wonder what is the point of saving, when the spendthrifts are simply borrowing gigantic amounts of money and living the high life. The article said that last year, banks wrote off more than 10 per cent of their credit card loan balances, and that over the past 12 months banks have written off more than £4.5bn of credit card loans.

The UK government said (when declaring the recent UK budget), that people must curb their personal expenditure, as Britain is now the most indebted country in the world.

In the UK at least, people are richer than they think they are, and actually have a good standard of living compared to third world countries. As long as you have a roof over your head and can get a regular supply of food, you're actually doing quite well in terms of survival. The problem is that living from paycheck to paycheck and being constantly indebted is mentally stressful and when it comes to making much bigger investments like property, such peoples credit score severely restricts them from creating great wealth.

Britains house prices

2010-09-21T08:15:00.001+01:00

Having studied the UK property market religiously for the past couple of months, here's what I've discovered.

BTL investing: The problem with BTL interest only mortgages with the landlord putting in a small deposit, is that the arrangement fees added on by the banks are too high. They can be in the region of 3k per year or more. I honestly can't figure out how the new generation of BTL landlords are making money, as thousands of pounds are added onto the mortgage every year via the arrangement fees. I've seen that the more money the landlord puts in, the better deals you get from the bank, so if you are rich enough to put in say 75% or more as a deposit you will be offered very low arrangement fees and a better interest rate. The rich truly do get richer.

Property prices: Property prices are definitely going down. In Central London and a few select areas, prices are going up or holding steady, but mostly everywhere else I've seen, prices are stagnating or going down. There are still cash buyers around and the odd bidding war still takes place for certain properties. Using the "Propertybee" tool on Rightmove.com shows how long properties have been on the market, and how much they were reduced by. I'm seeing properties on the market which have not sold for almost a year. Some sellers will have to reduce their price. Lots of other sellers will simply take their house off the market, so don't expect a massive house price crash. Overall from what I've seen, my gut instinct tells me to expect a 20k drop by christmas.

Property condition: From going to viewings, I've noticed that no property is perfect. All of them are compromised in some way. The TV shows say you should choose a property in the right location next too good schools and shops and transport links etc, but in reality no location is perfect so you have to compromise on something. Maybe one rooms a funny shape, or the kitchen is old, or the gardens to small, or its a bit far from the shops, etc. One trick I've come across is to look at how close a property is to bus routes. People like to say a property is good if its close to train or tube transport, but I've seen that some cheaper properties are close to bus stops which can then take you to the nearest train station quickly. When renovating and redecorating properties, all properties I've looked at, even the ones in good condition needed a bit of minor redecoration here and there.

Building surveys: Most people do not do a full building survey, and only do a valuation survey which is cheaper and mandatory by the bank. I also noticed on TV shows that most buyers don't do the full survey. I estimate 9 out of 10 buyers do not do the full building survey. The reason is probably due to the cost which is about double the price of a normal survey. Also it slows things up a bit. I talked to my millionaire property mentor Mr Piper about this, and he said he never does full building surveys as its all about common sense. Obviously its worked out for him as he's now a multi-millionaire. In general I probably will do full building surveys to cover my back, but I would definitely consider taking the risk if my gut instinct told me to.

Demand for housing in the UK is as strong as ever, if not stronger. The only thing holding back the market is the banks unwillingness to lend. I reckon in 2 years things will be back to normal and the banks will once again offer mortgages to people who can't afford them. After all, everything else has returned to normal and the bankers are once again raking in huge bonuses. House prices in Britain whilst dropping, are still high relative to earnings, and they will stay high. Average earnings in the UK are 20k, average house price £220k that's why few people can afford a property without excessive bank lending. My gut instinct tells me that If prices were going to crash drastically they would have done so by now. The fact is, that Britain is an expensive place to live in and will remain so.

The money seeking goes on

2010-09-20T09:13:00.000+01:00

I haven't blogged for a while, as I've been extensively researching the UK property market, and I even put in a few offers on some properties but ended up being outbid. I've also spent this time doing some thinking about the nature of wealth, and observing those around me who are deeply in debt, but spend money like they are rich! Its amazing what people will do to get wealth, or to make other people think they are well off. Its also eye opening to look back on all my years of moneyseeking and reflect upon what I have learnt.

After seeing all of the costly iphones and fancy, brand new expensive cars that my broke friends are buying on pricy hire purchase (loan) agreements, I asked myself if I was denying myself these pleasures, after all you only live once. I asked myself if I should start spending money more conspicuously now, and show off a little bit of my wealth, since have earned it. I then realized that I would only be doing this to impress other people.

Yesterday, I phoned my millionaire mentor Mr Piper for a chat, and he was at a car boot sale, looking for the cheapest goods he could find. He hasn't changed his ways and still does not overspend on high priced brand new goods. He continues to practice what he preaches, and its a sobering lesson to me that frugality is the way forward.

Why I'm not buying an iPhone

2010-06-23T09:15:00.002+01:00

The Apple iPhone 4 has just been released. Lots of my spendthrift friends have got iPhones and they seem to love the device. I decided to do my research, and look into getting a new phone. When researching the Internet, I came across a comment by someone who said: “I used to think that iPhones were for those that wanted to show off but I know now, that people use them because they are a life tool that will do anything you want it to do.” This made me think that iPhones might have an excellent capacity for changing the way that people live.

The iPhone is a type of smart-phone. I have a nice cheap normal pay as you go mobile phone which can cost me as little as £5 per month to run. In contrast, I know many people who regularly pay in excess of £100 per month for their mobile phone bill. I decided to look into buying a smartphone.

When thinking of upgrading my phone, I realized my options were:

Leave everything as it is and just stick with my current phone.
Buy a net book in order to experience Internet on the move. These small portable computers are the best way to experience mobile Internet, with better web-surfing and battery life than top of the range smart-phones. The downside is that they are physically much bigger.
Use or upgrade existing separate devices, to take on the same functions, i.e normal phone, normal camera, mp3 player. This option is a bit fiddly carrying around so many devices.
Get a new low budget smart-phone
Buy a new expensive top of the range smartphone.

Reasons to buy a smartphone:

Consolidation of devices such as camera, mp3 player, phone, PDA, laptop. A smartphone can do it all.
Internet surfing capabilities.
Ability to read pdf files and edit documents
More phone memory.

Reasons not to buy an iPhone:

A new version of the iPhone might be released next year. Lots of people who have already spent lots of money to buy the previous version will be spending more money to upgrade to the latest hardware.
If you lose it, or it gets stolen, you have to buy another (unless you also get expensive insurance).
Apple are selling "bumpers" which look like colored elastic bands which go around the phone for fashion purposes. They are selling them for £25 each, yet they should only cost a few pennies to produce! This is an example of how Apple mark up their products very highly, for the hyper consumers among us.
There's additional accessories which iPhone consumers might want to buy, such as special headphones, fashionable covers and cases, docking units, etc. They are optional but potentially add to the expense.
All of my "broke" friends seem to have an iPhone. What's that all about? Its one of the most expensive phones on the market yet the very people who should never even be considering buying one are the ones who have them.
Many software applications for sale at Apples "App" Store. Games and apps mainly cost money. This means that its too easy to keep shelling out money with just a few taps of your fingers.
iPhones are not perfect, and they experience problems such as the case overheating, and poor battery life.

If I got an iPhone, it would go against everything I have so far practiced concerning wealth building. I tried to convince myself that an iPhone would be an affordable luxury for me (which it is), but the fact is that when I looked at what I could actually use it for, the cost just seems too high for me. I the end I decided I would not be an "iClone" like everybody else. Let them play on their expensive iPhones while I focus my income on wealth building. I accept the iPhone is a good piece of kit, but I have to stay true to my wealth building plan, and that meant going for a cheaper more economical option.

I actually spent hours agonizing and researching over whether I should buy an iPhone. My whole philosophy, actions and purchases should echo that of the frugal millionaires in the book ""The Millionaire Next Door". If I did buy an iPhone it would go against everything I have come to believe about wealth creation and I would see it as saving all that money just so I can give it to Apple and Steve Jobs. It would feel nice to have a high end product such as the iPhone, but I know I would come to resent it due to it's cost, as If I'm honest, it would mainly be for keeping up with the Joneses.

Smart phones are just another excuse to spend more money. Lots of time and money is spent on these phones, goofing around on Facebook etc, which could instead be used for building wealth. Research of current phones showed me that no phone is perfect, all have some type of flaw, e.g Blackberries do crash and friends of mine who have them, say it is common for these top-end smartphones to regularly reboot themselves. iPhones have short battery lives, etc.

I did buy a smart-phone after all, but a low end one. I got the Nokia E63 black, which is basically a cheap Blackberry clone with above average end user ratings. It's got a lot of the functions of top end smartphones, at a fraction of the cost. It's not perfect, but no phone is, not even the iPhone.

I got the Nokia E63 smartphonecarphone warehouse currently shows you can get the cheapest equivalent iPhone 4 deal (16GB version, 300 minutes), for £30 per month, on the Vodaphone Network, and you pay an extra £30 for the phone. In reality, iPhone users will probably go for the more expensive price plans and could end up paying £50 or more per month. That's OK if you can afford it, but I bet lots will sink further into debt as a result.

To me the iPhone is another costly status symbol which won't add that much to my life. I can reproduce lots of its capabilities by buying a cheaper smart-phone, and save a bucket load of money in the process. Yes it is a compromise, but that is the nature of frugality. Let my broke friends enjoy their iPhones, I'm going to keep focusing on wealth building.

Spend it like Fergie

2010-05-27T08:31:00.000+01:00

Former Duchess of York Sarah Ferguson (nicknamed "Fergie") has squandered away millions upon millions of pounds by living extravagantly. Her financial situation became so dire recently, that a newspaper reported that she resorted to selling personal access to her former husband Prince Andrew, for cash.

Like many people in todays consumer society, she spent money with little regard for saving or investing carefully. As a result, even though more money has passed through her hands than many people could ever imagine, she has nothing to show for it. Thisismoney.co.uk showed why she is facing financial ruin.

The BBC website has a good article on how Fergie lived the high life, rather than budgetting carefully. People may laugh and sneer at a lifetime of living frugally but as Fergie shows, a lifetime of living extravagantly if you don't have a plan to preserve wealth, produces desperation, humiliation and poverty later on.

Many people, including myself, will be far better off financially by living within our means. This means budgetting and living frugally. Don't just spend it all, like Fergie did.

Book review of The Millionaire Mind by Thomas Stanley

2010-05-24T11:03:00.001+01:00

The reason I am so critical of the system which produces todays university graduates, is mainly down to this book, and undeniable evidence I have witnessed in my own life. Being clever, going to university and getting high grades is not a guarantee of future wealth. A long time it might have been, but not any more. The mind of a millionaire is not focussed on passing ritualistic university tests (which are part of a process which collectively earns the universities billions of pounds per year). The mind of a millionaire is focussed on creating wealth. This means: frugality, choosing an earning strategy very carefully, and being willing to work hard in the real world, in order to become wealthy.

I recently re-read this book, and I was reminded of just how good it is, and why I live my life the way I do; saving up thousands of pounds every year, looking for profitable investments, and living frugally. To me this is the 3rd best financial book I ever read, and currently only one of 3 books that I give an absolutely top financial rating to. It gives hope that one may become wealthy if they practice the right financial habits. Many people think they are not clever enough to be millionaires, or their education is not good enough, yet this book shows that academic success and financial success are 2 different things.

Stanley questioned many millionaires, and kept good records of the results. The millionaires studied said that they found out that hard work was more important than genetic intellect, in achieving their level of success.

On page 152, Stanley gives the case of champion world war II fighter plane pilot, Major Erich Hartmann who shot down 352 planes during the war, far more than most other pilots who were usually lucky just to get one. His mentor was Paule Rossman, a crippled fighter pilot who shot down more planes than his comrades despite his disability. His mentor realized he was physically disadvantaged compared to his opponents, so he planned his attack strategy very carefully beforehand. Stanley says millionaires also pick their battles carefully, and choose the most profitable opportunities. He says that too many occupations are filled with clever people, therefore highly qualified university graduates have a difficult time finding work. It's better to choose a vocation where there are fewer competitors. Stanley says "where you will fight is much more important in winning than what you do once the dogfight begins".

Chapter 2 of the book briefly parodies many get rich quick schemes and wealth seeking strategies in America, and says the best way to find out how millionaires became rich, is to ask them. This is what makes the book so valuable, as it is composed of the results of data gathered from interviews with real millionaires.

Many millionaires were heavily criticized at one time or more, but ignored their critics and went on to become successful anyway.

The importance of morals is explained and the example is given of an intelligent, highly academically qualified prisoner who applied to be a math tutor to the children of millionaires, but was rightly turned away due to his untrustworthiness. Stanley says "smart" people are many times seen to have a halo by a lot of people, but they are not automatically better than everybody else in every area, and some of these smart people lack integrity. Stanley says academically smart people can find that their careers are filled with other highly qualified competitors, and so end up hating their vocations. Pg 78 says that the ability to get high grades in school, only seems to relate well to an ability to do well in aptitude and academic tests. Life is a marathon, and doing well or badly in school does not automatically relate to how you will perform in real life. No matter how badly you are doing or have done in life, don't stop believing that you will eventually cross that finish line.

The book says the stock market is invested in by millionaires, but the money originally came from the cashflow created from living below ones means.

Chapter 3 says that at school, many millionaires did badly. They learned to work hard in the real world, to overcome this. The book Successful Intelligence by Robert Sternberg is quoted, as it details how successful people learned to work hard as they knew their brains would not match the top students unaided. Low scores on tests of inert intelligence don't preclude intelligence, neither do high scores guarantee it. Sternberg's book shows how successful people responded to earlier failure by outworking and eventually outperforming the so-called intellectually gifted. Hard work is a better predictor of success than grade school experiences. I actually did buy Sternberg's book as a result, and it inspired me that I do not have to be a genius in order to create wealth; I just have to work for it.

On page 158, The case is given of "Doctor Heart" who saved millions into an investment fund, but then a get rich quick seminar by a "finance guru" convinced him to invest his money in a new scheme. The guru lost all his money. It shows how important it is to get good financial advice and that even clever people who are financially well off, can be fooled by cheap scams. These schemes always sound excellent, but are never anything more than scams.

The reality of what graduates might experience after university is exposed on Page 203, when Stanley gives the true story of a man he met working at the local photocopying store. The man behind the counter was very interested in what Stanley was photocopying, and it turned out that he was a lawyer!! Because competition is so fierce for lawyers, even though he he is self-employed as the owner of his own law firm, he has to take another job just so he can pay his bills! There were more than 70 pages filled with listings for lawyers in the local yellow pages for that city alone, so with all that competition we can see that even the most educated will have severe difficulty finding work! As Stanley quotes "he's intelligent; he passed the bar exam, he went to an accredited law school. So what? He's just one of thousands of attorneys listed with 74 pages of other very smart competitors". It just goes to show just how tough life is for graduates and that they are not necessarily going to have an easy, well paying life after they have graduated. I myself have met many well qualified graduates in the UK who are working in very low paid jobs, or who can't find any job at all as the competition is so fierce. These days, everyone seems to have a degree, so why would any employer pay an extremely high premium for it? The majority of my views about the current state of graduates and the role of university were formed by reading this book. In my own life, I have seen that there are too many graduates and not enough jobs to go around. I do not believe that there is a good enough chance of becoming wealthy by having a university degree, when compared to what has to be invested into it. Most people do go to university in the hope that it will get them a better paying job (in spite of what some might say), so we need to accept the truth and look critically at the real likelihood of that happening. Its like a lottery with the odds stacked against you. There is no guaranteed job for anyone who is taking a degree, which makes it a risk as to whether you get a high paying job, or any job at all. The amount of time and money invested into university and the debt incurred are some of the reasons why I believe most graduates (but not all) will be worse off financially if they go to university. Many news outlets have run stories about how highly educated graduates cannot find work. All that studying for nothing, yet someone like Sir Richard Branson who has no degree, is one of the richest men in the world. An article in The Daily Mail (14th Aug 2009) entitled "we've made the grade so where are our jobs" is an example of what graduates, even the brightest from the best schools, have to look forward to. I have made clear the financial disadvantage of being a graduate, many times in my blog.

As a criticism of the book, sometimes it throws so much data at you that its hard to know if its really relevant or not. I think that there's too much data for even the author to keep full track of. On page 218 the story is given of some millionaire homeowners who regularly go to a certain hardware store to purchase DIY stuff. This shows that some millionaires do their own DIY work, and it is not a hindrance to their wealth. BUT on page 387, it says DIY might be a waste of time which could be spent building wealth; "there is strong evidence that do-it-yourself activities are substitutes to building wealth". So, the evidence here is contradictory. The real life stories and examples of millionaires provide good emotional anecdotes which help to even out the amount of data thrown at the reader.

On pg 261 the theme of frugality and long term planning is summed up when it says: "to build wealth one may likely have to forgo realizing a high income for many years". Choosing a spouse who is financially aware can also have a positive effect on your wealth. Most millionaires look to the future and compute the lifetime costs and benefits of activities likely to save money. Using discount coupons to buy food is something that many millionaires like to do. The example is given of Mrs Point, on page 301, who uses coupons in the shops, yet has an extensive investment portfolio and is richer than her neighbors. They think she is having trouble making ends meet, but the reality of her frugal lifestyle means she is building wealth at a far greater rate.

On page 350 it says "there is a strong correlation between net worth and the proportion of one's wealth that is invested in real estate". This means that investing in property is historically a good thing in general. No reason why that should change now. If the numbers make sense, and you can afford the property then go for it.

Also, page 388 shows that 2 thirds of millionaires studied gave money to charity, so it appears to show how generous rich people are.

The Millionaire Mind is a stellar attempt to show that many millionaires are not the perfect humans a layman would imagine them to be. They are not the best of the best, or the best looking among us, with perfect grades at school and a distinguished family background. They are not the beautiful people. They are more likely to be the underdog like the injured fighter pilot Paul Rossmann, who learned to win by avoiding highly dangerous dog fights filled with competitors and instead devised an alternative strategy which proved to be vastly superior. Stanley says: "He won because he selected the target, the time, the place, the altitude, the angle of attack. He was proactive". Many of the millionaires surveyed said that if they were one of the beautiful people they didn't think they would have become so successful because they would not have needed to be so very careful in selecting the opportunities most likely to make them wealthy

A truly excellent book with great stories and examples of becoming wealthy which is sometimes bogged down by an overload of factual data. It still stands head and shoulders way above most other financial books. It shows that being clever cannot compare to good planning and hard work. Getting rich, is a marathon that everybody is allowed to race.

Moneyseeker3000 rating: 5 stars out of 5

Book review of The Millionaire Next Door, by Thomas Stanley

2010-04-03T11:06:00.001+01:00

Book review of The Millionaire Next Door, by Thomas Stanley

After reading hundreds of books about wealth, this book to me is second only to "The Richest Man in Babylon". In The Millionaire Next Door, Thomas Stanley has created a classic. He actually took the time to go out and study real millionaires and ask them questions about how they became wealthy. I read the book again recently, and I swear it gets better every time.

Stanley found that wealth is the result of a lifestyle of hard work, perseverance, planning, and most of all, self-discipline. He says that many millionaires do not look wealthy, and because they do not purchase high cost, high status artifacts, or live in expensive homes, they could be your next door neighbor. Stanley identifies Prodigious Accumulators of Wealth (PAWs): high earners who save and invest their money, and Under Accumulators of Wealth (UAWs) who have high incomes but do not save and instead waste money on high status goods.

Most millionaires are frugal, and not wasteful, or "hyper-consumers" as Stanley calls non-frugal people. Stanley says millionaires became so by budgeting and controlling their expenses, and they maintain their affluent status the same way. High earners who live in luxury have little money left over after funding their high-consumption lifestyles. Frugality is the way to wealth. Who would have thought that people who wear cheap clothes, live in modest houses, and have a cost conscious attitude are the ones who have a great chance of becoming rich?

Stanley gives many examples of millionaires who buy their suits at discount stores, only buy secondhand models of cars they like, and use coupons when they go shopping. It does not mean they are mean and penny pinching it just shows that they are practicing good financial habits which keep them financially affluent.

Stanley talks of financial defense, which is saving money, and financial offense, which is high earning. He says defense is more important as one can become well-off on a moderate salary, whereas somebody who makes a lot of money but wastes it all, usually ends up poor.

Critics say the book is too stats heavy in places, and can be too statistically biased.

Before reading this book, I assumed millionaires lived lavishly and spent money opulently like the rap stars and sports stars we see on TV, or like JR Ewing from Dallas, flaunting their big money at every opportunity. Now I know that it is usually the "poor" people who buy these expensive goods, and that is why they are "poor". This book illuminated the shocking truth that the people you think are rich, flashing their money and expensive cars, usually are not rich, but are in fact deep in debt because that lifestyle costs money. There are lots of millionaires who live next door to ordinary people with a fraction of their wealth, and due to their frugal habits these millionaires are able to create and maintain real wealth.

Moneyseeker3000 rating: 5 stars out of 5.

I went looking for millionaire mentors, and I found Mr Piper, who is the model of the people described in Stanley's book. He looks nothing like the media stereotyped millionaire, and sometimes when I look at him in his casual clothes, I think this guy can't be a millionaire, yet he has a property empire worth £4m and earns in excess of £120k annually. He is very frugal and cost conscious, and scrutinizes every purchase, always looking for bargains. He has no education, yet created his wealth from his habits, the very same habits I see in Stanley's book.

The car boot fair

2010-03-13T22:06:00.000Z

Mr Piper, my good friend and millionaire mentor has a habit of going to car boot fairs to look for bargains, mostly every weekend. I decided I would try to take on this habit myself to get an insight into why he does it. I finally got around to going to my first car boot fair this week. Here's what happened:

I found out about a regular car boot fair in my local newspaper. Travel time was only 10 minutes by train. When I arrived, quite a lot of people (hundreds) were there. I was amazed that so many people had turned up to look for bargains. They had actually got out of bed early and put in the effort to attend the fair.

The sellers seemed a ragtag bunch of people, who I felt could have made more effort to present their goods, with many of them having simply thrown their items onto the ground. In many cases, presentation could definitely have been improved. There were not many price tags like you would normally see in a commercial shop, and for some reason this put me on edge, almost as though the sellers could make up any price when asked.

Of all the items being sold, the household relics, ornaments from peoples pasts stood out to me the most. It made me think of how silly it is to hoard items, and to buy lots of expensive consumer goods, as in the end, they will simply be sold off as junk.

As I looked at the car boot fair environment, I felt I was looking into the mind of Mr Piper, after all he spends his time going to car boot sales for a reason. I saw how items can be picked up for low prices if you go to the right places. I saw that many people will put in the effort to wake up very early and travel to the fair in order to buy and sell goods. If they can put in that effort then it proves that there are no excuses for most people to not try to do whatever they can to improve their finances by buying or selling cheap items.

I don't think going to car boot fairs will become a regular habit for me, as the items seemed a bit too random so I would rather use eBay, but at least I went along for a look. I purchased one item only, a piggy bank for 50p. I finally sought out a car boot fair, and I can go to another one any time I like, so I have added another financial tool to my inventory should I ever need it.

Wealth: Mind over Matter?

2010-02-25T06:36:00.001Z

When I first began my moneyseeking, I was mainly started off reading the stuff by motivational gurus such as Anthony Robbins. These type of gurus say the most important thing needed to become successful is to use your mind correctly, and you must spend lots of time each day imagining your perfect lifestyle. I agree with this up to a point, but years later I think such gurus push the mental side too much.

Now that I've actually met real life multi-millionaires and had a chance to observe their activities I see that their beliefs do have a big part to play in their wealth but only as a starting point. It is their actions, their habits, the daily efforts they put in, and the risks they take which account for the majority of their wealth.

Actually taking action to ensure things get done can be the boring bit, but should be the main focus of your money making activities. The late multi-millionaire and inventor Thomas Edison, said "genius is 1% inspiration and 99% perspiration". This basically means your financial intelligence is best developed by actually working towards your goals and more time should be spent working towards your wealth than merely thinking about it.

My own "mental financial work" now only takes me around 10 minutes each day. First I plan my daily activities, leaving as much time free as possible for unexpected events. Then, I listen to a pre-recorded mp3 I created which clearly and briefly describes the (financial) goals and habits I want to achieve this year. It only takes 5 minutes to listen to, and then that's it. (Some people like to take this a bit further and actually watch computer slideshows of their imagined perfect life. This is easy enough to create using programs such as Microsoft Powerpoint or similar. Latest versions of the windows operating system have a free automatic slideshow in the folder viewer). After I have used this mild mind control, I am painfully aware that only by taking action will I have any chance of achieving my financial goals in life.

Wealth begins in the mind, but don't spend too long in your head, or by the time you wake up, many of your chances will have passed you by. Once upon a time, when I was at rock bottom, I imagined that one day I would have thousands of pounds in the bank and would not be living from paycheck to paycheck, but it took years of action, saving, and frugality before I was finally able to realize this dream. My money seeking journey continues; it started in my mind, and the long road is paved with action.

How to get rich by Mark Cuban

2010-02-24T06:01:00.000Z

Billionaire Mark Cuban has re-posted his popular blog entry about how to get rich. You can view it at his blog. When getting advice on becoming rich, who better to listen to than a billionaire who has actually got rich in business, rather than one of the many false financial gurus who only made their money from selling get rich quick information/education.

He says getting rich takes a long time (years) and recommends frugality for these initial stages. Notice how Cuban gives this advice away for free rather than being like the false financial gurus who charge thousands of pounds for: seminars, DVDs, training courses, computer programs/games, books, audio programs, etc.

ISAs are rubbish

2010-02-22T17:44:00.000Z

I'm really starting to believe that ISA's are rubbish. ISA savings accounts (and normal bank accounts) pay so little it's simply ridiculous, Why are they promoted so much? So they are tax free, big deal. The rates are so low that a recent news article showed that people just can't be bothered anymore.

When I took out my first ISA a couple of years ago it was about 5% return, then the rate dropped drastically. You can only put in a relatively tiny amount of money (£5100) each year, into a cash ISA. You can change ISA providers each year, but the process is cumbersome and not well administrated. If you are only getting a tiny amount of return on your money in an ISA, the fact that its not taxed means nothing. Whenever you sign up to an ISA that seems to be a good rate, instead of playing fair and keeping the rate at the level advertised, the bankers drop the rate later on when you are not looking.

At the moment, the top paying taxed savings accounts pay more than many untaxed ISA's. Even after tax, the return on your money in a top savings account can still be greater than an ISA. ISA's have the tendency to make you think "I've put the money in now, so I'll just forget about it". Then you don't realise a year later (or sooner), when they drop the interest rate. I'm just sick of banks luring in customers with high rates, then dropping the rate drastically, many times without notice. When I read Ramit Sethi's book "I will make you rich", I didn't agree at first, when he said it was too much hassle to keep opening new bank accounts, so he didn't bother chasing the new accounts with "higher" rates. I did not agree with the idea of trading extra bank interest for simplicity, but now I'm starting to think a bit differently.

I've noticed that many rich people don't keep much money in the bank, it's mostly invested. The book The Richest Man in Babylon says idle gold is not good, and that money must be kept moving, through investments. ISA savings and bank accounts pay so little these days it's a joke. The few accounts that seem to pay a little bit of extra interest are soon reduced down to low levels, leaving the saver to start the search for a new bank account/ISA all over again. The problem is the administration in between, i.e. all the bank correspondence, new passwords, etc. I think this creates a possible security problem as more people have a chance to access your personal details. The book "The Richest Man in Babylon" says "a small return and a safe one is more desirable than risk".

I've currently got about 11 accounts with 8 different banks! I'm going to keep my life simple and prune everything down to just 2 banks. I'm going to stop worrying so much about bank interest and concentrate more on safety of savings, even though I will get a low rate of return. I will focus on making my money from my own investments, such as property, because right now, anything beats the bank. Savings rates are rubbish, and even with tax breaks, ISAs are rubbish.

Inventing wealth with Thomas Edison

2010-02-16T09:21:00.000Z

Wealth is invented, first of all in the mind. It must be created with dreams and desire, given life through plans, and made definite by action. Lots and lots of action. Look at all the stuff Billionaire Donald Trump controls; he has to take efficient action to keep it all in check. Even my millionaire mentor Mr Piper has a mini-empire he has to keep track of, in addition to having a busy personal life. Lots of things need to be done, many plates need to be juggled, multi-tasking is required, and action is the bedrock. Inventing your wealth will take a lot of creativity and action, so who better to study than my favorite inventor, Thomas Edison, who is famous for taking more action in a day than many people will take in a lifetime.

Thomas Edison was one of the worlds most prolific inventors who got so many things done (with his team) that he has 1093 US patents for inventions, to his name. Edison got a lot of work done. He was a master of taking action, which is also a vital skill for making money. He was an inventor, which meant he created things. He was also a multi-millionaire, who created his own wealth, as well as devising or perfecting many important inventions, such as the light bulb, which have changed the way people live forever. He has since been surpassed by Kia Silverbrook who currently holds 2905 US patents, but Edison remains my favorite inventor due to his colorful life story. Edison was a great inventor, and unlike the reclusive Kia Silverbrook, there is lots of information about him so we can research how he did what he did. Like many underdogs, Edison was told he was not good enough to go to higher education and so did not attend university. Rather than disbelieve in himself, he started to invent things. Edison was not arrogant and realised he would only accomplish his goals via research and hard work. His secret to success was taking action, and working continuously at a problem until he solved it. He met failure many times, for example when his Menlo Park research team allegedly took 10,000 tries to perfect the modern light bulb.

I was thinking of my own millionaire mentor Mr Piper, and how he reminds me of an inventor, with all of his: practical, mechanical, electrical, and financial skills. His garages and outbuildings are like an inventors workshops, full of tools and parts which help him to save even more money by repairing and re-using items. He does not need to do any of this as he is a multi-millionaire but he became so wealthy by continuing to live the lifestyle he now leads. Like Edison, he also takes an amazing amount of action, and gets so many things done, that I am still astounded by how he does it.

One of my major goals this year is to take much more action, and complete lots of projects. Thomas Edison is my role model on getting more things done, taking action and overcoming procrastination. Doing more things makes it easier to make more money. I don't expect to be as good as he was, but I think I can certainly improve my own performance. I have noticed that many successful people put in the work that other people cannot be bothered to do, and reap the rewards. Many people (including me) want an easy life and easy riches, which simply makes them easy prey for the scam finance gurus and their get rich quick schemes. In chapter ten of the book The Richest Man in Babylon, rich man Sharru Nada says that the luckiest man in Babylon, is the man who is able to work. Edison said: "Opportunity is missed by most people because it is dressed in overalls and looks like work".

How do you invent wealth? First you plan for it, then you work for it.

Great quotes by Thomas Edison:

My main purpose in life is to make enough money to create ever more inventions.... The dove is my emblem.... I want to save and advance human life, not destroy it.... I am proud of the fact that I have never invented weapons to kill....

I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent....

My principal business consists of giving commercial value to the brilliant, but misdirected, ideas of others.... Accordingly, I never pick up an item without thinking of how I might improve it.

I readily absorb ideas from every source, frequently starting where the last person left off.

Because ideas have to be original only with regard to their adaptation to the problem at hand, I am always extremely interested in how others have used them....

A good idea is never lost. Even though its originator or possessor may die without publicizing it, it will someday be reborn in the mind of another....

I am not overly impressed by the great names and reputations of those who might be trying to beat me to an invention.... Its their 'ideas' that appeal to me. I am quite correctly described as 'more of a sponge than an inventor....'

"Genius is one per cent inspiration and ninety-nine per cent perspiration. Accordingly, a 'genius' is often merely a talented person who has done all of his or her homework."

Opportunity is missed by most people because it is dressed in overalls and looks like work.

The first requisite for success is to develop the ability to focus and apply your mental and physical energies to the problem at hand - without growing weary. Because such thinking is often difficult, there seems to be no limit to which some people will go to avoid the effort and labor that is associated with it....

I never did anything worth doing entirely by accident.... Almost none of my inventions were derived in that manner. They were achieved by having trained myself to be analytical and to endure and tolerate hard work.

Inspiration can be found in a pile of junk. Sometimes, you can put it together with a good imagination and invent something.

Personally, I enjoy working about 18 hours a day. Besides the short catnaps I take each day, I average about four to five hours of sleep per night.

Most of the exercise I get is from standing and walking all day from one laboratory table to another. I derive more benefit and entertainment from this than some of my friends and competitors get from playing games like golf.

If we all did the things we are really capable of doing, we would literally astound ourselves....

Our schools are not teaching students to think. It is astonishing how many young people have difficulty in putting their brains definitely and systematically to work....

The three things that are most essential to achievement are common sense, hard work and stick-to-it-iv-ness.....

I have far more respect for the person with a single idea who gets there than for the person with a thousand ideas who does nothing....

Many of life's failures are experienced by people who did not realize how close they were to success when they gave up.

Pretty much everything will come to him who hustles while he waits. I believe that restlessness is discontent, and discontent is merely the first necessity of progress. Show me a thoroughly satisfied man and I will show you a failure.

Unfortunately, there seems to be far more opportunity out there than ability.... We should remember that good fortune often happens when opportunity meets with preparation.

Just because something doesn't do what you planned it to do in the first place doesn't mean it's useless....

Results? Why, man, I have gotten lots of results! If I find 10,000 ways something won't work, I haven't failed. I am not discouraged, because every wrong attempt discarded is often a step forward....

Surprises and reverses can serve as an incentive for great accomplishment. There are no rules here, we're just trying to accomplish something.

As a cure for worrying, work is far better than whiskey. I always found that, if I began to worry, the best thing I could do was focus upon doing something useful and then work very hard at it. Soon, I would forget what was troubling me.

Barring serious accidents, if you are not preoccupied with worry and you work hard, you can look forward to a reasonably lengthy existence.... Its not the hard work that kills, its the worrying that kills.

The only time I really become discouraged is when I think of all the things I would like to do and the little time I have in which to do them.

The thing I lose patience with the most is the clock. Its hands move too fast.

Time is really the only capital that any human being has and the thing that he can least afford to waste or lose...

From his neck down a man is worth a couple of dollars a day, from his neck up he is worth anything that his brain can produce.

The dove is my emblem.... I want to save and advance human life, not destroy it.... I am proud of the fact that I never invented weapons to kill...

Until man duplicates a blade of grass, nature can laugh at his so-called scientific knowledge....

Its obvious that we don't know one millionth of one percent about anything.

We have merely scratched the surface of the store of knowledge which will come to us. I believe that we are now, a-tremble on the verge of vast discoveries - discoveries so wondrously important they will upset the present trend of human thought and start it along completely new lines .

"The electric light has caused me the greatest amount of study and has required the most elaborate experiments.... Although I was never myself discouraged or hopeless of its success, I can not say the same for my associates.... Through all of the years of experimenting with it, I never once made an associated discovery. It was deductive... The results I achieved were the consequence of invention - pure and simple. I would construct and work along various lines until I found them untenable. When one theory was discarded, I developed another at once. I realized very early that this was the only possible way for me to work out all the problems.

Book review of Winning Ugly, by Brad Gilbert

2010-02-14T13:21:00.001Z

Brad Gilbert was the tennis player and coach, who steered Andre Agassi to success. Andre Agassi's story of success through adversity, was first brought to my attention in the book "The Power Of Focus", and after reading Agassi's autobiography "Open", I realised that researching his tennis coach might give me extra ideas to use in my money seeking, and maybe in other areas of my life too. Brad Gilbert wrote the book "Winning Ugly", which covers how to use your mind for success, as well as tips for amateur tennis players.

The young Brad Gilbert was told by his tennis coaches that he was not good enough to be a professional tennis player, and would never make it, yet he went on to become a world top ten tennis player for many years, beating the best players of his day including Boris Becker, Pete Sampras, John McEnroe. He even won an Olympic medal in tennis. He won millions of pounds in prize money. In the preface of the book, Steve Jamison says: "Brad wins because he outthinks and out plans opponents".

The "winning ugly" concept just means to not try to do everything perfectly and gracefully. Brad Gilbert realised that he was not as good as the other tennis players physically, so he would have to use his mind to find a way to win. He monitored his training regime, and focussed his mind on gaining victory. He thought about his game plan before, during, and after every match. He aimed to maximise his strengths, and minimise his weaknesses. He said he went out there, and worked hard for every point he got.

Brad says: "No matter how hard you work, no matter how great your talent, your mind is the ultimate weapon. Most players use it against themselves......when you are the master of your mind, you will master the art of winning more.....And always remember, it's better to win ugly, than to lose pretty." He said he believes that "most of the time there is a way for you to win. You just have to find it".

Brad agrees that John McEnroe was right to call him "the worst tennis player" (page xxii) . He says "on paper, someone as good as John McEnroe shouldn't lose to me. And neither should Becker, Agassi, Chang, Edberg, Courier, Sampras....and a lot of other guys with better strokes and more so-called natural ability. Fortunately for me, tennis matches aren't played on paper. They're played on tennis courts. And because they are, I've been able to beat those players to the tune of $5m....It happened because I've used whatever talent and skills I do have in a calculated way that maximises their potential; that gives me my best chance to win. It's why I've been able to beat players who are supposedly better than me. You can do the same. Make the most of what you've got".

Gilbert took total responsibility for everything that happened to him. He carefully monitored his training, even obsessing over details such as exactly what to put into his tennis bag before a match. He realised that every little thing he prepared for would increase his chance of success.

A great part of the book is when Brad talks of when he won $15k cash in his first ever professional tournament victory, after being told repeatedly by everyone that he would never amount to much. He said "Nobody, but nobody, thought I had a chance out on the tour. I didn't have the strokes. I didn't have the natural ability. 'Who you kidding, Brad? Get a real job'....I realized for the first time that maybe they were wrong. Maybe I could make it on the tour. Maybe....this guy with the 'ugly' strokes, had a life in front of him as a professional tennis player".

The only minor downside to the book is when it starts getting very technical about tennnis, explaining how to improve certain strokes etc. Those bits didn't really interest me as I was only looking for his general success blueprint, and I have no intention of playing tennis anytime soon.

It is a book about tennis, but I think it's more a book about how you can use your brain and apply plans to be successful, in every area of life, including money. It's about how to win. It's about how to control and use your mind to create the successes that you want. Brad says good mental preparation is as important as good physical preparation.

Brad Gilbert is the underdog who came out on top, and he is a shining example of how to become successful, despite whatever disadvantages and flaws you think you may possess compared to other people. He later went on to prove his methods were real, consistent, and transferrable, by becoming a tennis coach and making top tennis players out of Andre Agassi, Andy Roddick, and Andy Murray.

This book gets the thumbs up from me. Brad had no special abilities or talents for tennis and was told he would never make it as a top tennis player, but he found a way to win, and continued to do so. Just like some of the real-life heroes in the book "The Millionaire Next Door", Brad Gilbert was not expected to do well, but in the real world, he proved everyone wrong by compensating for his weaknesses by creating a consistent plan for success.

Moneyseeker3000 rating: 4 stars out of 5

Book review of The One Minute Millionaire, by Mark Hansen and Robert Allen

2010-02-09T07:07:00.000Z

I first saw "The One Minute Millionaire" in a bookstore years ago, when I was in the beginning stages of my moneyseeking. I decided not to buy it at that time, as my intuition told me that it seemed to be too much of a hustle job, and would probably appeal mainly to the get rich quick crowd. The title put me off, I thought how could you possibly become a millionaire in only 1 minute? The reviews for the book were nothing special. As it is a popular book, I purchased a cheap second-hand copy this year, to make sure I hadn't missed any good advice. Here's my review.

The book is in two halves. It's two books in one. The first half is definite plans and advice about becoming wealthy, for" left brained", logical people. The other half is the fantasy story of a lady named Michelle, putting the plans put into action by making a million dollars in 90 days.

First half of the book, logical advice:
The advice is solid is some places, but mainly over simplistic. At the start, it says all that is required to be a millionaire in your lifetime is the ability to find investments that yield at least 10% annually after taxes and the discipline to keep doing this every year. That's easier said than done. Convicted fraudster Bernard Madoff offered investments yielding a guaranteed 10% per year, but he was unable to provide such returns, despite having a fantastic education and investment background. That's why he turned to fraud instead.

Some of this part of the book is good, but spoiled by some outrageous "no money down" deals. E.g: I made so much money, in no time at all, using quick and easy methods. When it talks about network marketing, this is a big fail in my eyes, because that type of business is a pyramid scheme, no matter what the organisers tell you, and pyramid schemes are illegal in many countries.

I recognised bits and stories of the book as being re-printed wholesale from Hansen and Allen's other books: "Multiple Streams of income" (pg 154, the extract of Mentored by a Billionaire), and "Chicken soup for the soul" (pg 364 the extract of Willing to Pay the Price). This is a cheap way to fill the pages, and shows why it pays to read many books, because then you can see when authors are copying from other books.

Second half of the book, fantasy story:
I enjoyed the fantasy story part, much more than the logical plans part. In the story, a woman is about to lose her children and has 90 days to make a million dollars to get them back. 90 days to make a million is a bit too far fetched for my liking, and though it's an interesting story, the audacity of the goal makes me think the author is trying to pull the wool over our eyes with the idea that a complete novice has a good chance of making so much money, so quickly.

In the story, a woman named Michelle is about to lose her kids, but meets a millionaire mentor named Samantha and turns her life around. Part of the story has Michelle buying houses at substantial discounts from people who are in financial difficulty. This is taking advantage of people's misfortune, which I disagree with, no matter how much they try to sell it as "helping the other person to solve their financial problem". In real life, sellers and banks are unlikely to offer huge discounts, and if they do, the property will be put on the open market which will push the price up. People are not stupid enough to give their assets away at a fraction of their true value. I've currently been studying the property market in England for over a year, hoping to find big bargains. There are none, unless you have enough cash to buy buildings outright, and even then discounts are minor when other costs are factored in.

The fantasy story of Michelle is like one of those action movies where everything is overly dramatic, and filled with amazement and danger which is conveniently survived, then everything comes together perfectly at the last minute. The perfect example being of the story's heroine, Michelle, getting all of the required money in cash just 7 minutes before the deadline. Things do not happen so conveniently, in real life.

Conclusion:
In the recent book "Stop Acting Rich, Start Living Like a Real Millionaire" - by Thomas Stanley, which I reviewed last year, Stanley says (letter in chapter 9) that to become a millionaire usually takes 20 to 30 years. This is based on extensive research of real millionaires. This is a complete difference to The One Minute Millionaire's claims that it's possible to become a millionaire in 60 seconds, or 90 days! I know who I believe (Thomas Stanley).

The main advice in the book about becoming a millionaire in one minute, is an example of the author's using the internet to sell their seminars/financial knowledge online. They have the profile and mailing lists to be able to do this. The vast majority of people, whom this book is aimed at, do not. The book title is therefore misleading and sensationalist, and like much of the advice in the book, it was clearly made up to increase sales. The fantasy story in the book of having a timeframe of 3 months to become a millionaire from nothing, is outrageous.

A potentially good book, spoiled by being overlong, dragging basic points out too much, and including rubbish advice like investing in Network Marketing (pyramid schemes/MLM). The fantasy story of Michelle in the other half of the book, is the best part of it, but that's not saying much because the goal of making one million dollars in 3 months is unlikely to work for the majority of readers. I know a few real life millionaires, and none of them ever made that much money, that quickly. There are some good parts of the book, some of the logical advice is very good, and the fantasy story gives an interesting if far fetched take on the journey to wealth, but overall I think I was right in my initial assessment, and the book is more hustle, than useful.

It is good to give people hope, and to inspire and motivate them, but not if the advice has a low likelihood of succeeding. Some of the advice is too outrageous to be true, and appeals to those with a get rich quick mentality. I want to believe that making money can be as quick, easy, and positive as the authors say, but I have already seen real life millionaires in action, who came from humble backgrounds, and I know how long and hard they had to work. I am not going to lose my head and forget everything I have already learned so I can join "The One Minute Millionaire's" travelling circus.

Maybe Robert Allen is genuinely trying to help people, but further internet research shows that the president of his "Nothing Down" real estate club in Atlanta went to prison for using Robert Allen's property investment techniques. Allen himself, went bankrupt in the past doing his property deals, and even though he says he was once a religious missionary in Tahiti, he did not do the right thing and pay back his creditors when he became rich again. John T Reed has written his criticisms of Robert Allen. He claims that Robert Allen once said to his associate: “We’re not in the real estate investment information business, Marc. This is show business.”

Moneyseeker3000 book rating: 2 stars out of 5.

The lotto lout's money runs out

2010-02-08T04:25:00.000Z

Mikey Carroll, the so called "lotto lout" who won 10 million on the lottery and spent it frivolously, has finally run out of money after 7 years, and is now signing on for government benefits (the dole, probably £42 per week). All that money has just gone up in smoke.

He is perfect proof that it is a person's habits, and beliefs, that make them wealthy. His habits were not to monitor his money, not to account for it, or do any form of budgeting, planning or investing whatsoever. As for his beliefs, he did not believe that money is a good thing. Before winning the lottery he was a dustman and now claims he's HAPPIER being penniless and wants his old job back! He said "I'll do anything to earn a pound or two now."

Notice the contradiction between him saying he's happier without money, yet he still wants to get money from a job in order to live decently, and is currently on benefits. In spite of wasting all of that money, he still needs money to live on which is why he has to claim the dole. Money is important for survival, so obviously the more you have of it, the better. It is a shame to see all of that money go up in smoke, but it just shows that unless you want to be wealthy, you will never be able to hold on to your money.

Investing in university graduation

2010-02-07T10:36:00.001Z

Now the Wall Street Journal is reporting that university graduates do not earn that much more than non-graduates over their lifetimes. This is an American publication, and I actually thought American graduates had an easier time than British graduates, and were more highly compensated because they pay far more for their education than in England. Clearly this is not the case. A source from the report estimated that the actual lifetime-earnings advantage for college graduates is a mere $279,893!!

There is a big debate about the worth of a university degree at the forum on MoneySavingExpert.

Being a graduate now, is much different from being a graduate in the past, as this Guardian article shows. Wes Streeting, president of the National Union of Students, said: "People are feeling incredibly angry. They have debts in excess of £20,000 after being told they would get a job at the end of their degree and earn more money. Instead they're just heavily indebted."

Heres a selection of news articles about what graduates are going through:

I have realised for quite a while that a degree is not a good investment for most people. Even though I am a graduate myself, I have long suspected that nowadays, graduates ultimately end up with less money overall, due to:

The lost opportunity to earn money for years, while they study.
Prices for all investments going up over the years, whilst they are studying.
High government student loan debts.
High commercial student loan debts.
Having to compete with all the other graduates when they graduate.
Having to compete with all the experienced non-graduates, when they graduate.
Gaps in employment, i.e redundancies.
No guarantee of getting any job.
Lack of financial knowledge.
Statistically, only a few graduates make "the big money" after leaving university.
Businesses make more profit by employing, or outsourcing, graduates from poorer countries like India, who will work harder for much less compensation. This results in less opportunities for graduates.
Higher tax rates for graduates if they do earn a "high" salary.

Books like The Millionaire Next Door and The Millionaire Mind show that having a degree is not a guarantee that you will be successful in the real world. If there are a lot of graduates, they will all have to fight for the same job opportunities, so their chances of success reduce. Amazingly, right now in England, more people are applying to university than ever before, so the problem will only get worse.

The studies that were done in the past, showing that graduates earn significantly more, were done a long time ago.They were flawed by not accounting for other common factors such as student debt, redundancies, taxes, and much other stuff that happens all the time in the real world.

I'm not jealous of people who have a degree, because I have one myself (I'd probably be richer by now if I didn't, lol), and it's not sour grapes because I didn't attend an "Oxbridge" university. I'm just telling it like it is. I am not saying that people should not go to university, I'm just saying don't expect it to make you super-rich (or even rich), because that's what I hoped would happen to me when I did my university degree. I thought that with my mathematical degree and high grades, it wouldn't be long before I was earning 100k. I deserved it right, because I really did work for it. It never happened. As I long suspected, I was not the only one to be duped by such a ridiculous fantasy. In the real world, you have to drag yourself up by your own efforts and in the majority of cases, a degree does not provide the extra push that it should.

Book review of Multiple Streams of Income by Robert Allen

2010-02-06T06:21:00.000Z

I finally got around to reading Multiple Streams of Income by Robert Allen. I had ignored it for many years, after discovering that the author had gone bankrupt in the past. I did not want financial advice from a failure. I have always liked the theme of money coming in from different sources. It's a popular book, so I got a cheap second-hand copy and read it. Here's my review:

The book is at it's best near the start when it talks of the basic principles of saving money. These sections were very good and contained well written chapters about basic money management. I thought the first 4 chapters were great and they covered the topic of personal finance in a very interesting and informative way. One chapter says every time you spend money; take a few extra minutes to: plan your purchase, get a discount, get a receipt, examine your receipt, etc. I didn't expect this type of good basic advice from this book. Unfortunately, after the first 4 chapters, it all goes downhill.

The book is at it's worst when it suggests outrageous money making schemes such as network marketing (aka pyramid selling or MLM), which has been discredited long ago. When it talks about this type of scheme this is a big fail in my eyes, because that type of business is a pyramid scheme, no matter what the organisers tell you, and pyramid schemes are illegal in many countries.

Many of the schemes presented in the book, sound great, but have little chance of working consistently in the real world. In the chapter entitled "Your Sixth Stream", on page 170, a guy named Ted Thomas claims he has discovered the best kept secret, of a virtually no-risk investment with a 50% return. He says it is so simple and rock solid safe that you'll wonder why everyone isn't involved in it. He then goes on to describe a crazy scheme of buying people's tax debts. He seems to suggest that you buy someone’s tax debts from the government, pay it, then hope the debtor pays you back, otherwise you get a percentage of their late fine, or the government allows you to take their house. But, when you think about it, if they can’t afford the tax, they wouldn’t be able to afford the late fine either! Their house would not be taken from them without a protracted legal fight. The scheme seems mercenary and ridiculous, taking advantage of people in financial difficulty, and would be complicated by government intervention. This type of outlandish scheme is typical of the other get rich schemes presented in the book.

The book is much longer than it needs to be, and many chapters are completely forgettable and just seem to be there to lengthen the book. Other chapters are outrageous fantasy schemes which look great on paper, but are likely to fail in the real world.

The principle of having multiple streams of income is a good one, and is a system I am following myself by attempting to invest in many different places. It is a good idea, but overall, not a good book. I just think the author could have explained the theory much shorter and simply.

I've got a problem with Robert Allen. I think his heart is in the right place, but it's hard to ignore that the president of his "nothing down" real estate club went to jail for using Robert's property investment advice. Also Robert Allen has been declared bankrupt in the past over his property deals, in spite of his fantastic university education background and real estate skills. Allegedly, he still has not had the integrity to pay his bankruptcy creditors back, even though he is now wealthy. John T Reed has written his criticisms of Robert Allen. He claims that Robert Allen once said to his associate: “We’re not in the real estate investment information business, Marc. This is show business.”

Moneyseeker3000 rating: 2 stars out of 5.

Mr Piper's Bentley

2010-02-05T09:44:00.004Z

A few days ago, Mr Piper advised me to not invest in a property I had seen. I took his advice and realised he probably saved me thousands of pounds as I had not understood the financing of the deal enough. Part of me still thinks I could have made that deal profitable in time, over many years, but this is probably just my own arrogance. Mr Piper's advice showed me I could save/make much more money by getting the financing correct at the start.

I decided to take Mr Piper and his wife out to dinner on Sunday to say thank you, and to see what else I could learn from this multi-millionaire. When I phoned him up, the first thing he said to me was "did I tell you, I've just purchased a Bentley. I've always wanted one. You must come and see it". Bentleys are very expensive motor cars, and so it was something else to look forward to seeing when I met up with Mr Piper on Sunday.

Bentley:
On Sunday, I arrived at the train station, and Mr Piper pulled up outside in his Bentley. It looks exactly like the one in the blog picture above. It was an old classic car, which was absolutely top of the range in its day, and as he drove me to his new house, I got the story behind it. He said he has wanted a Bentley for over 20 years, but didn't buy one before as he lived in an area of London where he was afraid it might get vandalised, as he didn't have a garage. This showed me that Mr Piper is prepared to wait for things, as he could quite easily have got a house with a garage many years ago. I will remember the lesson of patience, from this.

The car is a Bentley Turbo R, built in 1985. Mr Piper now has well over 4 vehicles (transit van, road car, motorbike, Bentley, can't remember the other one), all for different purposes related to his living, and property maintenance . He fixes and maintains them all himself, as he used to be a car mechanic. He got the Bentley from a specialist dealer, and did lots of research on the internet about the car, and it's price, for about a year beforehand. He said that when he purchased the car, there was a problem with the indicator lights, but rather than pay a mechanic over £100 to fix them, he instead purchased the parts for £3.50, and fixed it himself. The skill of being a mechanic which he picked up years ago, is still serving him well and helping him to save money, many years down the line.

I forgot to ask him how much he paid for the Bentley, but later at home, I checked the internet and the average price of that car is now around £20,000. You can bet your life that he purchased it in "cash", i.e with no loan. When the car was built in 1985, the original cost was $145000, which could probably have purchased a few houses at the time, so Mr Piper sure knows how to choose his cars for value!

New house:
Mr Piper purchased a 2 bedroom house last year with lots of land and about 5 outbuildings, including 2 garages. He paid £300,000 cash for it and said he likes it as he can park all of his cars there. The property needs a bit work doing to it and Mr Piper is doing all of it himself with occasional help from friends. I myself have helped him to cut down trees. He said he has now been in the property for 6 months, and it is truly amazing how much work he has done from fixing fences to landscape gardening, rubbish clearance, minor re-wiring, painting and decorating, etc.

He's got many more chickens now, and told me of all of the cheap chicken coops he found on eBay and Gumtree. The chickens lay eggs which he and his wife keep, or sell at the local market. I've never used Gumtree before, it's a website a bit like a private advertising site, where some people also give stuff away for free. The lesson I learned was to use Gumtree (www.gumtree.com) as he was talking about it so much that I figure if it's good enough for a millionaire, then it's good enough for me. He has started off many jobs in the property, and most people would think it needs no more work doing to it, as it already looks great, and everything works.

He had a new, massive "country style" wooden front gate which was so well made and clean that I was sure he must have had it specially contracted. He said he made and hung, the gate himself with a friend, and I started to wonder if there was anything he couldn't do. He had water drums connected to his roof gutters (many outbuildings, equals many gutters), and he collected water which he used to water the garden, feed his chickens and wash his vehicles. I thought this was very ecological, and saw the lesson that recycling things and not wasting them, is an excellent way to conserve money.

I looked around at the sheer scale of the place, and reckoned it would take 2 years to get everything the way Mr Piper wanted it. At the same time, knowing him, I bet it wouldn't take him that long! He then told me that the day before, an immersion water heater had broken down in one of his investment properties, and the tenant was complaining, so he spent the whole day fixing it. Amazing that he is even able to find the time to do this. He said to me "I can't wait until I sell all of my investment properties off, then I can spend my time doing other things".

Drawer:
As we were all about to leave for lunch, Mr Piper said "wait, I need you to give me a hand with something first". He took me to the garage and showed me that one of his friends had a broken wardrobe drawer (which you put clothes into), that had simply fallen apart. Mr Piper had offered to glue it together for him. It was a simple job that he did not need me to help him with, but I realised that Mr Piper was planning on teaching me a lesson, just like Mr Miyagi taught The Karate Kid, in the film of the same name. There were lots of tools, spare parts, and chemicals in the garage, and I realised that they represented many ways to solve any problem. He used glue to put the drawer together, and clamps to hold it while the glue dried.

I watched how he carried out the task, and wondered how much care and attention would he apply? What would he do when problems arose? Just how does a multi-millionaire deal with tasks? He just got on with the job without delay, and I helped by also applying glue and holding certain parts together while clamps were fitted. When there were problems getting certain parts to fit together properly, he dealt with those obstacles there and then, without complaint. He didn't stop until the task was finished. I timed the task, and it took 20 minutes.

Helping Mr Piper to fix that drawer showed me that he found time to do others people's tasks, in addition to his own. His friend had obviously given up on fixing the furniture and decided to throw it away and buy another wardrobe, but Mr Piper, who hates waste, offered to fix it free of charge, saving his friend time and money. What a great guy. I remembered the first interview I ever did with Mr Piper when he said to me that he thought most people give up too quickly and too easily. I think this was the lesson he was now teaching me, to be economical and to try to fix broken things rather than running out and buying new stuff.

Mr Piper does the maintenance work himself, for all of his properties, plumbing, building work, etc, despite having no formal training. Now I have seen how he applies himself to such tasks, by simply looking at how he approaches the simple task of fixing a drawer. It's nothing special, he just gets on with it. He takes action until the problem is solved. There is no mystery to how he does it, so why is it, that it was Mr Piper who fixed the drawer and not his friend to whom it belongs? Maybe that willingness to apply effort, and to not waste things is why he is a millionaire, and his friend is not.

Meal:
I couldn't wait to take Mr Piper and his wife out to lunch, as I wanted to say thank you for his advice. I also knew that most people would never get the chance to even meet a millionaire in their lifetime, let alone buy them lunch. Many people might say "he is the millionaire, let him pay", yet that selfish attitude only holds them back, because millionaires are people too, and appreciate their friends being nice to them. I said to Mr Piper, "take us to the best restaurant in town, I'm paying".

He drove us all to a local pub where they served food! They had a deal where they were doing 2 meals for £10, as well as other special offers. I came prepared to spend around £200, yet all of the food and alcoholic beverages for the three of us, only came to £48. The excellent book: "The millionaire Next Door", said that millionaires are cheap dates!

Some food was left uneaten, and Mr Piper asked the waitress for a bag to take the remaining food home so he could give it to his dog. He looked at me across the table, and said to me sternly "never waste food". As we drove away from the restaurant in Mr Piper's Bentley, I realised that he could have taken us to much more expensive restaurants, but he actually wanted to eat in a place where there was better value. I learned that the lesson was to always attempt to get value, no matter what the situation, and to not waste things.

Conclusion:
Mr Piper lives "cheaply", by this I mean he gets "value" out of everything. I see him as a re-cycler who re-uses and fixes things, rather than buying everything brand new. His television is one of the older CRT ones, but it has a big flat screen and you can bet he got it far cheaper than the modern LCD and plasma ones. His habit is not to waste things, and this is displayed in how he treats his money. He is so rich, he can afford to buy any car in the world, including the £1.7 million Bugatti Veyron (Grand Sport Version), but instead he chooses a £20,000 second hand classic car, which he waited 20 years for, and then spent a year researching, in order to get the best value he could.

From Mr Piper, I learnt the lessons of: frugality, total responsibility, self-reliance, action, economy, generosity, non-procrastination, ambition. He is the living embodiment of everything I read in the book "The millionaire Next Door", the only difference being that he does his own maintenance work, whereas that book said doing DIY tasks was counter-productive to wealth. Now I know it's perfectly OK to save money on building and decorating work by doing it yourself, and still create a lot of wealth.

Out in the world, when the question is asked "how do people become rich", many humans will step forward to offer up their own opinions, and it's hard to know who to believe. By looking at Mr Piper, I can see the truth with my own eyes. This is a man who started with nothing, has no university qualifications, yet he earns well over £100,000 per year, has a property empire of around £4 million pounds in real equity, and will easily make a couple of million more in his lifetime. He is a normal guy, whose habits have contributed to his economic freedom. Habits which I will also practice as I seek wealth of my own.

The looking glass

2010-01-30T12:26:00.001Z

I was recently thinking how sooner or later, the images we have in our heads about ourselves and our finances, becomes true in the real world. Reality is like a mirror of what we really believe about ourselves. The following poem from James Allen, in his book "as a man thinketh" illustrates this:

Mind is the Master power that moulds and makes,
And Man is Mind, and evermore he takes
The tool of Thought, and, shaping what he wills,
Brings forth a thousand joys, a thousand ills: —
He thinks in secret, and it comes to pass:
Environment is but his looking-glass.

When I encountered a major financial setback years ago and ran out of cash, I began my moneyseeking earnestly when I was given the opportunity to work, even though it was a low paid job. That job saved me from imminent financial disaster, and I swore I would make the most of it. I carried the above quote to work with me everyday, and every time I looked at it, I reminded myself that where I was now, was not where I was going to be in the future. I told myself that as long as I kept believing that I would be wealthy one day, and kept working and saving my money, my surroundings would gradually change around me. It was all down to my mind and what I believed, no matter what anybody else told me.

If you believe you will master your finances one day, and keep learning and trying, eventually your reality will match your thoughts.

My journey to wealth

2010-01-23T13:13:00.000Z

I was just thinking of how I made a phone call to a mortgage broker the other day, and he got me access to over one hundred thousand pounds to put down on an investment property! It served as a reminder to me of just how far I have come in my wealth journey that professional institutions now trust me with such high amounts of money. I didn't go through with the deal in the end, but I know I have come a long way from where I once was years ago, when I had no cash and no personal finance skills.

I started my journey wondering if I could really attain a good level of wealth. Along the way I have been to wealth seminars, read many books, DVD's, internet research, met millionaires. I have also met many other people who were also seeking wealth. I remember the Rich Dad Poor Dad craze which a lot of people thought would make them rich, yet none of these people have become rich, and I never seem to hear Kiyosaki's name mentioned in personal finance blogs.

My wealth journey has taught me that I can go farther than I ever thought possible. When it comes to money, I believe I will always have more than I need. My mind is the thing that has changed the most over the years, as I am accustomed to being around money, and I believe in my great financial destiny. My journey to wealth continues.

Saved by Mr Piper

2010-01-19T21:10:00.000Z

I put in an offer for an investment property a few days ago. It looked perfect, in a good location with excellent transport links. The only downside was that it had a downstairs bathroom, but the location was so good I didn't care. I didn't spot the extent to which banks charge high fees for mortgage arrangement, and in the end, talking to Mr Piper saved me from making the deal. Here's what happened after I had viewed the property.

I went on the Money Saving Expert website to see the best way to get my Buy To Let mortgage sorted out. As part of the instructions, I then went on Money Supermarket, and found that the best deal was with a company called The Mortgage Works. I then called a mortgage broker, told him my details, and he phoned me back the next day. The best deal he could find was also with The Mortgage Works (makes you wonder what these brokers get paid for). I had worked out a plan to get the mortgage paid off in half the time with aggressive overpayment, covering my risk by using an interest only mortgage.

I then called Mr Piper (friend, mentor, and property millionaire), and told him of my plan. He proceeded to tell me about all the different types of mortgages, and said that he had never had an interest only mortgage. He revealed that he only ever used repayment mortgages. Nowadays, most BTL investors use interest only mortgages, as they are usually not interested in investing for the long term. He said that mortgage brokers are only interested in their commission, and that the high arrangement fees make such deals unprofitable for the landlord. The arrangement fees are added on to the total mortgage, so would affect the entire repayments for the mortgage term! As an example, if the mortgage is for 100k, and the arrangement fee for 1 years fixed mortgage is 5k (yes, some fees really are that high), then expect to pay off payments based on 105k, for the entire mortgage term! If you take out successive fixed 1 years deals for 5 years, payments would now be based on a total of 125k! He said my plan would not work, as mortgages only allowed limited overpayment, before charging heavy penalty fees. All of a sudden my numbers did not look too good, and my grand plan dissolved.

Mr Piper also said that buying any house with a downstairs bathroom was a massive no-no. As he spoke, he delved into percentages, maths, mortgage rates, and I thought to myself that it was amazing that this guy had never been to college or university, started his days as a market-trader, then car mechanic, and here he is now, giving me an excellent multi-millionaire masterclass in property investing. Mr Piper has paid off all of his mortgages slowly and diligently, and is a multi-millionaire. He said "I didn't want the bank to own my properties, I wanted to own them myself, outright". He pointed out how risky interest only mortgages are, and how such landlords actually own nothing, they are merely renting the property off the bank. I realised that even though I could put down a deposit on a property right now, it would clearly be more profitable not to.

I learned a lot more from Mr Piper's masterclass. UK property is still expensive, and it is a massive challenge to make a profit as a landlord in this area. I have been moneyseeking for many years, and I thought I knew enough to pull off some audacious moves in the property market. I checked with my mentor first, and he saved me from what may have become a terrible mistake. I had every intention of checking as much as possible before I purchased anything. I remembered the words inscribed in the chest of Mathon the gold lender, in the book The Richest Man in Babylon: "Better a little caution, than a great regret". I pulled out of that property deal. I'm going to keep looking, and keep saving lots of money towards the deposit, hopefully prices might also drop a bit by the end of the year. I won't buy anything, unless I have checked it over with Mr Piper first.

Tom Vu Seminar

2010-01-18T03:52:00.001Z

There are many financial "scammers" out there, people who will say and do anything to part you from your money. Lots of them run financial seminars for property, stocks and shares, wealth building, etc. Lots of people want to get rich quick, so the fake financial gurus will happily set up shop to cater for this need.

One of the most memorable was the American property finance guru, Tom Vu. He doesn't do seminars anymore, but he offered financial seminars, promising that anybody could become a millionaire by investing in real estate / houses. In his adverts, he showed himself in wealthy locations, with lots of scantily clad women, promising that all of this could be yours if you just signed up for his seminars. You can search for Tom Vu videos on YouTube. He made his money from the seminars, which were expensively priced, and other scam artists are doing the same thing in England right now. The scam works by offering a free introductory seminar, then selling more expensively priced educational courses.

John T Reed has a critique on Vu, as well as a section on how to spot financial fraudsters, which he calls his B.S Artist detection checklist. Scam gurus employ actors to act in their adverts, and their displayed financial documents are usually fake. It's amazing how far people will go to scam money out of others.

The Bernard Madoff scandal showed just how difficult it is to tell who is a fraudster. Madoff was the biggest scammer of them all, and is a lesson for all of us to keep our wits about us and to not believe that there is a safe and easy way to make a lot of money. Madoff went out of his way, to scam billions, and he even conned many charities. In the book The Richest Man in Babylon, chapter five, the 5^th law of gold is that: "Gold flees the man, who would force it to impossible earnings or who follows the alluring advice of tricksters and schemers, or who trusts it to his own inexperience and romantic desires in investment". So this means you can't take shortcuts to wealth by following get rich quick schemes, but many have tried, and many will continue to try. A lot of good, financially successful, and prominent people were completely fooled by Madoff. They were blinded by a desire for easy money. If it can happen to them, it can happen to you. Don't trust these gurus and their "secret methods".

The words that a fraudster uses, and their evidence can be completely accurate, and logically correct. That is why it is more important to look at the real results of other people who have tried the same methods. What are the odds of yourself becoming rich by using a particular method? As an example, I could say that anybody can become rich, by choosing the correct 6 numbers for the UK National lottery. This is true, and logically correct, but the actual odds of doing so are obsolete.

Imagine a lottery winner saying they know the secret to wealth. They would have the winnings and the trappings of wealth to prove it, but the odds of you or them actually doing it again are miniscule. Fake financial gurus and scam artists love using fancy words and sentences, and putting in logically correct evidence to support their arguments, but they usually only make money from their seminars, books, courses, DVD's, personal appearances, etc.

I went to a few (free introductory) financial seminars a few years ago. They promised their methods would bring wealth, but on the way in to the hall, they made everyone sign a form which said stuff like "the results from this course are not guaranteed" and that "this company will not be held legally liable if you lose money". I remember one alleged guru at a finance seminar I went to, actually boasting that he was not registered with the FSA (Financial Standards Authority)! Anyone offering financial advice in the UK, has to be registered and regulated by the FSA, to ensure they are not criminals, and that their own finances are OK!

Wikipedia has an excellent section on get rich quick schemes. It includes schemes such as Forex Trading, and Success University in its description. I actually went to a Success University seminar a few years ago, and the speaker claimed it was not a pyramid scheme, then drew out a diagram of how the process worked, which looked exactly like a pyramid! I was invited to this seminar by 2 friends of mine, a banker and a lawyer. Both no longer participate in the organisation as they made no money whatsoever, and it shows that even professionals are easily sucked in by these seminars.

Nowadays, Tom Vu is a professional poker player, and he has won over 1 million dollars in tournaments around the world! This proves how excellent he is at reading people’s emotions, and exploiting that for his personal gain. I know a guy who spent around £30k on different finance seminars (he took out loans) about 7 years ago, and is still not successful. Scammers are very good at what they do. Don't even bother going to their seminars, as it's just a big waste of time and money. Anytime I see an advert for a finance seminar, the first things I think of, are Tom Vu and Bernard Madoff. You can get financial information for free on the Internet, or by buying books cheaply from stores such as Amazon. No need to line the pockets of scam artists.

Book review of I Will Teach You To Be Rich, by Ramit Sethi

2010-01-15T01:21:00.001Z

Ramit Sethi has done an interesting job in trying to cater this book for the UK market. His main message is that people need to stop wasting time talking about finance, and actually ensure they are doing something about it. He says getting started is more important than becoming an expert.

I loved the bit on page 13 (optimize your credit cards) where he gives the story of how his dad bargained for 5 days to buy a car, then walked away from the deal when they refused to throw in free floor mats. That's the kind of negotiator I want to be someday! These little stories from his own life experience really help to make this book more interesting.

He says switching rates for the best bank interest is a waste of time. I sort of see his point that it's a minor hassle to change, but the free money you get from switching banks cannot be ignored. As I write this, Alliance and Leicester bank is giving customers £100, just to switch to their bank (which I have every intention of doing). Hardly a waste of time for a few minutes of pressing a few computer keys. He highlights that high street banks pay far lower interest than online banking. I hadn't realized that the difference was so severe, as I only use online banking now, but it just goes to show how much people can restrict their finances if they refuse to learn new technologies.

He says don't budget, just have automatic direct debits to your savings account, and spend what is left over. The problem with this is that many people will overspend what is left over. You really do have to budget or you will waste money blindly. It's not easy to stick to a budget, and I'm always shocked when I go over mine, but like the edge of a cliff, a budget lets you know how far you can go. People have to learn to stick to budgets, I had to pledge to leave all my cash and credit cards at home, to help me stick to my budget.

Ramit does not have a lot of love for Real Estate/property investment. It's certainly a challenge for people to get into that nowadays, but the benefits of owning your own home and/or someone else's, truly needs to be championed. Ramit said that he currently rents, and that property is a bad investment. He said in chapter 9: "As an investment, real estate provides mediocre returns at best". However, I've noticed that virtually every rich person I have studied recommends investing in property, and whilst I will think about the points he made, I'll still be investing in real estate.

I reckon he appeals mainly to students. He has made a good point of the need to get into investing now, and shows convincingly that the power of compound interest means that the sooner you start, the better off you will be. This is a well informed, well researched book.

Moneyseeker3000 rating: 3 stars out of 5

Slumdog to millionaire

2010-01-12T09:31:00.000Z

I finally got around to watching the film "Slumdog Millionaire". It's all about a man who wins a million pounds in order to draw the attention of the woman he loves.

Throughout the film, a cast of different characters are displayed, and it showed that some people will do truly evil things to get their money, and to get away from poverty, but that we always have a choice of which path to take.

The film is a reminder of how hard it is to get money, especially when you are starting out, and of the desperation, misery, and fear, suffered by those who are truly poor. It's a reminder of why people seek money.

The film had a happy ending with the couple having love and money to get through life with. The message of the film is that love is a great thing, but with money, life is also fantastic because the couple will not have to struggle financially. Love and money, 2 of the greatest things which affect the human race. Many married couples split up because of money troubles, so even love can be ruined by a lack or mismanagement of money.

The hero of the story started off as a slumdog child in dire poverty in India, but by the end of the film, the underdog was on top. The film is an inspiration to keep trying, no matter how low down you are in life, because you never know where the future might take you.

Financial Resolutions 2010

2010-01-11T03:25:00.000Z

For 2010, I've set goals and resolutions for many areas of my life. I was doing some thinking about my financial resolutions for the New Year. They are not exactly goals, but they are habits, which I need to to follow at all times. This is what I'm planning on doing:

Only buy supermarket foodstuffs:

A little bit of fast food here and there. A few breakfasts and lunches with work colleagues. I thought it's not that big of a deal, but it is! It's outrageous how much money those places charge. Some outlets charge £1 for a glass of orange juice, when you could easily buy the equivalent of 10 glasses from the local supermarket! From now on, I aim to buy all of my food and snacks, no matter what it is, from supermarkets. I need to make sure I am taking packed lunches to work all the time, this might mean canned food, for simplicity. There's lots of other good stuff in supermarkets, so the more time I spend in there, the more bargains I can spot. This is not about being cheap and stingy, this is about being sensible. David Bach who wrote the books "The Automatic Millionaire" and "Start Late, Finish Rich", described this convenience spending as the "Latte Factor", where seemingly small purchases add up over time to more than you realise.

Stick to my monthly budget:

I had a brief period for about 4 months last year where I logged everything I purchased, onto a spreadsheet at the end of the week. I discovered that I spent twice as much as I thought I did! I found out that I would bring home an average of about 60 spending receipts per month, when I really thought I only did about 10! Logging everything was too cumbersome in the end, so I curbed my spending and stopped making detailed logs. I do miss the tracking of my spending because it was good to see exactly what I'd spent my money on, so I might try to re-introduce it on a basic level by only recording the amount of money that leaves my accounts, rather than individually writing every single purchase.

Don't carry cash or cards on my person, except for pre-planned purchases:

I spent some of last year travelling around different parts of the UK looking for properties to invest in. I found the time to do this, but I also had to find the money. This meant I had to carry my cash card so I could pay for travel. I ended up also buying snacks on the way, and I would forget to take my cash card out of my wallet so it was always there for convenience purchases. I know I had to spend some of that money on travel, but I should have controlled this more.

Wait until the next day before purchasing anything:

I've come across some great bargains and on the rare occasions when I have cash on me I have taken the plunge. I recently purchased the book "I will teach you to be Rich" - by Ramit Sethi when I saw it in WHSmiths store. I had intended to buy this book weeks ago, but it was unreleased in England, and it slipped my mind. When I saw it, I couldn't believe it and snapped it up immediately. I paid £12.99 for it. I later checked Amazon.co.uk and they are selling it for £7.29, almost half price!! I don't regret the purchase as it's a good book (so far), but I have to learn from this lesson or I will end up repeating the mistake on bigger investments.

Shop around before buying anything:

I will be looking to buy things as cheaply as possible. I won't simply buy the cheapest junk I can find, I will buy the cheapest, best stuff; meaning that I make sure the item is fit for purpose and isn't simply junk that falls apart as soon as you touch it. This should be standard, but it's the kind of thing it's easy to forget about if I don't continually remind myself. I won't buy anything unless I've tried to check 3 different shops for the best bargain. Using price comparison websites is a fast way to accomplish this. I'll be stopping in at charity shops, using eBay more, and I will also go to car boot fairs, as I've heard people are selling their old stuff at fantastic prices there.

Live for free:

This year, I aim to “live for free”, by using what I already have, and buying next to nothing. If I decide I must have an additional item in my life, first I'll try to: get it for free, borrow it from a friend, rent it, or get it as second-hand and cheaply as possible. I know I will have to spend money, but by taking this attitude, I hope to try to get value from what I already have, rather than rushing out to spend more.

Don't go out to any job “drink-ups” or parties, any more:

The problem with having a job is that colleagues expect you to socialise and go out with them. There's nothing wrong with this, but the going out always seems to be at expensive bars and restaurants. I've felt as though I would be the odd one out if I didn't go, and I silently cried every time I was expected, (along with everyone else) to part with, say £20 for group money to buy drinks. This "whip around" always disgusted me, as the final whip total could come to over £200, and yet I knew that many of my colleagues were in debt. Many times, £50 or more would be left unspent, and this remaining money always seemed to magically go missing and be forgotten about. I wondered if I am the only person who has noticed this, but I did not want to seem rude or cheap by making a big deal out of it in case I was wrong. How does alcohol in a pub/bar/restaurant cost so much anyway? Look at how cheap the same stuff is in the supermarket.

2 years ago I attended a Christmas work party in a local restaurant. The final bill came to hundreds of pounds, for about 8 people (I cried inside)!! It was only one plate of food each, one desert, and alcoholic beverages. I kept the receipt, and when I looked at it in a more sober state the next day I saw that the restaurant had also added on a £60 "service charge" to the bill. This was neither requested nor asked for by anyone. We had already paid for the meal and they charged us extra for no reason. The food and service was nothing special. Even if I had spotted it at the time, I would not have wanted to cause a fuss and seem cheap, due to peer pressure.

One of my colleagues was asked to attend a work function last year, and he politely turned it down saying he would rather spend time with his wife. I could see the fear in his eyes, as he was expecting everyone to start treating him like an outsider. Nobody treated him any less favourably as a result, so from now on, that's what I'm going to do as well. I have attended a few work functions in the past in order to "show my face", but now I'm going to have a zero tolerance approach. So what if my colleagues might think I'm a boring tightwad.

Make at least one property investment:

The property market is as good as it's going to get. I've spent years saving money, which is doing bad returns in the bank. Now is the time to add to my property portfolio. I feel it in my bones.

Re-assess my will, and maybe re-do it:

It's always best to have a will, or a messy situation can occur afterwards. Those who are good with money plan it all the way, from life to death.

Overcome procrastination:

Everything must start from somewhere. I've got so many financial plans. How do I find time to do them all? By making procrastination a study, and resolving to act immediately on my goals, I think I will be much more effective. In cases where things need to be waited on, such as not buying items immediately, I will at least write the task down immediately, so I don't forget later. Action, is the master key to financial success.

Use Wikipedia more:

I will use Wikipedia to gain knowledge about what I'm buying as there may be other developments within the industry. I thought about buying a PDA, 2 years ago, but by checking Wikipedia I discovered that the decline of the PDA was due to the increase in popularity of mobile phones which now have better features and usability than a PDA. This showed me that it was best to get a better mobile phone instead. I need to use Wikipedia more often.

I've also used Wikipedia to check on areas for future property investments I might want to make one day. You can check the history and features of an area without relying on estate agents. It's amazing how much information is out there.

Use Money Saving Expert all the time:

I will use Martin Lewis' Money Saving Expert site religiously. From insurance and banking, to shopping and spending, this site has it all. It is the best Personal Finance site in the UK. Every financial decision I make from now on, will be run past the website first, ensuring that I have a far better chance of getting the best bank interest rates, insurance, etc.

Mr Know It All

2010-01-10T10:02:00.000Z

It's always hard to know who to take financial advice from. Who do you trust? Who really knows what they're talking about. One thing I did in the past was to listen to advice from friends who were not proven financial experts. Now I'm a bit more financially intelligent, I realise that just because somebody is your friend it does not mean they know anything about money. Your own research and due diligence is always the most important thing to do.

One of my friends is a real Mr Know it all. He's OK with money, in a well paid job, and has saved up an impressive £40k over many years, but does not seem to know what to do with it. Over the past few years, he has asked me to enter joint property deals with him, but I have always turned him down because I know that he is too arrogant to research things properly. He thinks he knows it all when it comes to money or anything else, and never bothers to check things out properly.

I was talking to him the other day, and he suddenly started giving me financial advice. He said that UK bank's FSCS compensation scheme, only protects a saver's money to a maximum of 30k. From my own prior due diligence, I knew he was wrong, the FSCS actually covers 50k per person. He claimed that he was getting a 6% return on his savings account with his bank. I was pretty sure he was wrong, as I knew that the highest rate for all banks (instant access savings accounts) is currently is around 3.3%. Rather than let him ramble on, I said I would like to invest my savings with his bank, and got him to immediately check the details on his computer. It turned out that his bank was really paying him 0.25% on his savings!! This shows that you always have to keep abreast of current financial matters. The world of finance is always moving and you will never know it all.

Some people might seem to have a good track record with finances, but when you dig a bit deeper by doing your own research, it's amazing how many holes you can find. By getting knowledgeable about finance, it gets easier to tell when somebody is talking financial B.S.

The book Richest Man in Babylon says that anyone can give advice, and that advice is given freely, but make sure you only take what is worth having. If you become a Mr Know It All, then your knowledge is actually out of date. You need to keep learning, and keep increasing your financial intelligence.

In Chapter 2 of The Richest Man in Babylon, The rich man Algamish, Arkad's mentor, gave him 3 pieces of advice: 1. Live on less than you earn, 2. Seek advice from those who are competent through their own experiences to give it, 3. Make your gold work for you. My friend Mr Know It All practices the first piece of advice, but little else. I would never take his advice seriously.

I'm currently increasing my financial knowledge by reading 2 books. The first is I Will Teach You to be Rich by Ramit Sethi, and the other is Multiple Streams of Income by the controversial guru Robert Allen (he was criticised by John T Reed, but I want to see what the fuss is about this particular book). How is it possible to read all of these books, and do all of this financial research? The answer is to learn speed reading, and you'll get things done in no time. I will never be a know it all, I will make sure I am always learning.

Blog Stars

2010-01-09T06:48:00.000Z

Other personal finance blogs are a great source of information. They are free to read, and the people behind them usually have a real passion and hunger for personal finance. They are up to date, and in the moment, talking of their own journeys in finance. Their uniqueness and originality is totally fantastic, and I always find them interesting to read. They give great financial advice, recommend even more blogs to read, contain great stories about real people and their finances, as well as advising on which personal finance books to read.

Here are a few blogs which I think are truly excellent:

Money Saving Expert blog: Martin Lewis is the main man in the UK, when it comes to personal finance. All of his methods are up to date and he has written excellent books to help people with their finances. His site Money Saving Expert is the most visited financial site in the UK, with about 3 million visitors per month, and growing. I always consult the website before making my purchases, and when formulating my financial strategies, to get the most up to date information and to ensure I am getting a good deal.

Blog Maverick: This, as far as I know, is the only blog written and regularly updated by a billionaire! Mark Cuban has achieved much in his life and is happy to tell everyone how he did it. If he can achieve so much in his life and still find time to blog, then anyone can find time in a busy schedule to make progress on their goals. Cuban shoots straight from the hip and tells it like it is. It's like having a billionaire mentor.

Budgets are sexy: This is a site run by my friend J.Money. He’s a great guy and a personal finance living legend, who always makes time to answer queries. It's clear that he loves the topic and genuinely wants to help people to improve their finances. I came across his site when I did a search for bloggers who listed The Richest Man in Babylon as one of their top books. He named a new book I will teach you to be rich, to be his best financial book of all time. I always listen to advice from good sources, so yesterday when I saw the book had finally been released in the UK, I got it, and I will write a review when I have finished reading it. If not for J's blog, I wouldn't even have heard of this book.

There are so many personal finance blogs out there, just do a search for “personal finance blogs” on the internet. My mind has an insatiable hunger for personal finance information, and with all of these blogs out there, I can always get a massive dose of financial education whenever I need it.

J.Money from Budgets Are Sexy recommends the following blogs as good reading:

Even the stars go to Poundland

2010-01-08T05:10:00.000Z

Even the stars go to Poundland. A famous multi-millionaire footballer was seen shopping in Poundland the other day. It just shows that no matter how much money you have, it always pays to keep your costs low. Bargain stores like Poundland are excellent for keeping your costs low, but don't forget to also check around supermarkets, as I'm regularly finding that stores such as Sainsbury's are providing goods at 75% or less of what Poundland and other similar stores charge.

Buying goods at low prices is an excellent financial habit to cultivate, and this year I have every intention of seeking out the lowest priced, decent items I can find. I used to feel ashamed of being seen in the lower end stores, but now I feel good when I see how this shopping strategy has boosted my bank balance. Now, even Moneyseeker3000 goes to Poundland.

The billionaire book club

2010-01-07T19:27:00.001Z

There's so many millionaires who have written books, its hard to know who to get advice from. It can be overwhelming sometimes, thinking of which book to choose. There are less billionaires out there, so you can narrow your search by reading books by billionaires. These billionaires tell how they made their wealth, so you get the advice straight from the horse's mouth. Good billionaire books I have read, which you can find on Amazon are written by:

John Paul Getty
Bill Gates
Donald Trump
Sir John Templeton
Warren Buffet
Russ Perot
Michael Dell
George Soros
Michael Bloomberg
Richard Branson
James Dyson

These are virtually all of the billionaires who have written books. I own, or have read; all of these. There are only about one or two other billionaire books out there (which were actually written by the billionaire), so it is a nice, limited selection. The next time you think it's too much trouble to select a millionaire's book to learn from, narrow your search, and choose a billionaire book instead. If you don't want to spend the money on books, you can always read about these billionaires for free on Wikipedia.

Horse-like determination

2010-01-06T07:59:00.000Z

There was a story in the papers about a cleaner who desired to be a champion horse breeder. She managed to get a horse but could not afford to keep it in a conventional stable so she kept it in an allotment. Her horse went on to win races, beating other more established stables who spend millions on the upkeep of their horses.

This real life story shows how powerful determination is in getting to your goals. If you are determined, nothing can stop you, and you will find a way to reach your dreams, no matter how long it takes, no matter what it takes. No excuses. If a mere cleaner can breed a championship horse on an allotment, what can you achieve on your limited time and resources? The book The Richest Man in Babylon says "Where determination is, the way can be found".

J.O.B. Just over broke

2010-01-05T04:55:00.000Z

Some people (including some scam finance gurus) actually laugh at a job and say it is Just Over Broke. I don't think a job is useless at all, and I think it is a vital tool in moneyseeking. The key is to use a job correctly. If you save your money, you will do just fine, but if you spend it all on going to the pub, and expensive cars and gadgets, you really will be broke and begging payday loan companies for money.

One guy I currently work with had a top of the range new luxury car last year. This year I saw a brand new luxury big SUV car parked outside the office. "Why did you get a new car" I asked him. He replied "New year, new car". So now he is paying out more in tax, and insurance for this car, as well as being more in debt. He recently was complaining to me that he couldn't afford to buy a house, even though he earns a high salary, well in excess of the UK average. Even though I earn far less than he does, I can buy property, and he can't, simply due to the difference in our spending and saving habits.

So, what's the average UK wage? Different figures, such as £24k have been bandied about by the media. From my own observations and experience it's blatantly around £20k because I've seen many Central London workers who earn less than this, and wages are usually low in most other parts of England. Most people will actually be lucky to get that nowadays, as this is a terrible economy and there are not many jobs out there. Employers are reluctant to pay out a lot of money, and do not want to promote most people so they can keep paying their employees as little as possible. In addition many employees are part time workers, which limits the employers commitment to them. The odds are stacked firmly in the employer's favour, and they will pay as little as they can.

Many years ago I worked in Central London, and at one time I had a job which supposedly had excellent potential. This job was alongside fellow graduates who had been there for years and still earned £15k. I left the company after a few months when I realised they had no intention of raising anyone's wages although they kept promising to, and this was a top employer in Central London. If you are not well paid when starting out (and most people won't be), then the way to make money is to have about 2 or 3 different jobs.

Private vs public: In the old days, private sector (private business) paid more than the government public sector. I believe the tide turned a long time ago, with pay, job security, holidays, and conditions for public sector work now being better than the private sector. Obviously there are cases, such as banking, where private sector pays a lot of money, but never underestimate the public sector, where some managers and top level employees can earn well in excess of 30k, 50k, 80k, 100k. It all depends on which department you work for, and the position you reach. A news report showed how public sector employees are doing very well. Most people overlook the undisclosed extra finances public sector employees can get. There can be lots of paid overtime. There can also be stuff like shift allowance, which pays you a lot of money simply because you worked at a certain time. People forget to include these amounts when looking at how much public sector workers earn. For example police officers get a publicised pay of 23k per year, but a friend told me his brother was in the police, and the reality is that due to overtime rates, shift allowance, living allowance, etc, its unusual for any police officer to get paid less than 40k each year. And they get free travel! Similar situations occur in the army, the publicised pay is 15k per year, but there are lots of extra government benefits and tax breaks. I have a friend in the army, and he told me the soldiers get paid an extra "combat pay" when actually deployed on duty, in addition to their normal salary. He said his sergeant was getting paid over £4k per month in total!

Teachers earn a lot of money, experienced teachers can earn over £40k per year.

As far as having a job goes, I think public sector jobs are probably better for the following reasons: Better compensation for overtime, whereas in the private sector you might be expected to work extra hours for free. Better job security and a better appeals process if you believe you are being treated unfairly. There is better job security as you won't be turfed out by a private employer looking to replace you with unbeatable cheap labour from foreign countries.

It doesn't really matter if your job is public or private as long as you are getting paid and using that money to build a better future for yourself. I am always amazed when people have a chance of getting a job and saving money but they turn it down because they think the job is beneath them. When I was at school, having a "low status" job such as a bus driver was frowned upon, but now I see many bus drivers and train drivers making much more money than graduates, and with better overtime pay and job security.

Never put down a job, yes there are some downsides, but don't throw the baby out with the bathwater. A job is good, but being self-employed is better and is the eventual goal. My millionaire mentor Mr Piper, regularly earns in excess of £120k per year and has millions of pounds of real equity in property. This is well above the UK average, and is better than a lot of Members of Parliament and bankers. But he had a job first, a menial job in a market, selling chicken and cheese. He started out many years ago in a job, and built his way up to financial freedom. A job is usually the first stepping stone to success.

Robbed by the universities

2010-01-04T07:00:00.000Z

Investing in a university degree only benefits the universities. Higher education is now a billion pound industry which has made many universities rich. Students are being robbed by the universities. They happily take money from students, and from the government, all the while promising a golden ticket to success. Nowadays, when many graduates go out into the real world their best hope is to find work in a bar, and still they find it a struggle to even get menial work! All that time, money, and effort wasted.

I have shown evidence in many of my previous posts of why I believe university is a bad investment.

Many universities, including the top institutions such as Oxford and Cambridge, actually use multiple choice examination papers, which saves them time and money. The quality of graduates, even from the highest universities, is frequently lamented by employers, and it seems many students only attend university because they can't think of anything else to do with their lives.

The university lecturers hoodwink students into thinking that their investment of time, money, and effort will definitely pay off. Meanwhile, economic turmoil rages outside, in the real world of work. Even though they are fully aware that graduates are unable to find work, the lecturers still say to the students "don't worry, it won't happen to you". The statistics say: oh yes it probably will.

University is the land of make believe, when it comes to investing. Statistically, only a few graduates make the big money after university. For the vast majority, it is a terrible investment which will never pay off. In this way, students are being robbed by the universities.

There are now so many graduates, that a degree qualification is devalued. The situation is so bad that there has been talk of employers thinking of only giving Phd graduates a chance to get a job. A Phd is an extra 3 years of study!! This would be an investment of 8 years assuming you pass all exams the first time around, (2 years A=Level + 3 years degree + 3 years Phd). This is a loss of £200k earnings (£25k x 8), also, student debt would be well over £25k. So, this means a Phd graduate would enter the job market almost a quarter of a million pounds behind a non-graduate. The government has claimed a degree would give graduates 100k more over their careers than a non-graduate, but by the above calculations, this would still leave them around £150k behind. Most graduates, even Phd graduates cannot find a job at all, especially not a graduate level job, so the reality is more likely to be that graduates will slip further and further behind non-graduates. Rather than earning £100k more than non-graduates, they are far more likely to earn £100k less, as they will not have had a chance to gain industry experience, or invest in things such as property. Plus they are deep in debt; being well over 25k in debt with no job, is no joke. Government funded student loans have excellent repayment terms, but most students also take out hefty commercial loans, and you know what happens if you can't pay those off.

The daily mail ran a story on how the majority of recent graduates find it increasingly difficult to find a decent job.

Even older graduates who graduated many years ago and actually had a job, such as architects and quantity surveyors, are having to join the dole queue. So, don't think that even if a graduate has been established in a chosen field for many years, their job security becomes "safe". They are prone to redundancies and long periods of unemployment just like everybody else.

The BBC website has a good discussion area on whether a degree is a good investment.

I am not against the idea of education and learning, I'm just saying that university is too expensive in terms of time and effort for what the end result is. There are some professions for which a degree is essential such as being a doctor or dentist, and these have a far better chance of being a good investment, but for most degree courses, prepare to get robbed by the universities. If you enjoy learning and believe in becoming educated, find ways of gaining your knowledge, in cheaper, faster ways.

The following blog article I came across at GenerationX Finance, gives a whole range of financial educaton courses you can take online for free. You can learn, without being robbed by the universities.

Book review of Open by Andre Agassi

2010-01-03T01:47:00.000Z

Book review of Open by Andre Agassi

The ex #1 tennis player Andre Agassi is an example of determination and focus. He had to work for everything he ever achieved in tennis. At one point he lost his motivation, fitness and world #1 ranking completely and went down to #141. He decided to quit the game but then changed his mind and staged a successful comeback against fitter opponents. He came back to #1 by setting goals, devising new strategies and working hard. I first came across his story in the book The Power of Focus, and it has always inspired me to never give up, so I am happy he has finally written his autobiography so I can get the full story, straight from the horse's mouth.

Agassi tells of how he lost many tournaments and tennis matches in his career, and at first it was mentally devastating, but he never gave up. Over time he won more tournaments than most of his generation. He has won an Olympic gold medal in Tennis, and is one of only 6 people to have also won the 4 most major tennis tournaments, a career golden slam.

Andre Agassi is just a normal man, but the records, and the critics, rank him to be the number 3 tennis player of all time. Of all time! He put the effort in, and trained hard. Agassi did not even like tennis, he hated it, but he put the work in anyway. He is currently the 3rd highest ever earner in tennis (about $30m). The only 2 people to have earned more, are Pete Sampras and Roger Federer. It shows that you can even be successful at what you hate, as long as you put the work in.

When Agassi lost his tennis consistency and world #1 ranking (down to #141) due to his depression, he worked out an exercise routine with his trainer and spent lots of time running up and down a nearby hill (Gil Hill). He then went back to the basics and entered into amateur tournaments to re-learn his game, and had to endure people laughing at his downfall and telling him that he was too old and should give up tennis. Agassi kept working, and he worked his way back up to world #1 beating the best tennis players of that time, and adding more tournament victories to his record.

Agassi has set up his own charitable foundation, and also a school to educate children, using millions of his own money, and public donations.

Agassi is popular because he is so human. In his struggles with his age, his lack of motivation for tennis, his determination to do his own thing, his self-doubt. He provided inspiration by never giving up when he was ranked #141 and everybody thought his game was over, but he worked his way back to the top of tennis.

Autobiographies are always the best books. They are the story of success, straight from the horses mouth. This is a well written autobiography which defines the struggle with winning and losing, and everything in between. I can't wait to read it again.

Moneyseeker3000 rating: 3 and a half stars out of 5

Andre Agassi had to work for everything in tennis, from hitting millions of tennis balls from his dads dragon machine when he was ten years old, to putting in lots of effort when working with tennis coaches and his personal fitness trainer 'Gil' for the rest of his tennis career. Like many of the millionaires in the book The Millionaire Next Door, Agassi knew he was not as good as his opponents, so found a way to win by working harder, training more effectively, and devising better strategies to win. When he made his comeback, he had to deal with being older than his contemporaries, self doubt, and the embarrassment of falling so far in the rankings. He took on the challenge, and came out fighting. I can use the same approach for making money by: reading more books, doing more and better research, taking more action, setting better goals, and above all never giving up, even when everything seems stacked against me, just like Agassi.

GO

2010-01-02T02:48:00.000Z

I like the game of Monopoly, because it is a good basic test of budgeting and investing. You can become rich in that game, but first you must pass the number one square, which is GO. This is just like life because if we don't get off that first square and start moving, we can't play the game and start making money.

The world stands before us. All the money we want is out there waiting for us, but we must GO for it. In life, you don't get what you wish for, you get what you GO for.

Action is the key that sets us free. We must move forwards, in order to claim our share of that lovely money.

I find that my moneyseeking life looks a bit simpler when I look at the similarities with the game of Monopoly. This year, I'm going to play Monopoly for real, like I always do. I'm going to budget, and save, and invest. I've got plans of becoming even richer, but I realize that I won't get anything at all unless I GO for it.

The year ahead 2010

2010-01-01T06:28:00.000Z

The year 2010 is here. I face it with the accumulation of the moneyseeking skills I learnt last year, all the research I've done and books I've read. My financial intelligence has improved, particularly in the area of property, and this will be the year when I step into the battlefield once more to make further acquisitions.

I want financial freedom. My mentor Mr Piper has it. He is a multi-millionaire and can do whatever he wants, whenever he wants. He is not a slave to money, but it's master. This is a goal which will take many years, even as it took Mr Piper many years. It will be a long walk to freedom.

For 2010, I'm going to set goals for every area of my life, and work to attain them. In January, I will have my yearly money review, where I will re-evaluate all of my finances including: my Will, my current investments, and everything to do with my moneyseeking, to ensure that I am still on track, and to highlight areas I could improve. The book The Seven Habits of Highly Effective People says this is the habit of sharpening the saw. If I don't do it, nobody else will do it for me.

One of my main goals will be to overcome procrastination, and take as much action as I possibly can. I've seen how effective Mr Piper is by taking so much action, therefore if I can improve myself more in this area, I think it will make the biggest difference to my moneyseeking, and to all other areas of my life. I shall devote more of my time to the study and practice of making quick decisions, taking fast action, and doing much of it.

My financial resolutions for the Year ahead (2010), are as follows:

To always seek the best and cheapest deals.
To always check at least 3 different shops before buying anything.
To stick to my monthly budget.
To only buy food and snacks from supermarkets (because it's significantly cheaper than convenience stores and fast food places).
To not carry any credit cards, debit cards or cash on me when I go out, unless I have a planned purchase in mind.
To overcome procrastination, and research and act on financial decisions quickly.
To purchase at least one investment property.
To re-assess my will, and change it if necessary.

Life is a journey and you will usually never get anywhere until you decide where you want to go, and then start taking steps to get there. My road ahead leads to my financial freedom. Which road have you decided to take?

The Richest Man In The World

2009-12-31T20:42:00.000Z

What better way to end the year 2009 than with a focus on the best money seeker on the planet. He is the richest of the rich. He is the ultimate financial icon. He is the richest person in the world. His name is Bill Gates.

We all want money. When it comes to actually getting it, and having wealth, one man has exceeded all others on the planet. His name is Bill Gates. He created the technology company Microsoft, and his shares in the company make him a billionaire, and the richest person on the entire planet, with a net worth of 50 billion dollars. His charitable foundation gives away billions each year to worthy causes, and he also has a fantastic and happy family life. Hate it or love it, Bill Gates is on top.

How did he do it? Well, he took action to create his own financial fortune. He was proactive and did not wait for somebody else to make him rich. He realised that he had to seek money. He left university prematurely, showing that he thought it was a waste of time, and instead took immediate action to start Microsoft. Ironically, he now has many honorary degrees from different universities. These so called educational institutions clearly agreed that money was a better measure of excellence than actually spending a lot of time studying for a degree.

What can we learn from him? After all, by learning from the richest man in the world we are sure to increase our chances of gaining wealth. He wanted to make money, and realised the only way to do this was to control his own destiny, with his own business. Statistics show we might never be as rich as Bill, however by learning financial lessons from him, we can still do much better with our own finances. The only way for us to have a chance of becoming wealthy is to seek to control our finances, by budgeting, saving, investing, or starting a business.

Bill Gates is also the most charitable man in history, proving that we all have a choice of how we use our wealth.

Bill Gates is a prolific reader, and he has a massive library in his home. It shows that he knows the value of research and seeking knowledge, in order to have an advantage in the world. He proves the quote that “all leaders are readers”.

Bill Gates is a reminder that it really is possible for a human to have and control a massive amount of money, and also have a fantastic life filled with joy, generosity, and love. If he can make such a positive difference in his own life, and in the life of others, then we can all become better at increasing our wealth and satisfaction with life, if we will only try.

Year 2009 review

2009-12-29T09:56:00.001Z

Year 2009 review:

2009 has been a year of much turmoil in the financial world. Personally, I failed to win the National Lottery, and ended up cashing in all my Premium Bonds when I discovered I could get a better return in a bank account. I managed to increase my overall wealth by many thousands nonetheless, and came close to adding an investment property to my portfolio. Here's my take on the effectiveness of current financial investments, in terms of: business, stocks and shares, savings, property, a job, and other stuff.

Business:

It's been a challenging time for businesses, yet the British economy has not collapsed, and businesses are still making profits. There are still opportunities in business to make money.

Stocks and shares:

I have not invested in the stock market. I've heard too many stories from acquaintances who have been burned. My mentor Mr Piper does not believe in stocks and shares. I would only invest a tiny fraction of my money into index funds. Personally I think the best shares to invest in would be: supermarkets, banks, and travel because these are things people will always need, and will always pay for. I'll put some money into index funds this year, but it does not really excite me as I cannot control the investment closely enough.

Savings:

Simply saving money in high interest, instant access accounts is great way to store your money. If any investment opportunities crop up, you can access your money immediately to take advantage. Cash is king. Savings in the bank do not get a lot of interest, so get as much bank interest as you can, but also look to invest your money elsewhere, in your own investments, such as property (if you can afford it). Saving is something which must be done, it is the corner stone of wealth, and the building block of a great fortune. I saved up money for many years before I had the financial ability to make bigger investments.

The banks have gotten away with causing one of the biggest financial collapses ever, yet they are passing on tiny savings rates to savers, and the Office Of Fair Trading has allowed them to continue charging customers too much money for being overdrawn. The banks are not on your side when it comes to making money. The banks are not giving me a fair return on my money. I currently aiming to transfer a majority of my finances into property, this year. I will still keep lots of money in the bank for emergencies, but I will always know that I can do a better job with my own investments.

I am not putting down banks completely, and I still believe money must be built up in a bank, but for a purpose. Putting money in a bank is still better than doing nothing, and is better than putting your money under the bed.

Property:

I've had a good look at the recent property market, viewing properties in person, attending auctions, and calculating the strength of the investment. Its quite eye-opening to see how different the reality is from from TV shows such as Homes under the Hammer, and Property Ladder. No property that I have viewed is perfect, and compromises blatantly have to be accepted. Generally, all properties need a bit of redecoration. I do believe in doing DIY, and easy jobs such as painting, and I will always evaluate the cost, time, and likely outcome, before I decide to use skilled labourers.

I have learnt that in the majority of cases, it's best to just live with the physical layout of a particular property. Not all houses have an upstairs bathroom for example, and I was adamant that I would not buy a property without this feature, but after much searching, I see that downstairs bathrooms are perfectly acceptable and quite commonplace.

As for auctions, TV shows such as Homes under the Hammer, have displayed many buyers purchasing at auction without having a survey done first. I see that the reason for this, is that there is limited time to view the property anyway, and the possibility also exists that the property may be withdrawn before the auction, so why invest too much into the property beforehand. I think this means you can only really spend a lot of attention on one particular property (like doing a survey) before an auction, and then focus on investigating and buying only that one (within your budget), to limit your risk and keep your pre-auction costs down.

Are house prices rising? I think they are slightly, but this is probably the bottom of the market, as houses are selling. 2010 is the year for Moneyseeker3000 to invest further. I almost purchased an investment property one month ago and I actually made an offer, but the next day I woke up and my gut feeling was that in 2010, similar properties in slightly better rental locations would become available. The first property I see which meets my criteria (location, total purchase price, amount of rooms, likely rental), I will buy.

I will take out a 2 or 3 year fixed interest only mortgage, as the thought of 25 year mortgages scare me. I will make sure the monthly repayments are fixed, and as low as possible. Then I will save up the profits into a high interest rate account in case I need it, and at the end of the short mortgage term, I will use my savings to pay off a massive chunk of the mortgage. By doing this, I'm pretty confident of paying off the mortgage entirely in under 10 years, avoiding lots of interest charges that I would otherwise get on a 25 year mortgage. Yes, there will be mortgage arrangements fees, but over time it still works out to far less outlay than a 25 year mortgage.

Property is a bit of a hassle, and everyone worries about problem tenants and repairs, but I have never heard Mr Piper complain about such things. Property has made him a multi-millionaire. Is it worth an extra bit of hassle for more money? Of course it is. I know a few other property millionaires; one of them, Mr Popinski, recently (November 2009) had a 4 bedroom house unoccupied for 3 months as he was “waiting for the right tenant” who would pay more money than the local £1100 monthly rental. The mortgage was already paid off, but I thought he would still lose money by having the place unoccupied for so long. I would have followed Mr Pipers advice of renting out a property for the maximum you can get right now, rather than waiting for more. Mr Popinski managed to find a rich foreign tenant prepared to pay £1400 per month! That's almost £17k per year going into his bank account, and that's just one of his many properties! That's the kind of hassle I like!

Job:

I think a job is a good investment. It's a stepping stone onto greater things. You have the opportunity to observe your work colleagues, so it teaches you about other people and how they spend their money. You can see how their actions have created their lives, even though they usually cannot see it themselves. Having a job can teach you to save finance and you can learn to not waste money on expensive gadgets and outings as many of your colleagues will do. Having a job has allowed me to save up tens of thousands of pounds which I can plough into other investments, so how could I ever be against employment. When going for a job, always go for the highest paying job you can get right now, because you never know when you might be made redundant! I recognise that being controlled by an employer is not fun, it's like being a slave, and my goal will always be to leave work one day and survive on my own investments and ingenuity just like my millionaire mentor Mr Piper. These stages come step by step, and having an income from a job which you use for your own benefit is usually the first step.

Other ways of making money:

There's other ways of making money, but its important to stay alert. Don't simply trust advice from friends or from the bank. Do your own research. Most people do not know how to make money, they only know how to spend it. To be rich, you can't be like most other people, you have to be far more frugal, far more active, etc. American finance guru Dave Ramsey says “you must live like no one else now, so you can live like no one else later”.

Charity:

I continue to give money to charities. There have been times I've looked at my pay packet and thought that maybe I should just stop giving my precious money away, and invest it instead, but then I think of charitable people like Bill Gates and Sir John Templeton, and use them as my charity role models.

There are people out there who look at rich donors and say they are only giving away money because they are rich, but this is just an excuse for them to not give any money themselves. Anybody can give away some money, and it's usually the same people who complain about charitable acts who don't even give away one pence of their own money to help others in need. Their hearts are bitter towards humanity, and it is very sad indeed.

Conclusion

I have learned much this year, and I feel I should be doing much better considering all of the research I've done, people I know, and money I have made. The fact is, that I am just being impatient. I have done a great job on building up my finances, and my financial intelligence this year, especially considering how uninterested I used to be many years ago. On my mantelpiece I have a large porcelain tortoise (which I got from Poundland :-) ). Every time I look at it, it reminds me that wealth is a slow and steady journey. It is a journey which is unavoidable for a moneyseeker, and it is a journey gladly, and proudly undertaken, by Moneyseeker3000. Bring on the year 2010!

Money

2009-12-28T10:55:00.001Z

Money, what is it all about? In this capitalist society, most of us work for money, and our lives are dominated by money to a large extent. Yes there are other things than money in the world, but ignoring money is a mistake which leads to serious consequences sooner or later. I became moneyseeker3000 because I discovered that I like money, and I want more of it. Life has many areas such as fitness, love, friends, other hobbies, etc. Money is also a definite area which needs attention. "Money is a good servant, and a bad master".

I began to seek money when I realised that money could do a lot of good in life, and that money was good to have. Money is not a bad thing to seek. So, how can anyone increase their money and wealth? Britain is a challenging country, with all its high taxes, bills on the increase, and the credit crunch making life difficult, yet through all of this, certain people continue to increase their wealth. The banks are paying interest rates of around 2.5% (before tax!), yet I'm currently finding property investments that I'm certain will yield at least 7.5%! Getting into these investments is not easy without a deposit, but it can be done by those who have spent their time saving money first. Making money is still possible for a minority of the population. Anyone can join in the money making by making a study of wealth. It takes a bit of time at first, but like any skill, after a period of training it will improve. Sacrifices must be made, but I have seen that no matter what your financial situation is, its possible to raise your wealth significantly.

A 7.5% return on your money, pales into insignificance when compared to the 29.0% and higher, charged by store cards and other finance institutions for loans. This showws that getting a high return on your money is not easy, but you have to do what you can. If you keep saving and studying for your great financial destiny, you will be able to see and act on opportunities which many people cannot.

Everybody has got their own idea on how to become rich. Even now, I have some of my less wealthy friends passing me on tips of how to get rich. One friend actually claimed he was currently earning 6% in bank interest. I did my checks, and discovered he was either lying, or was mistaken. Such confusion is commonplace when searching for the secret to making money. With all the books, people, and sources out there, it's hard to know who to trust. Some people even get into debt, in order to make themselves look rich. The basic secret to making money, is to spend less than you earn, and save or invest the difference. It is not easy and it does take time, but anyone can get there, even as I am getting there. The book The Millionaire Next Door, shows how ordinary people can increase their chances of being rich in their lifetime.

Money is freedom, especially in the UK, and financial freedom is a goal worth striving for. In my moneyseeking, I have met poor people and rich people, and it never ceases to amaze me how much a persons mind and beliefs are responsible for their financial situation.

As the year 2009 comes to an end, I think of all the moneyseeking I have done, the books I've read, the conversations I've had, and the people I've met. What stands out to me the most, is the real life example of my multi-millionaire mentor, Mr Piper. He is a man who started with nothing, and does not have an education or qualifications, but due to the attention and care he pays to his finances, and his desire to be independent, he has become a multi-millionaire. Each year, he routinely earns more than many members of parliament, and city bankers! He cheated nobody to gain his wealth. I sometimes forget just how wealthy he is, and how far he has come, because he just seems like an ordinary person and does not flaunt his wealth. To think that I have actually made friends with such people, is incredible! He is a completely normal person who saves his money carefully, spends wisely, and invests with a view to making money. I don't ask him for much financial advice at the moment, I just watch him going about his business and see that he practices good financial habits. He is always working hard, taking action, and acting on opportunities. He takes total responsibility for his life, and his finances. He relies on nobody, he makes his own wealth. I have never once heard him making excuses. He sought his own money. If he can do it, anyone can.

Book review of Talent is Overrated by Geoff Colvin

2009-12-16T07:12:00.001Z

Book review of Talent is Overrated by Geoff Colvin

There is no such thing as talent, and there are no geniuses. The book cites studies which show that top musicians can only get that way by putting in a certain amount of practice hours beforehand. Mozart was not a genius, but rather “Mozart became Mozart by working furiously hard”.

Many top performers such as business leader Jack Welch, Microsoft executive Steve Ballmer, and many others showed no aptitude for their field of expertise when young, and only when older, when they put the work in, did their results materialise.

The book says that putting in lots of practice is hard work, and top performers don't like doing it, but they do it anyway. Work is painful and uncomfortable but the successful people recognise that this is the price they must pay, whereas other people would rather avoid it.

World class performers in any discipline have usually practised far more than most people from an early age. The book says that top performers use “deliberate practice”, I.e they focus on what they are doing and keep monitoring their practice sessions and results. They don't just mindlessly go through the motions. This is the strategy explained in one of my favourite books The Power Of Focus.

The book goes on a bit too much about having to work hard all the time, and doesn't present any situations where a less experienced person has achieved fantastic results by avoiding a lot of hard work, simply by having a good plan. When facing a new challenge there isn't always enough time to have the experience necessary to make an optimum choice. Instead, a quick decision must be made. In these situations all you can do is take your best shot, and hope you get lucky. The book Think and Grow Rich says “It's not the lawyer who knows the most law that wins, but the one who prepares the best case”.

The book can be quite discouraging when you realise that in any challenge, your competitors may have far more experience than you. So how do you and me as normal people catch up? The answer is contained in books like The Millionaire Mind, which say people who are disadvantaged must find or create alternative paths to success. We must compensate for our deficiencies, compose alternative strategies. If someone is more experienced than you, you can still beat them with a good plan. The book The Millionaire Next Door talked of the handicapped fighter pilot who beat opponents more skilled than himself by having a superior attack plan. Recently, the underdog boxer David Haye beat the bigger and more experienced champion Nikolai Valuev, by having a better fight strategy, proving that lack of experience in comparison to your opponents is no reason to give up.

The book doesn't really address the issue of “procrastination”. It is quite possible to know your goal, and want to put the work in, yet not be able to lift a finger to do anything about it, due to laziness. I meet these type of people all the time, and also suffer from procrastination myself from time to time. Luckily there are many books out there with good strategies on overcoming procrastination. The best books I've found so far are The Procrastinators Handbook, and Get Everything Done.

It's a very well researched book, and you can tell the author really wants to uncover the truth about where talent comes from. The book says great performance starts from the mind; if you believe that if you put the work in you will become great in your chosen field, then it is more likely you will put the effort in and achieve your dreams. Success is not for a privileged few, anyone can do it, but it will probably take a lot of work beforehand.

Moneyseeker3000 rating: 3 and a half stars out of 5.

The book Talent is Overrated, takes away another excuse that people have for not making money, because they now can't say that rich people are that way because they are more talented. Rich people have put the work in, and use basic wealth building strategies to seek and maintain wealth. It isn't always fun, but they put the work in anyway.

I'm now reading Open, the autobiography of Tennis champion Andre Agassi. Amazingly, he says he has always hated the game of tennis, but he put the work in anyway, and achieved success. I became interested in Agassi's story years ago, after he was briefly mentioned in the book The Power Of Focus, where it explains how he was a winner who started losing badly but eventually returned to massive success. He took responsibility for his performance and proved that he could beat people much younger and better than him, by having a good plan, and by putting the practice in.

You don't have to love what you do to become a success at it. I don't always love seeking money, but as long as I keep working to my plan, I expect to achieve a good measure of financial success.

House prices are on the up

2009-12-15T10:51:00.001Z

Well, apparently, the BBC website says house prices are on the rise. I'm actually seeing certain houses finally selling in my street, so I know there must be some truth to this. This would be the first house price rise ever, in the midst of a recession. Houses are going up in value, because demand is pent up. Everybody wants to own their own property. In the same way people will stretch their finances and take out loans for expensive cars and clothes, they will happily take on a big loan for a property of their own. As soon as the banks start to ease their lending restrictions, there will be a horde of buyers pushing the price up even more.

The reason prices are rising, is that there are not that many houses to buy in Britain as land is scarce, unlike America. Property will never go out of fashion in Britain. In the UK, the drive to own property is all-consuming, and defies the logic of economics. House prices in England will always be expensive simply because everybody wants one, and there is not enough to go around. In spite of this, I think it's quite a small price rise, and to me it points out that the market has stabilised. This is the bottom of the market. All we need now is for more people to put their homes on the market, enabling moneyseeker3000 to have a better choice when adding to the portfolio.

This must be the shortest recession ever. The bankers are once again getting big bonuses. House prices are rising. Interest rates are low. There's great shopping deals in the high street and on the internet. Financially, for me this has been my best year ever. I've saved up many thousands of pounds more into my bank accounts, and I'm now monitoring the property market to buy investments that meet my criteria.

Hate it or love it, house prices are on the up, proving that even in the worst financial crisis the world has ever known, property is the number one asset class.

Book review of Buying Bargains at Property Auctions

2009-12-13T11:56:00.004Z

I saw the book Buying Bargains at Property Auctions by Howard R Gooddie, for £1 at Poundland, so I got it. Here's my review.

It's a good basic book which shows that it pays to research properties well before the auction. There is lots of legal stuff pertaining to the property and land which you need to be aware of, with a solicitors help. Buying property at auction is not a guaranteed path to riches, and could even make you bankrupt, and so you must still take precautions. I remember property developer Gary McCausland in his book How to make a million from property, saying that he has seen many people buy a property without having a building survey done first, and they got burned massively as a result. I don't like the idea of spending out money researching a property I might not be able to buy, but the book The Richest Man in Babylon says "better a little caution than a great regret".

The book mentioned how an 8% yield on property was good. I remember seeing a recent interview by TV property developer Sarah Beeny, who said BTL was not worth getting into unless the yield was 15% to 20 %. Those type of deals generally are virtually impossible to find, so getting 8% is indeed a more realistic target.

The book recommended the auction news services Property Auction News and Estates Gazette. These are both paid for subscriptions. I believe these are outdated as the fact is, Rightmove.com shows auction properties for free, as do auctioneers websites.

The book recommends extensive prior research of a property, and consultation with solicitors and surveyors. In reality, I have viewed a few pre-auction properties, and you only have a limited time to view the property (about 1 hour), so I don't think there would be time to carry out the extensive research he suggests. Also, a property can be withdrawn before the auction, so is it really worth spending hundreds, maybe thousands of pounds on researching a property before the auction? I think some research should be carried out, but when you get to the auction room, a lot of potential risks will still remain. It is still a reminder that you can get into serious trouble if you make no attempt to check out a property before auction.

Pages 87 and 88 have a buyers guide of all the things to do before the auction, such as arranging finance, instructing a solicitor etc. This is a plan I will follow if I buy via auction, but I wonder if there would really be enough time before the auction to get it done.

The book is padded out with lots of auction contracts and conditions of sale, which are blatantly there just to take up space.

The book does overplay the whole auction route, by overcomplicating things such as suggesting bidding strategies to get your property at a price you want. In reality, an auction is a simple process and only comes down to who bids highest on the day. It shouldn't take a whole book to get that one simple point across.

Moneyseeker3000 rating: 2 and a half stars out of 5.

The university industry

2009-12-12T07:58:00.001Z

I'm going to have another rant at how university is not such a good investment. I know someone who got a first class degree in Maths and Business Computing 2 years ago, and has just decided to "invest" thousands of pounds in a masters degree. He has been completely unemployed since graduating, and the masters degree will only produce more debt and mental anguish once he completes it and finds no one willing to throw jobs with 100k salaries at him.

Rather than studying good financial and investment techniques (which actually wouldn't be much use without a job or access to funds), certain people still persist in the belief that a university degree will solve all of their financial and self-esteem woes. In contrast, I've turned my back on education, even though I have a degree, and I spend my time looking for good investments in the real world.

The BBC website showed how UK universities generate billions of pounds for the economy. And there was me thinking that university was supposed to be about learning. It seems it has now become a way to fleece innocent trusting people out of their money, by giving them overpriced education and not telling them about the unlikelihood of most graduates earning a high salary, or even getting a job, afterwards. Graduates are under more stress than ever.

The book The Millionaire Mind, has shaped lots of my thinking about the role and usefulness of a university degree. Amongst other things, the book generally says that graduates are not guaranteed steady jobs after leaving university.

Its so hard for graduates to get jobs now that they are resorting to paying recruitment companies to try to find them unpaid intern-ship work! This certainly casts significant doubt on the governments recent claim that graduates will alledgedly earn 100k more than non-graduates over their lifetime.

A recent news article says graduates can only be expected to earn £2,500 more than non graduates. Remember that the average UK degree will put a recent graduate 175k behind a bus driver in the financial race. Here is how: A non graduate bus driver's total earnings of 25k per year, over 6 years, comes to 150k. In contrast, a student spends his years like this: 2 years of A-level = (-50k), 3 years of university = (-75k), at least 1 year of unemployment after graduating (-25k), add approximate student debt (-25k). This comes to a graduate balance sheet of -£175,000!

As you can see, a graduate earning £2.5k per year more than a non-graduate bus driver is nowhere near enough to make up the difference. There is also the "opportunity cost" that is missed, as the bus driver can buy investment properties sooner, so in fact the head-start of the non-graduate may be too much to catch up with. Non-graduates can find find better paying work than bus drivers, so the difference is probably even more pronounced in reality. Current conditions are showing that graduates are unlikely to find any job, and will be lucky to gain employment stacking shelves. To say that graduates earn £2.5k more is probably highly optimistic, and in reality they probably earn a lot less.

A small percentage of the UK population are high earners, i.e well in excess of 50k. Some graduates will reach this level, but it is only a few people, and is quite frankly like a lottery, and this is after years of study. I know many graduates who are right now stacking the shelves in the local supermarket.

People mainly go to university to improve their employment and career prospects, but this way no longer works. Like an old tribal raindance, people still believe in it, and sacrifice their time and money for it. I actually think that graduates generally earn significantly less in total lifetime earnings, than the average non-graduate. University is an industry which makes the lecturers, student landlords, and student shops rich. For most students, it is a bad investment.

This brilliant article shows why it can pay to skip university.

The Glimmer

2009-12-06T16:49:00.000Z

The other day, I was travelling around, viewing properties with possible investment potential. It was just for one day, but I suddenly realised that there are people out there who do this kind of thing all day, everyday, for a living, completely unfettered by having a job. I literally, and vividly, saw a glimmer of how it would be, to be truly financially free.

I imagined the freedom of being able to do whatever I wanted, whenever I wanted, completely unrestricted by not having enough money, or by having a 9 to 5 job. I saw a glimmer, a vision of the future, a view of a whole new way of living. I then remembered that this is the way my millionaire mentor, Mr Piper, lives his life. He does not have to rely on an employer for his finances, or upon having a regular job. There are many wealthy people out there who are financially free right now, and can control all of their own time.

The glimmer which I saw, made me remember why I do what I do, why I became moneyseeker3000. Financial freedom is a glorious notion, and I would love to truly embrace it one day. Until that day comes, I must keep learning, and investing, gradually increasing my wealth until I reach the level I desire, which will make me financially free one day.

The value of housing

2009-11-21T09:43:00.001Z

The housing market is very interesting. I was recently interested in a 2 bedroom flat for 115k. I phoned the estate agents about it, and there had been a bidding war, and it was now up to 140k!! I wasn't going to step into that battle, so I looked further afield for houses. I found some good looking stuff on Rightmove, and I've had a few viewings.

My criteria is to buy something as low priced as possible, in an ok area, that can be rented out immediately. The more money you pay, the bigger and better house you get, but less rental return on investment, and a bigger mortgage to pay. I want property as cheaply as I can get it. Theres no point in buying a wreck, as it will probably cost the same amount overall to do it up to the standard of a normal house. New build type houses are mostly cheaper than older victorian houses, and require less maintenance, so seem like good investment prospects.

One of the biggest lessons I've learned from checking the housing market is that there are no underpriced bargains. If any genuine bargains do turn up, they will be hotly contested by other investors and the price will go up so it is no longer a bargain. There is no such thing as "below market value", the market is what it is.

I'm selecting property based on my own research and decisions, with no help from my mentors. They are probably busy enough with their own stuff, and I doubt they can give me the level of assistance I would require from them. I have enough confidence in my moneyseeking abilities to select properties on my own decisions. If anything goes wrong, I only want myself to blame.

Q: what if the housing market drops? A: By buying property as cheaply as possible losses are minimised. In the long run, property always wins. I'm not in this for a fast buck and I expect to hold investment properties forever.

Why I'm ditching premium bonds

2009-11-17T07:08:00.001Z

After reading the Moneysavingexpert website, it showed clearly that premium bonds are a terrible investment as you have far more chance of winning the UK national lottery, than getting a big premium bonds payout. Your chance of winning the UK National Lottery jackpot per £1 spent, is one in 14 million, but for Premium Bonds the chance per £1, is one in 40 billion!

And thats why I'm ditching premium bonds. My money would be better invested in the UK National Lottery!

This fact stunned me so much that I've cashed in all of my premium bonds and put them into a high interest earning bank account, as reccommended by the article. Overall, the regular interest payments each year will add up to more than I would get from premium bonds in a year. It proves that making money does have a set of rules which need to be put into practice, and if you don't folllow the rules you will lose money.

Within the span of seven breaths

2009-11-16T06:26:00.000Z

This is all about action. It's always important to act quickly whenever opportunities present themselves. My millionaire mentor Mr Piper is always taking action. I remember one day when I questioned him about all of the many DIY jobs he had started around his new house, and was working on, in addition to managing all of his investment properties. He said to me "I'm always thinking about 16 different things at once". He values action, and doing as many different things as he can concurrently.

This year, Mr Piper moved into a new house and is improving the place whilst he is living there, and there is lots to do, yet in a few months he has already done what it would take many people years to do, mostly by himself, but also with help from friends. At one point he was assembling a greenhouse in the garden. I said to him "have you ever assembled a greenhouse before?". He said "I haven't done most things before, but I just get on with it". I asked him that question because I wanted to know how he is able to seemingly do every type of job put before him. He does not use lack of knowledge or experience as an excuse to not act. So many people, including myself, make up excuses to not act immediately. Mr Piper just takes action all the time, and this habit has made him a multi-millionaire.

There is a good book called The Baron Son, which talks about how important it is to take immediate action in order to maximise your chances of financial success. In the chapter entitled: Within the Span of Seven Breaths, it says..... "when a situation is fully understood, you should act within the span of seven breaths......It does not matter how much confidence someone has, or how many brilliant ideas they come up with. In the end, the ability to act decisively is what sets someone apart from mediocrity".

If you don't take action, opportunities will pass you by, never to be reclaimed. The Richest Man in Babylon says that "men of action are favoured by the goddess of luck".

Taking action immediately always carries a certain amount of fear and apprehension. Its hard to know exactly the right decision to make to increase wealth, but decisions and action must be taken anyway, or nothing will change. Nowadays I try my best to live by the following quote I saw, concerning action: "A good plan, executed right now, is better than a perfect plan carried out next week".

House of Horrors

2009-11-15T08:12:00.000Z

I went to view what loked like a "big monster" of a house on Friday. It turned out to be far smaller than it looked in the advert. The interior had sustained significant damage and it looked grotty and in need of significant re-fitting. As I looked out of a window, an airplane descended so low, and so loudly, I could see its undercarriage! It was very close to an airport. I made my excuses and left. If the price was lower, I could live with the airplanes, but my gut instinct told me the overall asking price should have been lower. Far from being a big friendly monster, the house was a horror.

I began to analyse the viability of flats and discovered that I could get an 8% return before tax, on some of these. Flats are less expensive than houses so the return is greater. As long as the leasehold is over 100 years, I'm interested. Flats are not freehold, which puts a few people off, but you have to live within your means and buy what you can afford. The same principle should apply to investing. I checked Rightmove and found a decent looking 2 bedroom flat with parking for £115k. Rental should be in excess of £700. It looks like a new build flat, yet seems clean and effective. New builds have a bad reputation compared to older buildings, yet people still buy them, as it is all that many people can afford! As long as the price is right, a bad deal can easily become a good deal.

I remember when Mr Piper was telling me of his rise to multi-millionairedom. He said that he was originally trying to buy his first properties in another area entirely, but when that deal fell through, he compromised and purchased properties in the high street where I first met him. He then expanded from there. He compromised on his original plan, and had to change tactics, but he kept on going. His success in property proves that if someone wants to be successful, no matter where they are or what happens to them, they will find a way to achieve their goal.

The property market has seen a few falls in value, but the problem is that its hard to get lending from banks. In every type of market, no matter how difficult it seems, there is always an opportunity to make money. The Richest Man in Babylon says "Where determination is, the way can be found".

Les Miserables

2009-11-14T07:28:00.000Z

There is a great musical called Les Miserables, which is the worlds longest running musical. I saw it a few years ago, and I discovered that the term Les Miserables refers to poor people, and the misery that poverty brings. The central character Jean Valjean starts off as a poor thief but transforms his life by becoming an honourable, wealthy businessman.

In the musical, there is a song sung by the poor people, and some of the verses are as follows:

[THE POOR]

At the end of the day you're another day older

And that's all you can say for the life of the poor

It's a struggle, it's a war

And there's nothing that anyone's giving

One more day standing about, what is it for?

One day less to be living.

At the end of the day you're another day colder

And the shirt on your back doesn't keep out the chill

And the righteous hurry past

They don't hear the little ones crying

And the winter is coming on fast, ready to kill

One day nearer to dying!

There is no honour, and no joy in being poor. I do not want to be one of the Les Miserables of the real world. One of my biggest fears is becoming one of those old people you see stacking the supermarket shelves at age 60 or beyond. My job is to make sure that never happens, because having little money in old age is no fun. How can I reduce the chances of becoming poor? By seeking out a wealthy life.

There is nothing good about being poor. "At the end of the day you're another day older. And that's all you can say for the life of the poor".

The sound of wealth

2009-11-13T08:52:00.001Z

A good way to increase financial intelligence is by listening to financial audiobooks. A selection of some of the stuff on my mp3 player are:
The Psychology of Achievement - by Brian Tracy, 50 Prosperity classics -by Tom Bowden, Think and grow rich - by Napoleon Hill, The Richest Man in Babylon - George Clason, 21 Secrets of Millionaires - Brian Tracy,

I also like to listen to money music whilst I'm walking, running or cycling, to keep my mind on the money, and to motivate me further. Here's some of the stuff on my playlist:

Money, Money, Money - Abba
If I were a rich man - Fiddler on the roof
For the love of money - The O'Jays
Glamourous - Fergie
Hate it or Love it, the underdog is on top - Mary J Blige
Jenny from the block - Jennifer Lopez
Jai Ho - Pussycat dolls
Dallas theme tune

Sound and music are good motivational tools for seeking wealth. So, to play us out, here's "money", by the Beatles. The song says: "the best things in life are free, but you can keep them for the birds and bees, because I want money".

Making all the right moves in property

2009-11-11T08:54:00.000Z

I've been marking out suitable property investments on Rightmove.com, and saving the properties which meet my investment criteria. Many of my selections are now going under offer from other buyers. This makes me happy, as it proves that I am picking the properties well. I'm going to travel to one of my selected areas, and look at a potential investment property on friday, and if it's suitable I might just put in an offer. Its a monster of a property for the price, so it might just be worth it.

From my property research, here's what I've discovered. Auctions are actually not that good, because the selection is limited, i.e not enough properties. Also, the properties might require so much work that financially it may cost the same to buy a better property on the open market, after factoring in extra repair and mortgage costs. It might just make more sense to buy a better property on the open market via estate agents, that way it can be rented out immediately. Also the build up time to the auction gives you a tiny amount of time to arrange for a survey, get financing etc. Its very high pressure and everything must be done in a rush. This is how big mistakes can be made. Auctions are probably best for buying decent ex-local authority (council) properties.

The property market is strange. It is definetely improving, and I hear stories from my friends of being gazumped when they try to buy properties. The fact that so many of the properties I am looking at are going under offer, proves that there are many people out there with the desire and ability to buy property. The improvement might be temporary, and it might not, but by buying an "inexpensive" (value for money) property to begin with, there's no need to worry about further price drops.

A good example of the power of property, is that millionaire lottery winner Karl Crompton has doubled his fortune by investing in property. He said "I wish I had purchased even more properties".

Review of The Automatic Millionaire - by David Bach

2009-11-10T22:53:00.001Z

I re-read "The Automatic Millionaire" by David Bach, in order to decide if it was better than his other book "Start Late, Finish Rich".

Bach tells the story of how he was inspired by a couple named "The McIntyres", who retired with much wealth despite having normal jobs. Their main secret was to automate payments into their savings and investments, because humans can't be trusted to just do it on a regular basis.

Bach says that budgets don't work because they are hard to stick to. Instead, deduct money into your savings account automatically each month. This is true to an extent, but budgets are important because they are like a map that helps you to chart your progress. A budget is like a fuel gauge on a car, which tells you how much gas you have left. I'm convinced you always need a budget, even if its difficult to stick to.

The latte factor is explained, and this means keeping an eye on small expenditures such as coffee, because they add up to more than you think.

Bach says the two main keys to financial success are: first, pay yourself first, second make it automatic. The paying yourself first bit is derived from the book The Richest Man In Babylon, but Bach says that many people say it but few actually really do it properly, so the procedure must be done via regular direct bank debits.

Homeownership is seen as a vital component to getting rich, and Bach says a mortgage must be paid off as early as possible in order to avoid big interest repayments. Short term pain, for long term gain. Bach says you can't get rich renting, and landlords get rich while people who rent stay poor. You aren't really in the game of building wealth until you own some property. Bach says you must buy a house, and pay it off early via automatic bank deductions.

Downsides are that Bach says you can become a millionaire by starting early enough, and investing into investments that compound interest at 10% per year. Quite a few finanicial books and gurus say a similar thing, but the reality is that safe investments such as banks generally give out a tiny return of roughly 4% interest. One finance guru who offered rates of 10% return consistently, was the worlds biggest fraudster, Bernard Madoff, and that was one big con. You will not get 10% consistent risk free returns on your money from the bank over many years. 3% is a more realistic figure backed up by historical and current bank data. What is the highest return you were ever offered for saving with your bank? How long did that offer last for? This shoots Bachs whole 10% consistent returns plan in the foot. Nevertheless, saving money over many years, even at a small interest rate of 3% is far better than doing nothing.

This is a very short and simple book, but it can drag out a point over an entire chapter, luckily it is not overly excessive in this. Sometimes repetition is the best way to learn. Is this book better than "Start Late, Finish Rich"? I think not, because "Start Late, Finish Rich" has more of an urgency to it, as many people will not think seriously about their finances until later in life.

Moneyseeker3000 rating: Three stars out of 5 for "The Automatic Millionaire"

The second richest man in the world

2009-11-04T07:00:00.000Z

Warren Buffett is currently the 2nd richest man in the world after Bill Gates. He has pledged his billions to charity, once again proving that the wealthiest people are usually the most generous. BBC2 TV showed an amazing interview and documentary about him last week. What was amazing, was how normal and down to earth he is, truly the billionaire next door.

The BBC show is called: The World's Greatest Money Maker: Evan Davis meets Warren Buffett, It was broadcast 2100 Monday 26 October and 1120PM Tuesday 27 October on BBC Two.

The BBC website printed a great article about Warren Buffett. A few things the article highlighted were:

He was able to negotiate some great deals because he had a ready supply of cash in the bank.
He invests for the very long term. He says investments should be treated as if you are going to own them for over 100 years.
He always leaves a "margin of safety", in his deals, so that if things don't work out as he'd hoped, he does not lose money.

The official biography of Warren Buffet The Snowball has now been re-released in paperback and only costs £6.59 from Amazon. Its on my upcoming reading list. Warren Buffett credits much of his success to the book The Intelligent Investor which currently sells for £8.31 on Amazon.

Warren Buffett is the great tortoise of finance. He is worth $40bn and at 80 years old is ultimate proof that the surest way to get rich, is by doing it slowly. He didn't make his money by trying to be smart using super-secret strategies. He kept things simple, and made modest investments. He did not seek out high returns, using risky leverage (debt). Instead, Buffett went for a steady annual compounding of increases, avoiding debt, and this has worked out better overall. The next time I feel impatient and want my investment strategies to pay off now, rather than many years down the line, I shall remember that getting rich is a long, slow process, just like it was for Buffett.

Ajay Ahuja on Inside Out

2009-11-03T07:00:00.000Z

Property investment guru Ajay Ahuja was featured on the BBC1 program Inside Out, on Monday 2nd November 2009 at 7:30pm. It did not paint a good picture of him. It showed disgruntled clients who were unsatisfied with the property deals provided by his company, had to sue him in court, and even then Ajay refused to pay up until threatened by bailiffs. The property deals his company found for his clients were found by the program to be greatly overpriced.

His company basically works by clients paying a few thousand pounds up front, then they find them "fantastic" property deals. They also sell financial property education DVDs, etc. I was amazed that some of the clients had not even seen the places they were recommended to buy, when they handed their money over. I was dismayed at watching the show, and it has strengthened my belief that when doing any deal, especially property, you need to make your own decisions and do your own research, rather than paying somebody else to find your deals for you.

I have got one of Ajay's books on property, but I would never purchase his expensive further information i.e courses and DVDs, as I always want to buy my financial education as cheaply as possible. I won't be spending any more of my attention on Ajay Ahuja.

Review of "Start Late, Finish Rich" by David Bach

2009-11-02T07:24:00.000Z

David Bach is the author of the best selling book The Automatic Millionaire, which I highly recommend. I finally got around to reading his follow up book, Start Late, Finish Rich. I ordered the book second-hand from Amazon Marketplace and I paid about 50 pence for it, plus shipping costs. Its a book I've seen recommended by many money seekers. It was a nice fast read, and I got through it in 2 days.

The books covers budgeting and getting out of debt, as well as property and stock-market investing. It does not cover these subjects in massive debt, but keeps them simple. Many people think its too late to start a plan of financial freedom, but David Bach shows that it is never too late.

The downsides are that chapter 17 recommends direct selling (multi-level marketing aka pyramid schemes) which as far as I am concerned is a con. Also, it could be argued that maybe the book is too simple, but surely life is too short to spend deliberating over more complex financial strategies. Also the book is American so a good portion of it only applies to American laws and investments, however by thinking about it, I can still see parallels where certain strategies might work well in the UK. The best books on finance are usually American.

The chapters on investing in property particularly stood out to me, as it gives good mathematical and anecdotal examples as to why property investments are always a good idea. Home-owners get rich, while renters stay poor.

The strengths of the book are its simplicity. Too many finance books are overcomplicating readers these days, so its refreshing to see a book that is short, simple and straight to the point.

3 and a Half stars out of 5 for Start Late, Finish Rich.

Final book review of Stop Acting Rich

2009-10-29T07:58:00.000Z

Review of Chapter THREE of Stop Acting Rich by Thomas Stanley:
Shoes and clothes of millionaires are divulged. Many non-millionaires overspend on the shoes they think millionaires wear, in order to look rich. Most millionaires do not spend lavishly on shoes. The ones that do are usually celebrities. Real millionaires do not buy expensive suits.

The lesson is that if you want to emulate a real millionaire, do not buy expensive clothes.

Review of Chapter FOUR of Stop Acting Rich by Thomas Stanley:

The watches that real millionaires wear indicates interesting facts about wealth. Apparently 4 in 10 millionaires who wear expensive watches received them as gifts rather than buying it themselves. The watch on your wrist does not show how wealthy you are, it only shows the time.

The lesson is not to be impressed by somebody who has an expensive watch, as the watch is not the same as their bank balance.

Review of Chapter FIVE of Stop Acting Rich by Thomas Stanley:

Grey Goose vodka is very expensive, and is a best seller. The buyers are usually non-rich people who think they are emulating the rich. A lot of these buyers of expensive vodka are trying to fool each other that they are very rich, when most of them are not.

The lesson is to not be taken in by the marketing hype of such products, and not to believe someone is rich by the products they consume.

Review of Chapter SIX of Stop Acting Rich by Thomas Stanley:

Wine collecting is seen in the media as a preserve of the rich, but apparently this is not true and few millionaires collect wine. Also, 94% of millionaires do not have butlers to prepare their meals.

The lesson is that real millionaires are not the wine swigging butler junkies that the movies make them out to be. The reality is far more sober.

Review of Chapter SEVEN of Stop Acting Rich by Thomas Stanley:

The most expensive motor vehicles are driven by those who are rich and those who act rich. Many middle class professionals are struggling badly to pay their car leases, along with all of their other expenses in life. Public opinion polls showed that most people thought that you have to have a very expensive car to be rich, when the reality is that most millionaires are happy to drive "cheaper" cars such as Toyotas. Most millionaires do not drive luxury cars. Stanley tells how baseball legend Joe DiMaggios favourite book was The Millionaire Next Door, which Tom Stanley is proud of. This baseball player built a $45 million fortune and did not squander it. He did this by being frugal.

The lesson is don't be fooled into thinking that those with the most expensive cars have money. When I read about the frugality of Joe DiMaggio, I am reminded of the story that came out in the news a few days ago that former British millionaire football player John Barnes has been declared bankrupt (which was allegedly overturned shortly after). In spite of all of Barnes money making in his lifetime (£millions), lack of interest in frugality and money matters lead to his downfall. Barnes said: "I just hate not having enough money. Apart from that, I don't like dealing with bills and never have done. I let my wife Andrea deal with them."

Review of Chapter EIGHT of Stop Acting Rich by Thomas Stanley:

If your house is in a cheap area you will not have to worry about spending a lot of money to keep up with the Joneses. He says a big home shows that a person probably has a big debt, which they have trouble maintaining. If you buy a big expensive house in a posh area, then you must spend on other things to maintain the illusion such as expensive clothes, cars, and consumables to go with it. Stanley says that your home and neighbourhood will have the biggest impact on your balance sheet. There are people who can live in expensive neighbourhoods comfortably, but such people are very rich, and they can afford it without struggle. Many people emulate the rich and even think that they themselves are rich. A 2000 poll showed that 19% of people thought they belonged to the richest 1% of Americans. Now that's funny.

The lesson is, don't live in an expensive area. Last year I was talking to a fellow moneyseeker, and I told him of my plan to invest in a property in a particular area X. He said to me don't invest there, invest in area Y, instead as its a more affluent area and the houses are more expensive. I looked at him gobsmacked and lost much financial respect for him. The higher the house price, the higher the mortgage, the higher the taxes, etc.

Review of Chapter NINE of Stop Acting Rich by Thomas Stanley:

All that glitters is not gold. Anyone draped in so called rich trappings of success is highly likely to be living on credit in order to pay for it all. People want success quickly and they don't care how much debt they have to go into to get it. In a fictional letter at the end of the chapter, Stanley says it can take 20 or 30 years to become wealthy.

The lesson is that becoming rich usually takes a long time (20 to 30 years), and the last thing you want to do is impede your progress by wasting lots of money on high status artifacts.

Moneyseeker3000 assessment of Stop Acting Rich by Thomas Stanley:

Stop Acting Rich is a wake up call to a world that thinks that rich people throw their money around, so that is the way for everyone to be, in order to be happy. Frugality is the way to independence and financial freedom. I give this book 3 stars out of 5. It doesn't offer anything new to the financial world that is not covered in his previous books. It shows that a few millionaires can afford the very best the world has to offer, but these people are glittering rich. Attempting to emulate the vision of rich people portrayed by marketing hype is counter-productive as most rich people got rich by being frugal.

Thomas J Stanley day

2009-10-26T08:59:00.000Z

Today is going to be Thomas J Stanley day. He wrote 2 of my top 3 books "The Millionaire Next Door", and "The Millionaire Mind", and has just released his next book "Stop acting rich...and Start Living Like a Real Millionaire". If you are interested in seeking money at all, you need to read his books right now.

You can find out more on his website www.thomasJstanley.com,

Have a look at Thomas Stanleys blog.

Also, check out Thomas Stanley on Twitter.

Thomas Stanley went out and did his research to find out how people get rich. Of all the books and sources I have read over the years, his books remain firmly on top of my pile. He is like a modern day Napoleon Hill, (the author of Think and Grow Rich), because he is going out and actually interviewing real millionaires to find the truth about money.

I have spent a good portion of my time going through Thomas Stanleys website and blog, and I'm going to learn everything I can from it. Moneyseeking is compulsive to me, and I shall be like a sponge, soaking up every last piece of advice. I have recently received his latest book, "Stop acting rich...and Start Living Like a Real Millionaire", from Amazon. It's 9 chapters and so I am going to start partially reviewing it as I'm reading it each day. Starting now.

Review of Chapter ONE of Stop Acting Rich by Thomas Stanley:

Stanley says there are many distinct types of millionaires and denotes the existence of the glittering rich, (or super-rich) millionaires, who have far more money than normal millionaires. People hinder their chances of becoming rich by trying to buy what these super-millionaires buy. People who have great financial defense, i.e. frugality are more effective than people who simply earn very high incomes. I'm going to remember this as it basically tells me that saving is far more important than earning. Previously I decided to see the split as 51% financial defense and 49% financial offense. Now I will see defense as far more important. Stanley shows how people become wealthy by living below their means. I particularly liked the bit where he says that school teachers have a much higher capacity to become wealthy than the norm, because for the most part, they are so frugal. This shows that anyone in a normal job can make an outstanding job of their finances if they are frugal. Wealth accumulation is akin to a long distance marathon and the fantastic example is given of Dr E who was only a college professor for over 30 years, yet became a multimillionaire via frugality.

I think that Stanley is showing that there are millionaires, and then there are even bigger millionaires. The lesson appears to be that attempting to be a super-rich millionaire like Donald Trump is a hard act to follow, but copying the habits of a less rich millionaire (such as my millionaire mentor Mr Piper who is Frugal with a capital 'F') is a far more realistic course of action.

Review of Chapter TWO of Stop Acting Rich by Thomas Stanley:

The glittering rich are able to hyperspend the way they do, because they can afford it. They are actually living within their means. The glittering rich are a rare breed. Most millionaires live in "affordable" homes in "non-rich" neighbourhoods, this is how they can build wealth as they don't need to spend extra money on expensive maintenance. Rich farmers, who usually live in rural areas, are exposed as exceedingly good at building wealth, as they are not in close proximity to opportunities to waste their money. So, when you see what looks like a glittering rich person, hyperspending in the top shops, buying the best the world has to offer, they are either a real glittering rich person, backed up by their balance sheet, or they are a fake, wasting their money and future opportunities to be rich. The glittering rich are a rare breed, so such a person is probably the latter.

The lesson appears to be 'don't be ashamed to live within your means', as all of those people who seem to be flashing their money around are most probably in the biggest financial trouble.

Is there such a thing as financial DNA

2009-10-24T18:28:00.000+01:00

So, are rich people born or made? Is there such a thing as financial DNA? That's one of the questions that has always fascinated me, after all, I once worried that I might not "have it in me" to be rich. After much research, my current belief is that becoming rich is a skill that is learned. The lessons in the book "The Richest Man in Babylon", make it clear that people must learn to be rich. There is no financial DNA in the human body, so you have to create your own via study and practice.

An example I always think about in the nature versus nurture debate, is that of footballer Shaun Wright Phillips.

A tale of 2 footballers:
Ian Wright is a successful ex British footballer. He has an adopted son, Shaun Wright Phillips. Everyone said that Shaun was too short to play football succesfully, but now he plays on the England Football team, which is the highest recognition of skill. Why? Because Ian Wright trained him. He nurtured him. This proves that anyone can achieve fantastic things, no matter what their genetics, when they put the work in.

In contrast, George Best is regarded as one of the top ten footballers of all time. He has a son Calum Best who was completely useless at football because he couldn't be bothered to put the effort in, and has made his living to date from reality shows and living off his fathers name. Calum should have become a world class footballer, but is seen by the English media as merely a waster. He proves that his so called natural birthright of inherited talent is meaningless, without nuture via training.

Conclusion:
Making money is the same process of nurture over nature. The book "The Millionaire Mind", by Thomas Stanley makes it clear that you have to put the work in, in order to get wealthy. Other books which I want to read on this topic are Outliers by Malcolm Gladwell and Talent is Overrated by Geoff Colvin.

YMJ

2009-10-17T11:10:00.000+01:00

In September, Channel 4 showed a program called Young Middle class and Jobless. It was all about how professional workers and recent graduates are having a horrible time in the job market right now.

It showed experienced workers who have recently been made redundant and now cannot find any job at all. One guy earned 85k per year, but was deep in debt with no savings. Many of these professionals were in debt with no savings, and had to apply for jobseekers allowance

It showed that right now, many graduates are not getting any jobs. One guy had a First Class degree from Oxford University, yet he was not able to get any job at all!!

You can watch the show here:
Channel 4: Young Middle class and jobless

Review Links:
Review1 (people management)
Review: Prospects graduate forum
Orange TV blog review

So, the problem of job security is real. Even being a graduate will not help you in most cases. I have said for a long time that graduates are not guaranteed jobs for life, and financially, university is not a good investment for most people.

Learning from a millionaire

2009-10-10T11:26:00.001+01:00

Its amazing what I have learned from having Mr Piper as my millionaire mentor over the 2 years I have known him. I have learned that he is very cost concious, and self-sufficient. He thinks about all his purchases before making them. He says wealth building, is like building a wall, and must be done slowly, brick by brick.

On the last time we met, last week, Mr Piper talked of how he was going to devise a system of using rainwater to flush his toilets, and then getting a water meter installed, to save more money. I laughed inside, as I thought he is a multi-millionaire, so why go to that trouble. Then I realised that most people I know who are not as well off, would also laugh, and would never do such a thing. That is why they are not as economically stable, as they do not look for more opportunities to save money.

Mr Piper was assembling an old glass greenhouse in his garden. It seemed like an intricate task. I said to him "have you ever assembled a greenhouse before?" He said "I haven't done most things before, but I just get on with it". Rather than waste time in doubt, as I would do, he just gets on with tasks and projects immediately. "But what if you break the glass?" I asked. He replied: "I've already broken some of the glass panes, I just buy some more". This shows me that he takes action and does not wait to start things. He does not ask himself whether or not he could do a task. Whatever he has to do, he just does it, not constraining himself to any role. He does all his own handyman tasks and minor building work, including plumbing, car mechanics, and electrics. He proves that we can all adapt ourselves to any task, no matter what it may be.

Mr Piper goes to car boot sales every weekend. I will take on this habit. I have never been to a car boot sale before, but as it's the hobby of my millionaire mentor, I shall follow his actions, and see what I discover. I shall go to one as soon as possible.

I learn from Mr Piper mainly by watching his actions. By being around him, I can see with my own eyes the actions and beliefs that have made him rich, and continue to make him richer. Even if I never get to be a multi-millionaire like him, I will still be far, far richer, and more knowledgeable about money than I would have been otherwise.

There is a great book "The Millionaire Next Door" by Thomas Stanley, which details how most real millionaires are always cost concious and do not waste money like the rich stars we see on TV. This is in my top 3 wealth building books of all time. Mr Piper fits the model described perfectly, and his example demonstrates the truth about what it takes to build a lasting fortune.

Wealth creation seminars for free

2009-10-07T11:43:00.002+01:00

Once again, the Business Start Up Event approaches (26th & 27th November 2009). I don't think I'll be going to it this time as I've already been to the last event this year, and I have got other things to do, but I think its a great event. You get a chance to hear from millionaire speakers, and its always a good experience to be in the vicinity of millionaires.

The event is completely free, so it shows that other wealth creation seminars are a con in comparison, as its unlikely they could match the price, number, and calibre of wealthy speakers. You can also check out good video advice by wealthy business people at Smarta, or by doing searches on YouTube. Why pay to go to other wealth seminars?

The next time I think about paying to go wealth seminars, I will remember that the best information can always be found for free, or for low prices, by those who seek it.

Wizard money

2009-10-05T15:34:00.000+01:00

Harry Potter actor Rupert Grint has amassed a 9.2m property empire. It shows that he has been given good advice about investing his acting money. He won't be going broke anytime soon. Compare this to other actors such as Lindsay Lohan and Pamela Anderson, who are currently experiencing money problems despite having earned millions. It just goes to show that what you do with your money when you get it, determines whether you will be rich or poor in the future.

What is interesting, is looking at the readers comments section. It's incredible to see peoples' beliefs about money displayed in their remarks. Hate it or love it, Rupert Grint is on top. Some people hate it, and some people love it.

Keeping up with Peter Jones

2009-10-01T07:00:00.001+01:00

Entrepreneur Peter Jones knows a lot about seeking money. He has given a recent brilliant interview to the Telegraph, and this excellent advice is for free. The book "The Richest Man in Babylon" says you should only take financial advice from those who have proved their competency with money. Peter Jones certainly fits that bill.

Peter says he runs his businesses without any debt. He monitors his businesses closely to ensure that they continue to perform well. He says there is nothing more important than cash when it comes to keeping a business running. He once lost a company by not credit checking a customer, now he always runs detailed checks on any company which wants credit from his business so he has learned his lesson well and does not repeat it. He says having money does make you happy, and has lead to the happiest moments in his life.

He helped entrepreneur Levi Roots on the TV show "Dragons Den", and Levi's Reggae Reggae Sauce is now a well known brand. Peter reveals that Levi is now a millionaire. When Levi was on the show, many people thought that he was just a music man and would never get far. Now, thanks to Peter's advice, Levi has a range of sauces, and has a few books out as well. Levi struggled for many years, but as soon as he met somebody who actually had a good money plan, and had proved that plan in their own life, look at the difference in the results.

There are many people offering financial advice out there, and getting people to pay exorbitant fees for it. Peter Jones proves that there are still lots of rich people out there who are happy to give their knowledge for free. Take that advice, and use it.

House Party

2009-09-30T11:14:00.000+01:00

I've been searching for good property investments and I would love to find a bargain, or at least a good deal. I'm using Rightmove to search for properties, this way I can have a scan through hundreds of properties, before selecting ones which might be ok which I can focus more on. It's been fruitless and eye-opening at the same time, as I'm learning more about the mentality of homeowners in the current market, and also about the tricks that estate agents are using. Here's 3 property examples I dealt with recently:

One 3 bedroom house was £215k. I called the estate agents to test if the vendors would go down to £190k. I was told that they are holding out for full asking price and have recently rejected an offer of £210k! That seems ridiculously petty to me, but shows just how determined people are to stick to their guns.
A 3 bedroom house in a good location in London for £150k: this property seemed too good to be true. I phoned the estate agents who told me the house had already been sold, and anyway it now needed substantial repairs as it used to be an illegal drugs factory! He said hundreds of people had phoned up about the house. He then offered to sell me lower spec properties, and surprisingly offered to arrange my mortgage for me as well! I can just use moneysupermarket.com for that, so obviously I wouldn't need a mortgage from his company. In the UK there is no formal qualification for estate agents, anyone can do it, so I'm not simply going to let him take care of my finances by letting him do me a mortgage deal! Anyway, a month later I checked Rightmove and the property is still being advertised for sale! That makes me think the property is probably a fake listing by the agent to generate business, and maybe this is common practice amongst most estate agents.
A converted house which had been split into two 1 bedroom flats for £200k. I phoned up to be told that only cash buyers could purchase this property. The reason? The owner had turned the property into 2 flats without planning permission, and now no bank will lend on it. This shows why its important to prepare and plan properly before undertaking any endeavour. In the book The Richest Man in Babylon, it says "better a little caution, than a great regret", as the seller of that house is now finding out!

The housing market is showing me that house prices are still too high, compared to the ability of the average person to afford one. At the moment, I'm finding virtually no good property investments whatsoever. Lots of homeowners/landlords have simply withdrawn their homes from the market, stubbornly refusing to sell at a loss, holding out for better times. Any property that seems too good to be true, always is, and is either a fake listing by an estate agent which seems to keep being advertised no matter what, or needs seriously expensive building or legal work done for it. This shows how hard it is to make money, and that people generally don't throw their money away by needlessly giving out substantial discounts. Anyone who says making money is quick and easy, is a liar. There are no get rich quick schemes. I'll now be focusing more on auction properties, to see if local councils who have less interest in profit, are offering better property deals.

The housing market is no fun right now, so when I saw a cheap secondhand computer game Monopoly Party, for £5, I purchased it so I could have a good time with property without overpaying for the privilege.

Willing to pay the price

2009-09-29T05:44:00.000+01:00

In the great book "Chicken Soup for The Soul" by Canfield and Hansen, there is one story that sticks out to me the most. Its called "willing to pay the price". It's the true story about a man named Le Van Vu, who faced disappointment and distress, countless times in his life, as he attempts to gain financial security. It is the only story I remember from the book, and for a time I printed it out and carried it around in my wallet, as it is such an effective and compact motivational story about gaining wealth.

Le Van Vu had success within his grasp many times, but fate always seemed to conspire against him. At one point, he came close to committing suicide after losing all of his money again. When, after numerous setbacks, the lead character of the story has the chance to work his way towards owning a small bakery in America, he takes on the opportunity. He had to live very thriftily at this time, and had to live inside the bakery with his wife, as he couldn't afford to rent another place, and washed in the bathrooms of the local shopping mall. He saved every penny he earned, and was finally able to put down a deposit on the bakery. He eventually became a millionaire. I always think of this when I have to make hard, long, constant sacrifices to achieve a financial goal.

Attaining financial security and freedom is not an overnight process. No matter how many books I read, money I earn, investments I make, or people I associate with, making money still takes a long time. Even the game of Monopoly is actually quite a long game. Even millionaires I know, did not do it overnight, some taking over 15-20 years to reach their current level of financial security. They will have encountered setbacks I cannot even imagine. I have to keep reminding myself that this time is the price I have to pay to achieve my goals.

My current level of wealth, mentally, spiritually, and financially, is far more than I ever thought it would be before I became a moneyseeker. Although I'm not a millionaire, getting to where I am now has still required years of sacrifice, effort, and learning. To go further will require even more sacrifice, effort, and learning. I need to continue to be willing to pay the price.

Read the story of "Willing to Pay The Price"

The only way is Up

2009-09-27T12:19:00.000+01:00

I was talking to one of my millionaire friends 2 days ago. His name is Mr Popinski and he is a Polish Immigrant who is about 55 years old and came to the country when he was 5. He made his money from property, and also from a highly successful convenience store which is in an extremely profitable location. I met him about 2 years ago and consider him one of my millionaire mentors. I was originally aware that his wealth was around £2 million. It turns out that I was wrong. In conversation, he revealed to me that he actually had far more properties than he had told me about previously, with an additonal worth of over £4.5 million! In fact, his finances are so far up, that his wealth is around £6.5 million. And thats only what he's told me so far.

When the young Mr Popinski was a teenager, his father opened a convenience store in the UK. Mr Popinski said to his father "If you let me run my own convenience store, I promise you that I will make you a millionaire". It took many years of hard work, thrift and dedication, but Mr Popinski achieved his intention, and also runs a multi-million pound property portfolio. He is very thrifty and hard working, and still gets up at 5am in the morning to go to the cash and carry depot, to buy supplies for the convenience store. His main indulgence is a luxury foreign car with personalised number plates, that he purchased brand new, for 60k in cash. I had always thought that this expensive car indicated that he was an Under Accumulator of Wealth (UAW) as described in the book The Millionaire Next Door (by Thomas J Stanley). I therefore sought more of my advice from rich people whose wealth was less conspicuous. Now I see that when you have a bucketload of money you can probably afford to flash a little cash every now and again.

I have noticed that this gradual disclosing of wealth has been a feature which my main mentor Mr Piper also shares. Every now and again Mr Piper will disclose other stuff that he owns, for example he has more houses all over England which he never told me about when we originally met, and he also has a boat. Of course its not really my business to ask exactly what they've got, and I would feel awkward asking straight out for a complete list of all of their assets. They did not trust me completely when we first met, as they did not even know me, and now that we are more famiiar, I am getting access to far more of their wealth secrets, and further proof of their accomplishments.

When Mr Popinski disclosed this extra £4.5 million, I felt strangely in awe. I've long thought it an accomplishment for someone to even make one million, but for some people to actually have millions and millions of pounds is just incredible. Planet Earth is a place where most people are in poverty. At work in a normal job, colleagues consistently complain about their lack of money, and of their financial woes. Yet there are actually people out there who have made not just one million, but many, many, millions. I know, because I have met them face to face, I have seen some of their asssets and I have seen how they live. Normal people, living an abnormally abundant life.

The scale of Mr Popinski's wealth inspires me further. He has no university degree, no qualifications, just a strong work ethic, thrift, and determination. He looks and acts completely normal, and nobody would ever realise that he was a millionaire. He looks just like a next door neighbour. If he can achieve such heights, then so can I. So can anybody else. It is not an overnight job, it will be a long process, but once you get to a high place financially, the only way from there, is up.

Millionaire researcher Thomas J Stanley wrote about the realities of millionaires in his books, which I read avidly. His new book Stop Acting Rich and start living like a real millionaire will be published in October 2009, and I have already pre-ordered it. I think that money and finance is fascinating. I find it incredible how high a persons finances can go, when they aim up.

The Wilsons sell up

2009-09-26T07:00:00.001+01:00

It was reported that Fergus and Judith Wilson are selling their property empire. These 2 ex-school teachers made a fantastic amount of money by investing in the property market. It seems to me, that their only minor financial mistake was that they never had an exit strategy, as it would have been better for them to have sold about 3 years ago when property prices were much higher.

The Wilsons are 2 colourful characters who pursued their big dream, and came from being mere maths teachers to a place on the Sunday Times UK Rich List. Their example shows that nobody is constrained by their beginnings, or by their current job. With a portfolio of over 900 properties, Judith Wilson is Britain's most successful private landlady.

Judith Wilson's website has good practical advice on pursuing your financial dreams, and she tells of how she did it. It's good to have a read through it to see just how she became so financially successful. I like the part where she tells of buying her first investment property but had to pay part of the mortgage out of her own wages. Instead of feeling bad that she had negative cash flow, and would have to meet the mortgage payments with part of her own income, she realised that she had secured a second house for just £40 a month. She also talks of why its better to buy houses than flats, as flats do not realise the same capital increase as houses.

The Wilsons are ordinary people who have achieved something extraordinary. They have had good press and bad press about their activities, but I like to look at the whole story and seek out the best bits, in order to learn more about UK property.

Flushing your money away

2009-09-22T08:50:00.001+01:00

The News of The World reported that the late UK reality TV star Jade, blew her fortune. She was rumored to have made over 6 million pounds in her career. It just shows that if you earn the big money but don't save it, and just spend lavishly, you end up with nothing.

The late king of pop, the moonwalker himself, MJ, was also thought to be extremely rich, but only upon his death were his finances revealed, and he was much poorer than people thought, due to his copious spending.

This is why accounting for money, and budgeting, is so important. Every week, I enter all the receipts I have got from shops onto a separate spreadsheet so I can get a good idea of what I have spent for the month, and the rate at which I am spending. Sometimes, I ask myself why I go to such an extent, but then on the spreadsheet, I can literally see areas where I am throwing my money away. Then, I can take action to stop it.

If the above celebrities had budgets which they stuck to, and limited their expenditure, they would not have experienced the extent of financial difficulty which they suffered. It just goes to show that if you earn a lot of money but just flush it away, then you are not really wealthy.

Only by keeping records of my expenditure can I know where my own money is going. From looking at examples such as Kerry and MJ, I can see that a good way to go broke and flush your money away, is to not even bother to look at how money is being spent.

The financial X Factor

2009-09-21T07:00:00.004+01:00

Ever seen that TV singing talent show "The X-Factor"? Its amazing how deluded some of the contestants are. Some of them really think they can sing, but they really can't. Its the same with finances, because it's so important not to delude yourself with how your finances are doing. It's important to keep accurate records of your wealth. How well are your assets doing? Are you sure? Have you checked? Do you record your finances on a spreadsheet where you can objectively look at the facts?

Anyone can talk a good game about how well their finances are doing, but what is the reality? A good way to judge, is by looking at your balance sheet. Have a look at your cash flow, your net worth, your investments, your income. Are the figures getting better, or worse, or staying the same?

Did you know that Simon Cowell has written his autobiography? It's called "I don't mean to be rude bu t". In it, he shows just how hard working he is. His success is not an accident. I read that book last year when I came across it in the library. I was amazed to read that he went bankrupt previously. It just shows how far you can go when you keep on trying, no matter how badly you are defeated.

Now, check the video of this contestant out. He really believes he has the X factor, yet reality tells a different story. I know I don't want my finances to be as deluded as this guys singing:

Now have a look at a much better contestant. He has clearly put the work in, and gone out and got experience. He proves that when you make a consistent effort, and train, and learn properly, then there is a big difference between an expert and a deluded novice:

Financially, in a whole planet filled with other contestants trying to attain financial security, do you have the financial X-factor, or are you just kidding yourself? Take your finances seriously, or you will end up as another one of life's financial jokes, living paycheck to paycheck, whilst those who have developed their financial X factor, steal the stage.

Is it still worth investing in property?

2009-09-19T15:00:00.000+01:00

I mentioned in an earlier post about three 2br flats for sale, with an auction guide price of £250k combined. The flats were being sold off by the local council, and together they make up a freehold building. I went to view the property in person before the auction, and I had an interesting time checking the place out, and using a torch to explore the cellar. They were big rooms, and the current state of decoration and repairs needed were not terrible, with no structural damage. I reckoned they could be renovated with £20k per flat, or maybe even half that figure, by not using professional labour.

I was sure they would sell at auction for at least £500k combined, as they are in a dream location, next to a busy transport hub right in a city centre. Journey time to London by train = 15 minutes! They went for auction, and sold for 340k combined!

To give an indication of how good the deal was, there are virtually no 2br flats in that area for sale, and the few decent ones were going for at least 200k each, and they were not even as well located as that council property. A brand new housing complex has been built in the area by private developers, where they are selling 2br flats for 400k each!

So is it still worth investing in property? Of course it is, for the following reasons:

If you just keep money in the bank, it will lose its value due to inflation. Money, buys "things" (assets), such as houses. When the value of "things" go up, your money in the bank may be too little to enable you to buy those things. I remember reading the divorce judgement papers of Paul McCartney and Heather Mills online, and seeing that the majority of his wealth was in things (assets), which went up in value more than his cash. Therefore, the majority of your wealth should be in assets (but still have a lot of cash in the bank, because cash is king).
To benefit from the property market, you have to be invested in it. You have to be "in it, to win it".
As long as the property you are buying is affordable to you (i.e. within your means), then you won't have too much trouble running it. Its only when you overstretch yourself that things have the potential to go very badly, very quickly. If you cannot afford to buy in a certain area, then don't buy in that area.
Property is a good place to park your cash. Unlike the bank, it is a long term investment (at least 10 years).
Historically, property has been a fantastic asset class. Not only does the value go up more than cash in the bank over 20 years, you can also collect rental income, or live in the property if you choose. Overly negative people always talk about the cost of maintaining property, but when you think about it, a property will probably only cost you a few hundred pounds a year to maintain, and maybe less than that. If you have home insurance (and you should) the cost of house maintenance is negligible. One of the worst things that could happen is the boiler going, at a cost of about 2k, but that would be a rare event. Houses are built to last for a very long time, and getting a survey before purchase should (hopefully) confirm this.
The British are obsessed with property, and they will do whatever it takes to get their hands on it. Property in the UK, especially in London, will always be hot stuff. The only reason the market has slowed up is due to lack of lending. Once that is solved, expect mayhem, as the mad scramble for property begins anew.

Bank interest rates are at their lowest, currently 0.5%. Rates have never, ever been this low in England. For at least 5 years, I don't think rates will rise very high, i.e, into double digits, like some "experts" are predicting. Remember that at the peak of the housing market in 2007, people were struggling badly to pay their mortgages. The government is fully aware of the carnage that will result if interest rates are allowed to rise. Expect rates to remain low for some time to come.

Property is still worth buying, but you have to choose very carefully, and you have to buy cheap, and well within your budget. At the moment, the best way of doing this appears to be via auction, but even then, it is still very difficult to seek an appropriate property investment. Keep seeking, and you can find good investments, even in this market. That's what I'm trying to do.

Developers delight

2009-09-15T07:00:00.006+01:00

The property market seems to be picking up, despite all the fundamental factors being negative. A developer in my street had 5 flats up for sale for about a year. He sold 3 of them this year, and auctioned off one of the remaining ones last week. He got virtually the same price as the flats he sold previously, so I bet the developer was delighted.

That developer sold his 1br flat for 160k at auction a few days ago. He previously sold the other 1br flats for 170k this year, so actually I think he has achieved a very good price for it, and I am surprised. I had a look at the results of another auction a few days later, and saw that a 2br flat about 10mins walk away from that development, sold for 100k. I don't know what condition the 2br flat was in, but it certainly seems like a better bargain at that price.

About 2 weeks ago, I went to view a freehold property which is due to be auctioned off very soon. It's out of my budget, but I went for the experience anyway. The property is three ex-local authority 2br flats in a busy city centre, with fantastic transport links. It needs a bit of cosmetic work doing to it, but the guide price was 250k! I know for a fact that 2br flats in that area would cost around 200k, and due to how close it is to the transport system, they would probably fetch even more. I reckon at auction, it will sell for around 500k or more. It was good to turn up to the viewing anyway. There were about 5 other developers there, so it just goes to show that there is no such thing as a genuine bargain, because other people will find out about it, and compete with you on price. It was fun looking around the property, and we had to use torches to check out the cellar, because the lights did not work!

The property market is not stagnant, and people are still buying and selling property. My millionaire mentor, Mr Piper, sold his main residence this year, and bought another lair, in spite of the poor property market. Life goes on, and if you are into property, its best to just get on with things. London is still looking a little expensive, so I'm now looking a bit further afield.

I've lined up some books on property to read, whilst I scour rightmove.com for investments that meet my criteria. I'm currently re-reading Beating the property clock, by Ajay Ahuja. This is an interesting and practical book by a successful and active buy to let investor, and he has his own website which contains good advice on how buy to let investors operate. His methods might not work too well in this recession, but I just want to learn about his perspective. Other books I've got lined up are: Property Ladder: Developers Bible, How to be a property millionaire, How to make a million from property, The Art of the Deal.

The most important thing about property investments are the numbers. If the numbers don't stack up, then do not do the deal. Property is a funny old game, but people will always need somewhere to live. The property crash has been nowhere near as bad as I hoped it would be, and the signs point towards this being the bottom of the market. Bankers are still getting paid big bonuses, and the market, in my opinion has remained resolute. The British desire to own property, coupled with limited supply, has kept the market strong and the prices high. Houses in Britain will always be expensive.

Benefits

2009-09-14T10:00:00.002+01:00

So, is claiming government benefits (the dole) good or bad, i.e will it make you richer or poorer?

There's a good show on TV BBC1 weekdays at 9am called Saints and Scroungers. It's all about how certain vulnerable people can benefit from government financial assistance, and about the rogues who cheat the system. It might seem like those who cheat the system are only taking a little bit of money, and that the government steals all of our money through taxes anyway and so deserve to be robbed. This is not a good attitude to have.

Lots of people who get discovered for benefit fraud do so via an anonymous tip off. That means someone who knows the claimant reported them to the authorities.

Name one famous rich person who got there by claiming benefits. There aren't any. Donald Trump would never claim benefits. I accept that sometimes hard times may come upon us, and we may need a handout from the government, but if I fell on hard times and had to collect benefits, I would not allow the situation to continue for very long.

Zig Ziglar, in his "Goals" audio program, told the tale of wild pigs who were lured into a trap by following a trail of free breadcrumbs.He says that being on the dole makes people contented, unmotivated and lazy. There are a lot of people who live a comfortable life on the dole, but the big money, will always elude them.

Being financially free is all about self-dependence, and while I accept that there are many people who definitely need to be on benefits, relying on the government forever, is a bad habit which will not achieve the goals of self-sufficiency and financial independence.

Martin Lewis speaks

2009-09-13T07:00:00.004+01:00

Martin Lewis of moneysavingexpert fame, has made available a 1 hour presentation on money saving tips. It is a live, one hour talk, giving practical useful advice about how you can improve your finances. You can watch it completely free here.

Isn't it amazing that you can attend wealth courses by so called 'wealth gurus', costing hundreds of pounds, yet here is one of Britain's foremost financial experts, giving fantastic advice for free.

There are so many people out there who are offering dubious financial information, and requesting that you pay a premium for it. Its refreshing to see experts such as Martin Lewis giving out great financial advice for absolutely nothing. Martin Lewis and his website are amazing, and I always follow his advice on a regular basis.

Exercise your financial muscle

2009-09-11T07:00:00.000+01:00

Exercise is a good way to become fit and strong. Being healthy makes you more alert, and more fit, in order to take on the challenge of money making. Building muscle is just like building wealth in that you have to have a goal, have a plan, and take regular action, accounting for your results as you go.

A good exercise plan lets you see your progress developing bit by bit. You have to have a goal and a plan, and check your results periodically to see if it is working. I go to the gym with my written plan of which exercises to do, and how much weight I lifted last time. In this way I can check and improve my progress. It's amazing that I've never seen anybody else in the gym with a written plan. How do they remember all the exercises they are doing? How do they know they are not getting worse instead of better? Even personal trainers recommend using a written exercise plan.

I always want to lift heavy weights immediately, but I have to work up to that little by little. I will get better as time goes on, as long as I keep taking action. The stronger I get the more I can do. Financially, the better I get at handling my finances, the more I can handle in future.

To exercise your financial muscle, think and act on your finances on a regular basis.

JTR speaks

2009-09-09T09:00:00.001+01:00

Rich Dad Poor Dad by Robert Kiyosaki is one of the most popular and widely acclaimed, and disputed, financial books. John T Reed has been his most prominent critic.

By going through YouTube, you can get some good videos where John T Reed speaks. There a few John T Reed videos on YouTube, so he can finally be seen and heard in person.

Is Rich Dad Poor Dad the next Ponzi style Bernard Madoff scam to be unravelled and is John T Reed the whistle blower? Or, is it just negativity directed at a great financial book? Only time will tell.

Keep an open mind, and question everything, when it comes to financial information.

Graduate Misery

2009-09-04T21:00:00.003+01:00

The financial news site This is Money, sadly reported that one in four students who graduated in 2005 are still jobless. Forty-three per cent of the graduates had resorted to stacking shelves, pouring pints and other stop-gap jobs. For the graduates that did get jobs, 4 years after university the average pay was around £24k.

So, lets add up the worth of a degree as an investment (again). 2 years A-level + 3 years degree + 4 years unemployment = 9 years. Is it worth sacrificing 9 years of your life to then only earn 24k, if you are lucky? Bus and train drivers earn more than that in a mere fraction of the time!

If you get lucky, or go to the very top universities, or do well in a useful course such as medicine, you of course have a much better chance to gain high paid employment quickly, but only a small percentage of graduates are in this bracket.

Hundreds of graduates are battling it out for every job. Graduate pay is low or non existent. The article mentions 24k salaries, but I know graduates who earn almost half that! Most graduates can only cry, and lament their wasted years and money. I know other graduates in so called 'good' subjects such as maths, engineering, and computing who still haven't found work, 2 years after graduating. This is the real world. If they wanted money, they should have sought elsewhere.

Here's a selection of readers quotes from the article:

"It was only in the 60's where we were able to choose from a number of jobs as we left university - we shall never see those days again!"
"It is a myth that having a degree will get you a better job, or indeed any job at all. That has certainly been my experience throughout my working life, and I studied not one of the "easy" options - but Engineering."
"Most people realise 75% of the current degrees on offer in universities are as good as worthless in the real world."
"I went to University and now I work. In the real world being degree-less is not a hindrance. I can see many of my non-Uni colleagues working up the ranks and doing well. Most Uni degrees are completely out of sync with real life. I think Government propaganda is to blame."
"I don't understand why so many students opt for such useless degrees. Doesn't common sense tell them that getting into debt to obtain a certificate that will do nothing to enhance their employment prospects, is being stupid."

I am not against education, or university and I think that learning is a wonderful thing. All I am saying is that if you are going to university to make money, then you need to think about that plan very carefully beforehand.

Facing Fear

2009-09-02T07:00:00.005+01:00

Fear is something all of us must face. Felix Dennis in his book How to Get Rich said that fear is the biggest obstacle preventing people from becoming rich. Fear of: failure, what people might say, what people might think, what people might do. The book The Millionaire Next Door says that millionaires feel fear like everybody else, but they act in spite of it. Fear is all in the mind, and its important to learn what fear is and how to deal with it, so it does not hold you back from making money.

Feel the Fear and Do it Anyway, by Susan Jeffers is the bible on fear. This book details how everyone suffers fear, and that fear never goes away. When faced with difficult or challenging situations, once you have made your risk assessment, all you can do is "feel the fear, and do it anyway". You will just have to somehow handle whatever comes next.

Watch my back, is a great book by Geoff Thompson which involves facing fear. This is the true story of an English doorman who had many street fights and had to face his fear every night when guarding the doors of pubs and clubs. It's a big book, but one of the chapters "The Adrenal Map", is an incredible analysis of what fear is and the effect it has on your mind and body. He talks about how the body may start to tremble uncontrollably, and how the mind starts to question itself and start to distort the actual situation. Fear is not a reason to back away, or to do nothing. No matter how scared you are, you have to move forwards. He says the only way to deal with fear, is to face it. Watch My Back is the story of one man’s search for courage. Depressed, bullied, intimidated by life and indoctrinated to believe that this was his lot, Geoff Thompson, on the verge of a breakdown, decided to fight back. In a bid to confront his fears, he took a job as a bouncer in one of Britain’s roughest nightclubs….

Geoff Thompson was a factory cleaner and a doorman before he tried to fulfill his big dreams in life. When he tried to fulfill his dreams, he had to put up with his friends laughing at him, and multiple disappointments and rejections. He faced his fears and is now a successful writer and BAFTA award winning playwright. He is an avid follower of self-help books and has written many excellent self-help books himself. Geoff Thompson is one of my big heroes and I always follow his progress and try to buy at least one of his books every year. I'm currently looking at reading 2 books of his: Hunting the Shadow: How to Turn Fear into Massive Success and Everything That Happens to Me is Fantastic Geoff Thompson is a real person, who has faced his fear and produced real success, using real techniques.

I'm currently looking at property investments and many times, the fundamentals of some of the deals I come across, scare me. I'll be borrowing "massive" amounts of money from the bank, and there are many risks involved. I'm planning to structure these investments as safely as I can, via research and not over investing, but in spite of my risk assessments, an element of risk and fear will always remain. All of the people who became great financially were scared, but they faced their fears and eventually came out on top. I must follow that same path, and run towards my fears, rather than backing away.

How I met Mr Piper

2009-08-31T07:00:00.006+01:00

Mr Piper is my main millionaire mentor. He controls a property empire worth in excess of £4m with only about 5% debt, and earns well in excess of £100k annually. Mr Piper is married, and lives with his wife on the outskirts of Surrey.

When I first began my moneyseeking, books I read on wealth recommended finding a millionaire mentor, but where could I find one? One day, I happened to pass by a shop that was being done up (re-fitted)by a handyman, and I got talking to him in order to see what was planned for the shop. He revealed that he owned the shop, and also every other shop adjoining it, as well as a quarter of that high street! He was a millionaire, many times over with an empire made up of commercial property, flats and houses with all of the freeholds owned outright. He purchased many properties 20 years ago when prices were cheaper than they are now, and has never sold a property, until this year when he sold his main residence in order to move to a new area.

I asked one of my friends who lived locally about him, in order to confirm his story, and he said "Mr Piper, everyone knows him, he's a millionaire". I asked a few more people, and most seemed to be in fear of him. They were scared of what they did not understand, and thought that a millionaire must be some kind of a mythical creature to be avoided. Maybe his mere existence reminded some of them of their own failures to handle their finances well. Not one person had ever asked his advice about money. I crossed that barrier, and in the process, found that he was just a normal person.

Mr Piper takes things on himself. He acts on things immediately, and is extremely proactive. He shows that to get anything done, and to get rich, you have to keep taking action, and keep going. He is his own: handyman, plumber, electrician, etc. He is very thrifty. The last time we met, he was going through shops like Poundland and charity shops, seeing what stock they had. He told me of recent bargains he had picked up at car boot sales, and on eBay. He never buys anything without doing a price comparison first. He drives 4 vehicles including a Transit van, a normal car, an old jeep, an old motorbike. These vehicles are mainly used for transporting his DIY stuff around, and he does not own any expensive sports cars.

There is a book called The Millionaire Next Door, which talks about how very wealthy people don't waste money and live frugally. I could barely believe it when I read it, but I soon came to find that it was true. Mr Piper fits this image perfectly. Before I became a money seeker, I thought that only losers went to charity shops and car boot sales.

Mr Piper is the richest person I know, yet he probably spends less money per month than the poorest person I know, which is incredible. Its not that he is stingy, but he respects money. He is also the most reliable person I know as when he promises to do something, he does it, whilst most other people I know usually never come through on their promises on time, if it all.

Thomas J Stanley, author of The Millionaire Next Door is soon to release a new book: Stop Acting Rich: and Start Living Like a Real Millionaire. I'm sure this book will be the usual stuff about how rich people live frugally, but I shall endeavour to read it nonetheless. It will serve as a reminder of how real and long lasting wealth is built on thrift and financial proactivity. Mr Piper is a real life millionaire who I can compare to all of the stuff I read in books, in order to seek the truth about money.

Lotto millionaire myths

2009-08-30T06:00:00.003+01:00

Yet another lottery winner talks of losing money in a newspaper story. This particular winner still managed to keep a large portion and is still a millionaire. He gave away money to friends and family, yet they hated him for it.

It just annoys me so much when I hear some lottery winners saying "I wish I had never won". All of that money is such a wonderful thing, and I know I would never think, or say, such a terrible thing about money. I have respect for riches.

There are many myths and old wives tales told about rich people, in order to make people feel more comfortable about not being rich, and to justify not even trying to seek wealth. These negative fantasy stories hold people back from achieving financial freedom.

They say rich people are all drug addicts. Some rich people do turn to drugs, but far more poor people turn to drugs. Go to a drug rehabilitation centre, or talk to social institutions or the police, and they will confirm that poor people are the ones that take drugs the most. Ironically, they do it to escape their poverty stricken lifestyles. Much crime is fuelled by poverty.

There is a myth that rich people are unhappy. Far more poor people are unhappy. Do you think its fun to receive government handouts and know that you are not achieving your full potential? Is it good to have debts mounting up, while you live hand to mouth? Is it nice to work in a low paid job and have to suffer petty workplace politics, and still live in fear of your boss firing you? Give me wealth any day. Money definitely makes me happy. Many other things also make me happy, but I will never discount the elation created by money.

Supposedly rich people have a high rate of divorce. There are far more poor people than rich people, so the amount of divorce will therefore be much higher for poor people.

"Rich people fall out with their friends". This also happens to poor people, so it's no big deal. It just shows how petty and resentful many people are, in general.

The fact is that the vast majority of people who win the lottery do very well. Only a few hit the tarmac, and the media sensationalises those stories out of proportion to the facts. The alternative to wealth is poverty, and anyone who has a large disrespect for money soon finds that "money is a good servant, and a bad master".

Money is all in the mind. There is the "poverty mentality" which causes people to seek poverty, no matter how much they have. Then, there is the "prosperity mentality", sometimes known as "the millionaire mind", which always keeps a persons finances high. Many people will look at the stories of failed lotto millionaires and conclude that wealth is not worth having. I will look for the successful lotto winner stories, and even in the bad stories I will examine them and think of how I would do it differently. I will play the lottery this week, because next time, it really could be me.

Kerry, Callie, Morrissey, and responsibility

2009-08-29T12:00:00.002+01:00

Our finances and how we handle them are always down to our own doing. We must individually take charge of our wealth. A look at a few celebrities and their wealth highlights this.

Kerry Katona:
The media celebrity Kerry Katona has been pictured in the papers over the years squandering her multi-million pound fortune. She has been declared bankupt and is losing the big money deals that sustained her wealth. This week, she allegedly assaulted her accountant due to her financial woes, and supposedly screamed at him "Its all your fault". If true, this displays a shocking lack of personal responsibility, and shows that 100% responsibility must be taken for our finances.

Callie Rogers:
Callie Rogers the young lottery winner is allegedly broke. By my estimation she should still have a few hundred grand left, however its heartbreaking to see her losing much of her 1.9 million pound lottery winnings. There is a lot of good advice out there on how to invest a big lottery win.

I won the lottery last Saturday. I spent £5 on tickets, and one of my entries won £10. It's good to win money, but it's far more reliable to create it via work and industry.

Neil Morrissey:
The actor Neil Morrissey almost became bankrupt after a failed business deal, but accepted an IVA instead. He lost 2.5million, his entire fortune. He said "Bankruptcy's the easy way out, I decided no, I'd step up to the plate, try to do the right thing and get everyone their money back." He has pledged to put a large portion of his future earnings into paying off his debts. What an honorable man.

Responsibility:
We are all responsible for our finances, whether we win it like Callie, squander it like Kerry, or lose it like Morrissey, what happens next is up to us.