RPF-0039-Profits_Are_Better_Than_Wages
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00:00:15.200 | Radical Personal Finance, episode 39.
00:00:18.600 | Welcome to the Radical Personal Finance podcast for today, Monday, August 11th, 2014.
00:00:41.200 | Thank you for being here.
00:00:42.200 | Today, what can we learn about life, business, and wealth from the 400 people with the highest incomes?
00:00:53.200 | Or rather I should say from the people with the highest, let's see, how do I say it?
00:00:56.600 | 400 highest income earners?
00:00:58.200 | I think that would be accurate.
00:01:07.200 | Thank you for being here with me.
00:01:08.600 | I appreciate it and I trust that the content today will give you something to think about, something thought provoking,
00:01:14.400 | something to get your brain going.
00:01:16.400 | Today, I'm going to talk only about one article, one article and then one, let's see, what is this?
00:01:23.200 | I guess report, one IRS report that came from that article and then we're going to extrapolate and just see what we can learn.
00:01:29.600 | I hope we're going to keep today fairly focused and fairly brief.
00:01:33.400 | The article that I came across, you know, I like to do them on Monday shows, I'd like to do basically a news roundup.
00:01:39.800 | And I was just looking through different things and I was not inspired to talk about anything from this past week.
00:01:45.200 | Maybe it was the going, the events going on in Africa and in the Middle East that just made me think about how there's so many things that are more important than money.
00:01:54.000 | Or maybe just wasn't, there wasn't any good news this week, I don't know.
00:01:58.000 | But I looked through all these different stories and nothing inspired me except this one.
00:02:02.400 | And so the article that we're going to talk about is a Forbes article written by, let's see, Mark Agrori.
00:02:10.000 | And this was from June 25, 2014.
00:02:13.400 | And the article is titled, "Want to be rich? Salary alone won't get you there."
00:02:18.800 | And my interest was peaked when I looked at that title because, you know,
00:02:25.000 | that's often a time, it's what I find myself saying more and more on this show than anything else.
00:02:33.000 | Let me read the introduction to this article.
00:02:34.600 | I'm not going to read the analysis from this article because the point is that this sends us to a report that I didn't know existed.
00:02:42.400 | "If your only goal is to become rich, you'll never achieve it," said John D. Rockefeller, America's first billionaire.
00:02:48.600 | His point was simple.
00:02:50.400 | When the only thing you care about is making money, no amount of money is ever enough.
00:02:55.800 | What you have always pales in comparison to what you don't have and could have.
00:03:02.200 | That's why true success involves a lot more than money.
00:03:05.800 | But even so, while we all define success differently, as well we should,
00:03:10.000 | most of us do factor some degree of wealth into our success equations.
00:03:15.800 | So how do you become super rich?
00:03:18.000 | First, embrace one fact.
00:03:21.000 | You'll never get there on salary alone.
00:03:24.000 | How do I know?
00:03:25.400 | The IRS says so.
00:03:27.400 | And he goes on and he links to this report, and maybe I'm a dumb-dumb and all of you know that this report existed,
00:03:32.600 | but I never knew it existed.
00:03:35.000 | And so evidently every year the IRS releases an annual report entitled
00:03:40.400 | "The 400 Individual Tax Returns Reporting the Largest Adjusted Gross Incomes."
00:03:46.000 | And so this report, and he links to it right on the IRS website,
00:03:49.000 | you'll find it in my show notes at radicalpersonalfinance.com/39.
00:03:54.000 | And so this most recent report goes from the years 1992 to 2009.
00:04:00.000 | So evidently 2009 is the latest year for which this data is available.
00:04:04.400 | And I was fascinated to look through this report.
00:04:07.000 | It's so interesting to me to look and say, "What can I learn?"
00:04:13.400 | So first of all, you may be interested to know how many individual tax returns were filed actually in the United States.
00:04:23.800 | There were actually 102,009.
00:04:25.800 | And unless I say another year, I'm going to look at 2009 data.
00:04:29.800 | So in 2009, there were 140,494,127 tax returns filed.
00:04:37.800 | Interestingly, this was 2 million fewer than the year prior.
00:04:42.800 | In 2008, there were 142,450,569.
00:04:47.800 | In 2007, there were 142,978,806.
00:04:53.800 | And each year of this report, I see the number of tax returns increasing.
00:04:58.800 | And from 2008 to 2009 is the only year that I was able to spot in the data
00:05:03.800 | where you actually had a decrease in the number of tax returns.
00:05:05.800 | I don't know what to make about that.
00:05:07.800 | This is just an aside.
00:05:08.800 | I actually am interested to, and I wonder, it's on my list of things to research now,
00:05:13.800 | as to why the number of tax returns was filed went down,
00:05:17.800 | whether it was because of the low dollar figure or whether it's a friend, let's see, David Gross from the Pickett line
00:05:26.800 | and his other war tax resistance friends are having an effect.
00:05:30.800 | I don't know.
00:05:31.800 | That was just an aside.
00:05:32.800 | But the point was there were 140 million tax returns filed.
00:05:36.800 | And this report looks at the top 400.
00:05:39.800 | So this is an extremely small percentage of the total number of tax returns.
00:05:45.800 | But it's very interesting when you look at the adjusted gross income amounts.
00:05:49.800 | So the number for the cutoff for 2009, in case you're curious,
00:05:55.800 | the cutoff income figure for the 400th highest tax return was $80,966,000 of adjusted gross income that was reported.
00:06:08.800 | This was also, interestingly, it was down.
00:06:10.800 | So this is the 400th -- number 400 in terms of income.
00:06:14.800 | We don't know what the -- I couldn't find anywhere in the report what the highest earned income was.
00:06:19.800 | But the average for these 400 was actually $202 million.
00:06:24.800 | So the average adjusted gross income for these 400 individual tax returns, $202 million.
00:06:29.800 | That's actually down from 2007, which was the highest year, which was -- that I could see here,
00:06:35.800 | which was an average of $344 million.
00:06:38.800 | So it's interesting to see the decline of income over those years.
00:06:44.800 | And if you remember, 2008 would have been where we had a massive recession, I guess would be the best word for it.
00:06:52.800 | In 2007, again, the average for the top 400 was basically $345 million.
00:06:59.800 | In 2008, it was $270 million.
00:07:01.800 | So you can see the impact of the recession right there.
00:07:04.800 | But let's talk about some other key numbers.
00:07:07.800 | And the one outcome that I want to use -- and let me give you a couple of -- let me give you a couple --
00:07:12.800 | let me continue in this Forbes article, and then I'll go over a couple of other numbers that I wanted to point out.
00:07:19.800 | In 2009, it took $77.4 million in adjusted gross income to make the top 400.
00:07:25.800 | Why do they have a different number than my $80 million that I just went over?
00:07:29.800 | I'm not sure, but let's just go with the Forbes article.
00:07:32.800 | 2009 took $77.4 million in adjusted gross income to make the top 400.
00:07:37.800 | That might sound like a lot, but it's down from $109.7 million in 2008
00:07:41.800 | and significantly down from the record high of $138.8 million in 2007.
00:07:46.800 | Making $77.4 million just lets you squeeze into the top 400, though.
00:07:51.800 | The average earnings were $202.4 million.
00:07:54.800 | Clearly, a lot of money, but significantly down from the 2007 average of $334.8 million.
00:08:01.800 | I'm not sure why the discrepancy between their article and the number I was just reading.
00:08:05.800 | What's interesting is how the people on the list made their money.
00:08:08.800 | Here's a breakdown by percentages.
00:08:10.800 | Listen to these percentages.
00:08:12.800 | Wages and salary, 8.6%.
00:08:16.800 | Interest, 6.6%.
00:08:19.800 | Dividends, 13%.
00:08:21.800 | Partnerships and corporations, 19.9%.
00:08:25.800 | Capital gains, 45.8%.
00:08:29.800 | The top 400 averaged $92.6 million in capital gains income,
00:08:33.800 | or 16% of the total capital gains reported by all taxpayers.
00:08:37.800 | That means just 400 people accounted for over one-sixth of all capital gains income.
00:08:43.800 | What this means is if you want to get rich, working for a salary won't cut it.
00:08:49.800 | Making relatively safe income investments won't cut it.
00:08:52.800 | Investing only in stocks of large companies won't cut it.
00:08:55.800 | Owning a business or businesses, whether in part or partnership,
00:08:58.800 | could not only build a solid wealth foundation,
00:09:01.800 | but could someday generate a huge windfall and make you rich.
00:09:07.800 | I'm going to stop in terms in the article.
00:09:09.800 | Feel free to read the rest of the article if you like.
00:09:12.800 | But let's go back to these statistics.
00:09:14.800 | Wages and salaries, 8.6%.
00:09:17.800 | Interest, 6.6%.
00:09:18.800 | Dividends, 13%.
00:09:20.800 | Partnerships and corporations, 19.9%.
00:09:23.800 | Capital gains, 45.8%.
00:09:26.800 | Now, some days on the Radical Personal Finance podcast,
00:09:29.800 | I wonder -- well, lately I wonder if this is the Van Dwelling show.
00:09:32.800 | [laughs]
00:09:36.800 | Excuse me. I couldn't resist.
00:09:37.800 | I read a couple other books on van dwelling over the weekend,
00:09:40.800 | which was really interesting to me.
00:09:43.800 | I now know all the details I need to know if I want to move into a van.
00:09:48.800 | [laughs]
00:09:51.800 | Where was I?
00:09:52.800 | I sometimes wonder if this is turning into the Entrepreneur's Hour.
00:09:57.800 | Or, I don't know, my Entrepreneur on Fire is the most successful entrepreneur podcast I know of.
00:10:04.800 | I sometimes wonder if this show is turning into the Entrepreneur's Show of some kind
00:10:08.800 | because it seems to me like all of the answers always come back to entrepreneurship.
00:10:12.800 | Every time I sit down and I try to think through massive topics that are coming up in society --
00:10:19.800 | I've had a couple actually this weekend.
00:10:21.800 | And a couple of shows, I had various show topics that I thought about doing a show on.
00:10:25.800 | I thought about doing a show that was influenced by the goings-on in the Middle East.
00:10:30.800 | And I was thinking, "What if I were going to become a refugee?"
00:10:36.800 | And I thought about using the news as a show topic to say,
00:10:40.800 | "How would I plan for myself if I were suddenly just forced to become a refugee?"
00:10:45.800 | And I think this is a very interesting thought process to go through
00:10:49.800 | because there have been millions of people in recent history
00:10:53.800 | who have been displaced from their homes, displaced from everyone they know
00:10:57.800 | and everything they know, and forced to become refugees.
00:11:01.800 | And I think that would make an interesting show topic.
00:11:06.800 | And I've got it on my list of show ideas.
00:11:09.800 | Or whether it's another one that I was thinking about doing today.
00:11:13.800 | And I've been working on research for a show about basically becoming rich
00:11:19.800 | while working a minimum-wage job.
00:11:22.800 | I was inspired, I read on the Matt Walsh blog his article that he wrote on Walmart.
00:11:27.800 | And he wrote this quite provocative article to somebody who wrote him an email
00:11:35.800 | that said why he was crazy about basically working minimum wage.
00:11:40.800 | And I happen to be a little bit familiar with Walmart,
00:11:42.800 | a little bit familiar with their benefits program,
00:11:44.800 | because I've had some clients that worked at Walmart.
00:11:46.800 | And so I thought about doing a show, and I'm actually planning this show.
00:11:49.800 | I'm doing some research and trying to crunch some numbers to really make it compelling.
00:11:53.800 | But basically how to become a millionaire working a minimum-wage job at Walmart.
00:11:57.800 | And it's created for me a very interesting thought process.
00:12:02.800 | Because--and I've been thinking about it all weekend--
00:12:05.800 | is basically what would I tell somebody if I were coaching somebody
00:12:08.800 | who were, let's say, 18 years old and working a minimum-wage job at Walmart,
00:12:12.800 | how would I coach them in their wealth plan?
00:12:14.800 | And to me it brings together everything that I want to bring together in this show,
00:12:18.800 | the integration of financial planning knowledge, of technical financial planning knowledge.
00:12:24.800 | So I've been going through Walmart's benefits and laying out a sample tax plan
00:12:29.800 | for this person making minimum wage.
00:12:31.800 | It brings in the importance of education, of entrepreneurship, of developing skills,
00:12:36.800 | of understanding programs, of tax planning, of goal setting, of success planning.
00:12:41.800 | It brings together basically everything.
00:12:43.800 | And it's been a fascinating mental experiment for me, but I don't have it ready for today.
00:12:50.800 | But my answer is I thought, "Man, it's tough to get rich working a minimum-wage job at Walmart,
00:12:56.800 | but it's easy to get rich as an entrepreneur."
00:12:58.800 | And it seems like whether the problem is I don't have enough money and how do I retire?
00:13:04.800 | Entrepreneurship.
00:13:06.800 | The problem is low rate of return on my investments?
00:13:08.800 | Entrepreneurship.
00:13:09.800 | The problem is how do I plan for inflation and global economic collapse?
00:13:14.800 | Entrepreneurship.
00:13:15.800 | Basically every answer just seems to go back to entrepreneurship.
00:13:19.800 | And I just thought, "What a fascinating topic."
00:13:22.800 | Notice this.
00:13:23.800 | 8.6% of the income of the highest-paid 400 people in the United States of America,
00:13:30.800 | 8.6% is wages and salaries.
00:13:35.800 | Everything else is investment income or business income.
00:13:41.800 | So let's go with investment income.
00:13:42.800 | Interest is 6.6% and dividends are 13%.
00:13:45.800 | So I'm going to lump those together and do some fuzzy math and call it 20.
00:13:48.800 | 13 plus 6.6, I'm going to call it 20.
00:13:50.800 | So 20% is coming from interest and dividends.
00:13:54.800 | And who knows what those dividends are coming from?
00:13:56.800 | Although I'm going to go through some other tables.
00:13:58.800 | Who knows what those are coming from?
00:14:00.800 | Large publicly-traded corporations or private ones.
00:14:04.800 | 20% from partnerships and corporations.
00:14:06.800 | And 45%--46%, actually, 45.8%--46% from capital gains.
00:14:12.800 | So the point is here--and this is one of my problems with the financial planning business
00:14:16.800 | and most of--not the financial planning business, but a lot of the kind of the advice business,
00:14:22.800 | the financial advice business that you hear so much about.
00:14:27.800 | My beef essentially comes down to, is it do as I say or do as I do?
00:14:32.800 | If you listen to any major financial pundit or read any book, ask yourself,
00:14:39.800 | "Why is this person getting wealthy?"
00:14:42.800 | I'll pick on--I don't know who to pick on.
00:14:45.800 | I don't like to pick on people, but I'll pick on the financial pundit
00:14:51.800 | since that's kind of the field that I'm basically in at this point.
00:14:54.800 | Let's say we list--I'll pick on--let's pick on Dave Ramsey, Suze Orman,
00:14:59.800 | and they're basically the only two in that field that are the big well-known ones.
00:15:05.800 | I'll pick on them.
00:15:06.800 | I was going to lump in Clark Howard, but he's actually a different story.
00:15:09.800 | Let's lump in--let's talk about Dave Ramsey and Suze Orman.
00:15:12.800 | What is the advice that you get from Dave Ramsey and Suze Orman?
00:15:15.800 | And to their credit, I actually--I've never, with more than 30 minutes,
00:15:20.800 | watched the Suze Orman show.
00:15:21.800 | I at least listen to Dave a lot.
00:15:22.800 | To his credit, he talks a lot about entrepreneurship.
00:15:24.800 | So I guess I can't be too--let me just be critical of basically--
00:15:28.800 | the primary thing that you read in financial advice.
00:15:32.800 | Save money, put it in an IRA, and let that grow your money.
00:15:35.800 | But the problem is that doesn't work.
00:15:37.800 | I mean, it does work.
00:15:39.800 | There's no reason why it can't work, but it doesn't work.
00:15:42.800 | And here's what I mean.
00:15:44.800 | It's very, very slow, and it's not how you make big money.
00:15:47.800 | You don't get into the top 400 by putting money into an IRA,
00:15:51.800 | investing it in publicly traded corporations, and making 10% on your money.
00:15:55.800 | You don't get into the top 400.
00:15:57.800 | You get into the top 400 by starting and growing a business.
00:16:00.800 | You don't get to be a multimillionaire.
00:16:04.800 | You don't--I don't know what the cutoff would be.
00:16:06.800 | Let's see.
00:16:07.800 | Hang on.
00:16:08.800 | I'm going to pause the show.
00:16:09.800 | I'm going to do some quick math.
00:16:10.800 | All right, got my calculator.
00:16:11.800 | So here's what we're going to do.
00:16:12.800 | Let's see how rich you can get if you follow all the 401(k) advice.
00:16:19.800 | So let's assume that you are--I'll use 25 years old.
00:16:22.800 | 25 to 65, let's use 40 years.
00:16:24.800 | It's a nice round number for me to do,
00:16:26.800 | although I recognize we could actually do this differently.
00:16:29.800 | So let's use--let's ignore IRAs,
00:16:31.800 | and let's just say a 401(k) contribution of $17,500.
00:16:36.800 | Let's assume there's a small employer match,
00:16:38.800 | so I'm going to use a total of--what would be fair?
00:16:41.800 | Let's use $22,000 a year.
00:16:43.800 | So that would be--if I use $22,000,
00:16:46.800 | that would be a deferral of $17,500 of income
00:16:52.800 | and an employer match of $4,500.
00:16:55.800 | That would be a--I think that would be a conservative assumption.
00:16:58.800 | Because I'm doing this live on air, I'm going to ignore catch-up contributions,
00:17:01.800 | and let's just say we contribute $22,000 per year to a 401(k).
00:17:06.800 | So $22,000, 40 years.
00:17:08.800 | Let's do this annually one time per year at the beginning of the period.
00:17:14.800 | Let's do this beginning--okay, and let's just--let's use 10% interest.
00:17:18.800 | That'll be fair.
00:17:19.800 | 40 years, starting with zero.
00:17:21.800 | At the end of 40 years, investing $22,000.
00:17:24.800 | Guess how much money we have?
00:17:25.800 | A lot--$10,710,000.
00:17:29.800 | $10,710,000, $739.85.
00:17:33.800 | Is that a lot of money?
00:17:34.800 | Absolutely.
00:17:35.800 | Is there any reason why that can't work?
00:17:38.800 | No, I don't know any reason why it can't work.
00:17:41.800 | The question is at 25 years old, do you make enough money,
00:17:43.800 | and are you prescient enough to start saving $22,000 a year?
00:17:49.800 | Some people are.
00:17:50.800 | Very few people are, though.
00:17:52.800 | But these are very--I mean, these are big numbers.
00:17:55.800 | But it is possible to make $10 million.
00:17:57.800 | You can use that as a tool.
00:17:59.800 | But how does somebody--I mean, I don't know.
00:18:01.800 | Let's see.
00:18:02.800 | I have no idea how much Dave Ramsey makes from his business,
00:18:05.800 | but my guess--I don't have any idea.
00:18:08.800 | I looked up one time his charitable foundation,
00:18:12.800 | and he makes--he made a $500--last year I looked up the tax return
00:18:17.800 | for his charitable foundation,
00:18:19.800 | he made a $500,000 contribution to his charitable foundation,
00:18:22.800 | and that charitable foundation made contributions to individuals
00:18:25.800 | and to individuals and various churches.
00:18:29.800 | So if we assume that that's a 10% tithe,
00:18:32.800 | which I have no idea if it is or not,
00:18:34.800 | that's just the money that's going through his charitable foundation,
00:18:36.800 | it could be one-tenth of what he gives,
00:18:38.800 | or it could be all of what he gives.
00:18:40.800 | I have no idea.
00:18:41.800 | But let's say he made a $500,000 contribution.
00:18:43.800 | That means a minimum of $5 million of income--of current income--from his business.
00:18:49.800 | And that has nothing to do probably with deferred income.
00:18:52.800 | So I would say it's probably got to be far higher.
00:18:54.800 | But let's compare--$5 million.
00:18:56.800 | So the point is, does a money pundit like Dave--
00:19:00.800 | does he make his money based upon putting money in a 401(k)
00:19:04.800 | or does he make his money upon having an incredibly successful radio show?
00:19:08.800 | It's the radio show.
00:19:10.800 | That's where you make $5 million a year.
00:19:12.800 | And again, I made that number up purely--my only logic was, again,
00:19:17.800 | the $500,000 contribution to his private foundation.
00:19:20.800 | And it looked like--I can't remember, this was a while ago--
00:19:23.800 | but that was the 2013--maybe the 2012 number.
00:19:26.800 | Anyway, it was about a half a million bucks contribution to his charitable foundation.
00:19:30.800 | And I said, "Well, let's say he does give 10% of his income, so that would be $5 million."
00:19:34.800 | To repeat myself, that's where it came from.
00:19:37.800 | I have no idea what he makes.
00:19:38.800 | I have no idea what some of these people make.
00:19:40.800 | But the point is that they make it from business.
00:19:43.800 | And this is like the bell that--I feel like the guy pointing out that the emperor has no clothes.
00:19:49.800 | Everything is made from business.
00:19:52.800 | Business is what makes all the money.
00:19:54.800 | So this is just proof, is that 45% of the growth comes from capital gains.
00:20:00.800 | Capital gains.
00:20:02.800 | And there's no chance in the world that this is, "Oh, I have a portfolio that--
00:20:06.800 | I'm running a S&P 500 index fund, and the capital gains in that are $300 million."
00:20:11.800 | This is building businesses, owning them, and then selling them and cashing out.
00:20:15.800 | And here's my proof for that.
00:20:17.800 | This point is made in the article.
00:20:19.800 | But I'm going to skip the data, and I'm going to go to the back end.
00:20:21.800 | You might be interested in this.
00:20:22.800 | Let's go look at the last chart here.
00:20:24.800 | So this is--let's get past the tax charts here.
00:20:27.800 | Okay, so this is the number of tax--the frequency of appearing in the top 400 tax returns
00:20:34.800 | by adjusted gross income for the tax years 1992 to 2009.
00:20:39.800 | So we have here from 1992 to 2009, so that would be 17 years.
00:20:45.800 | We have 17 years of income coming in--we have 17 years coming in of data.
00:20:52.800 | And so the question is, how many total taxpayers were there in the top 400 for those 17 years?
00:20:58.800 | And the answer is there were 3,869 taxpayers total that appeared in that chart,
00:21:06.800 | in that segment of the top 400.
00:21:10.800 | How many of them--of that 3,869, how many appeared there only in one year?
00:21:19.800 | That number is 2,824.
00:21:21.800 | So of that--let's run this percentage here--2,824.
00:21:27.800 | So 73% of the people that are listed for any of the 17 years,
00:21:34.800 | 73% of them were only in there for one year.
00:21:38.800 | What if we add now the 458 that were in there for two years?
00:21:42.800 | So let's do 2,824 plus 458, divide that by 3,869.
00:21:49.800 | I did my math wrong.
00:21:51.800 | 28--I've got to hit pause.
00:21:54.800 | The answer is 85%.
00:21:56.800 | So 2,824 were only in there for one year.
00:21:59.800 | 458 were only in there for two years.
00:22:02.800 | 181 were in there for three years.
00:22:04.800 | 113 were in there for four years.
00:22:06.800 | How many people out of that 17 years, how many individual taxpayers were in there
00:22:10.800 | for 10 or more of those years?
00:22:13.800 | The answer is 87.
00:22:16.800 | So 87, divide it by that.
00:22:21.800 | So that is 2.24% of the taxpayers were in there every year.
00:22:26.800 | So the point is that, A, any time you hear tax numbers--and most of the time
00:22:30.800 | this data is probably used to talk about tax strategy and tax the rich more
00:22:34.800 | and tax the unrich more, and I don't want to talk about that today.
00:22:38.800 | The point is that most people are not in the top percentage rates
00:22:42.800 | of income taxes for a long period of time.
00:22:45.800 | In fact, only about 2.25% of the 400 are in there for 10 years or more.
00:22:52.800 | So--excuse me, 2.25% of the 3,869 were in the top 400 for 10 or more of those years.
00:23:01.800 | A total of 87 taxpayers in the country.
00:23:04.800 | Now, could you talk about the distribution?
00:23:07.800 | Absolutely.
00:23:08.800 | Now, why is this?
00:23:09.800 | I think it has a lot more to do with the Pareto Principle
00:23:12.800 | and a lot more to do with the growth of compound interest,
00:23:15.800 | but 87 people were in there for the top 10.
00:23:18.800 | The vast majority of the top 400 taxpayers were only in there
00:23:21.800 | for one year or a couple of years.
00:23:24.800 | If you add the top two years, it was 85% of those taxpayers.
00:23:29.800 | So to me, what does this just prove?
00:23:32.800 | Well, I wouldn't want to extrapolate too much, but to me it's good evidence
00:23:36.800 | in the indication that if you really want to be really rich,
00:23:40.800 | start a business, and hopefully you'll have a cash-out exit plan for that.
00:23:45.800 | Now, let me prove this to you in another way and ignore the super-rich,
00:23:48.800 | because sometimes it's great to learn lessons from there,
00:23:50.800 | and sometimes it's hard to learn lessons from there.
00:23:53.800 | Let me ask you a question.
00:23:54.800 | Stop and think for a moment about all the wealthy people that you know.
00:23:59.800 | So make a list of three of them in your head. I'll wait.
00:24:04.800 | All right, top three wealthy people that you know.
00:24:07.800 | Of those top three, how many of them are business owners?
00:24:13.800 | Chances are it's at least one or two of them actually is a business owner,
00:24:18.800 | started a business, runs a business, owns a business, no matter at what rate.
00:24:22.800 | Whether this is on a relatively modest scale, as in a friend of yours
00:24:26.800 | who owns a plumbing company or an electrical company in a blue-collar scenario,
00:24:33.800 | it's very likely that if somebody owns a small plumbing company with, let's say, two trucks,
00:24:40.800 | that they're probably making more money than the guys that are working for them.
00:24:45.800 | I mean, I just got to assume that.
00:24:47.800 | Not in every year, but in general, that would be a good thing,
00:24:51.800 | whether it's on a modest scale like that or whether it's on a more extreme scale.
00:24:56.800 | Do you know someone who owns several restaurants?
00:24:59.800 | Do you know somebody who owns a car dealership?
00:25:02.800 | Do you know somebody who--I mean, you insert it.
00:25:05.800 | You have your three people. Just ask yourself, "What are they?"
00:25:08.800 | Now, of the other maybe one or two, there's probably somewhere in there that's a professional.
00:25:13.800 | But here's the question.
00:25:15.800 | The professional, are they actually rich because they are running a business
00:25:19.800 | or are they actually rich because of something else that's not associated with business?
00:25:22.800 | I'll use my own profession, financial advisors.
00:25:25.800 | Financial advisors do not get rich because they're great at investing.
00:25:31.800 | Are there a few who do? Maybe.
00:25:34.800 | There may be a few advisors, but they're not individual financial advisors.
00:25:40.800 | They're running a mutual fund. They're running a mutual fund advisory company.
00:25:44.800 | They are running a hedge fund of some kind.
00:25:46.800 | They may get rich based upon their investment prowess and their skill.
00:25:51.800 | But even them--and my point still stands--
00:25:53.800 | the majority of just average retail financial advisors,
00:25:58.800 | we get wealthy not because of our investing acumen, but because of our business.
00:26:05.800 | The ability to develop a skill, whether that skill is a sales skill,
00:26:08.800 | whether that skill is a financial planning skill,
00:26:11.800 | you get rich because you develop that skill and employ it and help people.
00:26:15.800 | That's a business.
00:26:17.800 | If someone is a doctor, are you getting rich because of a salary?
00:26:22.800 | I don't know what they pay at a hospital,
00:26:24.800 | but it's nowhere near what a successful physician can make
00:26:27.800 | if they own a large practice.
00:26:30.800 | The money goes to the owners of the businesses.
00:26:32.800 | So I just point this out because I'm just tired of reading finance books
00:26:36.800 | and financial advice that says, "Put money in your IRA."
00:26:40.800 | Now, can an IRA be useful? Yes, it is so useful.
00:26:44.800 | It's a great tool, but it's just a tool. It's a tax tool.
00:26:48.800 | It's not a wealth plan. It's not going to make you rich.
00:26:53.800 | It may build wealth over time, over a long career,
00:26:55.800 | but chances are you're going to flake on the career.
00:26:57.800 | Now, there's always exceptions.
00:26:59.800 | I did have a couple of clients that were millionaires,
00:27:02.800 | and they were millionaires because they took money
00:27:04.800 | and they put money into their deferred accounts.
00:27:06.800 | But you know what? They made a lot of money too.
00:27:08.800 | You have to make six figures plus.
00:27:11.800 | How else are you going to be able to afford to save $20,000 a year
00:27:15.800 | if you're not making six figures plus?
00:27:18.800 | There is the path, and this is part of what I'm going to talk about in my Walmart plan,
00:27:22.800 | but the path is--there is the extreme savings path,
00:27:26.800 | and that is a valid thing, and you've got to do it,
00:27:29.800 | especially if you're not making much money.
00:27:31.800 | But just statistically speaking, in general,
00:27:34.800 | it's a lot easier to get wealthy if you have more income.
00:27:36.800 | We've got income and outgo, and a lot easier with more income.
00:27:40.800 | So I don't want to keep repeating myself,
00:27:42.800 | but the theme of this show is largely--I mean, it's entrepreneurship.
00:27:47.800 | And because that seems to me--almost every financial planning question that I get asked,
00:27:53.800 | I just say, "Entrepreneurship, entrepreneurship."
00:27:56.800 | And I'm not cavalier about it.
00:27:58.800 | I'm very aware of the challenges of it.
00:28:01.800 | But if somebody is interested in being wealthy,
00:28:04.800 | go and dissect some of these numbers, and go and look through these charts,
00:28:08.800 | and understand what the wealthy--what the--
00:28:12.800 | understand what these charts say.
00:28:14.800 | Want to pay less in taxes? Entrepreneurship.
00:28:17.800 | Want to have more money? Entrepreneurship.
00:28:21.800 | I think that's--I think I made my point.
00:28:23.800 | I'm actually going to quit with that.
00:28:24.800 | I don't want to just go around and around in circles.
00:28:26.800 | So consider entrepreneurship. Consider that.
00:28:30.800 | I'm going to play two clips, two audio clips here.
00:28:33.800 | And the most pithy--I actually heard this as I was working on my show this weekend,
00:28:38.800 | on my Walmart show, which I may be able to get it released this week.
00:28:43.800 | I'm hoping, but I'm going to be traveling at the end of the week,
00:28:46.800 | and I'm just trying to do a lot of work.
00:28:50.800 | I've got a lot to do this week.
00:28:52.800 | So I'm hoping to get it released this week.
00:28:54.800 | But as I was thinking about it, I just kept coming back to this.
00:28:58.800 | And then I thought--and I was driving to my car,
00:29:00.800 | and I was listening to--I subscribed to a magazine, Success Magazine.
00:29:04.800 | And I was listening to the Success CD, and this was an old one.
00:29:07.800 | And it was a quick blurb from some Jim Rohn audio.
00:29:12.800 | And I was struck--Jim Rohn, in case you're not familiar with him,
00:29:15.800 | he was a speaker. He died, I think, a few years ago.
00:29:18.800 | I don't remember the exact year, but he was a professional speaker.
00:29:23.800 | And his tagline was "Is America's Business Philosopher."
00:29:28.800 | And I've always enjoyed everything I've ever listened to him,
00:29:31.800 | because just in listening--when you listen to him speak,
00:29:36.800 | he seems to just pack so much wisdom into a pithy statement.
00:29:40.800 | And his statement--and I've heard it for a long time.
00:29:43.800 | I wasn't thinking about it, though, until I re-heard it again this weekend.
00:29:46.800 | "Profits are better than wages. Wages will make you a living,
00:29:51.800 | and profits will make you a fortune."
00:29:54.800 | I just thought about that, and I thought, "What a pithy, pithy statement.
00:29:58.800 | Profits are better than wages."
00:30:00.800 | So I'm going to play two pieces of audio here.
00:30:02.800 | I'm done with my commentary at the end.
00:30:04.800 | I'll close the show out just with a thank you
00:30:07.800 | and a couple of announcements about my schedule and what's coming this week.
00:30:10.800 | But I'm going to play two pieces of audio here.
00:30:13.800 | The first piece of audio is a piece of audio from a speech,
00:30:16.800 | and it's called "Profits are Better than Wages."
00:30:18.800 | And this audio is 4 minutes and 7 seconds.
00:30:21.800 | Then the second piece of audio is about 10 minutes,
00:30:23.800 | and it's called "Getting Rich is Easy."
00:30:26.800 | And it's actually 10 minutes and 55 seconds.
00:30:29.800 | And just these two pieces of audio--I hope you enjoy them.
00:30:32.800 | And I don't like to rip anybody off, but I recognized--
00:30:36.800 | I thought Jim Rohn's done a much better job of distilling these concepts
00:30:40.800 | that I think are so key, and I hope you enjoy these two pieces of audio
00:30:44.800 | that I'm about to play for you.
00:30:46.800 | So here we go.
00:30:48.800 | If you're ready, say, "I'm ready."
00:30:50.800 | (audience) Ready.
00:30:51.800 | Here's the first one.
00:30:53.800 | Profits are better than wages.
00:30:58.800 | Once I understood that, I got rich.
00:31:02.800 | Profits are better than wages.
00:31:05.800 | Nobody taught me that in high school.
00:31:08.800 | I went to college for a year and a half and never heard it.
00:31:11.800 | I'm 25 and broke.
00:31:13.800 | I'm not destitute. I'm broke.
00:31:15.800 | Too much month at the end of the money is broke.
00:31:19.800 | And I finally hear this philosophy,
00:31:21.800 | "Profits are better than wages."
00:31:25.800 | Now, here's the phrase that goes with it.
00:31:27.800 | Wages make you a living, which is fine.
00:31:30.800 | Profits make you a fortune, which is super fine.
00:31:35.800 | And you can live both fine and super fine.
00:31:38.800 | You've now got the mechanism and the ways and means to do that.
00:31:42.800 | Profits are better than wages.
00:31:43.800 | Guess what? I taught this in Moscow when I was teaching capitalism.
00:31:48.800 | You know, the communists had it all wrong.
00:31:50.800 | They taught that capitalism was, you know,
00:31:52.800 | a big company that oppresses its workers.
00:31:54.800 | I mean, it was absolutely ridiculous.
00:31:57.800 | They had mentally lost it when they came up with this ridiculous philosophy.
00:32:02.800 | Communism taught capital belongs to the state, not the people.
00:32:06.800 | And we taught all these years what?
00:32:07.800 | Capital belongs in the hands of the people, not the state.
00:32:11.800 | That's why, of course, kids should pay taxes,
00:32:13.800 | because they can be capitalists, and all capitalists should pay taxes.
00:32:16.800 | And it doesn't take much to start an enterprise that makes a profit.
00:32:20.800 | I teach kids how to have two bicycles, one to ride and one to rent.
00:32:24.800 | I mean, you know, how long does it take?
00:32:26.800 | How long does it take to make a profit?
00:32:28.800 | I mean, a little ingenuity and you're on your way.
00:32:31.800 | So profits are better than wages.
00:32:33.800 | Capitalism better than communism.
00:32:35.800 | Communism said people are too dumb and stupid to know what to do with capital.
00:32:42.800 | So you must take capital away from all the dumb, stupid people
00:32:46.800 | and give it to the all-wise, all-knowing state.
00:32:51.800 | And let the state run everything.
00:32:53.800 | I mean, that was communism.
00:32:55.800 | And they devastated every country they touched.
00:32:58.800 | I've been to East Germany.
00:33:00.800 | It's taking a trillion dollars just to clean up East Germany.
00:33:04.800 | They've already spent 500 billion, they got 500 billion more to go.
00:33:08.800 | I mean, every country they touched, and I've been in all of them,
00:33:12.800 | they devastated them all with their devastating philosophy.
00:33:16.800 | We teach capital belongs in the hands of the people.
00:33:19.800 | That's where the ingenuity is to bring goods and services to the marketplace.
00:33:22.800 | And I'm going to show you later the miracle of capitalism grassroots in America,
00:33:27.800 | which you're involved in.
00:33:29.800 | But once I understood this now, it was so incredible.
00:33:34.800 | Profits are better than wages.
00:33:35.800 | Now, when I first was recruited, I'm a distributor for this little product called a Bunda Vita.
00:33:41.800 | And here's what my mentor said, Mr. Shove.
00:33:45.800 | He said, Mr. Owen, you can start this miracle working business part time.
00:33:52.800 | You don't have to go full time. You can start part time.
00:33:55.800 | And he said, if you'll devote to start with, let's say 10, 12, 15 hours a week,
00:33:59.800 | where you'll start making a profit, here's what you can now say.
00:34:05.800 | I'm working full time on my job and part time on my fortune.
00:34:10.800 | Because profits lead to fortune.
00:34:13.800 | I got so excited about that philosophy.
00:34:15.800 | I'm working full time on my job, but now I'm working part time on my fortune.
00:34:21.800 | I found a way not only to make a living.
00:34:24.800 | You won't believe this.
00:34:25.800 | I found a way to make a fortune.
00:34:30.800 | Can you imagine what that's like then to get up in the morning?
00:34:34.800 | To go to work on your fortune, not to go to work to pay the rent, which is okay.
00:34:40.800 | But a chance to go to work to make a fortune?
00:34:43.800 | And I said, right now I'm working part time on my fortune and full time on my job.
00:34:47.800 | But it won't be long until I'll be working full time on my fortune.
00:34:51.800 | Can you imagine what life is going to be like?
00:34:56.800 | Jim Rohn stealing all my good stuff. I love that.
00:35:00.800 | I mean, it's so true though, isn't it so much more exciting to work on a fortune
00:35:04.800 | and work on a business, something that you control?
00:35:08.800 | I hope you enjoyed this one. Getting rich is easy.
00:35:10.800 | I got rich for the time I was 31. Here's the best advice I gave my teenage...
00:35:13.800 | Hang on a second.
00:35:15.800 | Okay, so I owe you an apology. I don't know why the audio is funky.
00:35:18.800 | Sometimes the YouTube videos do this to me when I play them.
00:35:21.800 | Most of the time they're fine.
00:35:23.800 | If any of you know, I would love to have this problem fixed.
00:35:26.800 | I'm going to go ahead and play the audio anyway because it's understandable.
00:35:29.800 | Just the quality is not as good as it should be.
00:35:31.800 | It's understandable. If this is bothersome to you,
00:35:34.800 | check for the link in the show notes to the YouTube video called "Getting Rich is Easy,"
00:35:38.800 | and you can just listen to it right on YouTube.
00:35:40.800 | It's 10 minutes and 55 seconds.
00:35:42.800 | And then at the end I'm just going to come back with some quick announcements.
00:35:46.800 | Actually, I'm going to skip that so that if the audio bothers you.
00:35:50.800 | I'm going to skip the closing music and just do the announcements now.
00:35:53.800 | So this week I've got a couple of shows coming out, several interviews lined up,
00:35:58.800 | one with Curtis Stone about spin farming,
00:36:01.800 | which I think is just a really interesting topic that should be out hopefully tomorrow, Tuesday.
00:36:06.800 | And then I've got another interview lined up with someone who is an independent musician.
00:36:09.800 | And I don't know this person.
00:36:11.800 | I am going to--his name is Dan,
00:36:15.800 | and he's actually the one who wrote the theme music
00:36:17.800 | and released the theme music for the show that I use, that Spanish-sounding tune.
00:36:21.800 | So I'm interested in talking with him.
00:36:23.800 | And then I leave on Thursday.
00:36:25.800 | I'm driving from Florida to Texas for the Podcast Movement Conference.
00:36:28.800 | I'm going to do my best, if I can, to leave you a show that will go out in my absence,
00:36:34.800 | and then I'm going to try to get some shows lined up for next week for Monday and Tuesday.
00:36:38.800 | So I'll do my best to bring you shows.
00:36:40.800 | However, if not, it's because I'm traveling,
00:36:42.800 | and then as soon as I'm back in town I will get the rest of them out to you.
00:36:45.800 | So I'm going to go ahead and play this audio now.
00:36:47.800 | Thank you for listening.
00:36:48.800 | I hope these concepts are helpful.
00:36:50.800 | Enjoy the audio.
00:36:51.800 | I really do think it's worth listening to.
00:36:53.800 | But it may be easier for you just to click right through to the YouTube video.
00:36:56.800 | Don't let it annoy you, though.
00:36:59.800 | I got rich by the time I was 31.
00:37:02.800 | Here's the best advice I give my teenage friends.
00:37:04.800 | It was easy.
00:37:06.800 | What can I tell you?
00:37:07.800 | It was hard?
00:37:08.800 | No, it was easy.
00:37:11.800 | I'm a millionaire by 31.
00:37:14.800 | Let me tell you how I did it.
00:37:15.800 | I got three reasons why I got rich by the time I was 31.
00:37:18.800 | Let me give you those.
00:37:19.800 | Here's number one.
00:37:20.800 | I lived in America.
00:37:21.800 | I mean, how lucky can you get?
00:37:24.800 | America's easy.
00:37:27.800 | That's why everybody wants to come here.
00:37:29.800 | People haven't plotted a scheme for 50 years saying, "If I could just get to Poland, everything would be okay."
00:37:34.800 | No.
00:37:36.800 | No.
00:37:39.800 | The boat people are not desperately trying to get to Vietnam.
00:37:43.800 | No.
00:37:44.800 | They're not squeezing through the fence to try to get into Mexico.
00:37:48.800 | No.
00:37:50.800 | Neil Diamond says, "Looks like everybody's heading for..."
00:37:53.800 | They're all coming to America.
00:37:55.800 | Why? Everybody wants to come here.
00:37:56.800 | By every means possible to get here.
00:37:57.800 | Why? Because America's easy.
00:37:59.800 | So if you go home with anything, go home with that.
00:38:01.800 | Mr. Ong reminded us that America's easy.
00:38:03.800 | He got rich by the time he was 31.
00:38:04.800 | America's easy.
00:38:06.800 | Bangladesh is hard.
00:38:09.800 | Just take that home.
00:38:11.800 | Here's the average yearly income in Bangladesh.
00:38:14.800 | $120.
00:38:16.800 | That would be hard.
00:38:19.800 | Tell me hard versus easy.
00:38:23.800 | So America's easy.
00:38:25.800 | Cambodia would be hard.
00:38:27.800 | The Khmer Rouge killed 2 million Cambodians to make communism work.
00:38:32.800 | That's hard.
00:38:36.800 | America is easy.
00:38:40.800 | India would be hard.
00:38:42.800 | They got their challenges these days.
00:38:44.800 | Tough.
00:38:45.800 | America's easy.
00:38:47.800 | China would be really hard.
00:38:50.800 | Underline really and make a study.
00:38:51.800 | It's hard.
00:38:54.800 | America's easy.
00:38:57.800 | And now in about 90 days you can have that memorized.
00:39:01.800 | Tell you that's all you need.
00:39:02.800 | I got rich by the time I was 31.
00:39:04.800 | I lived in America.
00:39:05.800 | America's easy.
00:39:06.800 | Now here's number two.
00:39:09.800 | I found an opportunity.
00:39:12.800 | That's all you got to do in America.
00:39:13.800 | Search for an opportunity.
00:39:14.800 | Take the first one, right?
00:39:15.800 | Try it.
00:39:16.800 | If that isn't it, it leads to another.
00:39:17.800 | One door closes, another door opens.
00:39:19.800 | That's what's exciting about America.
00:39:21.800 | It's full of opportunity.
00:39:23.800 | A chance to try and then what?
00:39:25.800 | Try again and then what?
00:39:27.800 | Try again?
00:39:28.800 | Never.
00:39:29.800 | Never run out of opportunity to try.
00:39:30.800 | See if you can't better your life and your health and your future and your bank account and your income, make your fortune here.
00:39:35.800 | I lived in America, number one.
00:39:37.800 | Found an opportunity, number three.
00:39:38.800 | Number two.
00:39:39.800 | Here's number three.
00:39:40.800 | I found a teacher.
00:39:43.800 | What a grand and glorious, unique thing that was for me at that time in my life.
00:39:49.800 | I found a teacher willing to teach me.
00:39:53.800 | And his teaching came in two parts.
00:39:54.800 | Here's what it was, very simple.
00:39:56.800 | Number one, "Mr. Rohn, you have evidently messed up between ages 19 and 25."
00:40:05.800 | Now I could understand that, but he didn't leave me there.
00:40:10.800 | He said, "Now here's the answers on how to change it all the next six years so that the next six years won't be like the last six."
00:40:15.800 | What an incredible teacher.
00:40:17.800 | Taught me how to have a whole brand new six years.
00:40:19.800 | First six, what?
00:40:20.800 | I messed up.
00:40:21.800 | Second six, what?
00:40:22.800 | I got it right.
00:40:24.800 | Second six years I became a millionaire.
00:40:27.800 | During that second six years the government was about the same.
00:40:32.800 | I'm telling you.
00:40:34.800 | Interest rates were about what?
00:40:37.800 | The same.
00:40:39.800 | The pay scale was about what?
00:40:41.800 | The same.
00:40:42.800 | Lord knows my negative realities were?
00:40:44.800 | The same.
00:40:47.800 | Circumstances were about the same.
00:40:50.800 | The economy was about the same.
00:40:53.800 | The unions and their philosophy was about the same.
00:40:56.800 | What was going on around me was about the same.
00:40:59.800 | Then how come I got rich that second six years?
00:41:01.800 | I was not the same.
00:41:04.800 | I changed.
00:41:12.800 | So Mr. Owen if you can do that can anybody do it?
00:41:14.800 | Yes, I invite you on that journey.
00:41:16.800 | Anytime you want to.
00:41:17.800 | You can stay the same so that the next six years will be like the last six.
00:41:20.800 | Take a look at the last six years.
00:41:21.800 | And I'm telling you the next six years of your life is going to be like the last six.
00:41:26.800 | Unless you want to count on this short list that we call not much list.
00:41:30.800 | Most everybody's counting on this not much list.
00:41:33.800 | What if all of your negative relatives turned positive?
00:41:35.800 | What would that do for your future and your fortune?
00:41:38.800 | What?
00:41:39.800 | Not much.
00:41:41.800 | Not much.
00:41:43.800 | What if prices came down a little?
00:41:44.800 | What will that do for your future?
00:41:46.800 | I'm telling you not much.
00:41:48.800 | If the economy gets a little better what will that do?
00:41:51.800 | Not much.
00:41:54.800 | Now that the Democrats are in power what's that going to do for your future?
00:41:57.800 | Not much.
00:41:58.800 | We could get a good debate going here.
00:42:03.800 | If the Republicans would have stayed in power what would that have done?
00:42:06.800 | Not much.
00:42:07.800 | Hey, we could get a good debate going here.
00:42:10.800 | I'm telling you it's a not much list.
00:42:13.800 | If you don't make plans of your own guess what?
00:42:15.800 | You'll probably always fit into someone else's plans.
00:42:18.800 | Guess what someone else may have planned for you?
00:42:26.800 | Then what's going to make the difference?
00:42:27.800 | You're going to have to make the difference.
00:42:29.800 | You're going to have to take charge.
00:42:31.800 | Now Mr. Shultz my teacher gave me a promise and I want to give you that promise now.
00:42:34.800 | Here was the promise I got and I bring it to you.
00:42:36.800 | Here's what my teacher said.
00:42:38.800 | If you will change, Mr. Rohn, he said if you will change everything will change for you.
00:42:46.800 | You don't have to change the government.
00:42:47.800 | You don't have to change prices.
00:42:48.800 | You don't have to change taxes.
00:42:49.800 | Get all that.
00:42:54.800 | He said if you will change everything will change for you.
00:42:59.800 | And the first thing you start changing is what?
00:43:02.800 | Your philosophy.
00:43:04.800 | You start changing your mind.
00:43:06.800 | You start changing how you think.
00:43:07.800 | You start picking up new ideas and information.
00:43:09.800 | Gather new knowledge.
00:43:10.800 | Make better decisions about what's valuable.
00:43:12.800 | And I'm telling you if you do that your whole life will change.
00:43:15.800 | Your health will change.
00:43:16.800 | Your relationship with your family will change.
00:43:18.800 | Your ability to cope with challenges and problems will change.
00:43:20.800 | I'm telling you income, promotions, all of it will change.
00:43:23.800 | If you will change it will all change.
00:43:24.800 | If you won't change it isn't going to change.
00:43:27.800 | You can keep your fingers crossed if you want to and hope they'll straighten it out.
00:43:31.800 | You can wish for the wind not to blow quite as severe, but I'm telling you
00:43:35.800 | wishing for the wind to change in your favor, we call naive at best.
00:43:40.800 | Don't do this any longer.
00:43:41.800 | Wish for a better wind.
00:43:43.800 | The key is to wish for the wisdom to set a better sail.
00:43:46.800 | Utilize whatever wind that blows to take you wherever you want to go.
00:43:49.800 | That is the philosophy I picked up at age 25 and it revolutionized my whole life.
00:43:56.800 | And here's what I found.
00:43:57.800 | I found it was easy.
00:43:58.800 | I got rich by the time I was 31 and it was easy.
00:44:00.800 | Now here's my definition of easy.
00:44:02.800 | Got to jump this bill.
00:44:05.800 | My definition of easy meaning something I could do.
00:44:11.800 | I figure if it's something you can do it's easy.
00:44:16.800 | Now here's a parenthesis.
00:44:19.800 | Parenthesis, I worked hard at it.
00:44:22.800 | I found something I could do which was easy, but I worked hard at it.
00:44:27.800 | I got up early and stayed up late and worked hard that six years.
00:44:33.800 | But what I did was easy, meaning it was something I could do.
00:44:37.800 | You say, "Well, Mr. Rohn, if it was so easy, how come everybody else around you during that six years, how come they didn't get rich?"
00:44:42.800 | Here's why.
00:44:43.800 | It's easy not to.
00:44:49.800 | How else would you describe it?
00:44:50.800 | That's it.
00:44:51.800 | You say, "No, no.
00:44:52.800 | For all of the rest of them it was hard for them and it was easy for you."
00:44:54.800 | That's not true.
00:44:55.800 | You couldn't debate me on that in front of this intelligent audience.
00:45:02.800 | But here's the challenge.
00:45:03.800 | Let me give it to you in a philosophical phrase.
00:45:05.800 | I tend to be a little philosophical.
00:45:06.800 | Here it is.
00:45:07.800 | The things that are easy to do are also easy not to do.
00:45:14.800 | That's the difference between success and failure.
00:45:21.800 | So you've got the choice here today of one of two easies.
00:45:24.800 | Easy to or what?
00:45:26.800 | Easy not to.
00:45:27.800 | I can give you in one sentence how I got rich by the time I was 31.
00:45:30.800 | Here it is in one sentence.
00:45:31.800 | I did not neglect to do the easy things I could do every day for six years.
00:45:36.800 | Underline.
00:45:37.800 | I did not neglect.
00:45:41.800 | That's the key.
00:45:43.800 | I found something easy I could do that led to fortune and I did not neglect to do it.
00:45:50.800 | Major reason for not having everything you want in America.
00:45:53.800 | Major reason for not having more of what you want in America.
00:45:55.800 | More health, more money, more power, more influence, more everything.
00:45:58.800 | Major reason why you don't get it.
00:46:00.800 | Simple answer.
00:46:01.800 | Neglect.
00:46:05.800 | Neglect.
00:46:06.800 | And here's the problem with neglect.
00:46:07.800 | It starts as an infection.
00:46:09.800 | And if you don't take care of it, it becomes a disease.
00:46:13.800 | And here's what else is the problem.
00:46:14.800 | One neglect leads to another.
00:46:17.800 | Neglect to do wise things with your money will probably neglect to do wise things with your time.
00:46:21.800 | Neglect to do wise things with your time will probably neglect to do wise things with your business.
00:46:25.800 | One leads to another leads to another.
00:46:27.800 | Pretty soon neglect has you by the throat.
00:46:30.800 | Emptying your purse, emptying your heart, emptying all of your chances for equities and power and all the good things.
00:46:36.800 | Neglect.
00:46:39.800 | What if you should be walking around the block every day for your good health and you don't?
00:46:43.800 | I'm telling you, you're on the wrong track.
00:46:45.800 | You should do it, you could do it, you don't do it.
00:46:48.800 | That's called formula for disaster.
00:46:50.800 | All you've got to do is let that and a few other things accumulate for six years and now you're driving what you don't want to drive,
00:46:56.800 | wearing what you don't want to wear, living where you don't want to live, doing what you don't want to do,
00:47:01.800 | maybe having become what you really didn't want to become.
00:47:04.800 | I'm telling you, that's it.
00:47:05.800 | Just neglect along, drift along, and it's got you by the throat.
00:47:09.800 | It'll take all your values, leave you with just a little bit of dust in the summer wind and it'll soon be gone.
00:47:15.800 | I hope I said that well.
00:47:18.800 | That's it.
00:47:19.800 | It's where I found myself at age 25 until my teacher came along and said,
00:47:22.800 | "Mr. Owen, up till now you've messed up. Let's see if we can't clean that up, change it all."
00:47:26.800 | I did.
00:47:27.800 | Changed my life.
00:47:28.800 | Not just the money, all the rest of the values that came pouring in when I understood that it was me.
00:47:34.800 | It was me.
00:47:36.800 | So take the easy approach.
00:47:38.800 | This stuff's easy to figure out.
00:47:40.800 | Getting rich is easy.
00:47:41.800 | I teach it to teenagers how to be rich by 40.
00:47:43.800 | 35 if you're extra bright.
00:47:45.800 | This stuff is not difficult.
00:47:47.800 | I love to teach kids enterprise.
00:47:49.800 | I hope you enjoyed that.
00:47:52.800 | I apologize for the poor audio quality.
00:47:54.800 | I'll see if I can get that fixed.
00:47:55.800 | If you have any ideas, let me know.
00:47:59.800 | In the meantime, go and have a great day.
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