Ten Secrets to Getting Rich (part two)

You've read the first five steps... Here are the rest...

"Step Six : Give Yourself Time

It takes time to build a business as well as an investment portfolio. Building a business is not the same as getting a job. With a job, you expect to be paid soon after starting work. With a business, you may not be paid for years, if you are paid at all. That is why I recommend keeping your daytime job and starting a part-time business.

It is said that 90% of all businesses fail in the first 5 years. In my opinion, there are two main reasons for this sad statistic. One reason is lack of education and experience. Business is not something you can learn in school. Business is a combination of formal education, experience and guts.

The second reason is lack of money. We have heard the old cliche “Killing the goose that lays the golden egg”. When starting a business, many people kill the baby-goose before it’s old enough to lay the golden egg.

In other words, most small businesses are undercapitalized, which means the new business owner tries to support him or herself and often a family on a business that is not yet up and running. So the business is drained of cash when it needs it most to grow.


Step Seven : Start Small, Dream Big

In 1975, I realized that my $700 in savings was not much when compared to Mike’s hundreds of millions of dollars, which were rapidly growing into a billion dollars. Initially, I felt like giving up, saying to myself, “What’s the use. I’ll never have more than Mike.” But then I realized that if I continued with that thought process, not only would I never have more than Mike, I would never have much of anything.

I was comparing myself with Mike and trying to compete with him, rather than use him as inspiration and as a mentor. So that night I decided to dream big and start small.

Many people start small and stay small, simply because they have small dreams. In my opinion, big dreams are important because they possess ingredients vital for success: hope, desire, passion, energy, vitality, faith, drive, inspiration and creativity. These ingredients make life worth living.

So dare to dream big. Dream of all the wonderful things this world and life have to offer. Write your plan on how you can have all your dreams come true and look at the plan every day. Talk to people about your dreams, even those who criticize them. Then use their criticism to make your desire even stronger.


Step Eight: Before You Expand You Must Contract

In 1975, I knew that if I was to achieve great wealth quickly, I first needed to tighten up before I could expand. I was hurting financially because I had been sloppy with my money during the past 10 years.

In college, I’d spent a lot of money just having fun. In Vietnam, I’d developed the attitude of living life to the fullest because tomorrow I could be dead. If I was going to get ahead, I first needed to pull back a little. Instead of playing golf, rugby and tennis, I focused only on rugby.

Instead of spending every night in the clubs or watching television, I needed to get back to studying. Instead of trying to be everywhere and do everything, I decided to focus. I began doing more — of fewer things.

So, regardless of what you did yesterday, if you want to do better financially tomorrow, you may need to forgive your past, tighten up your activities today, so you can have a bright and prosperous tomorrow. To expand, you must first contract.


Step Nine : Get Bigger Faster

The problem with a small business or small investments such as one single family rental, is that you have to do all the work. You do all the work because there is not enough money to support paid management. So you own it and manage it.

Very often, a person begins to buy real estate and soon quits because the work is hard and the pay is low. They started with a small plan and stayed small.

For business or investing to work for you, in most cases you must get big. Instead of buying only two rental properties, plan on acquiring at least 20 properties as soon as possible. (But make sure you know what you’re doing first.) With 20 properties you can afford professional management, if the cash flow is strong, or you can trade the 20 units into one larger apartment house or office building.

The same goes with businesses, especially franchises etc. If you have only one franchise, you are the chief cook, bottle washer, owner and manager. If you have 20 of them, you have a chance of finding freedom faster.

The people who dream small, think small, and work small, work the hardest and are paid the least. So that night in 1975, I vowed to focus, acquire education, gain experience, start small and get big as quickly as possible.

I always remind myself of my rich dad’s words: “The bigger the asset you build, the less you work and the more money you make.”


Step Ten : The More You Share, The Richer You Become

In 1975, I knew that if I wanted to acquire great wealth quickly, I had to be a person who shared. I had to be generous. If I was greedy, stingy or tight, it would take me longer to attain great wealth.

So, I decided to operate out of the B (Business Owner) quadrant, rather than follow my poor dad’s ideas on labor unions and protectionism. I knew that I needed to focus on doing more for less money, for more people. I needed to focus on sharing as much of my wealth with as many people as possible.

So Step Ten is to be generous and share. If you do that, you will become far richer than those who work only for themselves.

Every day we are presented with multiple choices, so that we must continually choose and re-choose our chosen path. If you choose to be wealthy, use these ten steps to find your path and to stay on track."

By Robert Kiyosaki