Thursday, April 20, 2006

Bullion Investing


e-gold is a form of commodity money, so it is subject to the price fluctuations of that commodity. If the price of gold drops versus your national currency, the value of your e-gold drops in that currency. The account balance, which is denominated in gold grams, does not change, but its purchasing power will change in relation to the gold price.

This can, of course, work both ways. Proponents of the e-gold system would argue that the risk of significant price fluctuation is small compared to the risk of value fluctuations among fiat currencies. The opposite argument is that a typical user is more affected by changes in the price of e-gold than of fiat currencies; this is because most people are paid in and spend their local currency, while the use of e-gold will typically involve a foreign exchange transaction each time. In both cases, long-term shifts in the price of a currency or e-gold affect its owner, but anyone who frequently buys and sells e-gold will be exposed to short-term fluctuations as well. The price of gold has happened to increase over the past five years, so this factor has worked out to the advantage of anyone holding e-gold over that period.

As well as digital gold, e-gold also offers e-silver, e-palladium and e-platinum. Funds can be switched between e-metals using their sister company OmniPay. Metal-to-metal (or "M2M") exchanges are completed at spot price with no bid/offer spread. e-metal provides an easy way to gain access to bullion investing, without the hassles of delivery and storage.

Wednesday, April 19, 2006

Egold - Role in Global Commerce

Many small businesses in the U.S., Europe and Asia, each with full-time staff now operate as "digital gold currency exchange providers," doing nothing other than buying and selling digital gold currency for "fiat currencies," as gold bugs term the euro, pound, yen and U.S. dollar.

e-gold transactions — a "spend" — are completed electronically, usually using the web interface, and they always settle by weight of the metal even if denominated in some other way. A user may send (or "spend") a tiny amount of gold (a fraction of a gram, ounce or kilogram) to another user account instantly, anywhere in the world.

Even though e-gold is careful to not advocate any particular political agenda, as the Liberty Dollar does for example, e-gold could be viewed as a libertarian form of private currency.

Unlike fractional-reserve banking, e-gold holds 100% of clients' funds in reserves with a store of value. Proponents of the e-gold system contend that e-gold deposits are protected against inflation, devaluation and other possible economic risks inherent in fiat currencies. These risks include the monetary policy of countries or territories, which are perceived by proponents to be harmful to the value of paper currency.

The repository of the actual bullion bars with serial numbers and other data can be seen using the live "Examiner" function on the e-gold web site. Bullion is held in allocated storage with Brink's Global Services (part of The Brink's Company), Transguard Security Services (part of The Emirates Group) or MAT Securitas Express AG (part of the VIA MAT Group). Clients hold an unallocated share of this allocated bullion.

The user may take physical delivery of the precious metal upon payment of an additional fee. However in practice, most users permit the company to store the metal for them.

E-Gold - New Digital Gold Currency


e-gold is a digital gold currency operated by Gold & Silver Reserve Inc. under e-gold Ltd., and is a system which allows the instant transfer of gold ownership between users. There are over two million e-gold accounts. About one quarter of those are active.

As of January 2006, e-gold had 3,376,279 grams of gold in storage, which is worth approximately $61 million. There are typically 50,000 e-gold spends each day, with a total value each day of about $6 million (that is, about 350 kilograms of gold). In comparison, PayPal handles transfers of approximately $60 million per day.

e-gold History

e-gold was founded in 1996 by Dr. Douglas Jackson and Barry K. Downey. Transactions using e-gold have grown dramatically since 2005. The total amount of gold bars (over three tonnes) in the e-gold system is approaching the size of the national reserves of smaller countries. Secondly, e-gold itself is now generating a substantial income from spend and storage fees: it costs a few cents to make each e-gold "spend" and e-gold itself now earns well over a million USD per annum from spend fees. Thirdly, the use of e-gold as a currency is no longer a novelty, as indicated by the 100,000 spends a day figure.

The number of e-gold accounts (as claimed by e-gold) grew from 1 million in November 2003 to just under 2.5 million in November 2005. That growth rate represents a compound growth rate of 58% per annum. This high growth rate has been sustained by e-gold almost since inception.

Tuesday, April 11, 2006

Exchanging Fiat Currency


e-gold does not sell its currency directly to clients. Instead numerous digital gold currency exchangers, such as OmniPay (a sister company of e-gold), act as market makers selling e-metal in exchange for fiat currency and a transaction fee. Conversely, these exchange providers will sell fiat currency in exchange for e-metal, and a transaction fee. In this manner e-metals can be converted back and forth to a variety of national currencies. The amount of a particular fiat currency or e-metal necessary to complete a transaction is determined by the spot price of the metal in relation to the value of the fiat currency. e-gold is known as private currency as it is not issued by governments.

Compared to other systems like PayPal, the process of buying e-gold can be confusing to a person unfamiliar with the e-gold system. e-gold, unlike e-Bullion for instance, does not sell digital currency directly to the user. According to their website the reason e-gold does not provide an in-house exchange service is so there can be no debt or contingent liabilities associated with the business, making e-gold Ltd. absolutely free of any financial risk. They claim e-gold Ltd. does not possess currency of any nation or even have a bank account.

Monday, April 10, 2006

E-Gold Fees and Transactions

E-Gold Fees

e-gold charge an account fee (or Agio Fee) of 1% per annum (deducted in monthly payments) on all e-metal stored.

Spending e-gold is free, with transaction fees (or Spend Fees) deducted from the recipient. As of 2006 these spend fees vary on a sliding scale from 55% for very small amounts (0.0004 grams of gold, worth about 1 cent) to 5% for amounts on the order of 0.1 gram (about $2) to 1% for amounts of over 1 gram (about $20), with a maximum fee of .05 grams (about $1).

e-gold spends clear instantly, in contrast to cheques or credit card transactions. Unlike other online payment systems such as PayPal, there are no distinctions between merchant and non-merchant e-gold accounts. Anyone can create a "merchant account" (there is only one type of account) instantly. All e-gold accounts carry the same fees and have the same capacity to receive and transmit e-gold account holdings.


Non-reversible Transactions

Unlike credit cards, there is no way of having transactions reversed, even in case of a legitimate error or an unauthorized spend. e-gold's Terms of Use stipulate that all spends are final and e-gold cannot be held responsible for any spend. In this respect, an e-gold spend is more akin to a cash transaction (except for the fact that there is a fee levied) while PayPal transfers, for example, could be considered more similar to credit card transactions. As a consequence of this, it is of course not possible to buy e-gold online with a mere credit card.


Universal Currency

Proponents claim that e-gold offers the first truly global and borderless world currency system which is independent of exchange rate variations. Gold, silver, platinum and palladium are internationally recognised as forms of currency under ISO 4217.

Saturday, April 08, 2006

Security of Egold System

As with any online payment system, e-gold is vulnerable to various threats, notably phishing (for example, forged emails asking for login details) and spyware (such as keystroke logging).

In the early years of e-gold, this problem was widely reported to be rampant. The problem could have been due to the novelty of the system, combined with the irreversibility of payments, combined with the hardness of gold as money, combined with many of the early users being "gold bugs" rather than technically-oriented computer users.

Fortunately around early 2004, this problem seemed to be largely eliminated at a stroke, by e-gold adding a simple IP checking process for spends. (This has often been cited as a good example of how extremely simple solutions to security problems can often have big results.)

Some competing DGCs offer similar features to combat typical, simple, "mass" phishing attacks. e-Bullion utilizes a "two-factor", token-based authentication solution from CRYPTOCard, an alternative to RSA's "SecureID". Pecunix has an extremely secure, somewhat complicated, log-in procedure. 1mdc has a simple PIN-pad addition. GoldMoney allows user certificates to be used. Most systems include an optional "email confirmation" type of process. All of these approaches thwart simple keystroke loggers.

In 2005, the Los Angeles Times reported on a specially created trojan horse that compromised "dozens" to "the low hundreds" of e-gold accounts. While trojans usually silently record the login details of the unsuspecting user, the trojan in question (Win32.Grams) emptied the accounts themselves by transferring the contents to the attacker's accounts.

Friday, April 07, 2006

Regulatory Challenges to E-Gold

e-gold Ltd. was registered in Nevis, West Indies in 1999, but was removed from the register in 2003. As such it appears to be an unregistered entity.

In September 2004 several Australian e-gold currency exchanges ceased operation due to stricter application of Financial Services Licencing regulations. Digital gold currency exchangers that were closed down by the Australian Securities and Investments Commission (ASIC) include:

* goldex.net
* sydneygoldsales.com
* ozzigold.com

Whilst exchange providers can still operate in Australia many have found it impractical to do so due to proxy issues. It is unclear if unified banking regulations between Australia and New Zealand will result in e-gold exchangers being banned from NZ. Australian residents can though exchange e-gold via exchangers in the U.S., Europe or other countries.

Bullion Storage at E-Gold
As of November 2005, it is unclear if e-gold has an independent auditor of the physical bars, so there is no way of knowing if e-gold Ltd. really has the reserves to back the currency in the e-gold system. e-gold does maintain an "Examiner", a web page with updated statistics on outstanding liabilities and the total amount of each precious metal in its holding. While proponents generally consider this assuring enough, critics remain skeptical.

Limited Use
Beginning January 2006, eBay has restricted buyers and sellers from using any online payment system, except for PayPal. eBay specifically named e-gold as one of the online payment systems that will result in them cancelling a seller's account if used. e-gold runs a non-reversible transaction policy, meaning that there is no protection for purchasers if vendors fail to supply goods.

Thursday, April 06, 2006

The Avoid Debt Secret

Financial talking heads on television and radio try to tell you how to get out of debt, stay out of debt, or what dance steps to use to avoid debt. Just about everything they say is the wrong thing. I don't mean they are lairs and you should ignore them. Actually, many of their ideas do make sense.

They are wrong when talking about debt because they say "live within your means". By focusing on this phrase, what they are not telling you becomes a secret - the true secret to avoiding debt. Do you want to know the secret? If you didn't, why are you reading this?

The secret to getting out of debt and avoiding debt again is…

Living below your means.

I'm serious that this is the true secret to staying out of debt. If you live within your means you are spending everything you take in. While this avoids going deeper into debt, it will not dig you out of debt or keep you out. Living within your means is like walking on a treadmill, you work hard but you fail to go anywhere.

How do you live below your means? The best way is to create a spending plan. This can be a simple hand written graph listing your expenses or it can be as complex as a fancy computerized program tracking every dollar you spend through PDA and laptops. I prefer the Spending Plan Creator at Slave2Work.com, it's flexible enough to be used on your computer, or to be printed out.

Why is living below your means so important? When you live below your means you are generating a surplus amount of money each month. This surplus is money you use to pay extra on your debts until you are debt free. This surplus can be used to build an Emergency Fund, develop a savings plan for your children's college or prepare for your retirement. Living below your means is the real secret to personal financial success. It also will not come easy. We people like to live as high on the hog as we can. However, this doesn't help us have a surplus each month. You might have to make some difficult decisions to produce a steady supply of surplus money each month.

How difficult of decisions? You may have to sell your house and move into a smaller rental. Perhaps you will sell one car, stop eating out except for special occasions, come home from work instead of stopping by the bar or even taking on a second job. Be careful of the second job, though. It comes with more taxes, stress and its own set of issues.

When you are done reading, I want you to think about what you can do to start creating a surplus this month. What plans are you going to make, and steps you will take to provide a surplus to pay off your debt and begin a regular savings program?

After you have thought about them, go talk to your spouse about creating a surplus. When you are done talking, writing the surplus creating plan down and hang it on your refrigerator. If the two of you work together, you will be able to conquer your debts and put your family back on a secure financial footing.

Easy Money

Money always fascinates us and we are attracted towards it. Everybody wants it. There are lot struggles which are associated with earning money. We know with the experience of many that for earning handsome money, a good combination of luck and hard work is required. By a consistent approach toward hard work can help us in achieving it. If we do hard work in some direction and get a good proficiency in it. Then, this proficiency also brings with it some good fortune for us. This may be in the term of money or brand image of us. There onwards it depends on us, how we increase or decrease this achievement.

A consistent hard work and good luck makes us more wealthy and successful. Therefore a success or money is nothing except a combination of hard work and good luck. However irrespective of knowing these facts we go on chasing the easy money. We want to achieve the thing in few minutes which are achieved by others in years. We believe in luck, but we totally forget the hard work. We make our self totally dependable on luck. Due to this attitude we some times land in lot of traps. We land up in lot of schemes which promise us to make enough money, without doing the enough work.

We forget here that the both hard work and luck are equally responsible for ones success, by the ignoring the one of them we can not think about becoming successful. We do not require being masters of every thing to become successful, however only a super mastery in one thing make us a great achiever. Therefore instead of moving here and there we are requiring to concentrate on one thing and achieve high degree of proficiency in it. If we go on doing work in this way, some day our achievements will make us different from rest of others.

Whenever anybody thing about that art, your name will be associated with that art. You will become the master, the guru of that art. This is the real success in all term and nobody can easily take this from you. Everything name, fame and money will come to you. In this stage you do not have to think about the money, you will grow above of these things. This is the real success, which can never we bring by any easy money. More easily we earn the easy money, more fast we lose it also. Secondly the most of easy money earning planes are short term gains and can leave us helpless after some. So we are require to extra conscious in choosing the kind of money, we want to earn.

Easy Money

Money always fascinates us and we are attracted towards it. Everybody wants it. There are lot struggles which are associated with earning money. We know with the experience of many that for earning handsome money, a good combination of luck and hard work is required. By a consistent approach toward hard work can help us in achieving it. If we do hard work in some direction and get a good proficiency in it. Then, this proficiency also brings with it some good fortune for us. This may be in the term of money or brand image of us. There onwards it depends on us, how we increase or decrease this achievement.

A consistent hard work and good luck makes us more wealthy and successful. Therefore a success or money is nothing except a combination of hard work and good luck. However irrespective of knowing these facts we go on chasing the easy money. We want to achieve the thing in few minutes which are achieved by others in years. We believe in luck, but we totally forget the hard work. We make our self totally dependable on luck. Due to this attitude we some times land in lot of traps. We land up in lot of schemes which promise us to make enough money, without doing the enough work.

We forget here that the both hard work and luck are equally responsible for ones success, by the ignoring the one of them we can not think about becoming successful. We do not require being masters of every thing to become successful, however only a super mastery in one thing make us a great achiever. Therefore instead of moving here and there we are requiring to concentrate on one thing and achieve high degree of proficiency in it. If we go on doing work in this way, some day our achievements will make us different from rest of others.

Whenever anybody thing about that art, your name will be associated with that art. You will become the master, the guru of that art. This is the real success in all term and nobody can easily take this from you. Everything name, fame and money will come to you. In this stage you do not have to think about the money, you will grow above of these things. This is the real success, which can never we bring by any easy money. More easily we earn the easy money, more fast we lose it also. Secondly the most of easy money earning planes are short term gains and can leave us helpless after some. So we are require to extra conscious in choosing the kind of money, we want to earn.

Proven Secrets to Wealth

I'm going to show you a secret powerful way to move from where you are now, into a much higher level of success than you've ever dreamed possible.

My name is John David and I've been successful in everything I put my hand to once I learned to apply these simple principles and techniques I'm about to share with you.

I absolutely guarantee, if you apply what I show you here, you will have more success than you ever dreamed possible.

Whether you're a seasoned business veteran, or just starting out in the world, there are proven ways to fast track whatever goals you have. There are certain underlying principles that will absolutely improve your chances of success.

So lets get to it.

I can tell you in 5 minutes of being around you if you have what it takes to be a success... I'm not bragging, I'll even show you right now how you can tell yourself if you or someone you know has the potential to be successful.

Below, in my opinion, are the two predominate personalities on the earth today...

Which one are you?.

The Lion Personality...

These people rarely speak first, they will listen intently to information that is presented to them, and if it makes sense, they will apply what they've just learned to there situation.

Lions are solution oriented people.

Lions may be afraid of change, but they're more afraid of staying where they are.

Lions will take a risk if there is a good probability of achieving their goal. They generally are never completely happy with where they are in life, and have a very strong desire to grow and move ahead.

The Lion is usually always hungry for change and it shows in everything they do. A Lion personality can be aggressive at times, but they are definitely the type of people you want on your team.

The Jackal Personality...

No matter what anyone tries to teach them, they will have a better way of doing it.

A Jackal is usually living in fear. They are afraid to take chances. They are afraid of change. They are afraid of anything they aren't familiar with. If a Jackal personality is around a Lion personality, they will do everything in their power to hold the Lion back.

The Jackal type personality doesn't want anyone close to them to improve themselves, they just want things to stay the same. Jackals love to live in comfort zones. They don't want to stretch out and claim new territory and they're always looking for an easy meal to prey on.

Jackals are the people you MUST ABSOLUTELY AVOID LIKE THE PLAGUE if you want to be successful in any area of your life.

Your first step to success is, you need to decide if you are a Lion or a Jackal

If you are a Jackal personality you might as well stop reading right now because I don't want to waste any more of your time. I don't mean to be harsh, but you will read this information and you won't do anything with it.

Is it possible for a Jackal personality to turn into a Lion personality? Absolutely, but generally it will take a life shattering experience to move from a Jackal to a Lion.

Now that you know what personality type you are, lets get down to it.

Here is the roadmap for success in every area of your life...

-- End From The Beginning

The first thing we all need to learn, is to have a vision of where we are going and how to get there. If I dropped you in a strange city, and told you to find a building you'd never seen before, you'd have a very hard time locating that specific building wouldn't you?

Now if I dropped you in the same city and gave you a map and an address, you'd suddenly find it very easy to locate the building... right?

It's EXACTLY the same with ANYTHING you want to get out of life...

If you don't have a map on how to get there, chances are you never will. So how do you build a map of somewhere you've never been? Simple. Here's how you do it.

Get out a piece of paper and write down the job of your dreams... I'll wait. Don't fudge on this part, DO IT !!!

Ok put the paper aside and read on. You can go back to it later.

Now here's how you create a road map to your dreams. This example can be applied to every area of your life that you want made better. Your health, your marriage, your finances. Anything you want to dramatically improve just apply this simple technique.

Ok just for example sake, lets say you want to be a successful real estate agent.

Write that down on your piece of paper and then backtrack... WRITE DOWN EVERY STEP IT WILL TAKE WORKING FROM YOUR DREAM BACKWARD... in as much detail as you can think of.

For Example what will you need to become a successful real estate salesperson?

-- Real estate license
-- Decide which real estate broker you want to work for
-- Learn how to get lots of clients
-- Find a very successful real estate person and learn their secrets

Are you starting to see how to develop a roadmap to your dreams?

Of course your roadmap will have much more step by step details than what we've written down so far. Then go over and over it again outlining every step you will need to take to get where want to be.

And then once you have the roadmap, you need to plan your trip.

-- Time Management

It doesn't matter who you are or where you've come from, everyone needs to manage their time effectively. Time is the one thing that once it's gone, you will never get it back.

If you are serious about achieving your dreams, you MUST manage your time and the people you network with efficiently. I highly recommend you get yourself a time management software package. The one I use and highly recommend is called Time & Chaos http://www.chaossoftware.com

Once you have organized your time and your contacts, the next step, in my opinion is...

-- Find a Mentor

No matter what project you are undertaking, there is almost always someone, who has gone before you. These experts can save you months if not years of your life...

If you can get your hands on "how to" information showing you how someone got where you want to be, GET IT AT ALL COSTS... source this out with all diligence. This information can catapult you into your dreams faster than you could even imagine.

OK so you're probably saying how can I get someone to show me their secrets?

Believe it or not there are thousands upon thousands of downloadable information products written by experts who have done pretty well everything you can imagine. All you have to do is search them out. Check their credentials, and buy their product.

If it seems to easy, it is... Your only hardship is to investigate the "expert" and see if they really have done what they say they have. If you're not familiar with Google it's very easy to use. Just type some ones name in the search bar and hit search. You'll find out soon enough if they can do what they say they can...

Now go back to the piece of paper you wrote down your dream job and start building the roadmap to your dreams...

I wish you great success in everything you do...

Wealth, Money And Getting Filthy Rich

Lets talk about getting rich. Filthy rich. Rolling in dough. Gold plated Ferraris. Ok, maybe a gold plated Ferrari is overkill. Or just wrong. So how, how, how and how you ask? You’ve come to the right place.

1. Make it crystal clear as to why you want to get rich.

There are a million reasons for wanting to become a zillionaire. Understand why you want to get rich. If you don’t know why, forget it. Go home. Stay in Normalville. Keep picking away at your dead-end life. Understanding your motives behind serious moneymaking makes way for passion, purpose and meaning. Perhaps your purpose is to flummox your idiot boss by amassing enough cash to purchase a huge estate, and then invite him over for Kraft dinner. Maybe you saw a sad child on TV and you want to help that sad child through the gift of mini Ipods and DVD collections of the hit TV series Friends. Perhaps you want to have total financial freedom and study the astonishing and mystifying life of aardvarks. Behind every Donald Trump wannabe is a continuous driving passion, motive or purpose. Find yours. You must have a purpose to keep you going. Must! Find out what it is. Now.

2. You know why you want to be wealthy, but you can’t get off the freaking couch.

Okay, you have decided to become nauseatingly rich and clearly understand your motives. But you’ve noticed that you can’t let go of that gigantic bag of Doritos and the TV remote is glued to your hand. Maybe you have to take care of a few other issues before the Brinks truck rolls to your door? Becoming filthy rich also requires that you are honest with yourself and ready to make a few changes. Take health, for example. Good health provides good energy. Good energy means that you can now spend time inventing that cereal that looks like tiny Ipods, after cleaning sewers all day. There may be a host of issues to resolve in order to remove roadblocks to private jets and beautiful beaches. It’s not only your health. Perhaps you still live with Mom and Dad and all your credit cards are maxed out over your incredible collection of collectable Yoda and Gollum action figures. Sorry, getting megarich might not happen overnight. Make sure your priorities are in order. Get in shape. Stop giving your platinum American Express to your Barbie girlfriend. When you find yourself on a plane to Las Vegas with your two year old’s piggy bank, forget it. You are not ready. Are you ready now? Great! Let’s go!

3. I’m going to be incredibly rich and do it all by myself.

No, you are not. Sure, I’ve read about some guy who came from some dusty, impoverished country, worked his butt off and became the carpet king of the world. Or Anthony Robbins, who was so poor that he had to take a bath in his kitchen sink before he became a megarich and began to buy helicopters and other rich-folk transportation devises. At least I think he took baths in the kitchen sink. Maybe he washed his clothes in it. Anyhoo, most people probably had some help to realize their dreams of caviar and champagne. How about a financial advisor? The world is saturated with them and I’m sure you can find one to get you on the right track. You know, how to save money, make a budget and all those other important money subjects that school never bothered to teach you. Don’t be afraid of financial planners either. They don’t all work in Gucci-designed, cloud-covered penthouse offices, smoke Cuban cigars and treat you like annoying spinach stuck in their teeth. Some can be nice! Inexpensive! So whether it’s the help of a friend, financial planner, parent or Oprah herself, it’s most likely that in order to get that two hundred foot yacht, you need some help. Who can help you?

4. I want to get stupendously rich, buy a small country, but I don’t have any good ideas.

Okay, you have purpose, no skeletons barging out of the closet and some help. But no ideas. The good news is that there are an infinite amount of ideas hanging off the idea tree just ready to be plucked. The bad news is that some of them take a long time to come to fruition. Conventional wisdom dictates that we must start young, save x amount of money for x years and blah, blah, blah. Well, some of us don’t have all those years. We want our helicopter and we want to eat our cake while flying in our helicopter -- now! Just think of all the fabulous and quick ways people have become filthy rich. Take those Google guys, for example. What’s with that? You punch in words in a little box and it brings you to other words that match your words. Rocket science? I think not. Ever heard of Lavalife? Lavalife is an online dating service that began in Canada and was sold for $152 million dollars!! Cash! $152 million!! Cash! True story! And the truly amazing thing is that it started in Canada! I thought Canada was just a bunch of peace-loving, mild-mannered types that worshipped hockey, curling and penguins. Yes, even Canada has amazingly rich people. So, if a Canadian can do it, so can you! Put your thinking cap on and start unleashing those hidden ideas. Maybe one day even you can sell your Canadian dating service company to a USA company for $152 million cash. Think of all the helicopters you can buy!

Let us summarize.

1. Understand the reasons behind your quest for wealth. Is always having the latest Ipod part of your wealth definition or is financial freedom? Make sure your core values are yours and don’t come from the advertising world.

2. You are clear and comfortable with your reasons behind for your wealth quest, but you are a walking heart attack. Having great health makes everything easier. Make it a priority and key goal.

3. You think you can get rich by yourself. Make sure you have the right connections to help you on your way. How about a financial planner?

4. You don’t have any ideas or are afraid to try one. There is an infinite amount of ways to create wealth. The first step is to TAKE ACTION. Life rewards action. Don’t take your music to your grave.

Wealth, Money And Getting Filthy Rich

Lets talk about getting rich. Filthy rich. Rolling in dough. Gold plated Ferraris. Ok, maybe a gold plated Ferrari is overkill. Or just wrong. So how, how, how and how you ask? You’ve come to the right place.

1. Make it crystal clear as to why you want to get rich.

There are a million reasons for wanting to become a zillionaire. Understand why you want to get rich. If you don’t know why, forget it. Go home. Stay in Normalville. Keep picking away at your dead-end life. Understanding your motives behind serious moneymaking makes way for passion, purpose and meaning. Perhaps your purpose is to flummox your idiot boss by amassing enough cash to purchase a huge estate, and then invite him over for Kraft dinner. Maybe you saw a sad child on TV and you want to help that sad child through the gift of mini Ipods and DVD collections of the hit TV series Friends. Perhaps you want to have total financial freedom and study the astonishing and mystifying life of aardvarks. Behind every Donald Trump wannabe is a continuous driving passion, motive or purpose. Find yours. You must have a purpose to keep you going. Must! Find out what it is. Now.

2. You know why you want to be wealthy, but you can’t get off the freaking couch.

Okay, you have decided to become nauseatingly rich and clearly understand your motives. But you’ve noticed that you can’t let go of that gigantic bag of Doritos and the TV remote is glued to your hand. Maybe you have to take care of a few other issues before the Brinks truck rolls to your door? Becoming filthy rich also requires that you are honest with yourself and ready to make a few changes. Take health, for example. Good health provides good energy. Good energy means that you can now spend time inventing that cereal that looks like tiny Ipods, after cleaning sewers all day. There may be a host of issues to resolve in order to remove roadblocks to private jets and beautiful beaches. It’s not only your health. Perhaps you still live with Mom and Dad and all your credit cards are maxed out over your incredible collection of collectable Yoda and Gollum action figures. Sorry, getting megarich might not happen overnight. Make sure your priorities are in order. Get in shape. Stop giving your platinum American Express to your Barbie girlfriend. When you find yourself on a plane to Las Vegas with your two year old’s piggy bank, forget it. You are not ready. Are you ready now? Great! Let’s go!

3. I’m going to be incredibly rich and do it all by myself.

No, you are not. Sure, I’ve read about some guy who came from some dusty, impoverished country, worked his butt off and became the carpet king of the world. Or Anthony Robbins, who was so poor that he had to take a bath in his kitchen sink before he became a megarich and began to buy helicopters and other rich-folk transportation devises. At least I think he took baths in the kitchen sink. Maybe he washed his clothes in it. Anyhoo, most people probably had some help to realize their dreams of caviar and champagne. How about a financial advisor? The world is saturated with them and I’m sure you can find one to get you on the right track. You know, how to save money, make a budget and all those other important money subjects that school never bothered to teach you. Don’t be afraid of financial planners either. They don’t all work in Gucci-designed, cloud-covered penthouse offices, smoke Cuban cigars and treat you like annoying spinach stuck in their teeth. Some can be nice! Inexpensive! So whether it’s the help of a friend, financial planner, parent or Oprah herself, it’s most likely that in order to get that two hundred foot yacht, you need some help. Who can help you?

4. I want to get stupendously rich, buy a small country, but I don’t have any good ideas.

Okay, you have purpose, no skeletons barging out of the closet and some help. But no ideas. The good news is that there are an infinite amount of ideas hanging off the idea tree just ready to be plucked. The bad news is that some of them take a long time to come to fruition. Conventional wisdom dictates that we must start young, save x amount of money for x years and blah, blah, blah. Well, some of us don’t have all those years. We want our helicopter and we want to eat our cake while flying in our helicopter -- now! Just think of all the fabulous and quick ways people have become filthy rich. Take those Google guys, for example. What’s with that? You punch in words in a little box and it brings you to other words that match your words. Rocket science? I think not. Ever heard of Lavalife? Lavalife is an online dating service that began in Canada and was sold for $152 million dollars!! Cash! $152 million!! Cash! True story! And the truly amazing thing is that it started in Canada! I thought Canada was just a bunch of peace-loving, mild-mannered types that worshipped hockey, curling and penguins. Yes, even Canada has amazingly rich people. So, if a Canadian can do it, so can you! Put your thinking cap on and start unleashing those hidden ideas. Maybe one day even you can sell your Canadian dating service company to a USA company for $152 million cash. Think of all the helicopters you can buy!

Let us summarize.

1. Understand the reasons behind your quest for wealth. Is always having the latest Ipod part of your wealth definition or is financial freedom? Make sure your core values are yours and don’t come from the advertising world.

2. You are clear and comfortable with your reasons behind for your wealth quest, but you are a walking heart attack. Having great health makes everything easier. Make it a priority and key goal.

3. You think you can get rich by yourself. Make sure you have the right connections to help you on your way. How about a financial planner?

4. You don’t have any ideas or are afraid to try one. There is an infinite amount of ways to create wealth. The first step is to TAKE ACTION. Life rewards action. Don’t take your music to your grave.

Growing Rich

So you've read "Think and Grow Rich", and you've got an intellectual understanding that you "become what you think about". You have a list of affirmations about wealth, and you recite them every day.

But you still have no money. Wealth doesn't seem to be anywhere around.

What's the deal here? According to Napoleon Hill, you ought to be filthy stinkin' rich, right?

Well, here's the real deal: If you're not "Wealth Conscious", than all this thinking, and all this affirming isn't going to bring you wealth. Thinking, and affirming are simply actions you're taking. But they are just PART of the sequence of creating wealth. If you skip the FIRST step, you simply can't get anywhere.

So what's the first step?

Being.

To attract wealth, you first have to BE wealthy. THEN, you think wealthy thoughts, speak wealthy affirmations, and take wealthy action.

"But how can I BE wealthy if I'm NOT wealthy?" you ask. Logical question, but it's based on the false assumption that you don't have wealth. You HAVE wealth. You're simply not aware of it. You have constructed a physical reality that prevents you from experiencing Wealth. This can all be explained with the science of Quantum Physics.

So let's look at some very basic concepts of Quantum Physics that will explain what I'm talking about.

First, you probably are aware - at least on an intellectual level - that at a subatomic level, we, and everything else in the Universe, is Energy. When you break everything down, we're all made of the same stuff, and we're all connected. The Universe is just this huge ocean of Energy, vibrating at various frequencies which gives the illusion of individuation. That is, we experience the illusion of separateness from each other, physical objects, and wealth because our "senses" are decoding the Energy around us in such a way as to create our physical reality.

This all happens in our thoughts.

So, to simplify things quickly here for the sake of time (another illusion), "things" only exist because we observe them. It is in our observing that things come into existence. Without our observing, things are simply "waves" - probabilities of existence. Physicists agree on this.

Our beliefs are a very powerful Energy system in our lives. Our beliefs allow or disallow certain experiences in our lives, including wealth.They make up who we are. We "BE" in the world according to our beliefs. If we are being is "someone who is trying to get wealthy by repeating affirmations", then THAT is what our reality will be. We will just be TRYING to get wealthy.

We have to make the decision that we ARE wealthy, contrary to any external physical evidence. That evidence is an illusion based on the belief systems that have guided who we have been being up to that point.

A truly wealthy person isn't wealthy because they have money. They have money, because they are wealthy! That's the distinction that most people have backward!

Here's an example to illustrate what I mean:

Tony Robbins became a millionaire at a very young age. Then, due to a series of poor judgments, he lost it. But within a year, he had it back. How did he do this? HE NEVER LOST HIS WEALTH. He only lost his money, which is just a symbol of wealth! Because he is "Wealth Conscious", he literally "magnetically attracts" wealth into his life. He truly can't help it! It's who he is! And there are thousand out there like him, who attract wealth simply because it's who they are. You can make the same decision and have the same results.

Conversely, a person who has grown up with "lack consciousness" can win millions in the lottery and lose it within a year. Their consciousness - their ENERGY - simply can't maintain the attraction to Wealth because they aren't "wealthy" in who they are being.

But again, Wealth is a decision. If you aren't currently experiencing wealth, you first need to realize that abundance is everywhere...in fact it's all there is. Poverty and lack are the illusions. You can shift your consciousness to Wealth - BE Wealth - by simply making the decision, THEN your thoughts, speech, and action will allow you to experience the wealth that is yours!

This is indeed a complex subject which challenges our core belief systems. But it is those very belief systems that keep a person in a state of lack.

Look at your financial situation today. Look at your core beliefs about Wealth and You, and see if your life isn't a PERFECT reflection of your beliefs. Then, look where those beliefs may have originated. When you can awaken to yourself that your beliefs create your reality, rather than the other way around, you have the option to truly be free to experience a reality of prosperity that you deserve!

Wealth Knowledge

What is wealth knowledge? It is knowing how money is made, and how wealth is protected. It isn't really a secret. In fact, there are hundreds of books out there that spell it all out for anyone willing to pay a little bit. The problem is that the essential truths are not popular with those who want to get rich easily.

Wealth Knowledge - Creation of Wealth

The first thing to understand if you want wealth knowledge, is that wealth is created. It isn't shuffled around from person to person depending upon who is "trickier." There is more wealth on the planet now than ever before, and more being created every day. No one has to get poorer for a man to become wealthy.

Start to recognize and understand the ways in which value is created. This is the basis of your own financial enrichment. You have to create something of value to others, and that is how you really make money. Any other way of making money is fragile, probably unethical, and likely temporary.

In the business of property "flipping," for example, it may appear that there is no value created. Buy a fixer-upper for $120,000, sell to another investor for $130,000 - where is the value you created? In the application of your knowledge of values, how to find properties, and how to structure deals. You put a neglected property into the hands of someone who will renovate it and make it a nice home for some family.

Think first of how you will give people what they need and want. In any business you'll make more money finding ways to solve other peoples problems than in finding ways to get paid. There are always enough ways to get paid if you create enough real value.

Wealth Knowledge - Habits of Wealth

A wealthy person is different from a poor person. No, he or she doesn't have different feelings, or even a superior character. What makes the wealthy different is what they consistently do. Wealth knowledge is in knowing what habits to cultivate.

Debt is a means to buy "toys" for most people. Put another TV on the credit card. It isn't that wealthy people avoid debt. They have much more usually. The difference is that they use debt to invest, to generate more wealth. The next time you borrow any money, do it to buy income producing real estate, or to start a business.

Wealth knowledge is about knowing what pays you the most for your time. Discover that, and do those things more. Make it a habit. Just spending two hours to re-arrange your banking, might make you hundreds more in interest over the years. Does your job pay you $100 per hour? Those you sell real estate know you can make several times as much for the same time selling $300,000 properties as selling $30,000 lots. Why not concentrate on working where the money is?

Everything gets easier as you do it more. There are tasks that you want to avoid, but are important to your financial future. It's tough to get motivated to do them. Get in the habit of starting each day with these most difficult tasks, though, and it gets easier. Of all the things you need to learn and do, developing good habits is the key to wealth knowledge.

Tuesday, April 04, 2006

Steps to Achieving Wealth

Everyone wants to be wealthy. Only a few actually achieve it though so following these steps could help put you into that minority group of the rich.

Check out these 10 steps then apply them to your own personal situation:

  1. Set down a plan and chart your course.
    You need a plan if you want to obtain financial independence. Be clear about what wealth is, as far as you are concerned, and what having wealth means to you. Take tangible action and steps to achieve success in your wealth program. The first thing therefore, is to set your course and stay with it.
  2. Believe in yourself.
    Many people have low self-esteem. Others have very little confidence in their own abilities. Remember, everybody has been given the same amount of brain matter as well as the ability to think logically, in most situations. You have to believe you can achieve what you set out to do. Almost everyone has a gift or talent in some area. If you feel that you lack confidence, take a course to strengthen that weakness.

    If it is financials; if you do not understand finances, maybe a course in basic financial management and investment will help you. You may be good with your hands and feel that a course at night school, or some other institution, will help get you started. It doesn’t matter if you make a few mistakes along the way because most people learn as they go. Don’t write yourself off because most people can achieve what they set out to do - if they put their mind to it.

  3. Keep away from debt.
    Debt can be like a millstone around one’s neck. Debt can get you so deep down into a hole it is hard to dig yourself out. Debt is expensive. Debt will put you into bondage. You therefore need to get out of debt and stay out of debt. This should be a top priority. Be wary of people or companies getting you into debt because it suits their agenda or business. Try and maintain a good credit rating. If necessary, ask for a credit report and check if there are any inaccuracies that need correcting.

    If you have to get into debt make sure it is for things you need, rather than things you want. Even though you can use debt sensibly it is best to stay out of debt, unless there is an opportunity, which will result in growth of wealth. This debt needs to be controlled, e.g. if you need to borrow money for an asset that will definitely increase in value, as well as provide an income. This is termed a ‘good debt’ and should not be discounted - provided you do your homework before taking the debt on.

  4. Take control of your spending.
    The latest government figures show that consumers’ outstanding credit rose by 10% annually while the personal savings rate dropped to a new low, as consumer spending continued to grow. This negative savings rate implies that consumers finance their spending through borrowing, selling investments or other assets, or by spending past savings. With so many consumers living beyond their means, what can people do to rein in spending?

    It’s simple - they need to sit down and figure out a plan to budget the amount they spend each week and then stick to it. Is that all it takes, then - a plan? According to the self-help books (of which there are shelves upon shelves in any bookstore), the first step to better personal finances is to know where your money is going and keep it under budget.

  5. Watch your cash.
    Having cash available is more important than having a lot of assets. This simply means that our world today requires cash to pay for things. You need to watch your cash flow to ensure that you can lay your hands on cash when it is needed for an emergency. While it is good to build up your assets, if you have a cash emergency or cash crisis it is not always easy to realize or sell off assets and turn them into cash.

    Make sure that you have some cash away in a savings account for your immediate and emergency needs. The rest of your net worth can be put into assets and investments that grow. Always keep close to your cash flow to ensure your spending does not get out of hand, and that your spending is according to your cash budget. One of the biggest enemies of creating wealth is spending. Study the many tips available for saving money and keep good records of your cash payments so you can see where your money is going at all times. Wealth creation comes about because your cash going out is a lot less than your cash coming in - so maintaining a watch on your cash flow is critical.

  6. Make sure your money is working for you.
    If you have spare money after meeting all your needs, make sure this money is working for you. This means investing in products that grow and produce an income. If your money going out is less than your money coming in you will end up with a surplus of cash. Make sure you set some of this aside for emergencies and the rest should be invested; to grow and multiply. The whole area of investment is complex and there is a lot of information available to help you to make decisions. You may need to talk to a financial planner or investment adviser because you should be aware of the risks, as well as the income and gains the investment products can produce.
  7. Invest for Growth.
    You need to move from being a good saver to a wise investor. Do this slowly, after obtaining the right advice. It will be your first step on the road to building wealth. It’s only by putting your money to work that you will get ahead in the struggle for prosperity.
  8. Pay yourself first.
    This is a well-known principle of wealth growth. It simply means that when your income comes in, make sure you pay yourself first before paying your bills and other costs. This may mean paying yourself $50.00 a week before meeting your other expenses. The $50.00 will mount up each week in an investment account, growing and building in wealth. It may be a cash savings account, which will build up into an emergency fund to cover any unexpected costs, or it may be a set plan of investment along the lines of dollar cost averaging strategies that your investment adviser can tell you about.

    Dollar cost averaging is simply a process of continuously investing a fixed dollar amount into a fund specifically for the purchase of shares. The term ‘dollar cost averaging’ seems technical and complex, but basically that is what it is. Through a dollar cost averaging strategy you will actually end up buying more shares when they are down, and fewer when they are up. It becomes a compulsory savings technique and means that those extra dollars are actually working for you, rather than being frittered away.

  9. Protect your assets.
    If you don’t protect what you own - you are foolish. There are many ways to protect your family, your income and your possessions. You need to have the right insurance cover and you may need to introduce or create structures (such as trusts). The use of asset protection strategies is an important part of protecting your wealth. There also has to be a plan in place to meet your needs in case of accident, sickness or disability. This may require something as simple as an insurance policy. Also, protect your wealth by putting security measures in place, to cover yourself from theft, burglary as well as identity theft, which is a big area of concern these days.
  10. Look to the future.
    Teach your children the principles of finance and wealth growth. If they are going to thrive and develop in the years ahead they must understand how money works and how debt can affect their wealth. They need to learn about finances and how to avoid financial mistakes. They need to appreciate that the cost of education is heavy and that they may have to contribute towards this cost by saving (on their own account) from money given to them, or income earned.

    Education is a key factor in obtaining the best job opportunities and earning more money, as well as developing the necessary skills and knowledge to create wealth. The end of the line is providing for future retirement and this could mean putting a retirement plan in place that will enable your wealth to generate income to support you and allow you to retire in comfort.

Increasing Your Income

Most accountants, financial planners and wealth-building experts agree that there are really only three ways to increase your income. You can either:

1. Increase your revenue (make more money)

or

2. Decrease your expenses (spend less money)

or

3. Do both 1 and 2

However, what is not so obvious are the words that should always follow these “income-increasing” statements. Accountants, financial planners and wealth-building experts are often so close to these principles that they assume we all know them to be true. They also tend to believe that everyone has the necessary discipline and patience to automatically make them happen. Here are the reality-based revised versions of the statements that, although might not be as easy to relate to, really make more sense and, if you follow them to the letter, will help keep you on track. If you want to increase your income you must either:

1. Increase your revenue (and at the same time keep your expenses the same or less than before)

or

2. Decrease your expenses (and at the same time maintain or increase your revenue)

or

3. Do both 1 and 2

One version of Parkinson’s Law is that “expenses rise to meet income.” Put another way: “The more you make, the more you spend.” If you truly want to increase your income, it is important to maintain the same, or even a scaled-down, style of living for a period of time.

For example, if you make $45,000.00 per year and receive an annual raise of 10%, you gain an additional $4500.00 per year ($375.00 per month) for a new total of $49,500.00. It is awfully tempting to spend this extra $4500.00, rather than invest or save it. In addition, it is easy to talk yourself into “upgrading” your lifestyle by trading up for a more expensive car, taking an unplanned vacation, or some other “deserved” reward. After all, you just “increased” your income by $375.00 per month. Right? Wrong – if you spend it!

If you spend the extra money, you have not really increased your income at all. In fact, if you spend it and then take added taxes and other liabilities into account, you may actually have less income than you had before the raise! Weird, huh?

The point here is that it’s not just about making more money. It’s about what you do with the extra money that determines whether or not you have truly increased your income. The reverse is also true. Let’s say that instead of the 10% raise, you get no raise at all. But, you decide to “raise” your income by cutting expenses. If you find a way to cut your expenses by 10%, you actually are gaining over $375.00 per month. If you are able to cut your expenses by $4500.00 per year, in reality, you just increased your annual income by 10%. Weird again, but true.

Your desire, ability and willingness to both cut expenses and increase revenue will determine how fast and how much your income will jump. It’s a powerful combination, and this is the “secret” that most wealthy people use all the time.

Wealth Creation Tips

As someone who loves to shop, enjoys holidays and owns way too many pairs of shoes, managing my finances is definitely something that does not come naturally to me, I have had to learn. Managing your money is so important in becoming more organised, less stressed and more productive in your life – you’ll be amazed at what you can achieve with your money when it starts working for you, rather than you always working for it!

Seek advice. It’s funny how most of us will go to experts for help in so many different areas of our lives, but we seem to think that somehow managing our money is something we can tackle for ourselves – usually when all evidence is to the contrary! Look for a financial planner or accountant who can help you set a course for your financial future – you’ll identify your future financial goals, get real about your budget, set up investment strategies that will help you to achieve your goals – and you’ll wonder why you didn’t do it sooner.

Budget is not a dirty word! I know for many people ‘budget’ and ‘diet’ are in the same category, but a realistic budget is a phenomenally powerful financial tool and is imperative if you want to take control of your money (budgets can, and should, leave room for money to have fun with and to reward yourself with for all of your savings efforts!). If you find establishing a budget difficult to do (or to get motivated to do) on your own, seek help from a financial professional or even a friend, colleague or family member who has it all together financially.

Keep track. Keep a written record of every cent you spend for 30 days to see where all your money is really going. This activity serves a number of purposes – firstly it probably shocks you into reality and secondly, it helps you to identify categories of spending which you’ll need to include in your budget. Remember, keep track of every single cent…at the end of the month, if you’re spending more than you’re earning that’ll be a good indication of where some of your financial stress may be coming from!

The big picture. As well as looking at your day-to-day spending, estimate your annual expenses by looking at all of your regular bills and financial commitments and totalling that amount for the whole year. Once you know what your total fixed liabilities are for the year, divide that amount by 12 for a monthly figure. This is the amount you should be putting away each month just to pay your bills.

Keep on top of it. Review your budget weekly – this is a great habit to get into and helps you to keep on top of where your money is going and to quickly identify areas where you are spending too much – it can be quite an eye-opener! You might create a spreadsheet to enter your income and expenses into and to keep as an ongoing record.

Credit or charge? Change your credit cards for charge cards that you pay off in full each month. Knowing that you’ll have to pay it off at the end of the month is a great motivator to help you get past those impulse purchases. If you do want or need a credit card, keep your credit limit low to help stop you from spending too much.

Go online. Bank fees and charges are one of those small expenses that don’t seem like much each time, but they can add up. You can easily avoid them by changing your banking habits. Online banking is ideal; it’s cheap, convenient, reliable, saves you time and helps you to understand your financial position 24-hours-a-day.

Keep your receipts. How many times have you wished you kept the receipt – whether it’s so you can return or exchange an item or claim it on your tax? Set up a simple receipt filing system – it doesn’t have to be complicated, perhaps just an alphabetical file – and you’ll be able to find anything you need without the stress.

Tax time. Keep a separate file for your tax receipts and other documents relating to your annual tax return. This will save you from the frustrations at the end of the financial year and help you (or your accountant) to make sure you maximise your chances of receiving a tax return.

Wealth Creation Lesson

This is a true story from my own experience that illustrates how buying assets for wealth creation works.

Just over 3 years ago I found myself with $75,000 to spend or invest. My wife and I needed a new car as the old one was 8 years old and not as reliable as it used to be, so we spent $40,000 on buying the latest model.

Our $75,000 was now reduced to $35,000.

We now made the wisest financial decision we have ever made (apart from buying our own home) and used the remaining $35,000 as a deposit on an investment property to help provide for our eventual retirement. The investment property cost a total of $178,000 including mortgage, conveyancing, and stamp duty costs.

Three years have gone by and this is what has happened.

The car has dropped in value by at least $10,000 and possibly more, but is providing good reliable transport.

The owner of the neighbouring property to our investment has put his identical property on the market for $319,000 which compares favorably with other properties in the area. As a conservative guess I would expect it to achieve a sale price of $300,000 or thereabouts.

This means that we have made around $122,000 on our original investment in the house and lost $10,000 on the car. It's actually worse than that. By buying the car instead of the neighbouring house we have forgone a possible $122,000 profit, so the car has has actually cost us $162,000! The old car is still running and in daily use.

The end result is that we have a paper profit of $122,000 on the house and a technical loss of $132,000 on the new car ($162k - $30k residual value).

The moral of this story is to put your money into things that increase in value (assets), and NOT into things that decrease in value (liabilities). You may not have a large sum of money to invest in real estate but there are other asset classes like art, antiques, coins or stamps where there are plenty of smaller investing opportunities.

If you can remember this story of buying a house versus buying a vehicle next time you make a major purchase, you can evaluate how the purchase is going to affect your future wealth. Do you really need a new vehicle or a wide-screen TV? Would a low-mileage second-hand car, and keeping the existing TV be sufficient? Making the right decision now will have a huge bearing on your retirement.

Learning to distinguish between wants and needs, and investing in assets is the key to wealth creation and a comfortable retirement.