Money Secrets of the Rich

Learn the 7 Secrets to Financial Freedom

John R. Burley

• Publisher: Morgan James Publishing
• Year: 2009
• ISBN:
  9781614483045
• Topic: Personal Development
• Subtopic: Personal Finance

One of the world's leading experts in wealth creation shares the 7 secrets that propelled him from debt to financial independence as a multimillionaire. John Burley is one of the world's leading experts in wealth creation. He has achieved what most people would consider impossible. Starting out with a little money, a workable plan of action, and a lot of desire, John was in a position to retire at the age of thirty-two. Now, in this step-by-step guide, John will teach you the seven crucial secrets he discovered on his journey to financial freedom. Money Secrets of the Rich is a detailed map that will guide you to your own financial security and riches. These are not "get-rich-quick tips" but rather the systems and practices rich people use to protect their money and grow it at high rates of return. Best of all, as John explains, it does not matter where you are today or how much money you earn; it is what you do with your income that will determine your success. "When I need strategic advice about money, John Burley is one of the people I call. Every time I am with John I learn something profound about money that immediately increases my wealth." —Robert Kiyosaki, bestselling author of Rich Dad, Poor Dad

PART 1

Finding and Following the Path to Financial Freedom – Laying Down Strong Foundations

“We all have two choices: we can make a living or we can design a life.”

Jim Rohn

CHAPTER 1

The 7 Levels of Investor

“If you reach for the stars, you might not quite get one, but you won’t end up with a handful of mud, either.”

Leo Burnett

What type of investor are you? Have your investment experiences been positive, negative or mixed? Would you like to know why you get the results you do when you invest? Of course you would! And the good news is that I am here to tell you!

Over the past 25 years, I have devoted myself to the study of money. I have driven myself to know exactly how it works and why. I have read almost every book, watched so many videos and DVDs, and listened to countless tapes and CDs. I have also interviewed, counseled and trained many thousands of people in the practices of wealth building.

During this in-depth study of what I refer to as the Money Game, I made a startling discovery: despite the many and varied personality types in the world, there are really only seven basic types (or levels) of investor. And while it is common for an individual to drift a little from one level to another, most people stay fixed at the same level for their entire lives. The bad news is that they are often stuck at a level that prevents their financial success. The good news is that with a little effort anyone, including you, can easily upgrade his or her skills and investor level.

What “level” investor are you?

Knowing this will give you a clear understanding of why you get – or do not get – the investment results you desire. Armed with this new awareness you can then adopt (or maintain) the attitudes required for your desired level. You can then empower your awareness and attitude with the appropriate action to give yourself the results you so richly deserve.

Hot Tip!

Always carry with you the Three A’s: Awareness, Attitude and Action. I have found that whenever people are off track, it is because one of the Three A’s is not being properly applied.

As I mentioned, the great thing about your investor level is that it can be easily changed. So as you read on do not despair if you are currently operating at one of the lower levels. You can always upgrade. Think of the process as a financial evolution. The key to your evolution is to first determine where you are and then where you want to go.

People often get caught up in the “I need to make more money” trap. In fact, your income actually has very little to do with your ability to obtain Financial Freedom. Let me be clear, the 7 Levels of Investor have nothing to do with your income. Rather, they relate to what you do with your income. I know people who make millions of dollars every year who are financial failures (I know, I agree this is ridiculous, yet it’s true). I also know a guy who was a student of mine who is a multimillionaire, yet he never made more than $18,000 a year from his job.

So don’t get hung up on your income. Concentrate instead on understanding that it is what you do with your income that makes all the difference!

As you read through the 7 Levels of Investor I want you to know that at various times in my life I have been at every single one of these levels. It was only as my knowledge increased that I was able to upgrade myself to the level I am at today. At some point in the descriptions of each level you should be able to recognize yourself and the people in your life. I recommend that you write down on the side of the page the people who you know at each level and also where you currently are. It will really help to open up your awareness.

The 7 Levels of Investor

Level Zero: The Non-Existent

This first Level of Investor is actually not an investor at all. These people are the financially Non-Existent. They live their financial lives with their heads in the sand. They essentially have no investments or savings and are completely unconscious or oblivious to money matters in general, and their own spending habits in particular. Their financial lives are often so completely mismanaged that they do not even qualify for the simplest credit products and so, ironically, although their financial outlook is bleak, they are often in a better financial position than the person for whom credit is all too easily available.

When asked what their problem is they will invariably state that they “just don’t make enough money”; if they just made more money, they would be okay. The fact is, in many cases, they are now “starving” on what they “dreamed” they could earn five years ago. These people fail to see that the problem is not necessarily their income (or lack of it) but rather their Money Habits.

Level One: The Borrower

People at this level are also not (technically speaking) investors. The Borrower is often in a far worse financial position than the Non-Existent, although his or her potential for change may be greater.

The Borrower often has very high levels of debt – they spend all that they make and more besides. What they know how to do best is consume. When they have money it gets spent, and at best they survive on a month-to-month basis. Their solution to a money crisis is to either attempt to spend their way out of it or to take on even more debt, oblivious to both the short and long-term consequences of their actions. Their idea of financial planning is to get a new credit card, or to refinance their home in order to buy more things on credit.

Like the Non-Existents, Borrowers also refuse to see that the problem is not necessarily their income (or lack of it), but rather their Money Habits. I know of one individual who was making more than $3 million a year and yet was still a Borrower.

Borrowers often get themselves caught in a vicious cycle of spiraling debt, coming to believe that their situation is hopeless, and as a result, giving up. They often live in complete financial denial. Unless they are willing to change, their financial future is bleak and they will accelerate towards financial oblivion.

Level Two: The Saver

The Saver usually puts aside a small amount of money on a regular basis. The money is generally deposited into a very low-risk, low-return vehicle such as a checking account, savings account, money market account or certificate of deposit (CD).

Savers usually save to consume rather than to invest (that is, they save for a new TV, stereo or something else to buy). They are afraid of financial matters and unwilling to take financial risks. And even when they are shown that in today’s economic environment cash investments usually give a negative return (after inflation and taxes), they are still unwilling to alter their investment habits.

The Saver’s idea of an “aggressive” investment is to start an insurance-style savings plan or buy whole life insurance (a horrible investment that almost no one should ever make – I will tell you why later). From my years in the business, I can tell you that the insurance industry loves this type of person because they can prey on their conservatism and deep-seated need for security, and make huge commissions in doing so.

Although the strategy of saving worked well for my grandfather way back in the first half of the last century when inflation was low and the temptation to consume was minimal, it no longer works in today’s economic environment. We need to face the facts: the days of old are gone. No longer do we work for the same company all of our lives and then retire with a nice pension. Few people working today will retire to live in the same home (mortgage-free) that they’ve lived in for the majority of their working lives. In addition, at retirement, my grandparents’ generation was able to receive the benefit of pensions and/or retirement plans that were almost fully funded by the federal government or their employer. And all these benefits of old were provided with only nominal contributions required by the employee. Thus, for them, the strategy of saving for the long term worked well. Over the course of their lives, by diligently saving and only paying cash (except for modest borrowings to buy their home), they were able to live comfortably when they retired.

Would the same be true today? It’s very doubtful. Let’s look at the main reasons for this:

1. Inflation – in recent times inflation has proven to be very irregular. The luxury days of counting on bank interest rates to keep up with inflation are over.

2. Consumption – throughout the world the level of consumption has exploded. The last two generations have become the ultimate consumers, eating up much of the money they should have saved for retirement.

3. Income taxes – the average family loses between 20 and 40% of their lifetime earnings to local, state and federal governments in the form of direct and indirect taxation.

4. Social security plans – when Social Securit...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Introduction
• How to get the most from your Money Secrets journey
• Part 1 Finding and Following the Path to Financial Freedom – Laying Down Strong Foundations
• Part 2 Know Thy Enemy – Eliminating Financial Traps and Becoming Rich
• Part 3 The Magic of Financial Freedom
• Acknowledgments
• About the Author
• Investor resource materials
• Index