How Come That Idiot’s Rich and I’m Not?
Quick Skim
For those who've wondered why some people seem to always find success while you struggle to live paycheck to paycheck, author Robert Shemin has the answer. In his new book, How Come That Idiot’s Rich and I’m Not? (Crown Publishers, 2008), Shemin provides a roadmap to becoming what he calls a “Rich Idiot” and building your wealth. He talks from experience, having become a multimillionaire himself by the age of 30 and owning a real estate empire of more than 400 properties. His wealth strategy relies on purchasing real estate, investing in stocks and bonds, and building your own business.
From the Book: 5 Ways to Increase Your Wealth
The key to achieving financial wealth first requires unlearning some of the things that have been holding you back, Shemin says. Here are a few:
1. Stop thinking too much. If you overanalyze and spend hours studying and creating complex charts to evaluate decisions, you risk becoming too set in your ways and unable to accept new ideas. In other words, “you’ve become too heavily invested in your own smartness,” Shemin says. By the time you’ve made a decision, the opportunity has disappeared. Instead, get the basic facts, verify those facts through others who’ve taken similar opportunities, trust your instincts, and then, most importantly, take action.
2. Throw away your long list of goals. Too many goals scatter your focus and energy, Shemin says. Instead, have one goal and pick activities to work toward it daily. “Setting too many goals is like taking aim with a shotgun,” Shemin writes. “Setting one goal is like taking aim with a laser beam.”
3. Get into debt. Good debt, that is — those assets that bring in more money than they cost. Good debt includes a loan to buy real estate or a loan to start your own business. Bad debt eliminate — debt on credit cards or that fancy car.
To help manage your cash flow and prevent bad debt, follow a budget, such as spending 30 percent on housing, 10 percent on transportation, 10 percent on insurance/medical, 15 percent
on food and clothing, 15 percent on travel and entertainment, 10 percent on savings, and 10 percent on charity.
4. Never say “I can’t.” Instead, say “How can I?” Maybe you don’t have the big bucks rolling in now but even a small investment can eventually pay off. For example, just a $1 investment per day can reap big rewards. In 20 years (earning interest at 10 percent), you’ll have $21,129, or $1.1 million in 60 years. Up that to $250 a week in savings (also earning 10 percent interest) and you’ll get even more — nearly $1.2 million in 25 years and more than $36.7 million in 60 years.
Need inspiration to keep yourself on track? Create a wealth wall that consists of pictures and words on luxuries you want, vacations you want to take, and examples of good works, such as a scholarship you could sponsor or a shelter you could help feed. Use the wall as full-color daily inspiration to reaching your goal.
5. Get to give. Wait a minute, shouldn’t it be give to get? Shemin says that in order to give, the “get” must come first. “I know that most of us are uncomfortable with receiving,” Shemin writes. “But Rich Idiots think of getting in a very different way. Rich Idiots know that the more they have, the more they can give. In fact, Rich Idiots crank this thinking up a notch and believe it’s their duty to get more so they can give more.”
The law of “get,” Shemin says, is receiving abundance with gratitude. So “get” more by being thankful for what you already have and always asking for more, such as for help, advice, and money. Then, donate to important causes. Even when you don’t have a lot to give monetarily, you can give by volunteering for a cause or contributing to your community.
Rich Idiots strive for balance in their lives — what comes to them in wealth is balanced with the wealth that flows from them to others, Shemin says.
Sneak Peek
“What made that guy or that girl back then an idiot is the same qualities that are making them rich today. And what got you the good grades and the pats on the back and all the gold stars is what’s keeping you from getting rich. Duh! And you thought it was all about hard work, sticking to the rules, and never coloring outside the lines.”
About the Author
Robert Shemin, a nationally recognized real estate expert, is the author of 10 best-selling books, including Secrets of Buying and Selling Real Estate Without Using Your Own Money (Wiley, 2003) and Successful Real Estate Investing: How to Avoid the 75 Most Costly Mistakes Every Investor Makes (John Wiley & Sons, 2003). He has been involved in more than 1,000 real estate transactions and serves as a spokesperson for the The National Association of Real Estate Investors and the American Congress of Real Estate Investors. He also serves as a regular expert on wealth for CNN. He holds a law degree and an MBA from Emory University.
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