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My wife and I attended the Donald Trump Wealth Building Seminar a couple of weeks ago. Actually it wasn?t a seminar, but a 2 1/2 hour promotion for his upcoming weekend seminar. I have attended sales pitches for seminars before, but I must admit that this was one of the better ones. I did walk away with a few tidbits that I will be able to use on my Financial Freedom journey.

To the dismay of a few attendees the Donald wasn?t there. What do you expect for free? He did have a 10-15 minute video introduction to the seminar – where he changed his name into a verb. He must have mentioned the Trump Way a hundred times. ?I will teach you how to create wealth in the Trump Way. You will learn how to evaluate projects in the Trump Way. By the time you will finish my seminar – you will be combing your hair in the Trump Way.? I added the last one.

The presenter was excellent. Trump found a person who he believed represented the average American. He owned a moderately successful real estate agency and was making a living, but wasn?t really getting ahead. Trump?s people mentored him obviously in the Trump Way. Now he has multiple streams of income and appeared to be in a much better financial position. Trump is definitely a smart man. He created a success story to help sell his seminar. I am not sure exactly how long Trump work with this person, but I imagine a few years.

During the presentation, it was stated a roadmap is essential to wealth building. You must have: A dream Must have a goal and be passionate about it Must obtain specific knowledge Create a Timeline

In addition to those you must learn how to use OPM (other people?s money), OPT (other people?s time) and OPE (other people?s experience). Trump?s time is Read more…

Unless you were lucky enough to be born into a family that has a large amount of money, then chances are you will have to work for money at some point in your life. You will earn a salary or hourly wage and you will use that money to pay your way in the world. But eventually, you will want to stop working and enjoy a retirement age. And if you have been wise and put your money to work for you, then you can often reach that time of relaxation much earlier.

Of course, not every situation is the same. Some people may have specific goals for which they are saving in addition to their basic retirement expenses, such as sending a child to college or buying a second vacation home. You may have a pension from your work, or you may be on your own when it comes to retirement expenses. Taking into consideration the fact that life expectancies are increasing all the time, and you may find yourself needing to plan for a greater period of time than you may think. So having your money start to work for you at an early age will pay out more and for a longer period of time in your future.

How is this so? Well, in part, as we discussed in the ?Get Rich Slowly? article, investing your money allows you to stay ahead of the depreciation of money?s value and earn some return on your investment as well. But there is also the fact that interest compounds over time, adding to your earnings without you having to lift a finger. As an example, let?s say that you were to invest $1.00 today and the annual interest rate or rate of return of the investment is 8%. That means that in one year, you will have $1.08 in the account. If you leave that money where it is, at the end of the year you will have earned interest on not only your original $1.00, but on the previous year?s interest as well, giving you about $1.17. This compounding interest will continue, year after year. But imagine that instead of $1.00, it?s Read more…

In modern society, we have a growing number of techniques to obtain wealth. One must simply gain the knowledge and skills necessary to implement the proper strategies and techniques. One strategy is called “triple compounding”, suggested by Steve Sjuggerud. Sjuggerud is the writer of investment letter “True Wealth”. He unfolds, “Your account can grow at rapid speeds for three reasons: First, you are adding to your account every month. Second, if you invest in growth mutual funds, your NAV (net asset value) is likely to increase overtime. Third, all dividends and distributions are automatically reinvested”.

One of the least practiced techniques for building wealth is to set aside money in separate accounts. Regardless of income, condition yourself to budget and stash away at least 5%-7% of your income each pay period and do not allow funds to be touched under any circumstances. Some individual get a certain amount taken out of their income before they see their paychecks (in addition to 401k plan). A number of Read more…

Most people want to retire with some level of financial security. We all want the peace of mind and self-dignity that comes from knowing that we are not at risk of ever becoming a burden on our families, the government or the state.

Knowing and understanding the three different phases of financial planning can act as a road map and help us prepare a good solid financial plan to improve our chances of meeting our life goals.

There are three different phases of financial planning:

? The Accumulation phase

? The Distribution phase, and

? The Preservation phase

As the name implies, the first phase, the accumulation phase is the period of accumulating assets that will contribute to your wealth. This phase include your working years. First you learn to earn money, and then you determine how best to manage your money to make it grow into wealth. You can effectively do this by investing in different asset classes that will form the foundation of your wealth.

This phase provides a certain level of financial stability and most people never leave this phase their entire lifetime. However, majority of the population do not even enter this phase to begin accumulating any assets. They continually live from paycheque to paycheque without giving much thought to their financial future.

If you find your self in this phase, if you have invested in your first property (not your residential home), if you have started or purchased your first business, or purchased some stocks and shares, congratulate yourself.

Examples of common asset classes to contribute to your wealth include:

? Cash (Treasury Bills, Money Markets, CDs)

? Bonds

? Stocks and shares

? Land and Property (real estate)

? Precious metals

The best advice for those in the accumulation stage is to hold onto the assets you are acquiring, and allow time to work it?s magic. Set time-bound goals for how long you intend to accumulate your assets before moving on to the next phase. Work diligently on your plan and keep your focus.

Continually learn more about the different asset classes available and diversify by investing in several classes. Different assets have different qualities and strengths, as well as risk and rewards.

Investing in several asset classes is a sound investment strategy that can significantly increase your ability to reach your investment goals faster.

The distribution stage is the period when you get to enjoy the benefits of wealth, when you get to draw down income from your assets. It is the reason for accumulating assets in the first place. After years of planning, investing and accumulating assets by the time you reach Read more…

A few weeks ago I posted an article on my website on debt reduction that generated an interesting conversation. It was a fairly standard article on what I thought was a commonly accepted principle. Here is the scenario:

Joe has two credit card balances. Card A has a balance of $8000 at 19.8% and minimum payments of $160 per month. Card B has a balance of $6000 at 5.9% with minimum payments of $120 per month. Joe has $400 per month to use for repaying his credit cards. How should Joe attack this debt?

The wisest strategy would be to pay the highest interest debt first. Any additional dollars available should be applied to Card A while only paying the minimum payment on Card B. Once the highest interest debt is paid, use the entire $400 to pay on Card B until that debt repayment is completed. I really don?t want to go into the math, but if you are interested take a look at this article. The bottom line is that by paying the highest interest rate debt first; less money is paid in interest resulting in more money in your pocket. That just so happens to be consistent with my objective to ?fattening my pockets.?

Well unbeknownst to me, there is a rather famous financial advisor, Dave Ramsey, who promotes a different approach. He recommends that a person pays the smallest debt balance first regardless of the interest rate. Since the smaller debts can be repaid faster, a sense of accomplishment is achieved each time a debt is paid in full. Ramsey believes that from a psychological perspective this increases the likelihood of sticking to the debt reduction plan.

Posting of the article provoked the following exchange:

Reader:

The article is assumes that someone with credit card debt will make a rational, logical, well thought out decision on how to tackle the credit card debt. If the person were this logical to begin with they would never have racked up the debt in the first place. Attacking smallest to largest is a much a psychological win as it is a financial win. By knocking out the small debts first the person in debt gets the much needed feeling of accomplishment and that eliminating debt is achievable.

So the author of the article is wrong and is mostly likely jealous of the ?expert? Dave Ramsey.

My Response:

I am sure that Ramsey has worked with thousands of people in debt and has come to the conclusion that paying the smallest debt first may lead to more success. However, I will guarantee that he doesn?t manage his own finances in that manner. Attacking the highest interest debt will put more money in your pocket over the course of the debt reduction process.

I agree that a sense of accomplishment is very important in a debt reduction program. However, compounding mistakes is not necessarily the wisest approach.

Reader:

I agree with the math of attacking highest interest rate first. However the author of the article (which I?ve seen elsewhere a few times) doesn?t acknowledge the psychological aspect of why the person ended up in debt, and the need to crawl before you can run. He ignores the hopelessness many people feel when approaching debt elimination, and the initial baby steps needed to begin the path of debt elimination. He takes a crack at an ultra simplistic method which has helped people at least get on the treadmill, work up a sweat, and eventually get to a point where they can run a mile without stopping. His approach suggests it?s really simple to jump on the treadmill and knock out a 5 mile run, because if you start there in the long run you?ll lose more weight (I jumped into a weight analogy, but you get my drift).

Incidentally part of Dave?s plan includes a 3-6 month emergency fund which he suggests to keep in cash or a savings account initially, others have said to put it in a MMA which check writing privileges. He does suggest that later on in Read more…

If you are interested in learning how people are building a wealthy live style over time then let me explain to you exactly how they are doing it. Making money is one thing. But there are those of us out there that are living the dream making millions.

Most people think the only way to get rich and make millions is marry into it or hit the lottery. Sure those will work but not everyone is just that lucky. So we must find another way to make our money.

Investing is where the money is at waiting for us to come take our share. When you invest money you wont see the pay off over night or even in a month or so. Investing takes time years. If you invest your money at the right time and in the correct spots you can easily make a huge amount of profits in just a few short years time.

However with any investment there are risks involved. You never know just how your investment is going to go. One month it might make money one month it might lose. It?s a numbers game, and those that know how to play it will win big.

I myself research on the Internet looking for my next big investment each and every Read more…

Depending on your individual financial circumstances, there are attractive and appealing reasons for releasing your home equity for investment purposes. In fact, when left sitting there, you are incurring opportunity costs because your equity is not working for you as its monetary equivalent can, and neither is it invested in a vehicle that will generate you decent investment returns.

For your home equity to work for you by generating a rate of return, it must be converted into cash. The only way to do this is to obtain a mortgage on your home, or an equity line of credit, both of which will require you to pay interest on the amount borrowed over time.

Consider the interest payments as the employment cost of borrowing cash against your home equity for investment purposes. The only economic benefit home equity offers is that of reducing your mortgage payments.

So long as you can find investments with net returns that will exceed the cost of your mortgage interest rate, then it is a wiser decision to earn more by utilising your equity than what you pay to borrow on it. There are many investments that can easily beat the cost of a mortgage!

This largely depends on ones risk tolerance and financial objectives. Mind you, risk tolerance is also dependent on how much financial acumen one has and their understanding of what is at stake. It pays to learn as much as you can and thereby raise your risk factor within reason.

Let us consider the employment cost of releasing your home equity. You currently hold a mortgage of ?80,000 on your property that is worth ?240,000. This means that your equity is ?160,000. If you took an 75% loan-to-value mortgage, you can borrow as much as ?176,000, which will give you ?96,000 to invest after you have repaid your original mortgage. Your current monthly repayments are ?438 per month. After the re-mortgage you will be paying ?668 per month, an increase of ?230 per month equivalent to ?2760 per annum. This will be the net cost of the extra borrowing in the first year of borrowing. ?2760 over twenty-five years will be ?69,000. I have not factored in tax advantages of interest only payments.

Now, let us look at the opportunity costs for investing the ?96,000 released. At a 13% average annual rate of return, this will grow to just under two million pounds in twenty-five years. This is a no-brainer! Would you be willing to Read more…

One day when I was about 7 years old, my mother and I were at a store and I saw a toy that I “had” to have. I asked my mom to buy it for me. She said: ? Dominic, we can’t afford to buy that, money doesn’t grow on trees you know. ? My mother was a widow with two children and was not rich. We had enough to get by, but anything more was usually out of reach.

I daydreamed about how much fun I could have if I had such a tree. I saw myself picking a few twenty dollar bills from that tree, with a big smile on my face thinking of all the cool stuff I was going to buy with it. About twenty years later, I am amazed that such a tree actually does exist: the multiplis streamae incomum.

Plant a tree, reap the rewards

What first caught my attention in multiple streams of income is the possibility of having many different automated or semi-automated income generating systems. It seemed like a great way to make a living. The internet brought this possibility to anyone who has a little bit of knowledge about the way the web works.

There are many advantages to this approach:

1. Security
If you lose one of your “jobs”, you can count on your other ones to keep you going. Something catastrophic would have to happen for you to lose all your sources of income.

2. Low cost
Many streams of income can be set up at little or no cost. All you really have to spend is a bit of your time, more initially, then less and less afterwards to keep your system oiled up and running. You might want to pay for advertising, but then again, there are many great ways to advertise for free.

3. Frees up a lot of your time
Once you have put an initial investment in time (and sometimes a small investment of money), you can let your system, your automated machines, do most of the work for you and start piling your money. While it’s true that many will seem to generate only small amounts of money at a time, they will all add up to a substantial amount fairly quickly. Once your machines are set up and running, you’ll have more time to do the things you really want to do and best of all, since most of your money will be coming from automated sources, you will earn money even while you sleep or when you are on vacation!

I love the idea of passive income; income that does not require your direct involvement. You’ll want to put your streams on auto-pilot as much as possible.

Be ready to fail many times

Brian Tracy said that ?The best way to have good ideas, is to have lots of ideas.? The same thing applies to your streams of income. Set up a few streams, keep those that bring you money, and toss those that don’t. It’s as simple as that. By knowing from the start that some of your streams will not work, you won’t be as disappointed and it will be easier for you to keep your focus and your drive. Don’t be scared of failure. Fail a lot! Try as many different ideas as you can, especially if there is no up-front cost to you. This way you will have the best chance of succeeding.

Stay focused

Try not to do everything at once. Start small. Focus on one stream until is has a life of its own, then move on to another idea. Don’t try to make it perfect from the start either. It always seems to be easier to improve something that has already been set up, once you have seen it running for a while.

A dozen ideas to use as streams of income

1) Investing
If you have a job which brings a bit more than what you need for necessities, put aside 3 bucks every day and put it into a savings account. At the end of one year you’ll have $1095 plus interests. With the help of compound interests, you can even stop putting money into your account after a while and it will keep making money for you over time. You will be making interests on interests.

You can also make other kinds of investments that may bring you more return on your investment. Be aware though, that the higher the possibility for return, the higher the risks. More secure, less return. You may be interested in bonds, stocks, realty, buying a business, etc.

2) Affiliate Programs
The great thing about affiliate programs is that you can sell products without needing to keep an inventory, do invoicing… All you do is promote your referral link, and get paid a certain amount on every purchase made through that link.

A good source of affiliate programs can be found through Clickbank or Commission Junction. You can also do a web search for “affiliate program” and you will find many, many opportunities, in many different niche markets.

3) Online Auctions
If you have your own product, or maybe you have items in your house which you no longer use but that may still be of value to other people, online auctions can be a great tool. Ebay is probably the most widely used online auction site, but there are others you may want to consider.

Some people have made quite a bit of money by starting their own “Ebay business”. They buy good stuff that they find in garage sales or “offline” auctions, or they buy in bulk and sell at a profit. You can even set up an easy-to-use online store on Ebay or Yahoo. I suggest getting the book “Starting an Ebay Business For Dummies” by Marsha Collier if you are interesting of going in that direction.

4) Sell your own product
You may want to write an eBook and sell it on your website, on Ebay, or on eBook libraries. If you manufacture or craft your own products, a Read more…

Within the last several weeks the Federal Reserve announced its long range goals for the economy and the stock market rallied.

But then, several days later, the Middle East ignited once more, sending markets sharply lower.

The Fed?s policies quite rightly inform stock valuations, because the Fed directly influences interest rates. When rates rise, investors have the option of moving their money to bonds, to CD?s, and to other interest bearing vehicles, and out of equities.

But what does the Middle East have to do with the value of Altria, parent company of Phillip Morris, maker of Marlboro cigarettes, and majority owner of Kraft?

Altria, along with most other big stocks dipped when investors heard about Lebanon. With world tensions rising, you?d think people would smoke more and Altria would spike on such news.

This example shows that markets overreact to events.

You can take advantage of this fact through diligent observation and patience because bad news is cyclical. There is regularity to it, despite its erratic appearance.

Before 9/11, for example, there was a period of unusual calm, an absence of bad news, especially for the United States. If you live in the Midwest you know that there is an eerie calm before storms, and you can take your cue from it, and seek shelter.

Recently, a stalemate was preventing progress in the Mideast, and pressures were building. The sensitive investor could have predicted there would be an aggressive change in the status quo.

Moreover, the Group of Eight conference was convening in St. Petersberg, and this event is usually accompanied by tensions and protests, with various factions Read more…

When you write for an investing site, you see them all the time. You hear from the subscribers who are looking for that one stock pick they can invest their $500 in that is going to make them rich. Or ones who say they have a foolproof investing system, only to find that their method only works when the market is bullish. Notice there aren’t as many day trading or investing systems as there were back in the late 1990’s?

What you never see enough of though are investors who have an investment plan. A clear set of rules dictating when they will buy, how long they will hold, and where their stop loss is. This is what separates the successful investors from the rest. The cost of this investment strategy? A few minutes!

Its not difficult to get caught up in the emotion of investing in the stock market. The joys of when our research pays off with a profit, and the anguish and despair when we have to go against our own logic, and place that sell order. We’ve all been there. Unfortunately, we’ve done that a lot.

Its key to remember that the best investing strategy is capital preservation. While it makes sense when you read it, how many times have you watched a $200 loss turn into a $500 loss just because you thought for sure it would move higher? How many times have you turned that $500 loss into something worse?

A 50% loss means you need to make a 100% gain just to break even. While the world of investing in penny stocks provides opportunities, not many of them will give you a 100%. In the world of medium to large caps, it takes a long time with a successful company to get that 100% return.

QUit turning your small losses into larger losses.

Lets look at what you should include in your investment plan:

a) Starting capital. Its key to know how much capital you are putting at risk today. Its possible that you may invest in a company, only to learn later on that day that its shares are being delisted. Just because you invest $10 000 at the start of the day, doesn’t mean you will go home with that same amount. You need to set an amount that you are comfortable with. Capital preservation.

b) How much money Read more…