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This Book Will Finally And Certainly Get You Rich No Matter
Who Or Where You Are, Now, Guaranteed
This book is about being exact, straight to the point, being objective, practical, and effective at
creating wealth, getting rich, here, now, no matter who or where you are or your current
financial state!

By David Cameron Gikandi
An Images of One Production

Copyright 2004, David Cameron Gikandi. All rights reserved.

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This book is dedicated to Life, Love, Liberty and Abundance.


Contents
Introduction ................................................................................................................................................... 9
Part 1: The Physical .................................................................................................................................... 12
Move From Working For Money To Having Money Powerfully Work For You ............................. 15
We live in a culture where the cultural story tells us, Go to school so that you can get a job so that
you can make money. And after working for forty years you can retire and live well. It is the cultural
story, we are told it by our parents, friends, teachers, government But how true is it today? The
evidence on the ground shows us that work does not necessarily equal wealth. Most people are not
wealthy; they work long hours and have little to show for it, that is the fact. And when they retire, they
dont usually get the rosy picture the cultural story tries to portray; instead they get to survive on a
meager pension. So what happened? Why is the information we are getting not getting us the desires
we are having, as far as wealth goes? Why is it only a few people who seem to get wealthy and
financially free, and why is it that the knowledge they seem to have appears to be so elusive? The
answer is simple. .................................................................................................................................. 15
Understand The Incredible Power of Compound Interest And How To Apply It ........................... 23
Why all the big fuss about compound interest? Compound interest allows you to multiply your money
at a rate that is much, much faster than most people can possibly even dream of achieving in any job,
business, scam, lottery win, gamble, franchise, or whatever! It is by far the best shot most people have
at creating wealth and it is freely available to everyone, yet few people make use of it. Let us now look
at it with actual numbers, application and deep analysis to make it all clear and simple. You will grasp
its power in no time at all. Albert Einstein once called compound interest the 8
th
wonder of the world
and the greatest discovery in mathematics. Let us see why. ................................................................. 23
How your money skyrockets under compound interest ............................................................ 24
Understand Assets And Liabilities And How To Create Wealth With Them ................................... 47
In the world of money, there are two kinds of things: (1) Things that take money away from you and
(2) Things that put money into your pocket. Assets put money into your pocket, liabilities take it out.
As simple as this sounds, this is the cornerstone of understanding the building of wealth. And
surprisingly, many people dont know the difference. And if they do, they dont know how to apply
this knowledge to create wealth. Let us clear all that up here and now. ............................................... 47
What is the difference? ............................................................................................................. 47
How to use this difference to build wealth ............................................................................... 48
Get Comfortable With Moneys Natural Up And Down Cycles ........................................................ 52
Like all of life, money has its cycles. Money is part of life, so it cannot escape the cyclic nature of life.
Nor can you. All of life is cyclic. The in and out of breath, day and night, on and off, up and down
money goes in and out, up and down. Most people try to stay in one part of this natural cycle and
avoid the other part. No one can do that, yet millions attempt it. What you can do, however, is to
understand the cycles and flow, flow, with them. That way, you can insulate yourself from the
downturns, profit from both the up and down, and develop independence. The cycles, instead of taking
you for a ride, now serve you and free you. With understanding, you can stand emotionally and
financially free from the cycles of money and even profit under all conditions! .............................. 52
Get Comfortable With Moneys Unique And Surprising Nature ...................................................... 60
What is money? Most people think it is a very real, solid thing that is in short supply. They are even
willing to go to war and die for it. Money is not real in the sense that a banana or an apple is. It is an
idea. It mainly exists in the theoretical realm (most of it is not printed or coined). It can be multiplied
with great flexibility. As long as you think of money as a real, physical thing, your mind will not allow
you to see its most powerful abilities, abilities you can easily employ to achieve wealth. Once you
understand what it really is, you can begin to play with it instead of struggle for it or fear it. Lovely! 60
Money Is An Exchange Of Value ............................................................................................. 60
Money Is An Idea ..................................................................................................................... 61
Moneys Other Aspects ............................................................................................................ 61
Know How And Where Your Money Is Going And Coming From ................................................... 74
If you have worked in any business (been employed) or have owned a business, then you will
appreciate the value of knowing where your money is coming from and going, of budgeting, tracking,
and managing cash flow. Businesses that dont budget and manage cash flow almost always fail.
Money is like the blood of a business. It flows in and out, and if it runs out the business dies. Its that
simple. And you can appreciate that when it comes to a business, isnt it? That is the nature of money:
it flows in and out, and when it runs out the business is dead. So, ask yourself, will money change its
nature and act unlike itself just because it is now dealing with a person, an individual, such as you?
Shouldnt you also know what a business should know if you wish to grow wealth? ......................... 74
Reducing your expenses so you can have money left over to invest in wealth growth ............ 79
Golden Rule: A Part Of All That You Earn Is Yours To Keep .......................................................... 81
Wealth comes from the growth of assets (cash, stocks, property, or any other asset). Assets are
purchased with income. If you do not put aside part of your income to acquire assets, you will find it
extremely difficult to acquire wealth. However, if you do put aside part of your income to acquire
assets, you will find it very easy to acquire wealth. It is all very simple. ............................................. 81
Income and Wealth: The Relationship Explained ............................................................................... 84
It is hard to grow wealthy purely on income, and it is hard to create wealth without income. Lets
understand this relationship. ................................................................................................................. 84
How To Explosively Multiply Your Money Geometrically In Leaps And Bounds ........................... 88
Cultural Myth #1: High returns are rare and hard to come by. Truth: High returns are available to
everyone, all the time. You dont have to settle for an 8% return commonly offered to the masses. You
can get a 20%, 200% or even 2000% return on your money. Cultural Myth #2: High returns are
always accompanied by high risks. Truth: Money management practices and systemized, organized
investing makes high-return investing a low-risk venture, as you will see below. Cultural Myth #3:
Investing is risky. Truth: Gambling and speculation is risky. But investing is less risky than, for
example, buying a car (where you are guaranteed to lose value over time), and it is certainly safer than
not investing at all (where you are guaranteed not to grow wealth). Investing is a relatively safe affair,
and it is the only way available for most people to become wealthy. It offers a safe and powerful
chance to create and increase your wealth. How good is that? See how one trader has averaged a return
of 60%+annually for three decades, or how another has turned $400 into $200 million in 18 years.
These things are possible for you today. Cultural Myth #4: Investing is hard. Truth: Investing is easier
to learn than much of the stuff you learnt in high school or college. It looks hard because anything new
and un-understood always looks hard. Once you start to learn it, you will see that it is far simpler than
you ever imagined. The difficulty only exists in your imagination. Trust me on this. Prove it to
yourself instead of relying on hearsay and assumptions. ...................................................................... 89
The Golden Rule: Start Where You Are, Wherever That Is ..................................................... 91
The Super-Easy Mutual Fund Way .......................................................................................... 92
The Buy-And Hold Way ..........................................................................................................100
The Trend-Following And System Trading Way ....................................................................103
Moving Averages & Crossovers ..........................................................................................108
Moving Average Convergence Divergence (MACD) .........................................................112
Relative Strength Indicator (RSI) ........................................................................................113
The Parabolic Stop And Reverse (SAR) System .................................................................114
An example of combining a few indicators .........................................................................115
Trading Systems ..................................................................................................................116
Which markets do you trade? ..............................................................................................122
Price Swings Happen All The Time In Great Ranges. And Then There Is The Odd Massive
Move Now And Again.........................................................................................................123
How To Trade In CFDs (Contracts For Difference) ............................................................126
How To Trade In Futures (Futures Contracts) .....................................................................129
How To Trade In Options ....................................................................................................133
Preserving Your Capital, Systemizing Your Investing ............................................................141
Trading Psychology .................................................................................................................142
World Markets: How They Compare ......................................................................................143
Other Investments Available ...................................................................................................146
Power Strategies To Preserve Your Capital And Protect Your Assets .............................................149
The point behind preserving your capital (your money) is that you get to always have money to grow
and grow, rather than lose it and have to start again from scratch. There is no investor, even the very
best of them, that has not lost money. Even you will lose money sometimes; it is part of life. Smile
when it happens; you get to learn stuff and enjoy new insights. But by having a good capital
preservation system, you will get to keep your shirt on even when you lose; you only lose a portion of
your money and even a series of losses do not take you out of the game. You never start from zero
again; you just keep trending upwards; that is the point. The point behind protecting your assets is that
you get to secure them against their being confiscated by the government or tax agency, taken by
creditors, or grabbed in lawsuits. Asset protection also minimizes or eliminates taxes. Your assets are
what give you leverage, cash flow, and opportunities to increase your wealth. Arent those good
enough reasons to protect them?..........................................................................................................150
Preserving Your Capital ..........................................................................................................150
The Science of Money Management ...................................................................................150
Knowledge First, Action Second .........................................................................................154
Protecting Your Assets ............................................................................................................156
Have Only Smart Debt That Works For You And Avoid Bad Debt .................................................162
There are two kinds of debt. Debt that works for you and debt that works against you. Debt that works
against you can have a very constricting effect on your efforts to become wealthy. Do you remember
the power of compound interest and how amazing it is at creating wealth? Well, what if that power
was turned against you? That is what bad debt is; debt that turns the power of compound interest
against you. Good debt, on the other hand, allows you to benefit even more from compound interest! It
gives you leverage. ..............................................................................................................................162
Pay Minimal Taxes Using Simple And Advanced Strategies .............................................................170
The great Sir Winston Churchill once said that, No man has the moral or legal obligation to arrange
his financial affairs so that the state can put the biggest shovel in them. For most people, taxes are the
biggest expenditure they face. Most people pay almost 50% of their income in taxes (income tax,
corporate tax, sales tax, fuel tax, and all the other taxes they pay all add up to almost half their
income). Cut your taxes down to about 10% of your income. If you can put in place strategies to save
about 30 90% of the taxes you are presently paying, and this is what most wealthy people do, you
will have a lot of money left over to invest. Mathematically, our economies can do very well with 10%
taxes. The reason why we pay so much is government mismanagement, waste and expenditures that
dont make sense. The fastest way to double your income, whatever level it is at, is to cut your taxes if
you are paying the full rate. .................................................................................................................170
Turn Your Home Into A Profitable Investment .................................................................................195
As we have seen in our definition of what an asset is and what a liability is, if your home is still under
mortgage, it is a liability and not an asset to you. It is the banks asset and the bank is using it to make
money off you. Well, its now time to turn that around and start making some money out of it using
simple creative financing. Turn it from a liability into an income-generating asset. And if you have
already cleared your mortgage, you can really take it further and turn it into a real income generating
cash cow. Relax, you dont have to move out and rent it out. You will instead be using creative
financing to achieve your goals while you sleep safe and sound in it. ................................................195
Create Automatic Money Systems .......................................................................................................199
Look at nature. It is perpetual. It feeds itself. Keeps going and growing automatically. The solution is
in the system. You can turn your financial affairs into a natural, self-sustaining, dynamically growing,
minimum effort system. And all systems are collections of smaller systems working together. Right
now, your finances may be all over the place, like a disordered room that you have to keep re-
arranging and preventing from collapsing. Lets see how you can turn them into a system that works
for you and sustains itself. This is where you put all you have learnt so far together, tied together in
systems, and those systems tied together to form your money machine. ............................................199
A note on the power of giving .............................................................................................203
Increase Your Ability To Earn And Create Wealth ...........................................................................206
If you wish to continuously increase your wealth, it follows that you have to continuously increase
your ability to increase wealth. And you do so by continuously learning more. Money is value, and
value comes from within you. You must therefore increase your value, and then apply that increase
and you will experience an increase in wealth. You increase value by learning what you didnt know
before. ..................................................................................................................................................206
More Reasons Why People Never Become Wealthy ...........................................................................212
As you have seen so far, wealth is simple, but it has its ways. And as you have seen by now, if you
dont follow the way, you wont get there. If you dont follow the road to your destination, you can't
get there. If you wish to go to Paris, for example, but you are driving on the road to Damascus, you
will get to Damascus, not Paris. Now, in addition to all you have seen so far in this book, here are
some more reasons why people never become wealthy. .....................................................................212
You The Financial Warrior ..................................................................................................................215
What is The Way of the Financial Warrior? If finances are your game, get ready for the ride of your
life. .......................................................................................................................................................215
Part 2: The Nonphysical .............................................................................................................................221
The World Of Money Is Simple It Is All The Other Stuff That Gets In The Way ..................222
As you have seen so far in this book, getting wealthy can be quite easy. The world of money is,
literally, quite simple. The difficulties we face are not because making money is hard. No. They are
because we throw in a lot of other stuff into the game, and it is this stuff that we experience as
difficulties in making money, as money problems. This stuff is our own stuff, our neurosis, our
emotional issues, habits, fears, and so on. In other words, people dont have money problems; they
have psychological-emotional issues super-imposed on money. If for example you took a person who
says they have money problems and you give them a million dollars, they would find a way to transfer
their psychological-emotional issues onto something else. Or onto the million dollars. If you wish to
end your money problems, end your psychological-emotional issues. ............................................222
Vital: Cultivate Wealth Consciousness and Know How Wealth Creation Works ...........................225
Money represents an aspect of a persons internal value, but that does not mean that it represents a
persons entire internal value. That is very important. It is not about self-worth. Money only represents
an aspect of that internal value that pertains to wealth. You cannot therefore say that a wealthy person
has a higher self-worth and value than a poor person, but you can correctly say that in matters that
relate and pertain to money, the wealthy person has a higher internal value in that aspect of value or
that the person chooses to exercise a higher proportion of this internal value. This section of internal
value that reflects on the outside as money, when exercised, is called Wealth Consciousness, a
foundation in abundance and an unshakable certainty in abundance. The opposite of wealth
consciousness is poverty or scarcity consciousness. To become wealthy, you must develop wealth
consciousness and drop scarcity consciousness. ..................................................................................225
The Steps To Wealth Consciousness .......................................................................................227
A Little Faith (Belief) Can Move Mountains So Discover And Design Your Beliefs ..................240
To your subconscious mind the solutions to your problems of poverty is to become rich, but it is
logically invalid for it to pursue this course of action if it has been told that it will make you a bad
person. Simon Hall. Question: Do you really know what your conscious and unconscious beliefs
are? It would be a good idea to find out. Then, it would be an even better idea to create new beliefs
that support your desires. .....................................................................................................................240
Old Beliefs Do Not Lead You To New Cheese. Examining Your Money Beliefs. .................246
Use The J ourney Techniques To Move Past Old Patterns ...................................................248
Use Personal Transaction Analysis (TA) To Change Your Ways ...........................................248
Use Your Physiology And Movement To Change Beliefs ......................................................252
Accept Yourself, Know Yourself, Be Yourself .......................................................................253
Myth: Money Is The Root Of All Evil. Is It Really? ...............................................................254
How To Overcome Money Panic Easily and Immediately .................................................................262
You worry because you worry. Does that make sense? You create your world by your thoughts,
words, and actions. Worry creates that which is worried about. You worry about things because you
worry about things. People worry because they think it helps. It actually does the opposite. It creates
the very problem itself. Panic and worry dont help; they hinder. How would you like to learn how to
stop worrying and start living, very easily? It can be done, simply. ....................................................262
How To Become A Super Optimist And Stop Being A Pessimist ......................................................269
Think positive, think positive, think positive. How many times have you heard this phrase before?
Everybody has, and we say it because we know it works. Yes, it works wonders. But what if you
somehow keep finding yourself thinking negatively? Is there a part of you that is pessimistic? Can you
turn it into a vibrant optimist? Yes, you can become an amazing optimist very easily! Here is how. 269
Go Forth And Be Wealthy It Is Simple. Enjoy Yourself .................................................................274
Now, you are ready to be wealthy! Creating wealth is quite simple. It follows definite processes and
clear guidelines. There is no mystery, hocus-pocus, or voodoo involved. Dont worry; you too can do
it. So get started! Here are just a few short final words to help you along. .........................................274
Record And Celebrate Your Success .......................................................................................274
J oin A Peer Group ...................................................................................................................274
Have A Morning Hour Of Power Every Morning ...................................................................274
Make A Contract With Yourself And You Can Become Wealthy Easily ...............................275
Appendix .....................................................................................................................................................278
Have Multiple Streams of Income ........................................................................................................279
Recommended Books, Software and Courses .....................................................................................280
More Titles From Images of One and David Cameron: ..........................................................280
Books: ......................................................................................................................................280
Software: ..................................................................................................................................284
Courses: ...................................................................................................................................285
Disclaimer ...............................................................................................................................................459H286

Introduction
You strongly desire to finally, finally, now, here, quit the painful rat race, become
financially free, get rich and wealthy, know prosperity, experience abundance, and
start living and thriving instead of struggling and worrying!
Right?
Perhaps more than anything, you wish to truly enjoy your life, finally, without having
to worry about it, right?
Well, it is about time!
It is about time to finally become exact, straight to the point, objective, practical,
and effective at creating wealth, getting rich, here, now, no matter who or where
you are or your current financial state! No more B.S., no more going around in
circles, no more confusion and frustration.
It is time to get clear, and clearly rich. Here, now, no matter who or where you are
or your current financial state. It is time for a new, prosperous you.
Are you frustrated with fruitlessly trying to be financially free for years upon years
without any sign of success?
Dont you wish there would come a time when you would finally get done with the
searching and trying and actually start experiencing your own financial freedom and
wealth, actually and practically get rich?
This book is about being exact, straight to the point, being objective, practical, and
effective at creating wealth, getting rich here, now, no matter who or where you are
or your current financial state!
It is true that anybody, anybody, can become rich if they apply the right strategies
and put themselves in the right mindset and wealth consciousness.
This book is designed to be the book that shows you, clearly and leaving no doubts
at all, EXACTLY how you can become rich and wealthy no matter where you are now
and who you are! If you have been lacking the tools and the information, you will
find it here. If you have been unclear about anything else concerning the making of
money, you will find it here. It is that simple. This book will help make you rich if you
apply yourself! It is a book unlike any other ever written; it is exceptional. It is that
simple.
The information contained here is essential, and it will make you unstoppable and
unbeatable!
It will not only inspire you perhaps more than any other book you have ever read on
money, but it will also vastly enable you with practical tools to achieve your dreams
and desires. For sure! That is what it was written for. The buck stops here. And then
it grows into millions of real money. All you have to do is apply this simple, practical
information. You do have to apply yourself; you can't just sit on the couch, read, and
wait. But it is simple, and anyone can do it. Especially you. Because you are already
here, reading this.
We will now begin. But before we do, there are two things to note:
Our lives span a physical and a nonphysical world. Our thoughts, emotions and spirit
are nonphysical. Our actions (and money) are physical. Both count. Many people
wonder, How come no matter what I try I cant seem to get rich? Well, the reason
is that they ignore the workings (the laws) of one or both of these sides and live
completely blind to the laws, experiencing only the effects and thus thinking they are
victims of circumstances. Just because you dont know gravity doesnt mean gravity
wont work on you. You are about to prove to yourself that you are not a victim of
circumstances; only perhaps of having not been aware of the way things work or
dont. We will be looking at both sides of the veil; the physical and the nonphysical.
You will come out completely equipped to successfully handle and master both sides.
Balanced and powerful. But you do have to apply yourself!
We will be using many examples throughout this book. They will be actual examples,
many of them, and they will be taken from actual sources that you can double-check
yourself. We will do this because it is important that you get this on as much a
practical level as possible. You will have the opportunity to crosscheck for yourself all
the examples offered, prove to yourself the validity of this information. For this
reason, most of the examples will be taken from the Internet so that you too can go
check for yourself.

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Part 1: The Physical
The physical world, the world we live in.
This world has its laws, its ways, how
things work. If you know how things work
and apply that knowledge, they will work
without fail. The laws of gravity, of physics,
work for everyone, right? It is so with the
laws of money. Let us now look at the
actualities (not the myths or illusions) of
how money works, for real, in the physical
world. Let us master that. It is actually
simple.
But, always remember that the physical
world is not alone, nor is it independent.
There is a nonphysical world. The physical
arises from the nonphysical and is
dependent upon it. You must pay attention
to both worlds; otherwise you are bound to
trip without knowing why. For example,
wealth is a function of mindset, wealth
consciousness and strategy. Mindset and
wealth consciousness are the nonphysical
part, strategy is the physical. You cannot
consistently create wealth if you have the
best strategy in the world yet your mindset
is against wealth creation. And you cannot
consistently create wealth if you have the
right mindset but have not bothered to learn
and apply the strategy that works
physically.
This section, the physical, is about the
strategies of wealth. How money works.
Actual, hard evidence and numbers. Let us
begin.
To live through an impossible situation, you dont need
the reflexes of a Grand Prix driver, the muscles of a
Hercules, the mind of an Einstein. You simply need to
know what to do. Anthony Greenbank

Insanity is doing the same thing over and over again and
expecting a different result. Anonymous

Every living thing has been granted the power, if it so
desires, to seek an opening to freedom and go through it.
Carlos Castenada

Opportunities increase as they are taken. Sun-Tzu

For the rational man to hold steadfastly to his self-image
ensures his abysmal ignorance. He ignores the fact that
shamanism is not incantations and hocus-pocus, but the
freedom to perceive not only the world taken for granted,
but everything else that is humanly possible to
accomplish. He trembles at the possibility of freedom.
And freedom is at his fingertips. Carlos Castenada

It is not because things are difficult that we do not dare;
it is because we do not dare that they are difficult.
Seneca

A warrior lives by acting, not by thinking about acting,
nor by thinking about what he will think when he has
finished acting. Carlos Castenada

The world is not to be put in order; the world is order,
incarnate. It is for us to harmonize with this order.
Henry Miller

If we do not know what port were steering for, no wind is
favorable. Seneca

Move From Working For
Money To Having Money
Powerfully Work For You
We live in a culture where the cultural story
tells us, Go to school so that you can get a
job so that you can make money. And after
working for forty years you can retire and
live well. It is the cultural story, we are
told it by our parents, friends, teachers,
government But how true is it today?
The evidence on the ground shows us that
work does not necessarily equal wealth.
Most people are not wealthy; they work
long hours and have little to show for it,
that is the fact. And when they retire, they
dont usually get the rosy picture the
cultural story tries to portray; instead they
get to survive on a meager pension. So
what happened? Why is the information we
are getting not getting us the desires we are
having, as far as wealth goes? Why is it
only a few people who seem to get wealthy
and financially free, and why is it that the
knowledge they seem to have appears to be
so elusive? The answer is simple.
There is a science of getting rich, and it is an exact
science, like algebra or arithmetic. There are certain laws
which govern the process of acquiring riches, and once
these laws are learned and obeyed by anyone, that
person will get rich with mathematical certainty.
Wallace D. Wattles

The reality of life is that your perceptions right or wrong
influence everything else you do. When you get a
proper perspective of your perceptions, you may be
surprised how many other things fall into place. Roger
Birkman

Our life is what our thoughts make it. - Marcus Aelius
Aurelius Antoninus (121-180), Roman emperor and Stoic
philosopher.

Knowledge is not enough; we must apply. Willing is not
enough; we must do. Bruce Lee
The education system in place today was created in the 1800s. It was designed to
give people the skills to work in industries, offices, and so on. It teaches working
skills, not wealth-building skills. Even today, you will learn a lot in school, but one
thing you will not usually learn is how to get wealthy and financially independent. All
they tell you is, Study these skills, get a job, and you will get paid. If you go to
school to learn to be a doctor, they teach you how to be a doctor, but not how to
create wealth. If you learn how to be a chef, you will learn that, but not how to
create wealth. Do you see the picture now? The masses are not taught how to create
wealth. They are taught how to have the skills to work for others or for themselves,
but not how to create wealth and financial freedom. For all intents and purposes, the
vast majority of them are attempting to create wealth without a clue of how it is
done. There is nothing wrong with them; they are just not equipped to achieve the
goal they set. You always have to have the right equipment.
Ask yourself, what do most people do to get money?
They work for money.
Isnt it true? Literally, they work for money! That is all they have been taught to do.
That is what they believe will get them rich. Despite the evidence, they continue to
do so. Ask yourself: do you work for money? What about your friends and family?
And do you give people the advice that they should work for money? Most people do.
So, let us summarize the basic and almost global belief of humans today. It is this:
Work for money.
People have this equation in their minds:
Work x Time = Money
They believe it to be true, and they accept it when they are hired and paid based on
this equation.
So, to get rich, they work harder and for longer hours, dont they?
And when you look at their expenditures, how they spend the money they get, it
goes something like this, from income to zero:
Earn income > Pay bills > Spend > If any remains, save and invest blindly > Start
again
What is wrong with this strategy, this idea that working for money gets you
financially independent?
Well, for one:
It doesnt usually work! The hard evidence all over the world is that it doesnt work!
It doesnt create wealth or make you rich! Look around you for evidence.
So what does? What works? In summary, it is this (and this is what the wealthy and
financially independent do):
Have money work for you.
Yes, thats it. Money will make more money far faster and easier than you can.
Money has properties that you do not posses. For example:
It can be leveraged (multiplied) whereas you cannot be leveraged (humans
have not yet learnt how to bi-locate). If you have a job, you have to do one
job at a time, go rest, and so on. Money doesnt need to rest and it can be
applied on multiple fronts simultaneously. You on the other hand cannot hold
more than one job in the same moment. Money can be employed by you to
work for you in two or more different industries at the same time, but you can
only work one job and location at the very same time.
It can grow at speeds that you cannot hope to achieve. If you have a job,
your pay or wages probably grow at about 10% a year if you get a raise. If
you have a business, your growth can be faster, but it is still limited to the
speed at which your market can grow, your customers can consume the
products and so on. And that is why few businesses grow in double-digit
figures per year. Money, on the other hand, can grow at 20%, 50%, 100%,
200% or more per week, month or year!
Money wont go out of business until people stop using money. A job can be
lost because a business can close down because an industry can evaporate or
competitors can move in. However, money investments have more flexibility
(you can sell out of something that is going out favor and buy into what is
coming in) and as long as people are using money, those who have money
working for them will tend to stay in the game easier.
Money can work for you while you rest! How good is that!
There are many more reasons to have money work for you.
Before we proceed, let us see what the new approaches leading to wealth would be:
Instead of:
Work for money
We will move to:
Have money work for you
Instead of:
Work x Time = Money
We will move to:
Money
X
= Wealth (money leveraged to grow geometrically = wealth)
Instead of:
Earn income > Pay bills > Spend > If any remains, save and invest blindly > Start
again
We will move to:
Earn income > Invest 10% > Pay bills > Spend > Make It Systematic &
Perpetual > Quit Job If You Wish And Do What You Love
Instead of:
Investing is hard, risky and takes time
We will move to:
Investing is easy once you bother to look at it yourself and understand it
instead of relying on hearsay from others (who also rely on hearsay). It is
far less risky than a job or business once you apply practical knowledge and
discipline to it, and it takes just an hour a day or so to reap huge rewards
Yes, you are about to discover how:
You can multiply your money consistently and most surely and build it into
increasing wealth and cash flow.
Turn all this into a self-perpetuating system so that you can have your life
and time back, quit your job if you wish, and start doing whatever you love.
Look at these quotes again:
There is a science of getting rich, and it is an exact
science, like algebra or arithmetic. There are certain laws
which govern the process of acquiring riches, and once
these laws are learned and obeyed by anyone, that
person will get rich with mathematical certainty.
Wallace D. Wattles

The reality of life is that your perceptions right or wrong
influence everything else you do. When you get a
proper perspective of your perceptions, you may be
surprised how many other things fall into place. Roger
Birkman

Our life is what our thoughts make it. - Marcus Aelius
Aurelius Antoninus (121-180), Roman emperor (161-180)
and Stoic philosopher.

Knowledge is not enough; we must apply. Willing is not
enough; we must do. Bruce Lee

You do realize that you will have to acquire new knowledge and apply it, dont you?
You will have to change what you are presently doing, believing. Please have no
illusions about this, but if you keep doing the same things you are doing now, you
will keep getting the same results. You must start thinking differently and acting
differently. The amount of wealth you have now is 100% tied to the beliefs and
knowledge you are holding and applying now. Keep on reading and you will see what
you have been missing, and then it will be up to you to apply yourself differently.
Here is a quick list of the main laws of accumulating wealth:
1. A part of all you earn is yours to keep. If you give away (spend, buy stuff,
pay taxes, whatever) everything that you earn and are left with nothing, you
will obviously not accumulate anything. So, ensure that, no matter what, a
part of all that you earn is yours to keep, not to be spent on bills, purchases,
taxes, or anything else that doesnt earn you more money. You must start
keeping (saving) at least 10% of all that you earn. Pay yourself first.
2. Which leads us to the next point. Control your expenditures so that you are
able to keep at least 10% of all that you earn and you are able to live without
running out of money, the financial blood of any financial system. The only
way you can do this is if you know what your money is doing, where it comes
from, where it goes. You must start keeping records, specifically a budget, an
income and expense statement, and a cash flow statement. You dont need to
be an accountant at all, or even close. You can do all this automatically with
very affordable software such as Microsoft Money or Quicken.
3. Once you have started saving at least 10% of all that you earn, you must
make it multiply, bear children, grow, and work for you to make you more
money. This is where you begin to multiply your money. You let your money
bear more of its own kind more money! In other words, invest it well and it
will make you more money than you can possibly do yourself. And when your
investments bear fruit, dont eat all the fruit! Re-invest most of your
investment gains back again this is the only way it will grow in leaps and
bounds.
4. Preserve your capital. You cannot grow anything if you will be losing your
capital. Now, understand that it is the nature of money that you will win some
and lose some. No one, not even the greatest investor in the world, can
guarantee success 100% of the time. Accept this fact and relax. However,
you can put in place strategies to ensure that your capital losses are
mathematically managed so that they are easily offset by your gains. This is
the area of money management and asset protection, and we will look at it
later in more detail. Also, it goes without saying that if you wish to preserve
your capital, dont get into anything before you have studied it to know and
understand why and how it works. Investing your money based on hot tips,
stuff you saw on TV, your cousins chat with you last weekend. that will get
you into trouble. Find out for yourself first; do your research, and dont just
take what the experts say. Get in there, get involved, get your hands dirty,
and find out for yourself. If you dont want to do that, then the only other way
out is to get a very well qualified advisor with a proven, verifiable success
track record in that particular field to tell you what to do and what not to do.
Dont just get any advisor out of the yellow pages and go with them without
checking their performance record and references and so on.
5. If you have a home on mortgage, which many people do, convert it into a
profitable investment. As it is, most people hold homes that are actually
liabilities to themselves and assets to the bank. We will look at this in various
parts of this book.
6. Insure a future income. Structure your financial affairs so that you
progressively systemize the making of money and wealth. This will free you
from having to be present or having to hold a job. You will have created a
system whereby your money works for you and brings you both cash flow to
use now and when you retire, if you wish to retire, and ever-increasing
wealth.
7. Increase your ability to earn more. You will always earn based on what you
know, what you are aware of. If you are not aware of a certain opportunity,
you will not even recognize it. So, increase your ability to earn by making it a
habit to continuously upgrade your knowledge. Over half of all Americans
hardly read a book after they finish college. Of course they will be stuck in
time if they arent making any mental progress. They will be stuck in a day
that seems the same, the same old same old, a day that seems to repeat
itself. You must upgrade your knowledge consistently we live in a universe
where change is the only constant. You have to move with the cheese. Gain
financial intelligence and financial responsibility.
8. Cut your taxes down to about 10% of your income. For most people, taxes
are the biggest expenditure they face. Most people pay almost 50% of their
income in taxes (income tax, corporate tax, sales tax, fuel tax, and all the
other taxes they pay all add up to almost half their income). If you can put in
place strategies to save you about 30 90% of the taxes you are presently
paying, and this is what most wealthy people do, you will have a lot of money
left over to invest. Mathematically, our economies can do very well with 10%
taxes. The reason why we pay so much is government mismanagement,
waste and expenditures that dont make sense (for me personally, for
example, I dont wish to have my money spent on buying or building multi-
billion-dollar nuclear weapons and bombs the world spends over $3 billion a
day on the military during peaceful time, more in war time, and it just doesnt
make sense to me to develop these weapons instead of using this money to
create equal opportunity for all around the world).
9. Have multiple streams of independent income. This doesnt mean having
many jobs. It means creating income streams that are independent of you.
This gives you free time, more money to invest, and the ability to earn from
one income stream when another may be down. The cycles of money are that
you have up time and down times, and multiple income streams enable you
to insulate yourself from the downtimes (or even profit from them) and take
advantage of the uptimes in many different areas.
10. Avoid bad debt (debt that harms you) and use good debt (leverage) to help
you grow in leaps and bounds.
11. Create automatic money systems. These will give your finances a life of its
own. It will become a self-maintaining perpetual system with a strong
foundation and ability to grow. Some of the systems you will need to create
are an automatic saving and investment system, automatic debt reduction
system, automatic giving system, automatic personal finance management
system, and so on. We will look at these in more detail as we go on.
As you can see, these laws are very simple and logical. We will look at many of them
in more details in various parts of this book.
To begin with, we will first take a clear look at something you have definitely heard
of before: compound interest. This time, however, we will look at it with actual
numbers, deep analysis. The intention is for you to see where the power you are
looking for in terms of multiplying your money is. It is, in more ways than you may
have imagined, hidden in this simple thing called compound interest.
TAKE ACTION HERE NOW!
Dont just let this information stay at a theoretical level for you. Take
action and make it happen, make it practical and real for you! Ask
yourself, In how many ways can I act on this information that I have
just read? Write down all the ways you can think of, and then
schedule to do them starting now. Make it a must. Come back and
review this material every few weeks and ask yourself the same
question; you will keep finding new actions you hadnt previously seen.
Take action! In the moment, Now, Here. Move your body!
Take the first step, and the second step will appear. The way appears
progressively. Dont wait to see the whole way before you take a step.
Set the game up to win by recognizing it is ok and normal to make
mistakes. There are no failures, just successive moments. Life is a
process. If you stumble, be kind to yourself, and get up and continue.
Celebrate every step!
Are you facing any resistance or fears? Read the section on the
nonphysical in this book so you can transform yourself.
Be responsible for yourself.
Play and relax into it.
It all counts, the little things and the big.
Put into action, or else it is all useless.
Never leave the site of setting a goal or having a desire without doing
something towards its accomplishment.
It is always your next move. Napoleon Hill, author of Think and Grow
Rich
What saves a man is to take a step. Then another step. - Antoine De
Saint-Exupery
A journey of a thousand miles begins with a single step. Chinese
Proverb
Vision is not enough unless combined with venture. It is not enough to
stare up the steps unless we also step up the stairs. Vance Havner
Nothing comes from doing nothing. William Shakespeare
The great end of learning is not knowledge but action. Peter Honey
Follow your bliss. Joseph Campbell
"Knowledge is not enough; we must apply. Willing is not enough; we
must do." Bruce Lee

Understand The
Incredible Power of
Compound Interest And
How To Apply It
Why all the big fuss about compound
interest? Compound interest allows you to
multiply your money at a rate that is much,
much faster than most people can possibly
even dream of achieving in any job,
business, scam, lottery win, gamble,
franchise, or whatever! It is by far the best
shot most people have at creating wealth
and it is freely available to everyone, yet
few people make use of it. Let us now look
at it with actual numbers, application and
deep analysis to make it all clear and
simple. You will grasp its power in no time
at all. Albert Einstein once called
compound interest the 8
th
wonder of the
world and the greatest discovery in
mathematics. Let us see why.
What is compound interest? There are two types of interest. Simple and compound.
Simple interest is where you earn interest only on your principle (the money you
have invested). Compound interest on the other hand allows you to earn interest on
your principle and on the interest you earned before in the previous days. Look at
how these two compare:
Year $1,000 Invested at
15% Simple Interest
Per Year
$1,000 Invested at 15%
Compound Interest Per
Year
0 $1,000.00 $1,000.00
1 $1,150.00 $1,150.00
2 $1,300.00 $1,322.50
3 $1,450.00 $1,520.88
4 $1,600.00 $1,749.01
5 $1,750.00 $2,011.36
6 $1,900.00 $2,313.06
7 $2,050.00 $2,660.02
8 $2,200.00 $3,059.02
9 $2,350.00 $3,517.88
10 $2,500.00 $4,045.56

Important: Remember, to make the return you get on your investment compound,
all you have to do (what you must do) is to re-invest the earnings. So, if you are
earning $10 for every $100 you have invested somewhere, you can make this return
compound by re-investing that $10 so that it, too, earns interest. If you spend the
$10 instead of re-investing it, you will have converted that investment into a simple
interest one instead of a compound interest one. So, remember the key: re-invest
your gains if you wish to compound your wealth.
How your money skyrockets under compound interest
As you can see from the above example, an investment growing at a good compound
interest will double your money every certain number of years or months or weeks.
How long will it take you to double your investment with compound interest? Well,
that depends on the interest rate. Use the Rule of 72 to estimate how long it would
take. The Rule of 72 goes like this: divide 72 by the interest rate you are getting on
your money per year. The answer will give you the number of years it will take to
double your money. For example, if you are getting a rate of 5% per year, it will
take you 72/5 = 14.4 years to double your money. Look at this table:
Annual
Interest
Rate
Years To Double
Your Money
Days To Double
Your Money
4% 18.00 6,570.00
8% 9.00 3,285.00
12% 6.00 2,190.00
16% 4.50 1,642.50
20% 3.60 1,314.00
24% 3.00 1,095.00
28% 2.57 938.57
32% 2.25 821.25
36% 2.00 730.00
40% 1.80 657.00
44% 1.64 597.27
48% 1.50 547.50
52% 1.38 505.38
56% 1.29 469.29
60% 1.20 438.00
64% 1.13 410.63
68% 1.06 386.47
72% 1.00 365.00
76% 0.95 345.79
80% 0.90 328.50
84% 0.86 312.86
100% 0.72 262.80
200% 0.36 131.40
300% 0.24 87.60
400% 0.18 65.70
500% 0.14 52.56

Moral of the story:
Get the highest possible interest rate.
But dont people say that the higher the interest rate, the higher the risk? Is that
true? Sometimes. But often, quite the opposite is true; there are investment vehicles
and strategies (many of which you will see here in this book) that give you incredibly
high rates of return at lower risk than commonly accepted low risk investments.
New moral of the story:
Dont believe what people tell you until you check it out yourself. A lot of
people are missing great returns because of the fear of risks that dont exist
except in the cultural story of the masses!
Let us look at some more charts and see what they reveal about compound interest.
Value Over Time of $1 Invested Just Once At The Beginning at Various Compound
Interest Rates:
Interest Rate/Years Year 1 2 3 4 5 10 15
4% 1.04 1.08 1.12 1.17 1.22 1.48 1.80
6% 1.06 1.12 1.19 1.26 1.34 1.79 2.40
8% 1.08 1.17 1.26 1.36 1.47 2.16 3.17
10% 1.10 1.21 1.33 1.46 1.61 2.59 4.18
12% 1.12 1.25 1.40 1.57 1.76 3.11 5.47
14% 1.14 1.30 1.48 1.69 1.93 3.71 7.14
20% 1.20 1.44 1.73 2.07 2.49 6.19 15.41
30% 1.30 1.69 2.20 2.86 3.71 13.79 51.19
40% 1.40 1.96 2.74 3.84 5.38 28.93 155.57
50% 1.50 2.25 3.38 5.06 7.59 57.67 437.89
60% 1.60 2.56 4.10 6.55 10.49 109.95 1,152.92
70% 1.70 2.89 4.91 8.35 14.20 201.60 2,862.42
80% 1.80 3.24 5.83 10.50 18.90 357.05 6,746.64
90% 1.90 3.61 6.86 13.03 24.76 613.11 15,181.13
100% 2.00 4.00 8.00 16.00 32.00 1,024.00 32,768.00
110% 2.10 4.41 9.26 19.45 40.84 1,667.99 68,122.32
120% 2.20 4.84 10.65 23.43 51.54 2,655.99 136,880.07
130% 2.30 5.29 12.17 27.98 64.36 4,142.65 266,635.24
140% 2.40 5.76 13.82 33.18 79.63 6,340.34 504,857.28
150% 2.50 6.25 15.63 39.06 97.66 9,536.74 931,322.57
160% 2.60 6.76 17.58 45.70 118.81 14,116.71 1,677,259.34
170% 2.70 7.29 19.68 53.14 143.49 20,589.11 2,954,312.71
180% 2.80 7.84 21.95 61.47 172.10 29,619.68 5,097,655.36
190% 2.90 8.41 24.39 70.73 205.11 42,070.72 8,629,188.75
200% 3.00 9.00 27.00 81.00 243.00 59,049.00 14,348,907.00

Interest
Rate/Years
Year 20 25 30 35
4% 2.19 2.67 3.24 3.95
6% 3.21 4.29 5.74 7.69
8% 4.66 6.85 10.06 14.79
10% 6.73 10.83 17.45 28.10
12% 9.65 17.00 29.96 52.80
14% 13.74 26.46 50.95 98.10
20% 38.34 95.40 237.38 590.67
30% 190.05 705.64 2,620.00 9,727.86
40% 836.68 4,499.88 24,201.43 130,161.11
50% 3,325.26 25,251.17 191,751.06 1,456,109.61
60% 12,089.26 126,765.06 1,329,228.00 13,937,965.75
70% 40,642.31 577,062.74 8,193,465.73 116,335,496.65
80% 127,482.36 2,408,865.92 45,517,159.61 860,077,682.46
90% 375,899.73 9,307,649.57 230,466,617.90 5,706,581,621.09
100% 1,048,576.00 33,554,432.00 1,073,741,824.00 34,359,738,368.00
110% 2,782,184.29 113,627,216.59 4,640,650,289.12 189,528,844,864.34
120% 7,054,294.99 363,552,403.82 18,736,153,019.90 965,592,377,602.73
130% 17,161,558.31 1,104,576,757.19 71,094,348,791.15 4,575,876,141,814.84
140% 40,199,887.18 3,200,965,864.44 254,880,876,153.76 20,295,205,816,029.60
150% 90,949,470.18 8,881,784,197.00 867,361,737,988.40 84,703,294,725,430.00
160% 199,281,488.95 23,677,383,000.80 2,813,198,901,284.75 334,246,739,089,510.00
170% 423,911,582.75 60,826,678,771.34 8,727,963,568,087.73 1,252,367,375,378,790.00
180% 877,325,246.01 150,990,903,394.92 25,986,090,120,790.60 4,472,301,738,599,700.00
190% 1,769,945,761.51 363,036,212,362.73 74,462,898,441,675.10 15,273,196,049,090,700.00
200% 3,486,784,401.00 847,288,609,443.00 205,891,132,094,649.00 50,031,545,098,999,700.00

What you see above is mathematical certainty. Even just $1, simply dropped into the
right investment vehicle, can grow literally to billions of dollars. As you can see,
anyone at any income level can apply compound interest to grow wealth.
Sounds too good to be true, too simple to be true. But it is true!
We have been taught to believe that negative equals
realistic and positive equals unrealistic. Susan Jeffers
Compound interest has great power.
Even one dollar can turn into a million dollars in a certain amount of years at a
certain compound interest rate. One dollar, just one dollar, can grow into a million
dollars all on its own without your intervention. You would be pleasantly surprised to
know that a single dollar placed into an investment that grows at 20% a year will
become $1 million in 75 years. That is just one dollar! All you would need to do is
leave it alone, go away, go to sleep for 75 years, just leave it alone. When you
return it will be $1 million without any effort from you, other than your placing that
single dollar at the beginning!
Now, if instead you put in a dollar every single day into the same 20% a year growth
investment, you would end up with $1 million in 32 years instead of 75. In fact, a
dollar a day would become $1 billion in 66 years. A higher interest rate would
dramatically shorten that time.
This shows you that you can never have too little to start with. Whatever your
income today, force yourself into the habit of investing 10% of your income before
you pay bills or taxes or anything else. Pay yourself first - it is your money and your
life. Compound interest will always work for you without asking anything from you.
Your only part is to be consistent at investing and to choose good investments. After
that, you dont have to work for your money at all.
Now, as you noticed in the charts above, compound interest works best with time.
Thus, short-term investing usually does not earn as much as long-term investing and
it is usually a lot riskier for most people because it is less forgiving to those who are
simply gambling (investing without a plan and system). However, well-planned
short-term system trading can give you much higher returns with less risk
than long-term investing, but you have to be a very disciplined trader and
understand your system well and apply that system over a long time,
consistently reinvesting most of your profits. In summary, long-term
trading is less risky and has a higher return due to the power of compound
interest over time, but a well-designed short-term trading system (must be
a system) with profits reinvested (so that it becomes a lifetime system) can
give you far higher returns with much less risk than long-term buy-and-hold
strategies. It sounds paradoxical, but just relax for now; we will look at it in
detail in the section about multiplying your money.
Ok, now we will get a little more practical. Let us set up three virtual people who will
represent the typical people in society. We will use these virtual people to illustrate
how peoples financial lives look mathematically, and how the principle we are
learning in this book can change those lives.
First, many people say, I dont earn enough money to get rich. This is their favorite
excuse. We will therefore have one person who earns just $18,000 a year and we
will follow this person and see just how true this excuse is.
Meet Jack:

Name: Jack Low-Income
Profession: Kitchen Hand
Annual Income: $18,000
Savings: $0
Has Debt: Yes
Gets Paid: Monthly
Spends All Income
Before Next
Paycheck:
Yes

Next, we will have a middle-income earner:

Name: Jill Middle-Income
Profession: Medical Practitioner
Savings: $0
Has Debt: Yes
Gets Paid: Monthly
Spends All Income
Before Next
Paycheck:
Yes

And finally, an upper-income earner:

Name: Janet Upper-Income
Profession: Business Owner
Savings: $0
Has Debt: Yes
Gets Paid: Monthly
Spends All Income
Before Next
Paycheck:
Yes

Ok, we are all set to begin.
Now, as we saw from their profiles, these three people have typically poor money
habits. They spend all they earn, invest none, and they have bad debts (there is
such a thing as good debt, as we will see later, but most people have bad debt which
works against instead of for them).
So, let us see how their money situation looks like right now.
Jack earns $18,000 a year, which works out roughly to $1,500 a month. He spends it
all before the next paycheck, and invests none and saves none. So his cash situation
looks like this:
Wealth/Cash In Hand
$0.00
$500.00
$1,000.00
$1,500.00
$2,000.00
Days
D
o
l
l
a
r
s
Pay

He earns, spends, goes broke, gets paid, and repeats the cycle. How many people do
you know who do that? Most people in the world, right?
Now, look at Jills chart. She earns more, approximately $4,000 a month ($50,000 a
year), but she applies the same habits (knowledge and behavior and consequent
actions) as everyone else, and so she ends up earning, spending everything and
investing in nothing, going to zero or almost zero, and repeating the cycle:
Wealth/Cash In Hand
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
Days
D
o
l
l
a
r
s
Pay

And the same applies to Janet, at her income of about $8,000 a month:
Wealth/Cash In Hand
$0.00
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
Days
D
o
l
l
a
r
s
Pay

Did you know that the average American doesnt have $2,000 in their bank account?
That applies to people at all sorts of income levels. And remember that the average
person also walks around with a bad debt load and little or no good investments (for
example, a personal house under mortgage is not a good investment, under normal
circumstances, and we will see why later).
Now, let us see what happens when our three virtual people start to save.
One of the keys to wealth is this:
You must, must, simply must, start saving and investing at least 10% of all your
income.
You simply cannot expect to get wealthy, under normal circumstances, if you ignore
this rule. If you have previously found yourself resisting or unable to do this, dont
worry; we will look at changing beliefs (and thus behavior) in detail later and see
how you can change. You have to pay yourself first save 10% of all the money you
earn, when you earn it, and employ it to work for you for ever and earn more money
for you. In other words, 10% of your efforts must be kept for you and employed to
work for you. If you use 100% of your efforts and give them all away to others
(spend everything), you are not respecting yourself and your money simply doesnt
belong to you; it belongs to everyone else you pay. Learn to pay yourself first. It is
self-respecting and self-valuing. A part of all that you earn is yours to keep. Not to
spend, to keep. And not to keep idle, but to be employed to make even more money
for you. So, step one is to save 10% as soon as it is earned, before you pay
anyone else, and step two is to invest it.
Let us see how our three virtual friends do once they get the habit of saving 10% of
their income. We will, for now, assume that they are investing none of it at all. They
are simply taking 10% of their income every month and placing it in a big virtual
piggy bank at zero interest. Let us see how their financial situation looks like to see
the virtue of saving:
Jack starts saving his 10% (which works out to $150 a month). Here is his 2-year
graph:
Wealth/Cash In Hand
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
Days
D
o
l
l
a
r
s
Pay Savings

And here is his 40-year graph:
Wealth/Cash In Hand
$0.00
$20,000.00
$40,000.00
$60,000.00
$80,000.00
Days
D
o
l
l
a
r
s
Pay Savings

Jill starts saving her 10% (which works out to $416 a month). Here is her 2-year
graph:
Wealth/Cash In Hand
$0.00
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
Days
D
o
l
l
a
r
s
Pay Savings

And here is her 40-year graph:
Wealth/Cash In Hand
$0.00
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
Days
D
o
l
l
a
r
s
Pay Savings

Janet starts saving her 10% (which works out to $833 a month). Here is her 2-year
graph:
Wealth/Cash In Hand
$0.00
$5,000.00
$10,000.00
$15,000.00
$20,000.00
$25,000.00
Days
D
o
l
l
a
r
s
Pay Savings

And her 40-year graph:
Wealth/Cash In Hand
$0.00
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
Days
D
o
l
l
a
r
s
Pay Savings

What is the first thing you notice?
Savings automatically get them out of the broke-portions of their money cycle. We
will be looking at money cycles later in the section on the nature of money. But
briefly, money like everything else flows in cycles of in and out. You cannot fight the
cycles, but you can use strategies to insulate yourself from the cycles, and even
profit from the cycles!
Ok, now, lets get into the real game! Now, our three virtual people will start to
invest the 10% that they are saving, as soon as the receive it. We will assume they
are getting a 20% interest rate. Now, many people believe it is difficult if not
impossible to get anything beyond, say, 9% in average annual interest. Nonsense!
That is the cultural myth! You can get even 40%, 50% or more, and occasionally
(not always) you can get spikes of 200% or much more (although these spikes dont
last long). How many financial instruments do most people know, seriously know,
about? They just know about their mutual fund, maybe, and their bank account.
Everything else is unknown or just glimpsed at in hearsay. Yet they are sure that
15%, 20% interest on average per annum is impossible, and they will confidently
advise their friends with these facts. By the way, the financial advisory industry
takes advantage of these misconceptions. They offer people 2% to 8% interest and
turn around and make double-digit returns on the money they collect from the
people who invested with them; their profit is the margin between what they make
and the paltry 8% they pay out to investors. And guess who makes phenomenal
profits? The same finance industry! Not the investors! 80% of the financial advisory
industry is owned by, guess who, the banks! And do you know what it takes for
someone to earn his or her financial advisor certificate? Well, there are a small
minority of highly qualified and competent financial advisors, but a great number get
their certification after just a few months of basic training, mainly in selling and
putting together investments for the masses for the profit of the financial institution
itself (they are, after all, in business to make money, and why shouldnt they, it is
perfectly acceptable). So, for lack of knowledge or incentive, most people miss out
on large returns. Anyway, we will look at this in detail later and see the instruments
and strategies that can give you good returns. Meanwhile, back to our three virtual
friends:
Jack starts investing 10% of his income at an average annual return of 20%. Here is
his 5-year graph:

Wealth/Cash At Hand
$0.00
$5,000.00
$10,000.00
$15,000.00
$20,000.00
Days
D
o
l
l
a
r
s
Pay Investment

And his 40-year graph:
Wealth/Cash In Hand
$0.00
$5,000,000.00
$10,000,000.00
$15,000,000.00
$20,000,000.00
$25,000,000.00
$30,000,000.00
Days
D
o
l
l
a
r
s
Pay Investment

Jill starts investing 10% of her income at an average annual return of 20%. Here is
her 5-year graph:
Wealth/Cash In Hand
$0.00
$10,000.00
$20,000.00
$30,000.00
$40,000.00
$50,000.00
Days
D
o
l
l
a
r
s
Pay Investment

Wealth/Cash In Hand
$0.00
$10,000,000.00
$20,000,000.00
$30,000,000.00
$40,000,000.00
$50,000,000.00
$60,000,000.00
$70,000,000.00
$80,000,000.00
Days
D
o
l
l
a
r
s
Pay Investment

Janet starts investing 10% of her income at an average annual return of 20%. Here
is her 5-year graph:
Wealth/Cash In Hand
$0.00
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
Days
D
o
l
l
a
r
s
Pay Investment

Wealth/Cash In Hand
$0.00
$20,000,000.00
$40,000,000.00
$60,000,000.00
$80,000,000.00
$100,000,000.00
$120,000,000.00
$140,000,000.00
$160,000,000.00
Days
D
o
l
l
a
r
s
Pay Investment

Notice how, with compound interest, money grows initially at a slow peed and then
accelerates dramatically. That is the nature of compound interest. It starts slowly
and then picks up amazing speed with time! In fact, after a certain time, it is almost
a vertical climb, so that you are making more wealth than you know what to do with!
You join the sphere of the super-rich, the people who make more per minute than
they can possibly spend even if they tried their best. Now, the above are
mathematical certainties. Compound interest, math, does not discriminate. It doesnt
matter who you are or where you are. If you invest a certain amount at a
certain rate, you will get the same results as anyone else. It doesnt matter
who you are or where you are.
It follows, also, that time is your friend when it comes to compound interest. Which
means that the earlier you start, the better. If you havent started yet, start now.
The longer you wait, the more opportunity and growth that you waste.
Notice also how Jack, our $18,000 a year low-income earner, becomes a millionaire
in about 23 years, investing just a little bit of money every month. We have all heard
of true stories about real people who have made great fortunes from very little
money to start with. We have all heard these stories and we know they are true.
Some of these people made their money investing in businesses, some in stocks and
so on, but they all started with very little. Starting with little cannot prevent you
from getting wealthy unless you yourself allow it to. The point is, whether you earn
plenty or little, if you do nothing with it, you will get nothing out of it, and if you do
something with it, you will get plenty out of it.
Let us now look at a comparison of the way the investments of our three virtual
people grow. The purpose is to show the power of investing higher amounts of
money per month if you can:
Investment Growth @ 20%
$0.00
$20,000,000.00
$40,000,000.00
$60,000,000.00
$80,000,000.00
$100,000,000.00
$120,000,000.00
$140,000,000.00
$160,000,000.00
13579
1
1
1
3
1
5
1
7
1
9
2
1
2
3
2
5
2
7
2
9
3
1
3
3
3
5
3
7
3
9
Years
D
o
l
l
a
r
s
At $150 At $416 At $833

Here are the numbers for the chart above, showing the total value of their
investments (20% annual growth rate):
Year Investing $150
a month
(Jack)
Investing $416
a month (Jill)
Investing $833
a month (Janet)
1 $1,974.52 $5,476.00 $10,965.17
2 $4,382.23 $12,153.39 $24,335.99
3 $7,318.17 $20,295.74 $40,640.26
4 $10,898.24 $30,224.44 $60,521.54
5 $15,263.73 $42,331.41 $84,764.59
6 $20,586.98 $57,094.55 $114,326.35
7 $27,078.10 $75,096.59 $150,373.70
8 $34,993.31 $97,048.11 $194,329.51
9 $44,645.05 $123,815.60 $247,928.84
10 $56,414.29 $156,455.64 $313,287.38
11 $70,765.61 $196,256.62 $392,985.01
12 $88,265.47 $244,789.57 $490,167.58
13 $109,604.65 $303,970.23 $608,671.15
14 $135,625.45 $376,134.58 $753,173.34
15 $167,354.99 $464,131.16 $929,378.02
16 $206,045.70 $571,433.40 $1,144,240.44
17 $253,224.81 $702,276.80 $1,406,241.76
18 $310,754.59 $861,826.07 $1,725,723.83
19 $380,905.90 $1,056,379.02 $2,115,297.42
20 $466,447.78 $1,293,615.16 $2,590,339.98
21 $570,756.78 $1,582,898.80 $3,169,602.65
22 $697,950.25 $1,935,648.69 $3,875,950.38
23 $853,048.83 $2,365,788.75 $4,737,264.50
24 $1,042,174.66 $2,890,297.72 $5,787,543.26
25 $1,272,793.01 $3,529,879.27 $7,068,243.83
26 $1,554,006.96 $4,309,779.31 $8,629,918.67
27 $1,896,916.76 $5,260,782.48 $10,534,211.06
28 $2,315,057.90 $6,420,427.25 $12,856,288.22
29 $2,824,935.49 $7,834,487.75 $15,687,808.41
30 $3,446,675.67 $9,558,780.52 $19,140,538.88
31 $4,204,820.10 $11,661,367.75 $23,350,767.64
32 $5,129,294.67 $14,225,243.88 $28,484,683.05
33 $6,256,590.71 $17,351,611.57 $34,744,933.74
34 $7,631,205.45 $21,163,876.45 $42,378,627.61
35 $9,307,398.42 $25,812,518.27 $51,687,085.87
36 $11,351,333.17 $31,481,030.66 $63,037,736.88
37 $13,843,688.99 $38,393,164.13 $76,878,619.52
38 $16,882,845.46 $46,821,758.07 $93,756,068.43
39 $20,588,765.76 $57,099,510.37 $114,336,279.17
40 $25,107,731.93 $69,632,109.89 $139,431,604.67

Now, for each of these three people, once again to appreciate the power of
compound interest, here are charts showing how much of the money growth was
caused by the accumulation of the money they were putting away every month, and
how much was caused by the compound interest (notice how the compound interest
gives a greater boost towards the later years):
Jack:
Year Savings
Only
With 20%
Compound
Interest
1 $ 1,800.00 $1,974.52
2 $ 3,600.00 $4,382.23
3 $ 5,400.00 $7,318.17
4 $ 7,200.00 $10,898.24
5 $ 9,000.00 $15,263.73
6 $ 10,800.00 $20,586.98
7 $ 12,600.00 $27,078.10
8 $ 14,400.00 $34,993.31
9 $ 16,200.00 $44,645.05
10 $ 18,000.00 $56,414.29
11 $ 19,800.00 $70,765.61
12 $ 21,600.00 $88,265.47
13 $ 23,400.00 $109,604.65
14 $ 25,200.00 $135,625.45
15 $ 27,000.00 $167,354.99
16 $ 28,800.00 $206,045.70
17 $ 30,600.00 $253,224.81
18 $ 32,400.00 $310,754.59
19 $ 34,200.00 $380,905.90
20 $ 36,000.00 $466,447.78
21 $ 37,800.00 $570,756.78
22 $ 39,600.00 $697,950.25
23 $ 41,400.00 $853,048.83
24 $ 43,200.00 $1,042,174.66
25 $ 45,000.00 $1,272,793.01
26 $ 46,800.00 $1,554,006.96
27 $ 48,600.00 $1,896,916.76
28 $ 50,400.00 $2,315,057.90
29 $ 52,200.00 $2,824,935.49
30 $ 54,000.00 $3,446,675.67
31 $ 55,800.00 $4,204,820.10
32 $ 57,600.00 $5,129,294.67
33 $ 59,400.00 $6,256,590.71
34 $ 61,200.00 $7,631,205.45
35 $ 63,000.00 $9,307,398.42
36 $ 64,800.00 $11,351,333.17
37 $ 66,600.00 $13,843,688.99
38 $ 68,400.00 $16,882,845.46
39 $ 70,200.00 $20,588,765.76
40 $ 72,000.00 $25,107,731.93

Jill:
Year
Savings
Only
With 20%
Compound
Interest
1 $ 4,992.00 $5,476.00
2 $ 9,984.00 $12,153.39
3 $ 14,976.00 $20,295.74
4 $ 19,968.00 $30,224.44
5 $ 24,960.00 $42,331.41
6 $ 29,952.00 $57,094.55
7 $ 34,944.00 $75,096.59
8 $ 39,936.00 $97,048.11
9 $ 44,928.00 $123,815.60
10 $ 49,920.00 $156,455.64
11 $ 54,912.00 $196,256.62
12 $ 59,904.00 $244,789.57
13 $ 64,896.00 $303,970.23
14 $ 69,888.00 $376,134.58
15 $ 74,880.00 $464,131.16
16 $ 79,872.00 $571,433.40
17 $ 84,864.00 $702,276.80
18 $ 89,856.00 $861,826.07
19 $ 94,848.00 $1,056,379.02
20 $ 99,840.00 $1,293,615.16
21 $ 104,832.00 $1,582,898.80
22 $ 109,824.00 $1,935,648.69
23 $ 114,816.00 $2,365,788.75
24 $ 119,808.00 $2,890,297.72
25 $ 124,800.00 $3,529,879.27
26 $ 129,792.00 $4,309,779.31
27 $ 134,784.00 $5,260,782.48
28 $ 139,776.00 $6,420,427.25
29 $ 144,768.00 $7,834,487.75
30 $ 149,760.00 $9,558,780.52
31 $ 154,752.00 $11,661,367.75
32 $ 159,744.00 $14,225,243.88
33 $ 164,736.00 $17,351,611.57
34 $ 169,728.00 $21,163,876.45
35 $ 174,720.00 $25,812,518.27
36 $ 179,712.00 $31,481,030.66
37 $ 184,704.00 $38,393,164.13
38 $ 189,696.00 $46,821,758.07
39 $ 194,688.00 $57,099,510.37
40 $ 199,680.00 $69,632,109.89

Janet:
Year
Savings
Only
With 20%
Compound
Interest
1 $ 9,996.00 $10,965.17
2 $ 19,992.00 $24,335.99
3 $ 29,988.00 $40,640.26
4 $ 39,984.00 $60,521.54
5 $ 49,980.00 $84,764.59
6 $ 59,976.00 $114,326.35
7 $ 69,972.00 $150,373.70
8 $ 79,968.00 $194,329.51
9 $ 89,964.00 $247,928.84
10 $ 99,960.00 $313,287.38
11 $ 109,956.00 $392,985.01
12 $ 119,952.00 $490,167.58
13 $ 129,948.00 $608,671.15
14 $ 139,944.00 $753,173.34
15 $ 149,940.00 $929,378.02
16 $ 159,936.00 $1,144,240.44
17 $ 169,932.00 $1,406,241.76
18 $ 179,928.00 $1,725,723.83
19 $ 189,924.00 $2,115,297.42
20 $ 199,920.00 $2,590,339.98
21 $ 209,916.00 $3,169,602.65
22 $ 219,912.00 $3,875,950.38
23 $ 229,908.00 $4,737,264.50
24 $ 239,904.00 $5,787,543.26
25 $ 249,900.00 $7,068,243.83
26 $ 259,896.00 $8,629,918.67
27 $ 269,892.00 $10,534,211.06
28 $ 279,888.00 $12,856,288.22
29 $ 289,884.00 $15,687,808.41
30 $ 299,880.00 $19,140,538.88
31 $ 309,876.00 $23,350,767.64
32 $ 319,872.00 $28,484,683.05
33 $ 329,868.00 $34,744,933.74
34 $ 339,864.00 $42,378,627.61
35 $ 349,860.00 $51,687,085.87
36 $ 359,856.00 $63,037,736.88
37 $ 369,852.00 $76,878,619.52
38 $ 379,848.00 $93,756,068.43
39 $ 389,844.00 $114,336,279.17
40 $ 399,840.00 $139,431,604.67

Moral of the story:
To get wealthy, you need to invest your savings in high-growth vehicles
because it is the interest component that will make you rich, not the savings
alone.
Consider the following two illustrations that will show you the power of compound
interest.
The first one is one that I heard on Anthony Robbins Get The Edge program and it
does a great job at illustrating how money grows rapidly from humble beginnings
into great amounts when its given the right compound rate.
Imagine that you are playing a golf game and your friend challenges you to a bet
whereby you bet just 10 cents the first hole, and the bet doubles after every hole (so
that it is a 20 cent bet on the second hole, 40 cents on the third hole, and so on).
Would you take that bet? If you said yes, you had better be a damned good player!
Have a look at this chart:
Hole Bet
1 $0.10
2 $0.20
3 $0.40
4 $0.80
5 $1.60
6 $3.20
7 $6.40
8 $12.80
9 $25.60
10 $51.20
11 $102.40
12 $204.80
13 $409.60
14 $819.20
15 $1,638.40
16 $3,276.80
17 $6,553.60
18 $13,107.20

As you can see, the bet gets to an amazing $13,107.20 by the 18
th
hole.
Interestingly, it only gets to $25 by the time you are halfway through the game. The
biggest jump is towards the end.
Now, look at this other example: Suppose someone came and offered you either
$1million now or one cent only but with a guarantee that this cent will double in
value every day for a month. Would you take the one-cent that doubles daily for a
month or the million dollars right now? Well, if you took the million dollars you just
made the worst financial decision! That one-cent would double like this:
Day Amount
1 $0.01
2 $0.02
3 $0.04
4 $0.08
5 $0.16
6 $0.32
7 $0.64
8 $1.28
9 $2.56
10 $5.12
11 $10.24
12 $20.48
13 $40.96
14 $81.92
15 $163.84
16 $327.68
17 $655.36
18 $1,310.72
19 $2,621.44
20 $5,242.88
21 $10,485.76
22 $20,971.52
23 $41,943.04
24 $83,886.08
25 $167,772.16
26 $335,544.32
27 $671,088.64
28 $1,342,177.28
29 $2,684,354.56
30 $5,368,709.12
31 $10,737,418.24

There is no other financial power currently known to mankind that is more capable of
multiplying wealth than compound interest is. And the great thing about compound
interest is that it is available to everyone and it doesnt discriminate! And whats
more, it can make use of even the smallest amounts of money! The myth that you
need a lot of money to make money is just a myth. It is a false belief held by
millions of people; but that doesnt make it correct. Many people, in history and
currently, have proven that one can become wealthy with very humble beginnings,
and one sure way to do so is to invest in compounded ways. Simply re-invest your
returns, your fruits, and pick a good rate of return and a good investment strategy.
We will look at this in more details later and you will see exactly what you can invest
in, no matter where you are now.
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Understand Assets And
Liabilities And How To
Create Wealth With Them
In the world of money, there are two kinds
of things: (1) Things that take money away
from you and (2) Things that put money
into your pocket. Assets put money into
your pocket, liabilities take it out. As simple
as this sounds, this is the cornerstone of
understanding the building of wealth. And
surprisingly, many people dont know the
difference. And if they do, they dont know
how to apply this knowledge to create
wealth. Let us clear all that up here and
now.
What is the difference?
As we have said, the difference is very simple. You see, when you go to the bank to
apply for a loan or credit card and they ask you to list all your assets, they tell you to
list your car, home equipment, clothes, jewelry, house on mortgage, and so on as
assets. Everybody grows up getting such messages from their bank, insurance
company and so on. So they believe that these things really are assets. They are
not. To the bank they may be, because if you default on your payments they can sell
your assets, but you yourself dont usually sell these things. To the bank they are
collateral inventory to sell anytime without a second thought, to you they are
keepsakes. So lets define, once and for all, what an asset is and what a liability is.
An asset puts cash, money, into your pocket. End of story.
A liability takes money out of your pocket. Period.
So, is your car an asset? No, because it takes money from you and doesnt put any
back. So it is a liability. Is your house on mortgage an asset? No, it also takes money
from your pocket without putting any in (it is the banks asset, they use it to take
money from you and into their pockets). So it is a liability (unless you use creative
financing to turn it into something that gives you cash even when you live there, as
we will see in an example later on in the section on turning your home into a
profitable investment).
How to use this difference to build wealth
Now that we know the difference, how do we apply this knowledge? Again, it is very
simple. Follow this simple logic. You have an income from your employment or your
business, right? This is cash coming in. Therefore, if you wish to grow wealth, what
would you logically do? You would use that income to have it grow more of its kind,
more money, right?
So, and this is so simple, you use your income to only purchase assets, never
liabilities. Simple, no? The more liabilities you have, the more you will bleed money.
But, liabilities are usually the fun things in life, like the nice cars, boats, homes,
education and so on. So obviously, you have to have them so you can enjoy your
dreams. There is nothing wrong with liabilities; in fact, often they are the reason we
seek money in the first place! They are all good. But you will have to change your
approach when it comes to getting them. Instead of using your income to get
liabilities, use it to get assets. And because assets bring in more money, use the
assets to finance the acquisition and maintenance of your liabilities. This will leave
your income free to buy more assets, and thus your wealth will grow and so will
your ability to get more wonderful toys (liabilities) because you have increasing
assets.
So, we will now stop living like this
Income > Liabilities > Broke
This is no good because it gives you no chance to grow your wealth. You just get
trapped into a cycle of increasing liabilities that suck more and more of your income.
This is how each month would look like under this style of living:
Month 1:

Month 2:

Month 3:

Month 4:

See? The picture doesnt change. This style just keeps one in a loop of using income
to pay liabilities (bills, expenses, purchases, etc).
But we now wish to get wealthy, right? So, we now change our style of living to
Income > Assets > Liabilities + Wealth
The income buys the asset. The asset produces its own income, and using that new
income, it gets you the liability you like and maintains it. Meanwhile, your regular
income is still free to buy more assets. You now get gladly trapped in a cycle of
increasing wealth and toys.
This is how each month would look like under this style of living:
Month 1:

Month 2:

Month 3:

Month 4:

As you can see, the assets keep increasing with each new paycheck, and they handle
the liabilities, leaving the next paycheck to be free to add more assets.
So how do you use an asset to buy a liability? I am sure you can at least think of one
way. You have without doubt heard of how the wealthy use their assets to finance
their lifestyle. You may not have bothered to find out the details, but you know some
ways. You see, there are an almost infinite number of combinations possible, each
depending on the person, their circumstances, their assets and liabilities, and how
creative they are. In fact, some strategies are incredibly simple (some people, for
example, use their income to finance a property for rent purchased creatively with
profit built in at purchase time (not buy and hold waiting and hoping for future
appreciation), and they use the rent income to pay for a new car or whatever). We
cannot get into listing all the possible ways here. If you take the time to talk to
people, advisors and read books, you can find many ways in which you can start
yourself from wherever you are. I will give you an example of a slightly complicated
strategy of using your assets to buy your liabilities for you in the Options section of
this book.
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Get Comfortable With
Moneys Natural Up And
Down Cycles
Like all of life, money has its cycles. Money
is part of life, so it cannot escape the cyclic
nature of life. Nor can you. All of life is
cyclic. The in and out of breath, day and
night, on and off, up and down money
goes in and out, up and down. Most people
try to stay in one part of this natural
cycle and avoid the other part. No one
can do that, yet millions attempt it. What
you can do, however, is to understand the
cycles and flow, flow, with them. That way,
you can insulate yourself from the
downturns, profit from both the up and
down, and develop independence. The
cycles, instead of taking you for a ride, now
serve you and free you. With understanding,
you can stand emotionally and financially
free from the cycles of money and even
profit under all conditions!
Let us start looking at these cycles. We will look at actual money cycles, and perhaps
the best place to start looking is in the stock market itself.
Here is a chart of the U.S. markets since the 1930s (actually, it is a chart of all the
companies in the stock market that make up the Down Jones Industrial Average).
What do you notice? (By the way, you can do these charts yourself free on Yahoo!
Finance, which is where these charts were taken from.) Look at this chart:

It trends up generally from the 1930s till today, but it doesnt do that in a straight
line, does it? It waves up and down, up and down. By the laws of nature, the laws of
mathematics, it must wave up and down. Why? Well, for many reasons. For
example, let us assume there is a company in there that is worth $1 million dollars
(this is an example only so let us use a low figure we can work with). This company
has 1 million shares distributed, so each share is intrinsically worth $1 because if you
were to break up the company and sell its assets, you would get $1 million and you
would have to divide that million dollars by a million shares and give each share
holder one dollar per share. Now, in the stock market, there will be people buying
the shares in anticipation that the company will grow in value in the future, so they
are willing to pay a bit more than $1 per share. And so the price would rise, but if it
gets up too high (say to $2 a share), these optimistic buyers would now start to
think that it is too expensive to profit from. So they would stop buying. Now, the
people offering the share for $2 would, sooner or later, need cash to feed themselves
and their families, and so they would start lowering their price and sell the stock for
less than $2, and the price would keep dropping until it reached a point where the
buyers would again see it as a bargain (say, at $0.80 a share) and start buying it up
again, driving the price up again. This is just one simple example of how nature and
mathematics combine to keep prices swinging up and down within very definite
boundaries. It works not just in the stock market but also in all areas that concern
money. Even in your personal life, you earn money, but find that you must spend it
to eat, get shelter and so on (nature compels you). Yet you cannot spend more than
you earn and hold in debt, and you cannot earn more than what you are generating
with your financial wisdom and application (mathematics compels you). You can alter
how you position yourself in regards to the cycles (thereby finding degrees of
freedom and profit/loss), but you cannot stop the cycles.
Now, let us look at a different chart. Go back to the chart on top and notice how the
last 5 years there look like. We will now magnify that 5-year segment of the same
above chart. Here is a chart of the last 5 years (the last 5 years of the chart we just
saw above). What do you notice? Look:


The same waves! Up and down they go!
Now, magnify the last 1 year of these 5 years and see what happens:

Now, magnify the last 6 months of this year and see what happens:


Now, magnify the last 3 months of this last 6 months and see what happens:

Now, notice how straight the last few days on the chart above look like. The chart
seems to have a straight line moving up. Now, magnify the last 5 days of this and
see what happens:


Now, look at the last day in the chart above and notice that it has movement but not
as frantic as when you magnify the last 1 day of this as follows:

If you were to magnify this one-day chart above and focus on just one hour, you
would see that the activity is also quite busy. The cycles of money never cease. They
are one within the other, one within the other. They are fractal in nature.
Now that you can see that money moves in waves of up and down, like the ocean
currents, you can finally stop taking it personally when you experience the downside
of these natural cycles. It isnt you who is failing when you hit a down time; it is
simply that you are experiencing a natural phenomena. However, you can arrange
yourself so that you experience it differently (i.e., with less pain, or even with profit).
This is worth repeating: The dualities of life must always exist together. Hot and cold
exist together. Tall and short exist together. Night and day exist together. So does
having and not having. The experience called having is impossible without the
existence of the experience called not having. In the absence of that which is not,
that which is, is not. That is why we live in a relative world. So, you will do a very
good service to your mind and emotions if you accepted that you couldnt change
this aspect of creation no matter how much you tried. And it isnt your fault that
creation works like this (in other words, dont take it personally, you didnt fail).
However, (1) you do not have to personally experience not having so that you can
experience having (all that is required is that the experience exists somewhere in the
universe) and (2) you can set yourself up so that you experience much more of
having and insulate yourself from not having (e.g. through savings and investment
systems) and even profit from the not having part of an economic cycle (e.g.
making money when the market is falling).
So what can we learn about the cycles of money? Well, very many things. But for our
immediate purposes, here is what we can learn right now:
1. First, get comfortable with the inflow and outflow of money, with giving and
receiving, earning and spending, having and not having. These cycles are
there always, although they come in all sorts of disguises. There is no point of
fighting the wind, what you can't change. It is a waste of energy and an
emotional drain. Instead of trying to do the impossible (trying to resist
change, cycles), instead learn how to flow. Flow with the cycles, with the
changes, and develop the mindset and strategies to have reserves ready for
the inevitable down times and even profit from them. We will look at this in
more detail later.
2. Next, learn how to invest and profit in all conditions. As we just said, we will
look at this in more details later but just to quickly point out here: Many
investors only think of making money when things go up. They buy a stock or
a house or whatever, and look to make profit only if the price goes up.
However, the savvy investor looks at ways of making money on the way up
and on the way down. That way, it doesnt matter to them whether the
market is going up or down; they will still profit. All they have to do is switch
strategies and they are always in the game, any game, up or down.
3. Develop emotional mastery and detachment. You can only do this if you
understand and know yourself. Dont let these eternal cycles take you on a
ride of highs and lows. Many people allow their economic state to take them
in and out of fear, in and out of depression and desperation What is the
point? These cycles are always going to be there, so why peg your state of
mind and emotions to them? How does it benefit you? In fact, it makes things
worse. Why not, instead, detach your state from the state of your finances? It
is much more comfortable to do so. And you have more power to make the
right decisions. Worry keeps you in trouble. It is because you worry that you
worry, do you get it? Worry manifests that which you worry about. And
another thing, there is no point in taking these things personally. Many people
take it personally when they are in a down time. They blame themselves,
they feel shame, they feel guilty, and they even blame a single other person.
Hey, if you are one of these people, wake up! Life moves in cycles; thats
what life is. Whether you feel ashamed or not, you will be part of life and part
of the cycles. It is not because you failed that you lost your job, or are
temporarily experiencing money shortage, or whatever. Everybody and every
business and every government on earth has gone through ups and downs
with money! You are not alone. Dont take it personally, it isnt healthy to do
so and besides, it isnt personal. Flow with the cycles. Dont ask, Why did
they move my cheese. Instead, follow the cheese! The cheese will always
move; you can't prevent change. But you can follow the cheese instead of
trying to prevent change and blaming yourself for the change! There is much
more on financial-emotional handling in Part 2 of this book.
4. Again, you can see the importance of having savings and investments, and of
tracking your money to know how it flows in and out. Savings and
investments allow you to insulate yourself against down times and profit from
the up and the downtimes. If you dont invest, you miss the power of the
wave! When the wave is going up, have your money in there so that it
multiplies your money for you free! If you dont have any investments, guess
what, you will just be reading about people making money; you yourself
wont make any. Surf the waves! Invest! Put your money in the market and
step back and watch as the cycles of nature push the value of your money up
as the wave goes up. Nature will raise your money for you. And if you choose
to, you can also invest in the downtrend and surf that direction as well; make
money when the market is going down. And remember, if you dont keep
track of the inflow and outflow of your money, you will be surfing blind. You
cannot master the cycles if you dont bother see how they actually work in
your life. So start to keep a budget, cash flow statement, and income
statement. Microsoft Money or Quicken will do that for you easily.
All human life has its seasons and cycles, and no ones
personal chaos can be permanent. Winter, after all, gives
way to spring and summer though sometimes when
branches stay dark and the earth cracks with ice, one
thinks they will never come, that spring, and that
summer, but they do, and always. Truman Capote

The world is not to be put in order; the world is order,
incarnate. It is for us to harmonize with this order.
Henry Miller

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Get Comfortable With
Moneys Unique And
Surprising Nature
What is money? Most people think it is a
very real, solid thing that is in short supply.
They are even willing to go to war and die
for it. Money is not real in the sense that a
banana or an apple is. It is an idea. It
mainly exists in the theoretical realm (most
of it is not printed or coined). It can be
multiplied with great flexibility. As long as
you think of money as a real, physical thing,
your mind will not allow you to see its most
powerful abilities, abilities you can easily
employ to achieve wealth. Once you
understand what it really is, you can begin
to play with it instead of struggle for it or
fear it. Lovely!
Money Is An Exchange Of Value
Money is the 'body' of value. It is the physical representation of value that rises and
falls in ourselves, within us. Not within 'things' outside of us, but within us. For
without us, what can the value of a thing, such as a car, be to us? Nothing, at least
not to us. In other words, it is we, the observers, that place value in things, but this
value is really value in us - we give value to the material things. The material things
have no 'money' value in themselves - we give that to them. So, money is the
external physical representation of a particular section of our internal value, within
us, within you. That is why a house or a block of shares valued at $1 million today
can fall to a valuation of half a million dollars tomorrow when fear is introduced into
the hearts of those involved. The fear kills a portion of the internal values of the
participants and that is reflected by the paper money, the 'body' of value.
Money Is An Idea
Here is something else: physical paper money does not even represent money in full.
It cannot reasonably do that. By some estimates (and this varies from nation to
nation), only as little as 4% of the money in the system exists as paper cash.
Imagine how much cotton, linen, pulp, and metal the world would need so as to
make all the money everyone has in his or her bank accounts. Everyday, in the inter-
bank currency markets alone, over $1.3 trillion dollars change hands (only 2% of
those transactions are for goods and services, by the way). Imagine how much space
it would take to store all this money in paper form. If you were to stack only one
million US$1 bills, it would weigh one ton and be 361 ft high. Neither does money
exist backed by gold reserves any more. This is for exactly the same reason - we ran
out of the reasonable ability to keep a gold standard in the 1930s to 1970s.
So what does it exist as, the money that we are always talking about? Well, it is one
massive illusion. It is all just numbers written on paper and computer storage
devices, and assigned to people and entities such as companies and investments, or
more accurately, further records! To put it in another way, for every $100 or its
equivalent in any other currency, only about $4 exists as printed-paper notes or
coins, while the remaining $96 exists as numbers written on papers and computers
in banks and businesses and other entities. The only reason this system does not
collapse is that we all believe in it. The last time people stopped believing in it in a
large enough extent was just before the Great Depression when large numbers of
people rushed to their banks to withdraw their money and found that they could not
all get it because it did not exist! This is not what caused the Great Depression, but it
in a large way accelerated it. In every nation where people rush en mass to get their
money out of the bank, the financial system starts to collapse (think of Argentina, in
recent history).
If you walk into most bank branches in the world and ask for more than $2,000 to
$10,000 in cash, from your own account, they will politely let you know that you will
need to give them a few days advance notice so they can get the money ready for
you (the exact nature of these rules varies from country to country). Try it. Unless
you live in New York City or some other high finance center, you will be unable to get
that much cash in physical form if you just show up unannounced to withdraw your
account. Now $2,000 or even $10,000 is very little cash. $1 million can fit in a brief
case - it is a very small amount of money. You would think that most banks would
have enough cash to pay off a person who walks in to withdraw just $10,000. But
most bank branches can't do that in this world. Why? The money, in physical form,
does not exist! A plume of smoke! Only a small percentage of the money issued is
actually printed.
Moneys Other Aspects
Money is also a representative of an individuals level of trust in life, belief in
abundance, wealth consciousness and so on. These things will be covered in Part 2 of
this book, the part about the nonphysical. Wealth consciousness is extremely
important in the creation of wealth! Even with the right strategies, you cannot create
wealth consistently if you do not cultivate wealth consciousness!
An I nteresting By- The- Way: How Does The Federal
Reserve Work? Where Do U.S. Dollars Come From?

"The Central Bank is an institution of the most deadly
hostility existing against the principles and form of our
Constitution...if the American people allow private banks
to control the issuance of their currency, first by inflation
and then by deflation, the banks and corporations that
will grow up around them will deprive the people of all
their property until their children will wake up homeless
on the continent their fathers conquered. ... Single acts of
tyranny may be ascribed to the accidental opinion of a
day. But a series of oppressions, begun at a distinguished
period, and pursued unalterably through every change of
ministers [administrations], too plainly proves a
deliberate systematic plan of reducing us to slavery.... I
believe banking institutions are more dangerous to our
liberties than standing armies.... The issuing power
should be taken from the banks and restored to the
people to whom it properly belongs." - Thomas Jefferson

"The bold effort the present bank had made to control the
government, the distress it had wantonly produced...are
but premonitions of the fate that awaits the American
people should they be deluded into a perpetuation of this
institution or the establishment of another like it." -
President Andrew Jackson when he abolished the private
Bank of the United States (the Fed-like bank from 1816-
36)

"These are the rules of big business...Get a monopoly; let
society work for you; and remember that the best of all
business is politics..." - Frederick C. Howe, 1906

Most people assume that the systems they live in have
been set up purely for their best interests, by people who
are saintly in their motives. While this is true in some
cases, it is not always true. In fact, in many cases, it can
be the complete opposite. If you live by default, doing
what the masses do because it is the 'done thing', you
will get the default results of the system, the results
everyone else gets. But if you make a few small changes,
you can live as you wish. Let us therefore look at the
money system closer to see exactly what kind of a
system it is and how you fit in.
We will be focusing on the Federal Reserve Bank and the
U.S. money system, because the Fed directly or indirectly
drives most of the world.
The Constitution of the United States clearly states that
only Congress shall have the power to create money and
regulate the value thereof. Today, however, the money is
actually created and regulated by a privately owned
company that controls and profits by printing money
through the Treasury, and regulating its value. What is
the private company that prints U.S. dollars? It is the
Federal Reserve Bank (the Fed). Most people think the
Fed is a government arm. Its name is misleading. It says
'Federal' yet it is not federal at all. It is a fully private
corporation. It also says 'Reserve', yet it has no reserves.
As you will see, the money is printed literally and
completely out of thin air, not backed by any value or
gold (that ended decades ago when they abandoned the
gold standard). It is one of the most secretive and
controversial institutions today, the truth behind it
becoming only recently clear to an increasing number of
people.
The Fed began when, in 1914 and after trying to do so
unsuccessfully several times before due to opposition,
about 300 people and banks put together just $100 each
and formed the Federal Reserve Banking System. These
people and bankers formed and still form part of the top
2% of the world's wealthiest and powerful people. The
Fed is one of the most profitable companies in the world.
It also collects billions of dollars in interest annually,
interest charged to the U.S. government (which the tax-
payers pay). The history of its formation is filled with
controversy, with many experts having the opinion that
Congress illegally gave the Fed the right to print money in
ways contrary to the Constitution. This is how, in a
nutshell, the Fed works: The Fed creates money from
nothing, and loans it back to the U.S. and other
governments, and charges interest on the currency (you
will soon see more details on how this is done). It buys
government debt with money it simply creates out of
nothing, and charges interest to U.S. taxpayers.
The ownership of the Fed has always been kept a closely
guarded secret. In fact, even their books and detailed
accounts are kept secret (it has never been audited).
However, over time much has come to the open. On
some of the last times the ownership of the Fed was
investigated (because the Fed doesn't publish a
sufficiently detailed list of its owners), the following
emerged as the main direct or indirect (through cross
holdings etc) owners of the Federal Reserve Bank:
Rothschild Bank of London
Warburg Bank of Hamburg
Rothschild Bank of Berlin
Lehman Brothers of New York
Lazard Brothers of Paris
Kuhn Loeb Bank of New York
Israel Moses Seif Banks of Italy
Goldman, Sachs of New York
Warburg Bank of Amsterdam
Chase Manhattan Bank of New York
Citibank
Morgan Guaranty Trust
Chemical Bank
Manufacturers Hanover Trust
Bankers Trust Company
National Bank of North America
Bank of New York
What is interesting is that these big banks work together
in various aspects and they are connected to the old and
established London Banking Houses ever since the
beginning. There is only a small but powerful group of
individuals who own significant shares in these banks.
This gives them ownership of the Fed through their
ownership of the banks that have shares in the Fed (the
Fed's shares are not publicly traded but are sold only to
member banks).
Anyway, the Fed system was set up in 1914 after several
failed attempts. The bankers in favor of this system had
always been opposed by the people and their leaders
throughout the years, by presidents and congressional
representatives alike. But in 1913, Senator Nelson
Aldrich, the maternal grandfather to the Rockefellers,
pushed the Federal Reserve Act through Congress just
before Christmas during which time much of Congress
was on vacation. According to some historians, the
bankers also funded Woodrow Wilson's campaign and
when he became president, he passed the Federal
Reserve Act in 1914, an act he is later on record as
having regretted its passing.
In the past, money was backed by something of value
such as gold. All paper money could be exchanged into a
certain amount of gold upon its return to the bank.
However, between 1931 and 1934, virtually all major
countries abandoned the gold standard. The power of
gold as the standard for the international monetary
system was further diminished in 1975 when the U.S.
began selling some of its reserves on the world market,
turning gold into a commodity. By 1975, the gold
standard was virtually non-existent. Today, virtually no
money is backed by anything real; it is simply printed out
of thin air (actually most of it is simply created as a new
record on a computer, remaining in thin air).
The U.S. budget is almost always in deficit. Almost every
year, the budget has more expenses than income. No
individual would ever run their life that way perpetually,
no corporation could possibly ever run that way
perpetually, yet the government does this almost every
single year. It seems to be able to perpetuate the
impossible - forever in debt yet still strong. Do you know
how this debt is financed? When the government runs a
deficit, the Federal Reserve Bank - a private company -
prints dollars (actually just makes up computer money
and 'wires' it to the appropriate banks), "buys" the debt,
and the dollars are circulated into the economy and the
government then pays the Fed interest on that money.
For example, in 1992, taxpayers paid the Fed $286 billion
in interest payments alone! That would be all right except
for the fact that this debt was "purchased" by printing
money cost-free and out of thin air. This debt is passed
on to the taxpayers to pay through real work and sweat.
40% of personal federal income taxes are spent on
paying this debt and interest, making the people partly
enslaved to the Fed. What is even more interesting, other
than the fact that the Fed is a private company that
makes profit out printing, from nothing, the world's
money, is that the Fed's books are closed to the public
and are not audited by Congress.
Once the Federal Reserve Act was passed, the owners of
the Fed moved quickly to purchase controlling interests in
the media and financed a great proportion of the senators
elected after that. A few presidents, such as Lincoln,
Jackson, and Kennedy, have tried to change this system
but encountered too much opposition from other
politicians, banks and corporations. By simply giving the
task of printing U.S. dollars to the government itself, the
money can be issued without anyone charging 'interest'
for it, since it would be the government (the people) itself
printing the money.
The Fed's relationship with the government is very loose.
As a private company, it is not required to disclose much
to the public. It is run by a powerful group of people who
are free from the usual restrictions of governmental
checks and balances. Its Board of Governors is
independent of the government and its governors hold
office for far longer than any U.S. president does. It is
also self-financing (actually it is one of the most profitable
corporations in the world) and so does not rely on the
national budget (the primary tool of control that Congress
uses to influence agencies and other bodies). It operates
outside of the national budget (in fact finances it) and so
has monetary autonomy as well. In its task of regulating
the money supply, it is completely independent of the
government and is only 'required' to make decisions that
will be in line with the nation's economic policy.
The Federal Reserve Act was drafted in the Jekyll Island
Conference, which was arranged for by powerful banking
families, individuals and their corporations (such as J. P.
Morgan Co., the Rothschilds, the Rockefellers, and Kuhn,
Loeb & Co). The ownership of the Federal Reserve at the
top level has not changed much in the years with
successive generations within the controlling families
simply inheriting that ownership or extending it under a
different company name.
The Federal Reserve System is actually 'split' up into
several components. There are 12 regional Federal
Reserve banks, the most powerful one by far being the
New York Federal Reserve Bank. Each of these 12 Feds is
organized as a private corporation, just like any other
private corporation. The Federal Reserve System is
controlled by the Board of Governors (the Board) and the
Federal Open Market Committee (FOMC). The Board has
seven members who are appointed by the president of
the United States and approved by the senate. The Board
determines the interest rate for loans, sets the deposits
reserve ratio which significantly affects a bank's ability
create new credit, and decides how much new currency
Federal Reserve Banks will issue annually. The FOMC is
made up of members of the Board, the president of the
New York Federal Reserve Bank, and four presidents from
other regional Federal Reserve Banks. The FOMC sets the
open market policy which determines how much in
government bonds the 12 Federal Reserve Banks (all
private for-profit institutions) may buy or sell (this is the
major tool of monetary policy). There is also a Federal
Advisory Council that is comprised of 12 representatives,
one from each of the 12 Federal Reserve Banks. This
council meets at least 4 times a year with the Board to
advise it and discuss general economic issues. To
summarize, every single part of the Fed is private - they
are all private for-profit corporations (the Fed is one of
the most profitable corporation in the world). The only
part of this system that is in any way 'public' is the Board,
which comprises 7 people appointed by the U.S. president
(and often, the president himself gets elected owing to
the campaign contributions of the various private Feds
owns, so this is not an exactly impartial system). The
Federal Advisory Council that advises the Board in at least
4 meetings a year, despite the use of the word 'Federal'
in the name, is comprised of 12 bankers representing
each of their private Federal Reserve banks. The Federal
Reserve Banks themselves despite the use of the word
'Federal' in their name are not federal at all in any sense.
And they no longer keep any reserves (the gold reserves
we abandoned long ago and cash reserves don't mean
anything because cash is just printed out of thin air and
can be printed anytime anyway).
Most people think the Federal Reserve is an agency of the
government. No such agency relationship exists. The Fed
is a fully private, self-financing and directing corporation.
The Board (of which Alan Greenspan is the current chair
of) has the following main functions:
Set open market policies (responsible for interest
rate and money supply movements)
Set the required cash deposits reserve ratio
Set the interest rate (called the discount rate)
Set how much new currency to print (or make up
on the computer as most of it is done actually)
Monitor the economy and also report periodically to
congress on the U.S. economy

The 12 regional Feds each have the following functions:
Buy and sell government bonds in secondary
markets (open market operations that are responsible for
interest rate and money supply movements)
Lend to member banks
Give check-clearing services
Enforce money deposit reserve requirements and
other regulations of the member banks
Monitor banking and economic activity in the region
that they cover
Issue Federal Reserve notes (money) and collect
worn-out ones for destruction
Can you now see that the interest rate, money supply,
inflation, and all these other factors are very much
controllable by a very small group of people? Of course
they are! That is why Alan Greenspan does his job. His
job is to keep the economy going in a certain direction,
and he manages that consistently for many years and
that is why people find him so smart and powerful. The
point is, he can and does shape the economy. That is his
job. Now, in the minds of most people, the economy is
some wild horse and Alan Greenspan is a heroic cowboy
who somehow, somehow, smartly manages to tame the
horse and direct it. But what if the horse wasn't wild at
all? What if it was very tame and always listened to the
cowboy, but the cowboy tells everyone that the horse is
actually wild (even though it is completely under his
control). The point here is this: (1) the Board has proven
itself able to direct the economy with a fairly high degree
of accuracy and (2) this proves the economy is under the
direction of the Board (otherwise the Board would be
powerless and we wouldn't even have it).
Now, and this is very important, the economy only looks
to be out of control to those who are finding themselves
in it but hurting. Did you get that? If you are jobless, you
will think the economy is bad and out of control, because
that is your personal experience. But that is looking at it
from the bottom end. If you look at it from the top end,
there is hardly any 'out of control' going on. And this is
why: At the top, at the level where these bankers see
things, they control exactly how much money is in the
system (they make up and print the money at whatever
level they deem fit - government has nothing to do with it
since the 1914 law), they control the interest rates, they
regulate cash deposit reserves (which determine how
much credit/debt you are 'allowed' to have), and so on.
So what part of the economy is a mystery to them? To
you, the interest rate is a mystery and can move either
way to end up hurting or helping you. But to them they
can predict it better than you can predict the weather -
because it is they that set up the rate. To you, you don't
even know what the money supply situation is or will be -
but they do because they print the money. To you, you
pay taxes, 40% of which go towards paying the
government's debt to the Fed - but they simply make up
money from thin air and 'loan' it to the government
(much of the national debt is money 'owed' to the private
Fed). People think that Alan Greenspan is tackling some
unknown monster and winning most of the time for the
public. However there isn't much in the economic
equation that is unknown to him simply because he sets it
all up and has all the tools necessary to make sure the
plan works almost as planned (the tools in this case being
the Fed system, banks, money press, monetary controls,
etc). So just because the economy may look out of
control for you, personally, or even for a few million
people in hard labor, does not mean that, at the top level,
it is out of control at all. It is very deliberately set - that is
the point of the Board, to control the economy. The
perspective is very important. The truth can look very
different indeed depending on what perspective you use
to observe it.
A considerable amount of effort is made to conceal the
power and composition of the Fed. Naturally, considering
that the owners of the Fed are private individuals
(through banks they own) and also have huge stakes in
corporations in all sectors of the economy especially in
the media, pharmaceutical, food and defense industries,
and considering that great profits can and are made by
those who know what will be in the papers months in
advance, secrecy is an asset. Even internationally, the
Fed has an amazing amount of power. Consider, for
example, the case of loans made to foreign governments.
For example, let us see what happens when Indonesia
runs to the Fed and asks for a $10 billion loan. The Fed
will listen to the request. They will then directly and
indirectly, through its influence on organizations such as
the IMF, World Bank and U.S. government, set conditions
and guarantees for the loan that Indonesia has to meet.
They dictate how Indonesia has to run its economy,
imports, currency exchange, and so on. They then give
them the loan. Or more accurately, they log into their
computer terminals, create $10 billion out of thin air, and
'wire' it to Indonesia's bankers. That $10 billion is added
to the U.S. expenditure and if, as it usually is, it is out of
budget, it becomes a debt that the U.S. government owes
the Fed and which the Fed collects interest on. Indonesia
now owes the U.S. government, which in turn owes the
Fed. But the money itself was made out of nothing. Now
let us see how it is repaid back. The repayments are done
by people of a completely different perspective. Many of
them believe that money is real and actually equate
money with work on a 1=1 basis. They believe, for
example, that if $1 buys one banana, they must make 1
million bananas to make $1 million dollars, and that this
is the only way. Indonesia will have to follow all the
conditions set for it, open up its markets as per the
wishes of the few powerful people who set them for their
industrial reasons, and Indonesias people will work and
toil under the assault of international forces that wreck
their traditional stability until they pay that debt and its
increasing and huge interest. It is such an impossible
debt to pay, almost, that debt of this kind is the single
biggest consumer of a nation's GDP for most developing
countries. Most developing countries in all corners of the
world have money-based problems that are increasing
and independence diminishing despite the promises of
globalization and democracy. What most people dont
realize is that the Fed is the only entity in the world that
can make dollars (the global currency) out of thin air; the
rest of the world has to exchange something real like oil,
food or labor to get dollars. This is the true power of the
Fed. Now back in the U.S., the debt is held by the
government and owed to the Fed. So the U.S.
government collects directly from Indonesia over time.
Meanwhile, it has to pay back the Fed using taxpayer's
money. This doesn't make sense because the Fed made
up that money out of nothing and they didn't get gold for
it or anything like they used to - but that is the way the
system is set up currently. So in effect, the Fed makes
free money at their discretion, holds none of the risk,
does none of the work (the people of Indonesia and
America work and pay the interest and give up their
power), and is in truth one of the most profitable
corporations worldwide. After all, it is the corporation with
the monopoly of making and regulating U.S. dollars!
But the Fed knows two things that you or the Indonesian
common person doesn't. One is that money is not real.
What they are interested in is power and influence,
wealth and control over what is in fact real (land, oil,
labour, materials, waterways, etc). So they use the
unreal to gain access and ownership of the real. The
second, and most humorous, is that $1 is not equal to 1
banana or 1-hour work or whatever. You may equate
your time with money, and the local farmer in Indonesia
may equate 1 banana with $1. if that is the case, you
would think, "If I work hard, I will multiply my money"
and you may never stop to consider that billions of people
work like donkeys all day lifting bricks and getting
nowhere in terms of wealth. Money is not a time/effort
related thing unless you say it is. The result of time is
time; the result of effort is effort. Wealth consciousness
on the other hand is directly tied to your wealth. The
Indonesian common farmer will think, "Oh, if I grow 1
banana I get $1, so to get a million dollars I must work
hard and grow 1 million bananas." Do you know how
frustrating that game plan can be if one does not
genuinely enjoy growing bananas? And if the weather
goes bad or whatever, the plan goes off. The Fed on the
other hand does not do things this way; it doesn't
produce money based on some real output it has. The Fed
just looks around, sees what they deem is 'best'
(remember also that they are private and for-profit,
representing for-profit banks and corporations) and
makes it happen almost exactly as planned with relatively
little cost or work. They just create dollars out of thin air.
It also helps that they are a monopoly, with sole
discretion on these matters.
Interestingly, several senators, presidents, and even local
state representatives and citizen groups have in the past
tried to get the Fed system changed. Most have tried to
get the Fed act repealed and the government given back
its constitutional power to print money. This would
completely eliminate the 'debt and interest' that it ends
up 'owing' the Fed for new money, take away most of the
national debt, and cut taxes not by a few points but by
many multiples. However, these attempts are always
small and separated, defeated, and the media never
covers them. It takes only 5% ownership in a major
media corporation to have control (and you will be
surprised to know how much media content is dictated
rather than free press. America's news coverage is very
different from the type of coverage the rest of the world
gets, and this is common knowledge especially to those
who have traveled around significantly to see for
themselves). The Fed has about 300 wealthy and
powerful owners (not teachers, not doctors, not artists -
just exclusively businesspeople). Just one of these 300,
Chase Manhattan Bank, owned about 14% of CBS
according to a 1974 congressional report (it actually had
stakes in 28 broadcasting corporations). The remaining
banks, through cross holdings and directorships, control
just about all of the main media in the U.S. The banks
themselves are controlled by this small group of about
300 people of which just a few families have the majority
power. Do you know something else about the Fed?
Unlike any other part of society responsible for the
common good of the people (such as the government),
you as a citizen cannot vote them out if they are not
doing their job properly. You cannot even audit their
books and work. You pretty much just have to do as they
say. They are almost completely independent and
immune - because the system you have accepted is set
up that way. And without the Fed, the IRS wouldnt have
existed (at least not in its present form), but that is
another story all together.

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Know How And Where
Your Money Is Going
And Coming From
If you have worked in any business (been
employed) or have owned a business, then
you will appreciate the value of knowing
where your money is coming from and
going, of budgeting, tracking, and
managing cash flow. Businesses that dont
budget and manage cash flow almost
always fail. Money is like the blood of a
business. It flows in and out, and if it runs
out the business dies. Its that simple. And
you can appreciate that when it comes to a
business, isnt it? That is the nature of
money: it flows in and out, and when it runs
out the business is dead. So, ask yourself,
will money change its nature and act unlike
itself just because it is now dealing with a
person, an individual, such as you?
Shouldnt you also know what a business
should know if you wish to grow wealth?
Whether you are a company like Microsoft Corporation or you are a person called
John Doe, money is money. It will flow in, flow out, and when it runs out, you have a
situation. So, money will not change its nature just because it is dealing with a
person. Which brings us to the point of all this: Think of your finances as if you were
a one-person corporation, and then ask yourself, How can this corporation succeed
at making and growing money?
And when you consider what all good corporations do, you will realize that they all:
1. Make budgets so that they can ensure that their expenses in the coming
months are well covered by their income, leaving enough for savings and
investment (growth). If they dont budget, they end up operating blindly and
get into all sorts of trouble like having more expenses than income. Budgets
are there to help them prepare for the future successfully because if they
dont budget they are bound to spend more than they earn, and they are thus
bound to get into bad debt and have nothing left to invest for growth. To
begin with, right now, today or tomorrow, get a copy of Microsoft Money or
Quicken (see below) and put in your last two or three months bank
statements, and all your bills for those months. This will enable this software
package to create a budget for you based on your expanses and income,
automatically with just a little help from you. It is all very easy. If you ever
find yourself running out of money it is because you dont know what your
expenses are and how they relate to your income. If you did, you could easily
manage them. But you have to record them to know them.
2. Prepare monthly income and expense statements so that they can see how
they have been spending their money in the past. These statements are for
analyzing past performance. You cannot fix and optimize what you havent
bothered to track and record. They use these statements to help them
improve their habits and operations, to get better. Most people, on the other
hand, have no clue where their money goes! It is time you started knowing.
3. Have cash flow statements to monitor the blood flow of their business. A
cash flow statement allows you to analyze how the money is actually moving
on a day-by-day basis or whatever. The budget and income/expense
statement are end of period snapshots and dont show movement. You can,
for example, have more income than expenses in a given month, yet the
income comes later after the expense and so you actually run out of cash
even though you have the income. The cash flow statement helps you foresee
such events so that you can plan for them; it lets you see the actual
movement of cash in and out, and when, so that you always have cash when
needed.
These are the three simple tools for successful personal (and business) financial
management. And dont worry; you dont have to suddenly become an accountant.
You can get software to do all this for you.
The above habits, by the way, are common to almost all successful and wealthy
individuals. You ask any wealthy person you know and chances are they will tell you
that they do these things. And you ask any person you know who is not financially
independent and chances are they will tell you they dont do these things.
For about $60, you can purchase Microsoft Money or Quicken to help you keep track
of your finances painlessly and easily. These two products are created to enable
practically anybody to gain control of their finances. They will make it very easy for
you to see where your money is going, budget, forecast, and much more.
In summary, what these products do is to have you is simply enter your income and
expenses (manually or automatically through Internet banking), and from that they
give you a range of reports and tools to help you track and understand your money.
Have a look below at some of the screenshots from these products. As you will
notice, the screens are very intuitive and friendly and the features you get are very
empowering:


Have a look at these packages yourself:
Microsoft Money

Quicken

Now, to make things even easier, you can bank with a bank that offers good online
banking facilities that allow you to export your banking statement to Quicken or
Microsoft Money. What you then do is make sure that all (or as many as possible) of
your purchases are done using your banking card (ATM or VISA Debit card or
whatever). But do make sure that your bank doesnt charge you for such use some
banks dont while others charge incredible fees when you use your card more than
just a few times. Anyway, if you make most of your purchases, even the small ones,
using your bank card (remember, make sure there are no fees for this) and then
export your statements from your bank directly into Money or Quicken, you wont
have to manually enter this data and you will have managed to practically systemize
and automate your personal finance management.
What if you are on the road much of the time, away from your computer? How would
you keep your Microsoft Money or Quicken records up to date? Well, you would have
several options. One is simply keep all your receipts and enter them manually when
you get back to your computer. Or if you are using a bank card to pay for
everything, it will automatically be entered when you import your bank statements.
Alternatively, although not necessary, you can also use a PocketPC (they cost about
$200 to $500) to keep a record of your expenses while you are away, and then
transfer them to your main computer when you get back to the office or home. Here
is an example of a PocketPC, in case you wish to consider this option:

A Handheld PC
Reducing your expenses so you can have money left over to invest in wealth growth
Now, once you start tracking your expenses, you will get a clear picture of where
they are coming from. You will need to reduce many of them so that you can have
the money to invest and so on. To become an instant expert at reducing your
expenses, go to amazon.com and get a book on saving money on your shopping,
shopping frugally, saving money on your trips, phones, household expenses, and the
like. There are many good books on that; just get one. Meanwhile, here are some
tips you can use:
Stop using credit to buy; it bumps the true cost up greatly because of the
interest payments
While you are getting your finances in order, never pay retail price. You can
always find a sale, coupons, or even negotiate with the sales person and get a
discount.
Buy from auctions, eBay, buying clubs, outlets, classifieds, and so on. The
last place you should shop from is the department store because that is
where the prices are at their highest by far. The department store is the most
expensive place you can shop in. You can go back to it later when you have
things under control, but while you are getting your expenses under control
and your finances in order, avoid it.
Find the lowest cost provider for your monthly recurring expenses such as
telephone, energy, and so on.
If your car and rent payments are using more than 25% of your income,
downgrade them until your get your finances in order. For most people, it is
usually easier to reduce expenses than increase income. So if you are
spending almost a third of your pay on your house and car, this is going to
greatly limit your growth and cause you much stress. Just bite the bullet and
move to a cheaper house or suburb and drive a cheaper car. When you get
things under control and you start getting wealthy, you can get an even
better house and car than you have now.
Keeping track of your money is extremely simple when you use the right tools such
as good software. You dont have to spend much time or be an accountant. Once you
start keeping track, you will discover an amazing degree of clarity, power and
freedom to direct your financial affairs. Much of the financial troubles you had will
become easily solvable. And so will situations that caused you emotional problems
such as money panic. You see, you cannot change or control what you cannot see
and measure. So you first have to start seeing exactly where your money flows so
that you can get the freedom to change and improve!
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Golden Rule: A Part Of
All That You Earn Is
Yours To Keep
Wealth comes from the growth of assets
(cash, stocks, property, or any other asset).
Assets are purchased with income. If you do
not put aside part of your income to acquire
assets, you will find it extremely difficult to
acquire wealth. However, if you do put
aside part of your income to acquire assets,
you will find it very easy to acquire wealth.
It is all very simple.
Just to summarize:
No savings = no investment = no wealth growth
You can't invest what you dont have. So the first step is to, guess what, save some
money! Not once, but consistently and systematically. But look at it like this:
Lets make up a simple example for illustration. Lets say one week is composed of
10 days. And lets say you work for all those 10 days. You earn $100 each day. This
is week 1. By the end of week one, you have earned 10 x $100 = $1,000. Now, if
you spend the entire $1,000 and you have none of it left by week 2 (or even by
week 30 or week 200), your entire efforts for week 1 have evaporated! You have
nothing left to show for your efforts. Nothing! What were you working for? For who?
You gave away all your money. You paid everyone else except yourself! Now, here is
something you should know: No successful corporation or wealthy individual does
that! None! And if you are doing it, then it shouldnt be a surprise that you arent
accumulating wealth. So how should you live if you wish to start accumulating
wealth? Well, let us continue with our example. In week 1, you would keep the
money you earn on day 1 (so you keep 10% of your income), and spend the money
you earn in the remaining 9 days. And you would do the same in week 2, in week 3
and in every week. No matter what, you would keep that contract with yourself, the
contract to pay yourself first. It is honoring you, valuing yourself. It is a testament
that you believe that you have a future worth investing in. it is a testament that you
value your work, your income, what you make for yourself. You dont pay everyone
else and remain with nothing! Why on earth would you do that when it is your
money! You deserve to keep part of it; after all it is you who earned it. So, even in
week 200, you would still have with you the 10% from week 1, week 2, and every
other week. And you wouldnt keep this money so you can spend it on a holiday, car
or something like that (that should come out of your other 9 days). You keep it so
that it can work for you, bear children for you, and make you more of its own. You
worked for it, and now its time to have it work for you. So, you invest it right from
the beginning. So by week 200, you would still have with you the 10% from week 1
plus its children (what it has earned in your investment), week 2 plus its children,
and every other week plus their children. And because you are re-investing your
returns (the children the money bears), your investment will be compounding itself,
so the children themselves will be bearing children of their own, into many
generations. The gains you made in week 1 will be re-invested and they will earn
more money themselves in week 2 and so on, and that money itself will earn more
money in week 3 and so on And this just grows into what you call wealth,
generations upon generations of your money earning for you. And it all starts when
you honor yourself enough to ensure that no matter what happens, you keep at least
10% of what you earn every week! You pay yourself first.
Now, as your investments grow, you are of course entitled to enjoy some of your
money, but you must remember that keeping it invested is what gets it growing. So,
you may choose to spend, say, 30% of your investment gains (your returns) and re-
invest 70%.
Arrange your life so that, no matter what, no matter what, you keep at least 10% of
your income every week. And dont spend and hope some will be left over to save
and invest. Pay yourself first, first, before the bills, the gasoline, the food, the
clothes, the Pay yourself first.
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Income and Wealth: The
Relationship Explained
It is hard to grow wealthy purely on income,
and it is hard to create wealth without
income. Lets understand this relationship.
Income tends to come in relatively slowly for it to accumulate to great amounts
without it being invested. For example, the average income in the richer Western
countries lies somewhere between $30,000 and $50,000 a year. If you were earning
$50,000 year and you wished to be a millionaire, even if you did the impossible and
spent nothing, it would still take you at least 20 years to save 100% of your income
into one million dollars. But of course, you have to spend a big part of that income so
now it would take many, many times longer. So, to expect to get wealthy purely on
income is quite unrealistic. It doesnt matter how good your job is, it is usually
impossible to get wealthy and financially independent purely on income. You simply
must invest.
Let us look at some key properties of income:
Income comes in constantly (weekly, monthly or whatever) and is usually in
the form of cash.
Income grows arithmetically (if you get a raise or improve your business, it is
a relatively small raise in income once in a while). It is simple interest growth,
not compound interest.
Income is money out of thin air. So, if you have no money, and then you get
a job or a business, you create money out of nothing. Where you didnt have
money, it pops up.
Income is tied to physical factors such as the amount of time you work, the
number of products you sell, and so on. So its growth is limited to the rate at
which these other factors grow.
Now, consider wealth. Everybody knows that wealth grows extremely rapidly. Let us
look at some key properties of wealth (investments, assets that grow in value):
Wealth is not usually in the form of cash. It is the appreciation of the value of
assets.
Wealth grows geometrically due to the nature of compound interest.
Wealth is the appreciation in value creating more wealth out of thin air. For
example, one day your property or stocks are worth $1 million and later,
without you doing anything, they are worth $1.5 million.
Wealth is not necessarily tied to physical factors such as the amount of time
you work, the number of products you sell, and so on. You can invest
simultaneously in multiple fronts, use leverage, and grow wealth at rates like
170%, 1,400% or whatever, in a relatively short amount of time, something
that is physically impossible but possible in the world of investments.
So, we summarize it this way:
1. You need a way to make money out of thin air (income).
2. So that you can take this money and convert it into assets that grow
geometrically and create wealth out of thin air.
Apply both income and wealth building in your life; dont ignore any one of them.
Even if you are very asset rich, you still have to pay attention to getting an income
from your assets because you do need cash flow to buy food, live, travel, educate
yourself, contribute to society, and so on. Being income-rich and asset-poor is not
healthy for your financial independence, but so is being asset-rich and income-poor.
We summarize again:
Income: Money from nothing arithmetically
Wealth: Money making money geometrically
We will look at how to create wealth in the next chapter. But first, let us close this
chapter by looking at some key points on income:
Have multiple streams of independent income. Most people only have one stream,
their job. This has three main problems. First, it is not independent of you. When you
stop working, your income stops, so you can't stop. Have you noticed that? Funny,
isnt it. You can't seem to stop. Why set things up that way? You can set them up so
that you can stop and the income still comes in. The other problem with having only
one income stream is that you have no backups, no alternatives. Thirdly, the more
income you have, the more money you have to invest. If you are working in one job
that demands your time, then you find that your freedom of time to create more
income streams is limited. So, the criteria of how you select your income sources
should include, at the top of the list, independence and multitude. Try not to get into
income sources that you cannot delegate, automate or systemize so that you are left
with free time to create more income streams or to simply relax and enjoy.
How do you quickly get multiple streams of independent income? Well, we
will not go into depth in that area in this book because there are plenty of books and
magazines out there that can cover this topic very well. But briefly, the fastest way
most people get into new income streams is by selecting a good network marketing
company (or more than one). Network marketing has had a bad reputation but it has
also created very many financially independent people. Unlike starting a traditional
business, it doesnt require you to put in plenty of time and money up front. You can
start while still at your job. By the way, lately, even some of the more wealthy
people in society and even professionals such as doctors have been seeing the value
in good network marketing companies and joining in. Even Fortune 500 companies
have been getting involved in network marketing. If you still think it is the old,
scam-ridden affair, you are running on some rather outdated information. There are
still scams out there, but there are many large multi-million or multi-billion dollar
network-marketing companies all over the world. Another advantage with network
marketing is that you end up relying on the efforts of many other people in your
down line, and so it becomes, gradually, independent of you and frees you up. You
also rely on the company itself to do most of the work, such as shipping, billing, and
all the other corporate stuff, so that your work only involves letting people know,
basically. A good network marketing company will not even make you carry any
inventory. Also, your income rises faster than with traditional jobs and even that
many start-up businesses. The key is to find a company that fits your lifestyle and
then the business end will be effortless. There is also a great deal of help and
technical/delivery advances available nowadays so that even if you are afraid of
selling, that wont be a major problem to face at all.
We at Images of One have created a package that introduces you to the best,
easiest-to-succeed-in and most progressive network marketing company (in our
opinion). This package also empowers you and gives you all the tools you need to
succeed globally and do so as enjoyably as possible, and eliminate much of the
learning curve so that you can get straight into the success zone if you simply apply
yourself. To have a look at it yourself, click here and see how you too can begin to
quickly and easily create multiple streams of independent, growing income.
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

How To Explosively
Multiply Your Money
Geometrically In Leaps
And Bounds
Cultural Myth #1: High returns are rare
and hard to come by. Truth: High returns
are available to everyone, all the time. You
dont have to settle for an 8% return
commonly offered to the masses. You can
get a 20%, 200% or even 2000% return on
your money. Cultural Myth #2: High
returns are always accompanied by high
risks. Truth: Money management practices
and systemized, organized investing makes
high-return investing a low-risk venture, as
you will see below. Cultural Myth #3:
Investing is risky. Truth: Gambling and
speculation is risky. But investing is less
risky than, for example, buying a car
(where you are guaranteed to lose value
over time), and it is certainly safer than not
investing at all (where you are guaranteed
not to grow wealth). Investing is a relatively
safe affair, and it is the only way available
for most people to become wealthy. It offers
a safe and powerful chance to create and
increase your wealth. How good is that?
See how one trader has averaged a return
of 60%+ annually for three decades, or
how another has turned $400 into $200
million in 18 years. These things are
possible for you today. Cultural Myth #4:
Investing is hard. Truth: Investing is easier
to learn than much of the stuff you learnt in
high school or college. It looks hard
because anything new and un-understood
always looks hard. Once you start to learn
it, you will see that it is far simpler than you
ever imagined. The difficulty only exists in
your imagination. Trust me on this. Prove it
to yourself instead of relying on hearsay
and assumptions.
If we all worked on the assumption that what is accepted
as true is really true, there would be little hope of
advancement. Orville Wright, co-inventor of the
airplane

Man's mind, states John Galt, the protagonist of Atlas
Shrugged, is his basic tool of survival. Life is given to
him, survival is not. His body is given to him, its
sustenance is not. His mind is given to him, its content is
not. To remain alive, he must act, and before he can act
he must know the nature and purpose of his action. He
cannot obtain his food without a knowledge of food and of
the way to obtain it. He cannot dig a ditch or build a
cyclotron without a knowledge of his aim and of the
means to achieve it. To remain alive, he must think.
Thinking is not an automatic process. A man can choose
to think or to let his mind stagnate, or he can choose
actively to turn against his intelligence, to evade his
knowledge, to subvert his reason. If he refuses to think,
he courts disaster: he cannot with impunity reject his
means of perceiving reality. Ayn Rand
We will be looking at several new concepts here. In truth, they are not new, but for
the masses they are new. Many of the things you will see in this chapter have been
around for very many decades, some for at least a century, but they have been the
exclusive tools and knowledge of the few, the few that get to be very wealthy. The
general public is not informed about these things. There is no agenda in the
education system, media or financial circles for that. In other words, unless you
make the effort yourself to go find out about these things, the government,
education system or big business doesnt have the motive to come out and tell you
about them. It is not a conspiracy to hide these things from you, really, at least not
an organized one; it is just that there is no agenda or motive to tell you about them.
So, you might say, How come I havent heard about these things before. There
must be something wrong with these things. There is nothing wrong with them, or
even difficult. There are very, very many things in this world that we each havent
heard about. All sorts of things in all sorts of topics. This may be just one of them.
Let us begin
You are about to see how you can begin to invest and create wealth. We will
concentrate on three approaches (out of the very many available). The first approach
is for those who wish to make things as easy as possible. if you would simply like to
cut a weekly check and give it to a mutual fund to invest for you, and that is all, then
this is the approach to take. However, the returns are not usually as high with this
approach. The next approach is the traditional buy-and-hold strategy whereby you
research and buy into good companies and hold them long-term for capital
appreciation. This strategy has worked well for many people, including Warren Buffet
(who is one of the worlds top 5 wealthiest people, having made his fortune almost
entirely using this strategy), but it isnt a great strategy for cash flow and it depends
on you picking a stock well and making money only if the market goes up. It isnt
that difficult, but it isnt the best approach. The final approach is the one we will
really focus on, trend following and system trading. This has many advantages that
we will be looking at, you can make money whichever way the market goes, and it is
usually the least risky. However, it does involve a lot more study and process before
you get going.
Before we start, let us cover one golden rule
The Golden Rule: Start Where You Are, Wherever That Is
Do what you can, with what you have, where you are.
Theodore Roosevelt
The favorite excuse given by most people is this: I will invest when I have enough
money, or time, or Start now! Start where you are with what you have. This is the
golden rule. If you keep waiting you will keep waiting. If you only have $50 saved up
so far to start, thats good enough. Put it in a mutual fund, and start putting money
into that fund every week. Soon, it will be a substantial sum that you can take out
and invest elsewhere. There are many mutual funds that will accept a $50 opening
amount and small contributions there after. Money is not an excuse. Neither is time;
make time. Just do it. Start where you are with what you have, and you will see that
things get added unto you. If you dont start, you wont get anywhere. You just have
to start. Now, with what you have. It is enough to start with.
The Super-Easy Mutual Fund Way
Before we start, let us get clear on what a mutual fund is. A mutual fund is run by a
financial institution like an investment house or a bank. Lets say a bank runs it. The
bank pools together the money contributions of individual investors like you and
invests that pool of money in stocks, futures, currencies, and other financial
instruments. It then divides out the returns and distributes them to the individual
investors. So, if you join a mutual fund, you give them money. They pool your
money with all the other members money. They invest this pool in various ways.
You then get your appropriate share of all the gains and losses made by the fund.
If you wish to keep things simple, this is as simple as it can get. All you have to do
is:
1. Spend 30 minutes to an hour selecting a mutual fund of your choice, free, on
the Internet, at places like Yahoo! Finance or Microsoft Investor. You dont
need to know anything to do this. They give you free mutual fund screeners
and all you have to do is use the menus to find your fund. Call them and open
an account with them (some require large opening deposits, some require
zero).
2. Every week, send 10% of your paycheck to the mutual fund. You can even
set it up with your bank so that this money is taken out of your account
automatically, so you really dont have to do anything.
3. Sit back as your money grows. If you need to draw out any money from the
fund, simply take it out.
Thats it! How easy was that. What excuse can you possibly come up with for not
doing something so simple?
Now, lets first look at the advantages and disadvantages of this method, and then
we can look at it in more detail.
Advantages:
Its, well, easy.
You can start right now, in the next 1 hour.
You dont need much money at all to start.
Disadvantages:
Usually, you will only make money when the market goes up. Markets go up
and down, so that is like making money on half of the natural cycles of
money.
You have to buy-and-hold, wait, so that your holding goes up in value.
It relies on the assumption that the markets will move rationally up and
down. However, every now and then, markets move in dramatic, large,
unforeseen ways (just like the weather does) up or down, and this strategy is
not designed to take advantage of such dramatic shifts and can be hurt by
them.
You dont have the chance to make truly high returns on your money (like
80%, 100%, 200% or more).
Now, let us look at some funds. Go to Yahoo! Finance and go to their mutual funds
section. Then, click on the Top Performers link to see a list of the top performing
funds. Here is what I got when I did this:
From Yahoo! Finance:

Top Performers - 1 Year
Fund
Name
Symbol Return
ProFunds
Ultra
Energy
Inv
ENPIX 66.51%
ProFunds
Ultra
Wireless
Inv
WCPIX 65.23%
ProFunds
Ultra
Energy
Svc
ENPSX 64.94%
ProFunds
Ultra
Wireless
Svc
WCPSX 63.46%
U.S.
Global
Investors
Eastern
Europe
EUROX 54.12%
State
Street
Research
Global
Res S
SGLSX 54.11%
State
Street
Research
Global
Res A
SSGRX 53.66%
State
Street
Research
Global
Res R
SSGEX 53.30%
State
Street
SSGPX 52.66%
Research
Global
Res B1
State
Street
Research
Global
Res B
SSBGX 52.64%

Top Performers - 5 Year
Fund
Name
Symbol Ann. Ret.
ING Russia
A
LETRX 45.24%
Third
Millennium
Russia
TMRFX 34.12%
State Street
Research
Global Res
S
SGLSX 31.59%
CGM
Focus
CGMFX 31.57%
Bruce N/A 31.24%
State Street
Research
Global Res
A
SSGRX 31.06%
Bridgeway
Ultra-Small
Company
BRUSX 30.99%
State Street
Research
Global Res
B
SSBGX 30.21%
State Street
Research
Global Res
B1
SSGPX 30.20%
State Street
Research
Global Res
C
SSGDX 30.20%

Now, let us find some funds using Microsofts Investor.com web site. See what I got
(I am including a screenshot of the screener with the criteria selected so that you
can see how easily it is done). First, let us look for all funds with the highest return
in the last 3 years, and with a minimum initial investment and see what we get:
Microsoft Investor Easy Fund Screener
http://moneycentral.msn.com/investor/finder/mffinder.asp

Easy Fund Screener
Select from the following options:
Fund Family Name
(any)

Investment Focus
(any)

Historical Performance
3 Year High as possible
Morningstar Overall Rating
(any)
Minimum Initial Investment
Near $500

Morningstar Risk
(any)

Load/No-Load
(any)

Show explanations. Show more options.

Find Funds

The results:

Symbol Fund Name
3-year
Annualized
Return
Minimum
I nitial
Purchase
MCEAX
MassMutual
Instl Core
Equity A
55.76 0.00
MCEYX
MassMutual
Instl Core
Equity Y
54.57 0.00
MVEDX
MassMutual
Instl Core
Equity S
54.32 0.00
SGLDX
Scudder Gold
& Precious
Metals AARP
49.19 1,000.00
SGDAX
Scudder Gold
& Precious
Metals A
48.87 1,000.00
SGDBX
Scudder Gold
& Precious
Metals B
47.66 1,000.00
SGDCX
Scudder Gold
& Precious
Metals C
47.60 1,000.00
EKWAX
Evergreen
Precious
Metals A
44.73 1,000.00
SGGDX
First Eagle
Gold A
44.47 1,000.00
TGLDX
Tocqueville
Gold
44.23 1,000.00
EKWBX
Evergreen
Precious
Metals B
43.71 1,000.00
EKWCX
Evergreen
Precious
Metals C
43.69 1,000.00
INIVX
Van Eck Intl
Investors Gold
A
43.53 1,000.00
GOLDX Gabelli Gold 42.77 1,000.00
LETRX ING Russia A 42.62 1,000.00
TMRFX
Third
Millennium
Russia
41.04 1,000.00
OCMGX OCM Gold 39.74 1,000.00
EUEYX
Alpine U.S.
Real Estate
Equity Y
39.59 1,000.00
AUEBX
Alpine U.S.
Real Estate
Equity B
38.37 1,000.00
HFEAX
Henderson
European
Focus A
30.59 500.00
MIDSX Midas 36.54 1,000.00
HFEBX
Henderson
European
Focus B
29.79 500.00
HFECX
Henderson
European
Focus C
29.79 500.00
LEXMX
ING Precious
Metals A
35.35 1,000.00
FGLDX
INVESCO
Gold &
Precious
Metals Inv
34.82 1,000.00

Let us do a similar search using Yahoo! Finance and see what we get. This time, we
will set up the search so that we get results only from funds with a minimum initial
investment of $500 or less (I would like to prove to you that you dont need much
money at all to get into a high-return investment):
Yahoo! Finance Mutual Funds Screener http://screen.yahoo.com/funds.html

Symbol Fund Name
Min
Invest
Annualized
3 Yr
Return(%)
1HFEAX
Henderson
European
$500 29.92
Focus A
PNRZX
Jennison
Natural
Resources Z
$0 29.50
HFEBX
Henderson
European
Focus B
$500 29.11
HFECX
Henderson
European
Focus C
$500 29.11
UMEMX
Excelsior
Emerging
Markets
$500 28.22
QRAYX
Oppenheimer
Real Asset Y
$0 27.11
MXAIX
Fifth Third
Microcap
Value Instl
$100 26.92
IGNAX
Ivy Global
Natural
Resources A
$500 26.07
IRSAX
Ivy Real
Estate
Securities A
$500 26.06
HSSAX
Emerald
Banking &
Finance A
$500 25.48
PHRAX
Phoenix-
Duff&Phelps
Real Estate
Sec A
$500 25.31

Now, let us look at the details of one of the above mutual funds, the top one on our
list. I clicked on the symbol hyperlink and got this:

Henderson European Focus A

Min Initial Investment: $500
Min Initial Investment, IRA: $500
Min Initial Investment, AIP: $500
Min Subsequent Investment: $50
Min Subsequent Investment, IRA: $50
Min Subsequent Investment, AIP: $50

Purchase from any of these brokers:

Accutrade, Bear Stearns, Bear Stearns Load, BrownCo, HARRISdirect, J PMorgan INVEST,
MUTUALS.com Institutional, Pershing, Raymond J ames, Raymond J ames WRAP Eligible

See, you only need $500 to get started, and a minimum subsequent investment of
$50 at a time.
Now, I bet you are asking, How risky are these things anyway? Have you heard of
Morningstar? If not, look them up on the web. They have been around for ages, and
they are relied upon to provide risk ratings for various investments and companies
worldwide. You can, in your search criteria, elect to be shown the Morningstar risk
ratings. See:

Symbol Fund Name
Morningstar
Rating
Return
Rating
Risk
Rating
HFEAX
Henderson
European
Focus A
Above
Average
Above
Average
PNRZX
Jennison
Natural
Resources Z
Above
Average
Above
Average
HFEBX
Henderson
European
Focus B
Above
Average
Above
Average
HFECX
Henderson
European
Focus C
Above
Average
Above
Average
UMEMX
Excelsior
Emerging
Markets
High
Above
Average
QRAYX
Oppenheimer
Real Asset Y
Above
Average
Average
MXAIX
Fifth Third
Microcap
Value Instl
Above
Average
Above
Average
IGNAX
Ivy Global
Natural
Resources A
Above
Average
Average
IRSAX
Ivy Real
Estate
Securities A
Average
Below
Average
HSSAX
Emerald
Banking &
Finance A
High Low
PHRAX
Phoenix-
Duff&Phelps
Real Estate
Sec A
Above
Average
Average

If you wanted, you could also sort your results by the level of risk, so you get them
arranged from lowest to highest risk, or whatever.
Ok, now, let us look at the details of another fund, just so that you can see that
there are some funds that allow a $0 opening amount, and have no minimum
contribution level:
Jennison Natural Resources Z
Oppenheimer Real Asset Y

Min Initial Investment: $0
Min Initial Investment, IRA: $0
Min Initial Investment, AIP: $0
Min Subsequent Investment: $0
Min Subsequent Investment, IRA: $0
Min Subsequent Investment, AIP: $0

Now, let us lay to rest one popular myth, lay it to rest once and for all. And this myth
is that you need a lot of money to get into the game and get wealthy. First, go back
to the chapter on compound interest. Go to the part where we talk about Jack, our
virtual friend earning only $18,000 a year. See how his wealth would grow if he
invested 10% of his income every month in an investment that returned 20% a year.
Now, look at some of the funds we have seen here (and there are thousands of
mutual funds worldwide, by the way, thousands). Now Jack is a low-income earner.
And even he, simply by mailing in a check every month, can start to accumulate
wealth. He can start today! Just select the fund, send the check, and send a check
every month. And that is all. Jack doesnt need to start a business, get lucky, win
lotto, or whatever. Even someone earning less than Jack can get into the game.
Now, someone earning more than Jack, which is the majority of people in the
Western world, has absolutely no reason not to get in.
Now, that having been said, many professional investors will tell you that mutual
funds are great to invest in if you dont have any other option, but there are better,
more rewarding, less risky, more flexible ways to invest. We will see some of them
soon. First, let us look at the next way to invest.
The Buy-And Hold Way
Warren Buffett, one of the worlds greatest investors, made almost his entire multi-
billion dollar fortune using fundamental analysis of stocks and investing in stocks on
the long-term. He is one of the top five wealthiest people in the world and he got
there from zero using pure long-term investing principles. Those who invested in his
investment holding company also made a lot of money. A $10,000 investment into
Berkshire Hathaway when Warren Buffett took control in 1965 would be worth over
$50 million today.
This is what buy-and-hold involves:
1. Select a good company. You do so by analyzing its fundamentals (sales,
management, market, etc it is called fundamental analysis). Make sure it is
an undervalued company with growth prospects, or perhaps a monopoly that
has growth potential
2. Buy shares in this company.
3. Hold the shares for a long term and they will grow in value.
That is it in a nutshell. Now, let us look at some of the advantages and
disadvantages of this method.
Advantages:
If you select the companies well, you can create great wealth. There are
many, many people who have become multi-millionaires worldwide with this
strategy. Three well-known billionaire examples include Masayoshi Son of
Japan, Prince Alwalid Bin Talaal of Saudi Arabia and of course Warren Buffet
of the USA.
Once you select, you just sit back and watch. It doesnt involve work once
you get going.
Disadvantages:
You will only make money when the market goes up. Markets go up and
down, so that is like making money on half of the natural cycles of money.
You have to buy-and-hold, wait, so that your holding goes up in value. Your
cash is tied up and you dont get any cash flow with this strategy.
It involves a lot of work initially. You literally have to pour through a lot of
financials and reports to make sure you are selecting a good company. Now,
many people sometimes choose to be too lazy to do this, or to learn how to
do this properly, and so they select poorly, making their investing more of a
gamble.
It relies on the assumption that the markets will move rationally up and
down. However, every now and then, markets move in dramatic, large,
unforeseen ways (just like the weather does) up or down, and this strategy is
not designed to take advantage of such dramatic shifts and can be hurt by
them.
On the short-term, you dont have the chance to make truly high returns on
your money (like 50%, 100% or more).
It is hope-am-right based (great deal of attachment to the choice). There are
other strategies that aim to simply follow the market and make money that
way (great deal of detachment in the sense that the investor doesnt care
which way the market goes, for they will still make money).
Now, just real quick, let us define what fundamental analysis is so that you can get
an idea of what it involves. Investopedia.com defines fundamental analysis as:
A method of evaluating securities by attempting to measure the intrinsic value of a
particular stock. Fundamental analysts study everything from the overall economy
and industry conditions, to the financial condition and management of companies. In
other words, using real data to evaluate a stock's value. The method uses revenues,
earnings, future growth, return on equity, profit margins, and other data to
determine a company's underlying value and potential for future growth.
So, with this method, this is the sort of work you should expect to get into. If you
are not ready to do this, then dont get into this method. Dont ever buy-and-hold
based on stock tips you get from the media or friends, or even on most analyst
recommendations.
Now, let us see how this strategy has worked for the many people who bought and
held the following companies in the past. We will look at the annual return from
holding the 30 stocks of Dow as of December 31, 1999:
Company 10 Yr Average Annual Return 5 Yr Average Annual Return
1990-1999 1995-1999
Microsoft 57.9% 72.5%
Home Depot 44.3% 46.9%
Intel 44.2% 59.8%
Citigroup 35.1% 52.6%
Wal-Mart Stores 29.3% 46.4%
General Electric 28.4% 46.1%
Hewlett-Packard 26.7% 36.7%
Honeywell International 23.6% 29.6%
Proctor and Gamble 22.5% 30.8%
Johnson & Johnson 22.3% 29.6%
American Express 21.5% 43.3%
Coca-Cola 21.3% 19.0%
Merck 20.6% 31.2%
United Technologies 20.1% 35.2%
IBM 19.3% 43.7%
Alcoa 18.8% 33.2%
McDonalds 17.6% 23.2%
Exxon Mobil 16.9% 25.3%
SBC Communications 16.0% 22.7%
De Pont De Nemours 15.9% 21.6%
JP Morgan & Co. 15.5% 21.9%
Caterpillar 14.6% 13.7%
Eastman Kodak 14.1% 9.4%
3M 13.3% 16.9%
AT&T 13.2% 20.3%
General Motors 12.8% 21.4%
Walt Disney 12.8% 14.6%
International Paper 9.8% 10.8%
Philip Morris 9.7% 8.4%
Boeing 9.6% 13.5%

If this trading style appears to be what you are after, here are a few books that are
good for it:
One Up On Wall Street

Beating the Street

The Warren Buffet Way

Finally, let us look at the strategies that offer the best wealth-creation opportunities.
The Trend-Following And System Trading Way
You can trade in one of two ways, primarily speaking. You can trade manually
(proprietary trading) or you can trade systematically. To illustrate the difference,
consider a typical family-owned small restaurant and a McDonalds franchise. What is
the difference? The key difference (other than food quality) is that the family-owned
restaurant is run personally by the owners, and it depends on the owners for all
operations, for maintaining standards, for quality control, and so on. The McDonalds
franchise on the other hand runs by a system. The burgers are made according to a
systemized procedure, the order taking is systemized everything is systemized.
You can throw in a 14 year old straight out of high school into a McDonalds, give him
or her the manual (the system), which includes a checklist for everything, and they
will easily keep the place running. But if you throw this same 14 year old in the
family restaurant and take away the owner, the restaurant is bound to go down. You
dont need experience to work at McDonalds, but you need it to work at the family
restaurant. Why? Because what it takes (the rules, parameters and procedures)
has been transferred into the system at McDonalds, while at the family restaurant it
is still in the owners head so only he knows it fully. In our example, McDonalds
represents a trading system (system trading) while the family-owned restaurant
represents manual/proprietary trading.
A proprietary trader will approach each trade afresh. They will analyze it, get their
bearings, get their gut feeling or whatever it is they like to do, and get in and out of
positions based on decisions they make at on a moment-by-moment basis. On the
other hand, a system trader will first construct a trading system, then let that
system trade for him or her without further interference except for periodic reviews
to make sure things are on track or to make changes if the environment requires it.
Let us look at trading systems now in detail. This allows for tracking, optimization,
detachment (to avoid emotional trading), timesaving, and so on. Some traders will
argue that system trading is not as good as well-formed proprietary trading, while
others will argue that it is the best way to trade. The jury is out there. Use your own
intuition and research to decide how you wish to trade. I personally prefer system
trading based purely on technical analysis to trigger the buy and sell signals. I like it
because, once the system is put together, it will perform just about automatically
(even the analysis is done automatically by the computer). It frees up immense
amounts of time, and allows for detachment and optimization.
Let us first define system trading. Here is a great definition by Investopedia.com:
A trading system is simply a group of specific rules, or parameters, that determine
entry and exit points for a given equity. These points, known as signals, are often
marked on a chart in real time and prompt the immediate execution of a trade.
You see, once the signal to buy or sell is given, the buying or selling is done
immediately. The trader doesnt stop to first do research, get emotional or try to
beat the market or whatever. Emotional based decisions are a primary reason for
trading failures and one of the biggest advantages of system trading is the
elimination of the need to make any decisions once trading starts. In fact, the
system can be set up to execute the sell or buy order automatically even if you are
asleep. Your only task, once the system is set up, is to log in every day and week
and month to see how the performance is going and where you can improve things.
Because your results are tracked, you can look back in hindsight and see where you
may have done better. But you do not interfere with the system by making dozens of
daily changes you should have done that during system building and testing so
that once you start you merely improve once in a while. But when the market
conditions change, you may find that you need a completely different system. The
good thing is that you can have several systems at one time, switching between
them (automatically even) depending on market conditions.
Trend following involves, well, following the trend. As you saw in our stock market
charts in the section about the nature of money, all markets go up and down. They
trend up, and then they trend down, and then up, then down, and soon. System
trading aims at following these trends and making money both up and down the
trend. It does so by using trading systems (rule-based mechanical trading systems).
It is not the same as market timing or trying to predict anything. It is simply looking
to see where the market is going (the trend) and then making money on that.
Now, there is a difference here between system trading and trend following, actually.
With trend following, systems are used. But you can also use systems to trade using
methods other than trend following. But dont worry about that distinction for now. It
will become clearer as you get more involved with these concepts.
Let us now see what is involved in following the trend. First, you find the trend.
Then, you do the natural thing; you follow the trend instead of fighting it. It involves
going only where the price is heading, regardless of fundamental analysis, news
reports, technical indicators or anything else. This is the world of the pure trend
follower. Now, there are other traders who use systems and trends to trade, but not
purely based on where the price is going. For example, when you use an option
straddle, which you will see later, you make money regardless of which way the price
moves, as long as it moves either up or down. In such a case, you dont care about
finding the trend first. Or, you can use other strategies to make money in a flat
market where there is no trend. So there are many, many variations. Things will get
clearer as we move on.
System trading is a highly mathematical affair (dont worry, there is software there
to handle the math for you). The markets are cyclic, which means they are
inherently based on mathematics. So is money. System trading uses math to get in
and out of a trade, to manage money, to limit risks, and so on. That is why it is
called a system. The entire process is systemized. Before you even begin trading,
you have calculated everything, from what price point to get in and out of a trade,
what signals to follow, where to place your stop-losses, what percentage of your
investment money to commit to each trade, and so on. You decide all these before
you even take out your money and invest. So once you start investing, you are
simply following your system. On the other hand, traditional investors (non-system)
dont have these things decided before they start investing. They pretty much look at
the market everyday and decide on an individual, daily basis, what to do. The
system aims to make everything as mathematical and scientific as possible and
eliminate trading by emotion, ego, hope, and so on. The best trading systems are
self-perpetuating. They are mathematically designed to stay in the game, to
preserve capital, to cut losses and keep profits, and so on.
It sounds like a lot of work. And it is, initially, when you are learning about it and
designing your system. But once you get going, it only takes about an hour a day,
and just about six trades per market per year, for you to make a lot of money.
Perhaps a great way to get familiar with system trading is to hear the first hand
accounts of system traders. See the following books by Jack Schwager: Market
Wizards and New Market Wizards.
The Market Wizards by Jack Schwager

The New Market Wizards by Jack Schwager

Now let us look at some of the returns possible with trend following and system
trading. Look at this table from TurtleTrader.com, showing the returns of some
investment firms that use system trading and trend following:

The returns are high, arent they? Much higher than what you saw in the mutual
funds and even with the buy-and-hold trading strategies.
Lets look at some famous investors who use these strategies:
George Soros is a perfect example of how short-term, well informed mathematical
system trading can result in great fortunes. This multi-billionaire made his fortunes
running his famous Quantum hedge fund. He is well known for having made a
$1billion profit in one day in currency trading, almost breaking the Bank of England
in the process.
Or consider Ed Seykota. Futures Magazine says, Mr. Seykota himself has put
together a money management track record with returns of roughly +60% net of
fees over the three-decade span of his trading career. He is well known for turning
turned $5,000 into $15,000,000 over 12 years in one of his trading accounts.
The two founders of the Turtle Trading System, Richard Dennis and Bill Eckhardt,
also proved that system trading could provide greater than average returns. Richard
Dennis is well known for having turned $400 into $200 million in 18 years using
system trading. Bill Eckhardt believes that, Anyone with average intelligence can
learn to trade. This is not rocket science. However, it is much easier to learn what
you should do in trading than to do it. In 1983, Richard Dennis (as reported in the
Wall Street Journal and many other publications) trained a group of thirteen average
people he picked off the street from newspaper ads basically and taught them to
trade using their system (the now famous Turtle Trading System). He was out to
prove that anyone could be taught to trade and win. Over the next four years, these
traders that he trained managed to get annual returns of 80% per annum! By the
way, these traders that he trained included an actor, a security guard, two
professional card players, a low-paid bookkeeper, two traders, a boy fresh out of
school, a financial consultant, a woman who used to be an exchange clerk and a
fantasy game designer.
Now let us look at some of the advantages and disadvantages of this style of
investing:
Advantages:
You make money whichever way the market goes, up, down or sideways.
The returns are extremely high and the risk low if you use sound money-
management techniques.
You have cash flow as well as investment growth.
It is not hope-I-am-right based. It is a detached investment style which
eliminates, as much as possible, the interference from emotional trading, ego,
poor psychology, and so on.
Disadvantages:
It involves a lot of work initially. You have to understand money management
principles, trading psychology and learn how to create your own trading
system. It is actually easy but time intensive initially. Once you learn and
make your system, however, you just need an hour a day or less and that is
all.
Every now and then, markets move in dramatic, large, unforeseen ways (just
like the weather does) up or down, and this strategy is very well designed to
take advantage of such dramatic shifts and can in fact profit greatly in such
conditions.
Before we proceed, let us briefly look at technical analysis. You see, in system
trading, you dont use any fundamental analysis. In fact, you often dont even care
what a company does (that information is quite irrelevant when you are using
system trading). All you care about is the movement of the price. So, you rely on
mathematics to analyze this movement. This analysis is called technical analysis.
Investopedia.com defines technical analysis as:
A method of evaluating securities by analyzing statistics generated by market
activity, past prices, and volume. Technical analysts do not attempt to measure a
security's intrinsic value, instead they look for patterns and indicators on stock charts
that will determine a stocks future performance. the technical analyst's belief that
securities move with very predictable trends and patterns. These trends continue
until something happens to change the trend, and until this change occurs, price
levels are predictable.
Basically, because markets move in cycles of up and down waves, within fairly
defined boundaries, there is inherent mathematical predictability of a certain degree
within markets. All waves, all cycles, are mathematical in nature.
In technical analysis, you use technical indicators. A technical indicator is simply a
mathematical formula that is applied on the price of a stock, future, currency or
whatever you are investing in, and whose results are graphed alongside the price
chart. There are dozens upon dozens of technical indicators that you can use. Each
indicator has its own use and you can combine several to achieve your goals. You
will soon see how that is done.
We will proceed by first looking at a few indicators and how they are used, just to
give you a quick introduction into the world of indicators. We will then look at how to
build a trading system using indicators. Again, this book aims only at introducing you
to these concepts. You can get more details from the recommended books.
Moving Averages & Crossovers
A moving average is an indicator that shows the average of a security's price over a
period of time. When two or more moving averages are used, they form a moving
average crossover indicator. To understand it, let us first remind ourselves (or learn)
what a moving average is. Everybody knows that an average is. For example, the
average of five numbers is attained by adding those five numbers up and dividing by
5 like this:
Number 5 Number Average
3.20
5.32
6.45
5.56
4.92 5.09

Now, lets see what a moving average is. Take the same chart and add a day
column so it now looks like this:
Day Number 5 Number Average
1 3.20
2 5.32
3 6.45
4 5.56
5 4.92 5.09
6
7
8
9
10
11
12
13
14

Now, we start moving the average. As each new day gets a new number, we add it
and calculate the average of the latest 5 days (the yellow boxes show the numbers
being used to calculate the average):
1 3.20
2 5.32
3 6.45
4 5.56
5 4.92 5.09
6 2.10 4.87
7
8
9
10
11
12
13
14

Next day:
1 3.20
2 5.32
3 6.45
4 5.56
5 4.92 5.09
6 2.10 4.87
7 1.23 4.05
8
9
10
11
12
13
14

Now, plotting all of them down we get this:
1 3.20
2 5.32
3 6.45
4 5.56
5 4.92 5.09
6 2.10 4.87
7 1.23 4.05
8 0.98 2.96
9 2.30 2.31
10 3.60 2.04
11 4.21 2.46
12 5.60 3.34
13 9.80 5.10
14 6.50 5.94

The 5 number average above is what we would call a 5-day moving average. If you
plot these on a graph, you would get a chart like this:
0.00
2.00
4.00
6.00
8.00
10.00
12.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Number 5 Number Average (Moving Average)

Now, using actual stock prices, we will plot two moving averages on a price chart.
We will do that using the free charting tools available on Yahoo! Finance. Yes, free.
Just go there now and try it yourself. You can do it yourself in less than two minutes.
You simply select the company you wish to chart, select chart, then select to have
your moving averages plotted in. You dont have to calculate anything yourself.
Anyway, here is a chart I did in a couple of minutes just by simple clicking (the tools
available to investors now are amazingly powerful and simple to use, even the free
ones):

It shows a 5-day moving average (MA) in red, a 20-day MA in green, and the prices
used to calculate those MAs (prices are the blue bars they are bars because stock
prices are indicated as bars that show the high, low, opening and closing prices of a
share each day). Now, this is what this particular indicator does. Notice that
whenever the two MA lines cross each other, the prices trend has changed. In other
words, whenever they cross each other, if the prices were trending up, they now
start trending down, and vice versa. This is a rule of thumb. Sometimes the
crossover is quite late in indicating the trend change, and sometimes the trend
change is not a long lasting one. However, traders use this indicator to know when to
get in and out of a market. For example, if you had bought a share in an up-trending
market with an aim of selling when the uptrend has reached its peak, you may watch
the MAs and sell when they next cross over, which would indicate that the market is
now trending down. Many traders recommend using a 5- and 22-day MA for short-
term trading, and 25- and 110-day MA for long-term trading. All indicators are rules
of thumbs they work most of the time. So what most traders do is get a
confirmation form another indicator (you will see more on that later).
Moving Average Convergence Divergence (MACD)
Investopedia.com defines the MACD as:
The MACD is a trend following momentum indicator that shows the relationship
between two moving averages of prices. To Calculate the MACD subtract the 26-day
EMA [exponential moving average] from a 12-day EMA. A 9-day dotted EMA of the
MACD called the signal line is then plotted on top of the MACD. There are 3 common
methods to interpret the MACD: 1. Crossovers - When the MACD falls below the
signal line it is a signal to sell. Vice versa when the MACD rises above the signal line.
2. Divergence - When the security diverges from the MACD it signals the end of the
current trend. 3. Overbought/Oversold - When the MACD rises dramatically (shorter
moving average pulling away from longer term moving average) it is a signal the
security is overbought and will soon return to normal levels.
Again, you dont have to know any of the math or anything. You can just go to a web
site like Yahoo! Finance and with a few clicks have that plotted for you. Here is one I
had plotted for Yahoos stock:

The MACD bars are in blue at the bottom of the chart, along with the red signal line.
Assuming you owned some Yahoo shares that you bought at the beginning of this
chart. Now, when the MACD bars fall below the signal line, it is a signal to sell. Look
at the chart and notice how the trend changes when this happens. When the
opposite happens, it is a signal to buy. Again, notice that this is a rule of thumb. All
indicators are rules of thumbs they work most of the time. So what most traders
do is get a confirmation form another indicator. For example, you may choose to use
the MACD to give you the buy/sell signals, but only when your moving average
cross-overs also say the same thing (just as an example), thereby greatly reducing
your chances of getting an incorrect signal.

Relative Strength Indicator (RSI)
Investopedia.com defines the RSI as:
A technical analysis indicator that compares the days that a stock finishes up
against when it finishes lower. The RSI ranges from 0 to 100, but a stock is
considered overbought if it reaches the 70 level, meaning that you should consider
selling. When it is a true bull market, an RSI of 80 might be a better level since
stocks often trade at higher valuations. Likewise, if the RSI approaches 30, it is a
strong buying indicator (20 in a strong bear market).
Again, you dont have to know any of the math or anything. You can just go to a web
site like Yahoo! Finance and with a few clicks have that plotted for you. Here is one I
had plotted for Yahoos stock:

The RSI line is at the bottom of the chart. Again, assume you had some Yahoo
shares at the beginning of this chart. According to RSI procedures, you would
consider selling when the RSI went above 80, and buying when it went below 20.
Notice from the chart that this advice would generally serve you well, not loose you
any money, but would make you sometimes miss some good opportunities or have
you exit too early sometimes. So, again, you would be better served by combining
the RSI with another different indicator and using the two to confirm each other
before you act. This would greatly reduce the number of wrong signals you get. You
are beginning to see that professional traders will typically combine two or more
indicators, never really relying on just one. You are also beginning to see just how
easy this game is, isnt it? Go to Yahoo! Finance now and try it yourself for free. Try
combining two MAs with an RSI and see what kind of buy or sell signals you would
act on (which is whenever the two indicators both give a signal).

The Parabolic Stop And Reverse (SAR) System
The parabolic system is great for telling us when to get out of a trend. It begins by
assuming that we bought in at the beginning of a trend, and then watches to tell us
when the trend is about to end or reverse. It uses a very simple premise: a trend
continues. This means that in an up trend, for example, the prices will keep going
higher. So it calculates a target level (called a stop) for the next days price based on
a price acceleration factor. This next days target is a test; if the trend proves to be
still continuing, it will reach the target. If not, it wont, and that will be our cue to
exit the trade because the trend is changing. Look at this graph below, plotted free
and easy in a couple of minutes from BigCharts.com. The Parabolic SAR line is the
one made up of the red dots. Each dot is the price target for the day.

Now look at any part of the chart where the price is trending up. Notice that the
price bars are above the red dots. Notice also that when the price bars cross the red
dots, it means that on that day the price was below the target level. You will notice
that, as predicted by the rule of this system, the prices start falling after this
happens, and we enter a down trend. In the downtrend, the red dots are above the
prices, meaning that the downtrend is expected to remain until the prices fail to be
lower than the target. When they cross, an uptrend starts. See how predictable it is?
However, notice that when the market is choppy, you can get too many buy/sell
signals without much movement out of a price range (like in the September period in
our example above). So, again, you would be better served by combining the
parabolic SAR with another appropriate indicator and using the two to confirm each
other before you act.

An example of combining a few indicators
Now look at this chart, generated free from StockCharts.com:

Do you see how you can combine two or more indicators to have them confirm each
other before you take action? At the top we have the RSI, in the price chart itself we
have the parabolic SAR, and at the bottom we have the MACD. Try to see where you
would buy and where you would sell, given what you now know about these three
indicators (assume you owned the stock at the beginning of the chart).
Here is a book to give you a quick primer on technical analysis:
Technical Trading Tactics

Trading Systems
Now, you can buy ready-made trading systems on the Internet or you can build your
own. Of course, if you choose to buy one, you have to make sure you are getting
something that actually has been working and is still working (in fact, some of the
companies selling systems are fraudulent). You see, systems only work as long as
the market conditions for which they were built are still the same. Once the terrain
changes, you have to use a different system suited for the new conditions; the old
one will give you losses or poor performance. So, the advantage of building your own
system is that you know it inside and out, you know why things are triggered, and so
on. So you can easily learn from it and know when to start and stop using it. If you
just buy a system, you will not know these things and you will have to depend on
your vendor to inform you and so on. Dont get me wrong; there are people making
money with systems they have purchased and there are companies out there selling
good systems. I am simply pointing out the advantages of designing your own (or
knowing enough to understand and modify one you purchased). But if you are going
to buy a system, then get one that allows you a free trial, and test it using virtual
(play) money before you put in real cash.
Ok, so how do you determine the rules that the system will use to get in and out of
trades? Well, you first understand the basics of technical analysis. They are easy
enough to learn, as we have illustrated above. They look complex at first but when
you get into it they are easier than most things you did in college or high school. You
then get a software package to help you build the system and back-test it with play
money to see how well it would perform. Basically, you would, from your
understanding of technical indicators, choose two or more indicators that you like,
that seem to catch changes in trends in your chosen market. For example, you might
decide that for you, a buy signal is triggered if the short-term moving average line
(see illustration above in the technical analysis section) crosses above the long-term
moving average line, and sell when the opposite happens. This simple rule would
catch many good trades but also some bad ones. So you may, in your testing
through the software, decide to add another indicator to confirm the trend. For
example, you can say that the buy signal will not be generated unless this moving
average cross over is accompanies by the RSI being above at a certain level. There
are literally dozens upon dozens of indicators, each of which tells their own story.
You can see for yourself which story you wish to use to generate your signal. Once
you have created a system, you then back-test it using past data to see how you
would have performed. The software package you use to back-test the system will
also generate reports giving you statistics on your system, such as profit, number of
successful and unsuccessful trades, number of trades, days down, investment
growth, and other data that will help you improve your system.
This is a very quick coverage of this topic. If you are going to use system trading,
you should familiarize yourself first with it by reading a couple of good books on the
subject. Here is a short selection of a few good ones:
The Elements of Successful Trading

Trend Following

The TradingMarkets.com Guide to Conquering the Markets

Come Into My Trading Room

Trading For A Living

So which software do you use to build, test and execute your systems?
First, realize that some online brokers allow you to program your system into your
account online so that you can have the trades executed without the need of
software. However, you will most likely need software to build and test the system.
Also, you will notice that the brokers for the masses (such as the online brokerages
owned by banks, or even etrade.com, as of this writing) are designed to have only
minimal features and do not offer this ability to program your trading system in for
automatic execution. Shop around for a broker that suits your specific needs.
Ok, now, which software do you use? Well, you have to answer that question
yourself, because it is all a matter of personal preference and budget (they range in
price from free if you open an account with a certain broker to about $600 for some
of the best ones if you wish to purchase it outright).
A good one that is highly recommended is WealthLab. See the screenshots here:


You may also wish to start by looking at TradeStation to give you an idea of the
capabilities available. It is an award-winning package and you can try it out free for
30 days. Here is the company sales text and examples, extracted from their web
site:
Its no secret. As an active trader, emotionsspecifically fear and greed are your
greatest obstacles to trading success. Thats why many professionals believe one of
the keys to long-term success is to develop objective rules for when to buy and when
to sell. Until now, the ability to create, test and automate this kind of objective rule-
based trading plan was only available to select institutions that could afford huge
research staffs. But no more.
TradeStation is the first trading platform that gives you the power to create, test and
fully automate your own rule-based trading strategies. TradeStation puts up to 20
years of in-depth market history at your command with the power to instantly back-
test any trading strategy you design, before risking one cent of trading capital. When
youre ready to trade, TradeStation can automatically monitor your trading rules and
even execute your trades. Thats why TradeStation has become the fastest growing
and most highly awarded trading platform available today.

One of TradeStation's most significant advantages is that it enables you to design,
historically test and optimize your own custom equities, options, futures and forex
trading strategies before you risk a penny of trading capital.
This breakthrough is possible thanks to a proprietary technology called
EasyLanguage. It lets you describe your ideas using simple, English-like
statements and trading terms, very similar to how you would describe them to
another trader. In fact, TradeStation's EasyLanguage is the industry standard for
describing trading strategies.

Let's say you've been watching a 5-minute chart of a certain security and noticed
that whenever it makes a new low and then closes above the previous bar's close,
momentum shifts and the security tends to head higher. Is this chart pattern just a
fluke, or something that's happened consistently?
With any other trading platform, you'd have to stay glued to the chart waiting for
that pattern to occur again, make the trade, and take your chances. But, with
TradeStation, there's an easier way to test your idea. You simply click on "New
Strategy" from the short-cut menu and type the following:

Although the strategy is based on a very simple concept, TradeStation gives you the
power to describe sophisticated ideas and strategies having dozens or even hundreds
of parameters and conditions. For example, you can test strategies that contain
multiple entry and exit signals, various order types (market, limit, stop orders),
pyramiding and money management rules, advanced parameter optimization. You
can create strategies on pre-market hours only, post-market hours only, pre-and
post-market hours combinedor any other custom sessions you define. You can
even have your strategy place limit orders based on real-time bid and/or ask price.
In fact, to make writing advanced strategies easier, TradeStation's EasyLanguage
Dictionary includes several hundred pre-written built-in functions covering many of
the most popular trading concepts and technical indicators. These include all types of
Moving Averages, Stochastics, chart patterns and relative strength formulas, just to
name a few. All you have to do is find what you're looking for using the intuitive
search function, and then paste it into your strategy with one click.

Other good software packages include:
Wealth Lab.
Trading Recipes.
Metastock
Trendsetter
TradeStation

Which markets do you trade?
Again, this is a matter of personal preference and comfort. Here are your major
choices:
Currency markets: These are the largest markets of all ($1.3 trillion a day
worldwide vs. $50 billion in the stock markets). They give you great liquidity
and volatility and much lower transaction costs (often zero commissions).
They also offer a lower selection of things to trade in (there are only a few
currencies traded, compared to thousands of companies in the share
markets). They are also not as regulated as the other markets, which can
both be a blessing and a risk. You also get an extremely high amount of
leverage (up to 400:1), which means you can make money a lot faster but
also lose it the same way if you dont have a good system and plan.
Equity (shares) markets: These offer a great variety of companies to trade
in but have less liquidity and higher transaction costs which can tend to eat
up your profits if you trade too often or take too little profits per trade.
Futures markets: They offer higher leverage (much higher than equities but
much lower than currencies) and therefore higher profit potential, but some
experts argue that they dont lend themselves as well to system trading.
(Remember, you can also trade derivatives in each of these markets. For example,
you can trade in CFDs (see below) for these markets instead of trading actual
currencies and stocks.)

Price Swings Happen All The Time In Great Ranges. And Then There Is The Odd Massive
Move Now And Again
You may be asking, How often and how much do prices swing? Because, generally,
money is usually made when prices are moving. Well, they move a lot! But that
depends on the market and the country and time of year and so on. Let us take a
quick look at U.S. markets.
Using Microsofts free Investor.com web sites predefined stock finder tool
(http://moneycentral.msn.com/investor/finder/predefstocks.aspx), I came up with
the following list of the days fastest moving stocks. Time spent researching was less
than a minute. Look at the % price change columns):
Closed Above 50-Day MA Today
Company 50-Day Moving
Average
Market
Capitalization
Last
Price
% Price Change
Today
KongZhong Corporation 7.68 308.3 Mil 9 18.44
Payless ShoeSource, Inc. 10.31 880.8 Mil 12.93 16.8
Marchex, Inc. 12.79 399.9 Mil 16.04 16.74
Matav-Cable Systems
Media Ltd. (ADR)
14.91 240.6 Mil 16.39 16.24
Citadel Security Software
Inc.
2.74 114.9 Mil 3.87 15.87
Medwave, Inc. 4.76 52.31 Mil 5.2 15.56
Empire Resorts, Inc. 7.09 242.2 Mil 9.29 14.55
NeoPharm, Inc. 7.43 186.4 Mil 8 14.29
LCC International, Inc. 3.53 125.7 Mil 5.15 13.44
Advanced Micro Devices,
Inc.
14.47 7.716 Bil 21.02 13.07

This Year's Winners
Symbol Company Name % Price Change
Year To Date
Market
Capitalization
Previous Day's
Closing Price
TZOO Travelzoo Inc. 999.80 1.478 Bil 99.09
AIRT Air T, Inc. 474.80 78.68 Mil 30.12
HWG The Hallwood Group Incorporated 474.50 149.8 Mil 109.5
GRA W.R. Grace & Co. 460.70 951.1 Mil 14.95
BXX Brooke Corporation 450.50 260.3 Mil 28
ICU Cenuco, Inc 436.60 73.6 Mil 6
RIV Riviera Holdings Corp. 425.00 99.06 Mil 28.75
EXM Excel Maritime Carriers 361.20 257.4 Mil 22.75
RCF Rica Foods, Inc. 342.60 65.48 Mil 5.08
KMRT Kmart Holding Corporation 342.50 9.502 Bil 102.1

Closed Below 50-Day MA Today
Symbol Company Market Capitalization Last Price % Price Change
Today
NWS NEWS CORP LTD 24.89 Bil 18.1 -46.15
GTIV Gentiva Health Services 367.8 Mil 15.31 -12.71
A Agilent Technologies Inc. 10.96 Bil 22.58 -12.07
NT Nortel Networks 12.13 Bil 3.03 -10.09
Corporation
TVIN TVI Corporation 114.8 Mil 3.9 -9.51
MATK Martek Biosciences Corp. 1.282 Bil 43.71 -8.13
TACT TransAct Technologies
Incorporated
218.4 Mil 22 -7.56
NTMD NitroMed, Inc. 520 Mil 19.73 -7.15
VIDE Video Display Corporation 120 Mil 12.41 -6.69
AMXC AMX Corporation 194.8 Mil 16.41 -6.39

This Year's Losers
Symbol Company
Name
% Price Change
Year To Date
Market
Capitalization
Previous Day's
Closing Price
IBCIQ Interstate Bakeries Corp. -85.60 93.04 Mil 4.05
CHR Converium Holding AG
(ADR)
-84.30 330 Mil 3.97
SCOX The SCO Group, Inc. -79.70 61.24 Mil 3.24
ASYT Asyst Technologies, Inc. -77.40 185.1 Mil 3.81
CALD Callidus Software Inc. -75.20 107.2 Mil 4.7
CLST CellStar Corporation -74.60 65.18 Mil 3.23
DDIC DDi Corp. -73.50 99.31 Mil 3.88
PROXD Proxim Corporation -73.50 54.71 Mil 4.34
CIPH Ciphergen Biosystems -71.30 96.28 Mil 3.25
SGU Star Gas Partners, L.P. -71.00 227.7 Mil 7.11

And then, there are the crazy moves. Every now and then, the market moves in
large, unpredictable ways. Traders who use trend following strategies are often in a
position to profit from such moves, even when the market is collapsing (you can
make money both up and down, depending on the strategy you apply).
For example, during the October 1987 crash, the S&P 500 (a stock market index that
shows the collective value of a large group of selected companies in the market) fell
over 20%! Just to show you how unexpected and large such a move is, this change
was calculated to be 19 standard deviations from the mean, while a normal fall
would be within one, maybe two, standard deviations. Look at an example of what
was said about that fall:
Economists later figured that, on the basis of the
markets historical volatility, had the market been open
every day since the creation of the Universe, the odds
would still have been against its falling that much in a
single day. In fact, had the life of the Universe been
repeated one billion times, such a crash would still have
been theoretically unlikely. Roger Lowenstein
It is very important for you to realize that these things can and do happen. Things
that no one predicted, or even thought possible, can happen. Just keep that in mind.
Dont trade believing that the future will always follow the example of the past. It
wont necessarily do so.
Much of the real world is controlled as much by the tails
of distributions as by means or averages: by the
exceptional, not the mean; by the catastrophe, not the
steady drip; by the very rich, not the middle class. We need
to free ourselves from average thinking. Philip Anderson,
Nobel Prize Recipient, Physics, Some Thoughts About
Distribution in Economics
Now, let us look at how you can actually trade in financial instruments that offer you
the best opportunities for very high returns.
How To Trade In CFDs (Contracts For Difference)
CFDs are extremely simple to understand, but because they are new instruments,
they may sound confusing at first. They are not confusing, and right here you will get
a good understanding of them that you can then go on and expand on by getting a
good book on trading.
CFDs started out in Europe in the 1980s. They are a derivative and were initially
used by big institutional investors to hedge their portfolios. That was before retail
investors got wind of their tremendous advantages. A CFD is a derivative (a
leverage-based product based on an underlying asset). There are CFDs for shares,
commodities, indices, options, futures, currencies, and so on.
This is how they work: Instead of actually buying the shares outright through the
stock exchange, for example, you would buy share CFDs from a CFD provider. Your
CFD provider (much like a stock broker but not really) is the one who technically
owns the shares. You simply enter into a contract with your CFD provider. You never
own the shares themselves, but you get to keep the differences in price. What
differences? Well, if a share of XYZ was trading at $10 when you opened your CFD
position in it, if the price goes up to $12, your provider gives you 12 10 = $2 (the
difference). If it falls to $7.50, you give your CFD provider 10 7.50 = $2.50.
Everyday, your account is adjusted in this way. Every single day. Then, when you
close your position, you keep whatever money is in your account. See, it is quite
simple, isnt it? Your CFD provider is the one who owns the stocks (plus voting
rights, stock splits, etc); you simply get the differences in prices, up or down, until
you exit the position. Oh, you also get any dividends given on the shares during the
time that you are in the position.
One great advantage of trading in CFDs is the leverage you get. CFDs are traded on
margin. You only need to put up 1% to 10%, sometimes more, (depending on the
market you are trading and who your CFD provider is) of the value of the underlying
security to control it and get all of its profits (and losses). And that means what to
you? You magnify and multiply your returns greatly!
Let us use an example to illustrate this point. We will use the example given online
by one of the larger CFD providers in Australia, the CMC Group.
First, before we get into that example, look at this chart showing the price
movement of Telstra stock (Telstra is Australias largest telecommunications
company):

Now, here is the example trade. Here, we are comparing a trade based on
purchasing 2,000 Telstra shares with Broker X versus purchasing CFDs to control
2,000 Telstra shares with the CMC Group:
CMC Group
Amount of CFDs 2,000
Buy Price $4.60
Cash Required (5%) $460
Sell Price $5.00
Total Commission Charges $20
GST (10%) -
Net Profit $780
Return On Investment
(780 / 460 x 100)
170%

Broker X
Amount of Shares 2,000
Buy Price $4.60
Cash Required $9,200
Sell Price $5.00
Total Commission Charges $100
GST (10%) $10
Net Profit $690
Return On Investment
(690 / 9,200 x 100)
7%

As you can see, because of the leverage, you get two major advantages when using
CFDs instead of purchasing shares outright:
Your return on investment is multiplied. Instead of getting a 7% return in this
example, you would get a 170% return in the exact same trade!
Your capital is freed up and this gives you two bonus effects. First, you would only
need to put up, in this example, $460 instead of $9,200, so you have less of your
money at risk or tied up. Secondly, assuming you did in fact have $9,200 to trade
with, instead of blowing it all in one outright share purchase, you could have
controlled multiples of CFDs with that money, approximately 20 times more
($9,200/$460 = 20). Your $9,200 could have been used to buy CFDs controlling
almost 40,000 Telstra shares. So, using CFDs, you could have used your $9,200 to
make about $15,000 instead of just $690 with an outright share purchase as
shown above! Do you see the power of leverage?
Another advantage with using CFDs is that you can easily profit from down trends
and make money when the share price is falling. It is far easier and less risky to do
this with CFDs than with shares. This is because with CFDs there is no physical
transaction that is taking place (no shares actually exchange hands) and so many of
the natural restrictions you would find in the share markets do not apply. To go
short, you simply open a CFD position by selling the CFDs (instead of buying them)
and close it when the price has gone down far enough. Once you close it, you get the
difference in price between when you opened the position with a sale of CFDs and
when you closed the position.
By the way, although we keep talking of share CFDs for the sake of simplicity in
explaining the concepts, remember that you can trade in other CFDs such as indices,
commodities and currency CFDs CFDs are not just limited to shares.
Another attractive advantage of CFDs is that many providers dont have a minimum
amount of money required to open an account and no minimum size requirements
for a transaction (which means you can by a CFD for just one share, unless the
provider has a minimum dollar amount per trade).
CFDs also have some of the simplest stop-loss implementations. Your CFD provider
can guarantee that your position will be closed automatically at any predetermined
price level you choose (which would, for example, guarantee that you would not lose
out even if the share prices fell sharply and suddenly).
There are several other details not covered here (e.g. the interest payments that you
either make to the provider daily, or they make to you, depending on which way the
market is moving, whether you are long or short, and so on). But basically, the
above puts a good summary on this topic. Before you start trading, make sure you
read a couple of good books on CFDs.
How To Trade In Futures (Futures Contracts)
A lot of people either dont know what futures are or if they do, they believe that
they are too risky to be considered for anything other than gambling. Before we look
at what futures are and how you can trade in them, let us quickly see what their
benefits are:
Futures offer far more profit potential than the simple buying and selling of
shares does
They offer a great amount of leverage and therefore a much larger return on
investment potential and require lower capital to get involved
Futures are actually simpler to invest in than shares
Once and if you understand them, they are also less risky to invest in than
shares
They offer the opportunity to profit from both uptrends and downtrends
Some of the most famous and successful futures traders are the two founders of the
Turtle Trading System, Richard Dennis (well known for having turned $400 into
$200 million in 18 years) and Bill Eckhardt. Bill Eckhardt believes that, Anyone with
average intelligence can learn to trade. This is not rocket science. However, it is
much easier to learn what you should do in trading than to do it. In 1983, Richard
Dennis (as reported in the Wall Street Journal and many other publications) trained a
group of thirteen average people he picked off the street from newspaper ads
basically and taught them to trade using their system (the now famous Turtle
Trading System). He was out to prove that anyone could be taught to trade and win.
Over the next four years, these traders that he trained managed to get annual
returns of 80% per annum! By the way, these traders that he trained included an
actor, a security guard, two professional card players, a low-paid bookkeeper, two
traders, a boy fresh out of school, a financial consultant, a woman who used to be an
exchange clerk and a fantasy game designer.
So what is a futures contract?
The insurance example is often given to aid in the explanation of what a futures
contract is, so we will use it here. When you insure a car, the car insurance contract
guarantees you that if your car is stolen or written off, you will receive a pre-
determined amount of money in a certain number of days and ways. A futures
contract is similar to an insurance contract in the sense that you pay a small amount
of money today to secure a buy/sell price of an asset some time in the future. If for
example you are buying a futures contract for soybeans, you pay a small amount of
money today to guarantee yourself a certain price for soybeans in the future (say, in
the next three months). There are futures contracts for commodities, shares, indices,
currencies, metals, energy, interest rates, and so on. Futures contracts are
electronically traded, just like shares, in the futures markets (just like the share
market). Each futures contract specifies the quantity, quality, price, and date and
method of delivery.
Futures contracts are traded on margin. A margin is simply a security bond you
deposit with the broker for each futures contract you get into. For example, if you
wish to control $100,000 worth of a commodity, you simply deposit 5% or less of
this amount with your broker, and this is what is called the margin (it is security for
the markets, a way to give some sort of assurance that you will honor your
contract). In a futures contract, you are obligated to fulfill your part of the contract
(unlike options, where you can have the right but not the obligation). So, when your
contract matures on its expiry date, you either have to deliver the product or the
cash. However, most investors dont hold the contracts all the way to expiry; they
close them before the expiry date and take the profits or losses.
Let us focus for a moment on the leverage offered by futures that allows you to
control a large amount of assets for very little money (and reap all the profits and
losses from that large amount). This is one of the biggest strengths in futures. Here
is a table comparing the return on your investment in the futures and the share
market:
Shares Futures
Invest in: $85,000 worth of shares $85,000 worth of the SPI200
Money require to
get into the
trade:
$85,000 $3,500
Market rises 5%.
Your profit is:
$4,250 (5% of $85,000) $4,250 (5% of $85,000)
Return on your
investment:
5% (4,250/85,000 x 100) 120% (4,250/3,500 x 100)

As you can see from the table above, you need a much smaller amount of money to
control assets in the futures market. However, you gain all the profits from that
asset. And because you only invested a small amount of money (in this example,
$3,5000 instead of $85,000), your return on investment is multiplied even if the
actual market growth was small. Here, the market went up only 5% but the futures
trader got a personal return of 120% from that ($4,250/$3,500).
To give you an idea of how a futures trade goes, here is an actual trade from
beginning to the end. This trade was documented on Shares Magazines Charting
special issue of July December 2004. It was done by Andrew Doig of
SPIWatch.com, trading the SPI200 index, and shows how a 12% rise in the market
lead to a 60% return on the investment in less than a month:
Date Action SPI Closed
At
Profit/Loss Account Balance
13-Mar-03 Bought six
SPI200 contracts
to open position at
2680
2680 Nil Opening balance $100,000
$21,000 withdrawn from account for
initial margin/deposit (brokerage fee
$180).
Balance $79,000
14-Mar-03 Bought six
SPI200 contracts
to open at 2730 to
add to position.
Total position is
12 contracts.
Average price -
2725.4
2752 $14,100.00 $21,000 withdrawn from account for
$180).
Balance $72,100
17-Mar-03 Bought eight
SPI200 contracts
to open at 2756 to
add to position.
Final position 20
contracts.
Average price -
2725.4
2741 $7,800.00 $28,000 withdrawn from account for
$240).
Balance $37,200 (including
brokerage)
18-Mar-03 Placed stops to
close at 2725 (see
below to know
what a stop is)
2849 $61,800.00 Balance $91,200
19-Mar-03 Maintained stops
to close at 2725
2841 $57,800.00 Balance $87,200
20-Mar-03 Raised stops to
close at 2792
2867 $70,800.00 Balance $100,200
to close at 2792
2881 $77,800.00 Balance $107,200
to close at 2793
2862 $68,300.00 Balance $97,700
to close at 2794
2851 $62,800.00 Balance $92,200
26-Mar-03 Raised stops to
close at 2831
2894 $84,300.00 Balance $113,700
to close at 2831
2902 $88,300.00 Balance $117,700
to close at 2831.
Rolled from March
to June - cost 22
points per
contract.
Average now
2747.
2907 $80,000.00 March contract due to expire is rolled
out to June. Sell 20 March contracts
and buy 20 June to maintain position.
Roll cost $11,000 (brokerage $1,200)
Balance $97,200
to close at 2831
2894 $73,500.00 Balance $90,700
01-Apr-03 Maintained stops
to close at 2832
2887 $70,000.00 Balance $87,200
02-Apr-03 Raised stops to
close at 2877
2896 $74,500.00 Balance $91,700
to close at 2877
2912 $82,500.00 Balance $99,700
to close at 2878
2946 $99,500.00 Balance $116,700
07-Apr-03 Sold 20 June
contracts to close
out position at
3000
3003 $126,500.00 $70,000 deposited to account for
initial margin/deposit (brokerage
$600).
Balance $213,100

In the above trades, notice a few things such as:
Every time he buys some futures contracts, an amount of money is withdrawn
from his account. This is the margin, a security deposit held by the broker.
When he sells the contracts, the margin is refunded.
The profit and loss are calculated and added to the account every day.
He uses stops (stop-losses) to make sure that the profits are locked in should
the market take a downturn. All good brokerage accounts allow you to set
electronic stop-losses. Basically, a stop-loss is an instruction to automatically
exit your position if it moves against you by a certain percentage. The system
should automatically execute the exit when the stop-loss is triggered even if
you are away on vacation or deep asleep in bed. For example, lets say you
were risking $200 in one trade in which you were counting on the market
going up for you to make money. If the market instead went down, you would
lose your money, right? So what you do is, when you get into the position,
you set up a stop-loss that will automatically sell and get you out of your
position if the market moves down against you by a certain percentage. This
will prevent you from losing all your $200; you will only lose a fraction of it.
Most trading books explain stop-losses, and you can also find more
information on them online so we will not get into the details here.
Here is a book to get you started on futures:
Fundamentals of the Futures Markets

How To Trade In Options
Options are one of the most amazing trading instruments ever created. An option is
simply the right, but not the obligation, to buy or sell an underlying asset at a pre-
determined price (called strike price) before the option expires. Options are simple to
understand once you get adequate exposure to them, but initially they may sound
complicated (which they are not, really, but everything new does sound complex at
first). In this section, we will simply go into options briefly just to give you an idea of
what they are, what they do, and so on. There are plenty of books written on options
that you can get that will explain all this easily, but it is even better to learn hands-
on, live or on DVD, from experts (I highly recommend Optionetics for this). Well, let
us begin our introduction into options.
First, let us look at a few of their main benefits:
They allow you to benefit from the market regardless of which direction it is
going up, down, or sideways (flat).
They offer great leverage, which means you can participate in the markets for
far less money and get much higher returns on your investments.
They allow you to insure (protect) your portfolio against movements that
would hurt it.
Now, let us progressively understand what they are and how they work. Take it
easy; dont try to understand everything all at once. Its ok if you miss something; it
will make sense later. Just understand each step as we go and let go of the anxiety
of knowing everything at once.
First concept: An option is simply the right, but not the obligation, to buy or
sell an underlying asset at a pre-determined price (called strike price) before
the option expires.
Next concept: Because an option is the right and not the obligation, it follows
that the option buyers have the rights and the option sellers have the
obligations to serve the holders of the option should they choose to exercise
their right. It is that simple. If for example I have a right to buy your car for
$30,000 within the next three months should I choose to do so, you would
then legally have the obligation to sell me your car for that price before my
option expires in three months. For this privilege, I would have paid you a
small amount of money to secure this right, say $500, which you get to keep
whether or not I exercise my right. See? That is how an option works. You
can have options for stocks, currencies, futures, etc. Option buyers have the
right, but not the obligation, to buy (call) or sell (put) the underlying security
(stock, currency, etc) at a pre-determined price, before the option expires.
Next concept: There are only two kinds of options. Calls and puts. Call options
give you the right to buy while put options give you the right to sell the
underlying asset. For example, lets say you have 10,000 shares in XYZ and
the price today is $10 a share and you own put options to sell these shares at
$11 (the strike price) any time within the next three months. Next month, the
price falls to $7 a share. Instead of taking a loss on the shares, you simply
exercise your options and sell them at guess what - $11! The call option
works in the same way, except that it gives you the right to buy stocks at the
strike price, regardless of what the market price is (the price of XYZ could be
$20 a share, but if you have a call option to buy it at $11 a share, that is the
price you will get it at!)
Next concept: When you buy options (put or call), the only money you are
required to put up is the price of the option. You dont need to put up money
for the stock or the asset, and you dont have to put up any margin. Why?
Because you only have a right, not an obligation to trade. Your risk is limited
to the price of the option and thats it. Where does the money you paid for
the price of the option go? It goes to the seller of the option, the guy with all
the obligations. The seller receives what you pay for the option. And because
option sellers have the obligation to buy (if they sold a put option) or sell (if
they sold a call option) the underlying asset if the option is exercised, they
are required to have a margin (deposit) in their account.
Next concept: The strike price is the price at which the underlying asset
(stock, or currency, etc) can be bought or sold for if the option is exercised. If
you look at the financial pages of your newspaper or go online, you will notice
that options are available in several strike prices above and below the current
price of the underlying asset (usually several intervals of $2.50 or $5 above
and below the current price), giving you a good choice.
Next concept: The expiration date is the date the option expires. A stock
option expires by close of business on the 3rd Friday of the expiration month.
As an option approaches its expiration date, its value (price) falls until it
becomes worthless on expiration.
Next concept: In the United States, each stock option corresponds to 100
shares (this differs in some countries). The price of an option is called the
premium and is determined by several factors (the current price of the
underlying asset, volatility, strike price of the option, time remaining until
expiration). The premium is priced on a per share basis. If the premium were
$2, the price you would pay for that option would be $200 ($2 x 100 shares
controlled by the option). When you buy an option, the premium money you
pay is non-refundable and is kept by the seller of the option whether you
exercise the option or not.
Next concept: Once you own a put or call option, there are three things you
can do with it to make money (or avoid further losses and get out). You can
exercise its rights, let it expire unused, or offset it with another option to
neutralize it. (Offsetting: If you bought a call option, you sell a call with the
same strike price and expiration. If you sold a call, you buy a call with the
same strike price and expiration. If you bought a put, you sell a put with the
same strike price and expiration. If you sold a put you buy a put with the
same strike price and expiration.). Please note that there are two styles of
options: American style options can be exercised at any time before their
expiration date while European style options can be exercised only on the day
they expire.
Now that we have covered the basics of what a put and a call option is, we are in a
position to now really get in the game! In the options game, creativity and flexibility
is what makes you money. Think of it this way: the put and the call option are the
two legs that you have. You then take these blocks to the market (the dance floor).
The market is always dancing around in various ways, to the tunes of all its players
and influencing forces. You cannot control how the market dances, but you can use
your legs to dance with the market, placing your two legs appropriately so that you
are in harmony with the moves of the market, for that is when you make money.
The placement of your legs (your put and call options) is what is referred to as
options strategies. Option strategies are simply different combinations of put and call
options to suit market conditions and profit. There are very many options strategies
(combinations of puts and calls in creative ways). Here is a good summary of some
of the most popular ones, taken from the Optionetics web site (a bull market is one
where the prices are going up, a bear market is one where prices are going down):
Bullish Limited Risk
Strategies
Bullish Unlimited
Risk
Strategies
Bearish Limited Risk
Strategies
Buy Call
Bull Call Spread
Bull Put Spread

Call Ratio
Backspread
Buy Stock
Sell Put
Covered Call

Call Ratio Spread
Buy Put
Bear Put Spread
Bear Call Spread

Put Ratio Backspread

Bearish Unlimited
Risk Strategies
Neutral Limited Risk
Strategies
Neutral Unlimited
Risk Strategies
Sell Stock
Sell Call
Covered Put

Put Ratio Spread
Long Straddle
Long Strangle
Long Synthetic
Straddle
Put Ratio Spread
Long Butterfly

Long Condor
Long Iron Butterfly
Short Straddle
Short Strangle
Call Ratio Spread

Put Ratio Spread

Dont worry about those fancy names. You will understand them easy enough once
you are exposed to them. Let us briefly look at some of these strategies. One of the
best ways to understand something is diagrammatically, and you can get some
pretty good diagrams and brief explanations from RiskGlossary.com. We will look at
just a long and a short straddle using diagrams from RiskGlossary.com (a straddle
comprises a put and a call with the same expiration and strike price). We will not get
into the detailed explanations of why they work that way but we will look at the
nature and effect of each of these two strategies:
Payoff of a Long Straddle

A long straddle is a bet on high volatility. It makes money if
the underlying assets value moves significantly either up or
down. Look at one of the miracles of options: as long as the
price of the shares moves, in any direction, you make
money with this strategy! When do stock prices move?
Well, for many reasons. For example, they move whenever
announcements such as annual or quarterly reports are
made. You dont have to know what direction they will move;
all you need to do is go online and in two minutes find a list
of stocks with upcoming announcement, apply some simple
research and decision making in another 10 minutes, and get
the options and wait for the announcement. No matter what
direction the shares move, you will make money as long as
they move. This strategy has limited risk (limited to loss of
the premium on the options if the share prices dont move in
any direction) and unlimited profit potential (you can make
us much as the share price goes up or down). Why does it
work? Simple. If the price of the shares moves up, the call
option will gain, and if the share price moves down, the put
option will gain. Here is an example trade, given by
Ameritrade.com:
Long Straddle Example:

With shares in company XYZ trading at $42, you could create
a straddle by purchasing 1 XYZ JUN 40 CALL for $3 and 1 XYZ
JUN 40 PUT for $1. The result is a net-debit of $4.
The straddle would become profitable when the stock moved
away from the strike price and one of the options became far
enough in-the-money to cover the cost of the straddle. In this
case it would be below $36 or above $44. In addition, the
maximum loss would be reached when the stock traded at the
options' strike price ($40).
Here are the returns for various stock prices at expiration:

Payoff of a Short Straddle

A short straddle is a bet on low volatility. It makes money as
long as the underlier value does not change too much.

You can begin to see how making money in options is about selecting the right
strategy based on the market conditions etc, and simply applying it. There are many
books written on options and they can be adequate, but if you wish to learn fast,
understand deeply and more completely, and get to see the strategies in live
application, then I highly recommend that you either order the Optionetics
multimedia products or go to their live training courses held around the world. Here
also is another book you may want to look at to get a quick grasp on options:
Options Made Easy

Also, you dont really have to worry much about finding markets to trade in,
selecting strategies, making calculations and so on because there already exists
software that will do much of this for you (but you do need to understand options
well the software is just a tool, not a replacement for your brain or a shortcut to
avoid learning). Have a look at the OptionGear software, which you can download a
free trial of. You will be amazed at how easy it all gets!
An example of using assets to purchase liabilities:
We will now use options to see an example of one way you can use assets to pay for
your liabilities. In this simple example (lets keep it simple for the sake of
illustration), we will assume you wish to purchase a car worth about $17,000 and
you have actually managed to save up that money from your wages over time.
What most people do: They take their own hard-earned money they saved up
from their job and buy the car outright! So literally, they slave for the car. Either
way, the money saved up from their job deteriorates because the car deteriorates
and gets devalues with time, in fact as soon as you drive off the car sales yard.
What you can start doing, the smart way: Take that cash and with that money
buy some good blue-chip shares at the bottom of their annual price curve (meaning
when they are trading somewhere near their 52 week low). Next, get car finance on
your chosen vehicle. So far you havent given anyone your hard-earned money from
your job; you put it all in your shares that you get to keep. And you will not pay the
monthly car payments with your hard-earned wages either. What you will do is sell
call options on your shares and collect the premiums. As long as the buyers of your
options dont exercise the options, you will keep your shares and keep the premiums
and use them to pay your car finance, the options will expire, and you will sell new
options and repeat the process. You can do this for as long as no one exercises their
options. But when they do exercise the options, you are obligated to sell them your
shares, right? Right. But, this isnt a bad thing at all. Remember that you bought
shares in blue chip companies at a price near their 52-week low (easy to find using
free online stock screeners such as at Microsofts Investor.com site). For example, if
the share price were $20, you would sell call options with a strike price of $22.50, for
example, or $25. So even if the buyer of your option exercises their right to buy your
shares from you at, say, $25, you would have made a profit. Remember, they will
most likely only exercise it if the price is above $25, otherwise they make a loss,
see? So as long as the price is below $25, you can keep selling call options knowing
very well they will expire, you will keep the premium, and repeat the same. If the
price goes to over $25, you will have to sell your shares for $25, but who cares! You
have made a profit of $5 a share! Take that money and profits; find another stock
trading near its 52-week low, and repeat. You get to keep your money and have
your money earn its own money to pay for your new car! In this example, the money
you saved up appreciates and you keep your wages instead of sending them over to
the car finance company. By the way, this strategy of selling options backed by
shares that you own is called Covered Call writing. It is also nick-names renting
shares because you are receiving income on an underlying asset, just like getting
rent from an apartment.
Let us use an online example of this that you can check for yourself. We will use
Australian figures since that is what I am more familiar with when it comes to the car
finance issues, but you can do this in Asia, Europe, the U.S. or whatever.
This is a very rough example I quickly put together in a few minutes. Obviously, if
you will actually be doing this, you will get into more detailed research and set up
something better. Also, in some months, the premiums you would collect in this
example below would not cover the repayments completely and you would have to
add a little from your wages or whatever, and in some months you would have extra
income over and above the repayments. Again, you can put together a better
arrangement with more research and time so that everything is covered by the
strategy and you spend almost nothing out of pocket. Finally, I will be using car
finance figures calculated online at ANZ Banks (a top Australian bank) online car
finance calculator, and using actual market figures taken from the Australian Stock
Exchanges (ASX) online mock portfolio (they keep an online live portfolio to
compare the performance of a stocks and stocks with covered calls). Because this
portfolio was set up on January 2, 2003, we will stick to those dates. Here we go:
Assume the car you wished to buy cost $17,000 and you have $17,000 in cash. What
you would have done, then, in our example, would be to first buy the shares. On
January 2, 2003, you would have purchased 1000 shares in ANZ Bank at AU$17.32
each for a total of $17,320.00.
You would then go to ANZ Bank and get a car loan for your car. Keeping it very
simple, assume they give you the entire amount. According to their online car
finance calculator, this is how your finance would look like:
Amount Financed (including fees): $17,258.50
Balloon: $0.00

Monthly Repayment Amount: $360.69
Cash Due at Settlement: $0.00
Interest Rate: 9.29 %

Now, look at this table showing how much you would be getting from your selling
(also called writing) call options:
Date Sold Income $ (To pay for
the car payments)
02-Jan 1 ANZ Jan 1750 Call @ $0.29 290.00
30-Jan 1 ANZ Feb 1700 Call @ $0.46 460.00
27-Feb 1 ANZ Mar 1600 Call @ $0.64 640.00
27-Mar 1 ANZ Apr 1800 Call @ $0.32 320.00
And so on
Once you finish paying off your car, you will have (1) the car (2) your original
$17,000 in shares, now presumably appreciated to a much higher amount if you
have been actively moving it strategically and (3) you can still keep selling call
options and flipping the shares and keep the income since you no longer have to use
it to pay off the car. So quite literally, you got the car free, kept your money, grew
it, and gained an extra income stream. Contrast that with going and plunking down
your savings outright into a car (which is what most people do) and you will see how
the wealthy people make and keep their wealth and why they become wealthy! With
this strategy alone, you have accomplished several rules of wealth (1) preserve your
capital (2) make your money work for you (3) use your assets to pay for your
liabilities. Of course, this is a very rough, simplified example, but you can see how
you can set these sorts of things up.
Preserving Your Capital, Systemizing Your Investing
No matter what trading style you use, capital preservation is key to your growth of
wealth! You cannot ignore this rule; yet it is the rule most ignored by the vast
majority of investors/speculators at their peril. We will look at capital preservation in
a chapter all of its own. Part of capital preservation involves systemizing your trading
with a trading plan (instead of just winging it as you go), mastering trading
psychology and developing sound money management habits. We will look at these
separately in the coming chapter.
Trading Psychology
Your psychology is very much involved in your trading. It is therefore of critical
importance that you know yourself and know how you tend to react and so on. You
should not start trading without reading something on trading psychology. Most
professional traders will tell you that trading psychology and money management are
two key areas that one must master, and yet they are the key areas that the
average uninformed investor doesnt even know they exist.
Let us look at this briefly. Here are five common psychological pitfalls that many
traders fall into:
Over-confidence People consistently overrate their knowledge and abilities
especially when they know little about a subject!
Confirmation trap People tend to filter information and only see
information that supports their existing beliefs and point of view. They choose
to avoid information that contradicts their beliefs and point of view.
Anchoring and adjusting People often give disproportionate weight to the
first information they receive. This causes them to anchor, bias and adjust
their subsequent thoughts.
Irrational escalation of a commitment This is akin to living in the past.
People tend to make choices that justify past experiences and decisions.
Improper framing The decisions that an investor makes is often affected
by how the issue is presented. The same issue framed in a different way can
cause the investor to make different choices.
You can learn how to overcome all these and other tendencies that have led many a
trader to peril. See these books for more on trading psychology:
Trading for a Living

Come to My Trading Room

World Markets: How They Compare
You may be wondering, Should I invest in the U.S. or in another country? Well,
first, generally speaking, you can easily open a trading account in any country of
your choice. So how do you choose? Well, this brief paragraph cannot possibly cover
all the considerations you may have to take in, but some of the key things to
remember are:
The more liquid the market, the better for you. Liquid markets are those that
have many participants buying and selling, which gives you plenty of
opportunities to get in and out of markets quickly when you need to. The U.S.
markets are some of the most liquid, with liquidity of over 120% (meaning
each share changes hands on average more than once a year), while some of
the slowest markets in small developing countries have a liquidity of about
20% (which means a share changes hands, on average, roughly once every 5
years).
Trading information is key. U.S. markets generally have more trading
information given out to investors than most other markets. However, this is
most important for fundamental analysis investors; technical analysis traders
usually just need price and volume data (commonly available on all markets)
and they can usually make money, given the right strategy, without
fundamental information. In fact, many technical traders dont consider
fundamentals at all. They just need price data, which is always available
anywhere.
The size and rate of growth of a market obviously affects your returns. You
can research for yourself to find out what markets are growing at what rates.
The Internet offers plenty of short-term and long-term data on this such as the
following:

Source: ABN-AMRO Global Investment Returns Yearbook 2004



Other Investments Available
There are many available assets and financial instruments that you can invest in.
Here is a list of some of the most common (investigate them yourself if you wish to
know more about any of them). If you apply the right leverage and strategies to
many of them, you will get the high rates of return that super-investors get. It is all
a matter of creativity and information:
Shares
CFDs
Futures
Warrants
Indices
Options
Other derivatives
Currencies
Real estate
Commodities
Hedge funds
Index funds
Mutual funds
Bonds
LEAPS
Mobile homes
Airplane/helicopter leases
Bankruptcy receivables
Commercial deficiency portfolios
Commercial invoices (factoring)
Commercial judgments
Commercial leases
Contracts
Automobile notes
Business notes
Equipment notes
Mobile home notes
Collectible notes
Real estate notes
Dead of trust notes
Tax liens
Various consumer-based debt instruments like credit card debt, retail
installment contracts, corporate retirement plans, etc
Businesses
Contingency-based debt instruments
Government-based debt instruments
Insurance- based debt instruments
Etc

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Power Strategies To
Preserve Your Capital And
Protect Your Assets
The point behind preserving your capital
(your money) is that you get to always have
money to grow and grow, rather than lose it
and have to start again from scratch. There
is no investor, even the very best of them,
that has not lost money. Even you will lose
money sometimes; it is part of life. Smile
when it happens; you get to learn stuff and
enjoy new insights. But by having a good
capital preservation system, you will get to
keep your shirt on even when you lose; you
only lose a portion of your money and even
a series of losses do not take you out of the
game. You never start from zero again; you
just keep trending upwards; that is the
point. The point behind protecting your
assets is that you get to secure them against
their being confiscated by the government
or tax agency, taken by creditors, or
grabbed in lawsuits. Asset protection also
minimizes or eliminates taxes. Your assets
are what give you leverage, cash flow, and
opportunities to increase your wealth.
Arent those good enough reasons to protect
them?
Preserving Your Capital
The Science of Money Management
Whenever you invest, you spend your capital in the hope of getting more back. That
is pretty obvious. When you spend your capital, you stand the chance of losing it; in
fact, you will lose some of your trades. There is not a single investor alive who has
not lost some trades (whether they be in stocks, futures, real estate, businesses, or
whatever). Money management is the discipline of arranging your investing in ways
that maximize profitability while at the same time preserving your capital. Money
management keeps you in the game. Lack of money management can take you out
very easily.
To illustrate money management, let us begin by looking at some concepts and
examples.
The first concept we will look at is called drawdown. Drawdown is the percentage of
your trading capital that you lose in any single trade that has gone against you (in a
stock purchase, real estate purchase, etc). It is calculated each time your capital
account (equity) hits new lows. Let us look at an example to illustrate this:
You begin with a capital account of $10,000. Your drawdown is 0% because
you havent lost anything.
In the next trade you do, you lose $2,000, which makes your drawdown 20%
($2,000/$10,000 x 100).
You now have $8,000 remaining. Let us assume you then make $1,000 and
then lose $2,000. Your capital equity would now be $8,000 + $1,000 - $2,000
= $7,000, which gives you a drawdown of $10,000 - $7,000 = $3,000 or 30%
($3,000/$10,000 x 100).
After this, you make $5,000, taking your equity up to $12,000. You then
loose $3,000, which brings your capital to a new low (from $12,000 to
$9,000). Your drawdown would now be $3,000 or 25% ($3,000/$12,000 x
100). Please note that the drawdown is now calculated on the newest high
your capital got to.
Next, we shall consider drawdown recovery. First, realize that a 100% drawdown
would completely wipe out your entire capital, all your equity. Also, realize that the
more you lose, the harder it gets to recover (to break even and wipe out your loss).
For example, if you had $10,000 and lost 10% of it ($1,000 loss), your equity would
now be $9,000. To break even again and get back to your $10,000, you would
actually need a gain of 11.11% on the $9,000 to take it back to $10,000 (10% of
$9,000 is only $900, so you need more than a 10% gain). The more you loose,
increasingly higher the return you need to recover. Look at this chart:
% Capital Loss % of Gain Required to Recoup Loss
5% 5.3%
10% 11.11%
20% 25.00%
30% 42.85%
40% 66.66%
50% 100%
60% 150%
70% 233%
80% 400%
90% 900%
100% Out

As you can see, the more the drawdown, the harder it is to get back up. This is why
professional investors put into place trading plans to minimize this phenomenon.
They treat investing as a business, while the masses treat investing quite literally
as a trip to the casino with no game plan, unconsciously investing on emotions and
ego. Money management is the art of staying in the game and increasing your
capital despite the normal downturns (and all investors, even the very best of them,
experience downturns every now and then).
Many books have been written on money management and it would be a good idea
for you to get one or two. Money management is a wide field and it can range from
simple strategies (which suit most investors) to complex portfolio strategies. But let
us look at the components of a simple money management system briefly (this one
is suited for stock, futures, forex and other financial instruments investments but it
can be adopted for some other investments with a little creativity):
In any one trade, never expose more than 1% or at the most 2% of your
capital. Of course, this applies mostly to traders with bigger accounts. If you
have a small account, you may have to expose more than this initially. But
this is what it means: If you have a $10,000 trading account, you never
invest more than 2% of that ($200) in any one trade. $200 can buy you a few
futures contracts or some options or some CFDs (depending on what you are
buying into). So lets say you have a capital base of $10,000 and you wish to
buy some futures in commodity X and commodity Y, some CFDs in company
A and company B, and some options on company F and company G. You
would then spend only $200 on each of those trades (each trade gets no
more than 2% of your capital).
On each trade, make sure you set stop-losses. All good brokerage accounts
allow you to set electronic stop-losses. Basically, a stop-loss is an instruction
to automatically exit your position if it moves against you by a certain
percentage. The system should automatically execute the exit when the stop-
loss is triggered even if you are away on vacation or deep asleep in bed. For
example, lets say you were risking $200 in one trade in which you were
counting on the market going up for you to make money. If the market
instead went down, you would lose your money, right? So what you do is,
when you get into the position, you set up a stop-loss that will automatically
sell and get you out of your position if the market moves down against you by
a certain percentage. This will prevent you from losing all your $200; you will
only lose a fraction of it. Most trading books explain stop-losses, and you can
also find more information on them online so we will not get into the details
here. Just remember, dont set your stop-losses too tightly. If for example
you set it to be triggered by a 2% drop in a market that typically swings up
and down in price by 20% without losing its trend, you will end up exiting too
soon, missing much of your profit. Many of the ups and downs in a market
are what are referred to as noise. Noise is the sporadic up and down
movement within a trend. You need your stop-loss to be triggered by a
genuine change in the trend, not by noise. So understand your markets well
to know how to set your stop-losses. By the way, there are several types of
stops: price stops, time stops, pivot stops and size stops.
At any one time, limit your total portfolio risk to 20%. What this means is
this: Lets say you were in several trades at a certain time. Lets say
everything goes wrong and you loose on all those trades. Of course, you
would have set stop limits on all the trades, which is our rule number 2, so
you wouldnt actually loose all the money you have exposed in the market.
You would only loose the money up to your stop limits. Now, in this worst-
case scenario, you should arrange your trades so that you only lose 20% of
your capital if worst came to the worst and you would keep 80% of your
capital. 20% should be your maximum drawdown. (Remember, have these
things all calculated and set up before you enter your trades so once you are
in them you simply follow the plan.)
Trading is fairly predictable. Once you take the time to learn the relatively
easy ideas behind investing, you will notice that you can at least tell what the
maximum profit of a trade could be using technical or fundamental analysis.
With this information, make sure that your reward-to-risk ratio is at least 2:1
(even better, at least 3:1). This means that you only make trades where your
profit potential is at least 2 to 3 times what you risk losing (remember, you
have set stop limits so what you risk losing should only be a small percentage
of what you are actually putting into the trade). This ensures that you can
loose 3 times and recover from just 1 win. Many traders make the mistake of
having a ratio like 1:2, which means that any loss they take is twice as big as
a win, and they would have to win twice to recover from just one loss.
Lock in your profits as they come in. For example, if you entered a position
and your profits are rising as the minutes or hours or days or weeks go by,
keep adjusting your stop-loss upwards to lock in your profits. Some online
brokerages allow you to set such a stop loss, called a trailing stop loss. Lets
say you get into a position, and it moves up so that you are now $2,000
ahead. You havent sold and exited the position yet, but you wish to lock in
some of those profits in case the market turns direction and threatens to wipe
out your gains. At the same time, you dont want to sell in case it keeps going
up. So what you would do is move your stop-loss up so that the system
automatically sells and exits if the market falls and $500 of that $2,000 is
lost. So you have now locked in $1,500 of the paper profits. But lets say the
market keeps going up, and now you have a paper profit of $3,000. You
would move your stop-loss up so that you now lock in say $2,500 of that
$3,000 in case the market changes direction. You would continue doing this
as the market moves up so that you are guaranteed to stay on as long as you
are gaining, and exit automatically and take your profits if the market
changes. Trailing stop-losses can be set to move automatically as well (not all
brokerage services offer this facility).
Let your profits run and cut your losses early. Again, this has to do with stop-
losses and having a plan before you start trading. The common tendency with
most people is do just the opposite. They cut their profits too early because
they fear loosing their gains, yet they sit on losing positions too long in the
hopes that the market will turn around some day in future and give them
back what they have lost. When you determine before hand what your stop-
losses are and you set them, and determine your trailing stops strategy and
set that in place as well, then you will not have room for your emotions to
make you exit a winning run too early out of fear, stay too long out of greed,
or sit on a losing position out of blind hope. You will automatically cut your
losses early and let your profits run to predetermined levels.
Whatever you are trading, ask yourself what the maximum drawdown can be.
Then, make sure you have the capital to survive at least twice the size of the
maximum drawdown without being completely wiped out. Remember, the
ability to have remaining capital is what keeps you in the game by leaving
you with something to recover with. The cycles of money are like that; they
go up and down. That is normal. The trick is to minimize and survive the
adverse moves and profit from the successes. It is as simple as that.
Understand the markets you are trading in and the possible scenarios you can
find yourself in. If for example you are trading options, ask yourself what
could happen if someone exercised your option at certain parts of your
trading cycle (would you lose money?) Many people dont remember to
consider that the person holding their option can decide to exercise it and this
would cost them a lot if they hadnt looked at it well enough and planned for
that.
Understand your psychology. You should be comfortable with losing the
money you are exposing. If not, you will get emotional and start trading
emotionally. Trading emotionally is usually the sure path to poor trading and
heavy losses.
When you go through a string of three losses in a row, stop. Most likely, there
is something wrong with your approach. Re-evaluate it, yourself and the
market and see what is wrong.
As you can see, money management is literally game-planning so that when you
trade, you follow the plan and not your best-friends tips, your emotional drives, your
ego, and so on. It is setting the game up to win. It is guaranteeing success
mathematically. It is the difference between the investor and the gambler. Most
people invest without a money management plan; and when they fail they also fail
to see the simple math behind their failure and instead blame it on bad lack or not
being gifted or something. The above is just an introduction, and I strongly
recommend that you learn deeply about money management and trading psychology
from the recommended books in the appendix (plus any others that you find useful
to your particular personality).
There are some software programs available to help you with money management.
One of the best ones is called Trading Recipes.
Question: This money management thing looks great but what if I dont have
enough money to begin with to allow me to apply all the above principles such as
trading only 2% of my capital per trade? What if I am starting with just $100 and
adding $50 or $100 a week to my investment capital? What should I do?
Answer: There are many things you can do. For example, you can choose to start
by investing in a good mutual fund until your sum becomes big enough to allow you
to trade using money management principles. Whatever you do, dont wait till I
have enough money before I get started. Start now! If you wait you might wait
forever like many, many people do. Start now. Just start somewhere! Either way,
you will be learning and getting better.

Knowledge First, Action Second
If you wish to preserve your capital, dont get into anything before you have studied
it to know and understand why and how it works. Investing your money based on
hot tips, stuff you saw on TV, your cousins chat with you last weekend. that will get
you into trouble. Find out for yourself first; do your research, and dont just take
what the experts say. Get in there, get involved, get your hands dirty, and find out
for yourself. If you dont want to do that, then the only other way out is to get a very
well qualified advisor with a proven, verifiable success track record in that particular
field to tell you what to do and what not to do. Dont just get any advisor out of the
yellow pages and go with them without checking their performance record and
references and so on.
Protecting Your Assets
Dont wait until you get into trouble to start your asset protection. Start early. Now.
Legally, you cannot start putting asset protection in place the day you get sued or
something; the law will not recognize it. You have to start when all is good. And start
when you have about $50,000 worth of assets. Dont wait until you are rich. There
are several steps you need to take to protect your assets:
First, take an inventory of all your assets. The easiest, most sustainable way to keep
track of your assets is to use your Microsoft Money or Quicken software, but you can
of course use pen and paper. Count anything of commercial value that can converted
to cash (e.g. house, car, stocks, bonds, collectibles, bank accounts, jewelry,
businesses, copyrights, patents, retirement plans, insurance policies etc).
Then, choose the right asset protection structures. You have a choice between
domestic (based in your local country) and foreign structures (in a jurisdiction other
than where you live). In either case, you will most likely require a specialist to set
these up for you. Choose one well; research your specialist thoroughly before you let
them structure your asset protection for you. Here are some of the choices of
structures you have at your disposal (you will need to combine a few to achieve your
goals):
General Partnerships
Limited Partnerships
Corporations
Limited Liability Companies
Trusts (there are many kinds)
International Business Corporations (IBCs)
Captive insurance companies, etc
The idea, basically, is to wrap your assets with one or more of the above structures
in ways that isolate each asset, and protect all of them. For example, you can wrap
up your main business in two different companies and a trust, so that if the trading
section of the business fails (e.g. the market dries up, or the business is sued) the
other sections are not exposed to risk. For example, the land and building that the
business is on, if it is your land and building, is wrapped up as a separate holding
company and is therefore not exposed to creditor or legal action just because the
trading arm failed or was sued. And if that land or building is free of mortgage and
you have substantial equity in it, you can further insulate that equity by forming yet
another company to grant the holding company a second mortgage so that there is
very little equity left in the holding companys assets in case it falls into the hands of
a legal claim (e.g. someone falls in your premises and decides to sue). It gets more
detailed than this simple example, and here are some asset protection books you can
begin with (I highly recommend that you read one or two of these books, even if you
will end up appointing a specialist to set up your asset protection for you):
Asset Protection

Wealth Protection

Own Your Own Corporation

Loopholes of the Rich

Remember, you might have to mix both domestic and foreign structures. Domestic
structures may be inadequate for certain situations. You see, no matter how complex
and well set, domestic structures are still under the legal jurisdiction of the same
country where you live and where your assets are. So they cannot give you 100%
protection. Involving an offshore system will give you the protection of a separate
jurisdiction that is completely out of reach of your local legal system. Remember,
your assets dont have to move abroad; they can remain in your home country but
be owned by your offshore company or trust. Setting up an offshore company is not
as complicated or as expensive as you may think it is; it can be done for a few
hundred dollars or a couple of thousand dollars or so, depending on what you need.
Well, let us have a look at some basic concepts behind asset protection. We will now
look at various method (not structures, methods) applied in asset protection. The
right structures are then chosen and put together to achieve the aims of these
methods:
Jurisdiction methodology This involves taking advantage of cross-
jurisdictional differences to protect your assets so that the differences in laws
between two states or countries can be used to protect your assets (e.g. the
title to a persons assets could be held by a foreign IBC, also owned by this
same person, in a foreign jurisdiction that does not recognize the laws of the
persons local country, effectively insulating their assets against any claims
such as litigation or divorce claims).
Integration methodology This involves building-in your asset protection
into your business and investments so that it is part and parcel of normal
operations.
Unbundling and separation methodology This involves separating
(splitting up) an asset into its smallest component units and protecting and
insulating each component separately. For example, instead of having the
assets of a business held by the same company that is doing the business
trading activity, the assets could be held by an IBC and leased out or rented
to the local trading company. That way, if the local trading company is ever
sued or goes bankrupt, the assets will be beyond the reach of the litigation
because they will be in the ownership of the IBC.
Opportunity-shifting methodology This involves moving a new wealth-
creating asset outside of existing structures and into a new separate structure
before the wealth is generated so that you can transfer the wealth before it is
created and received.
Asset transfer methodology This involves selecting a system to move an
asset to a new structure in the safest, most tax effective way (e.g. to transfer
inheritance without paying hefty inheritance taxes, etc).
Transfer pricing methodology This involves separating a business or
investment operation in such a way that the profits are generated offshore to
minimize on local taxes. For example, a business that imports products for
sale in its local country could set up an IBC in a tax-free offshore jurisdiction
(there are companies like that will set this up and run it for as little as a few
hundred dollars a year it is simply a paper corporation without actual staff
offshore). This IBC would then import the products (on paper, at least), then
mark them up and resell them to the local import company. The profit
generated in the overseas arm would be completely tax free, while the local
arm would make only a minimum profit and thus minimize taxes. (These kind
of arrangements need to be well structured so that they can be considered
legal.)
OK, let us look at a very, very simple example simply to illustrate the power of asset
protection. In this example, we will focus only on local asset protection strategies
and ignore offshore ones we can use for even better protection. We will also leave
out trusts and other structures that we can add to this example to minimize taxes.
Let us pretend that you own five properties, apartments that you rent out to tenants.
Right now, you have them all in your name like many people do. Under such an
arrangement, you are personally liable for anything that goes wrong there, and your
insurance may not cover everything. In fact, you are liable enough to have to give
up even your other personal assets to settle any claims above and beyond the value
of those properties. How can you increase protection?
You could form a corporation and put all the five apartments in that corporation.
Because a corporation has limited liability, if someone in one of your properties falls,
sues and wins, they can only be awarded a claim of a value up to that of the five
properties. Once the corporation reaches its asset value limit in terms of claims
against it, it simply is folded into bankruptcy and closed. Everything in the
corporation is lost, but your other personal assets are left untouched. So that is
some protection, but not enough. To increase protection, you would form five
separate corporations and place each of your apartments in its own corporation. This
way, if a person falls and sues in any one apartment, they cannot be awarded assets
in other corporations. They get just the one apartment. But how can you protect
even further? How can you further protect the equity you have built in the one
apartment? You now employ equity reduction plan (ERP). An ERP legally transfers
the equity in an asset to a separate entity (like a corporation) without transferring
the asset itself. To set up an ERP, all you will basically need to do is set up a sixth
corporation to hold the equity itself. Even practitioners such as physicians can have
ERPs to hold their accounts receivables so that they are protected separately from
their medical practice. It sounds complicated but once you look at it in detail it is
actually very simple. Everything new sounds complicated until you have a good look
at it.
Here is a case study extracted from OCRA.com, a company that specializes in
offshore business services (case studies copyright OCRA (Isle of Man) Limited). For
several more case studies, see the section on tax minimization in this book. Have a
look at this now:
Holding Company
Oscar Valdez, a Mexican high net-worth individual is planning to invest in new
recreational and tourist facilities (spa resort, golf links, holiday cottages, restaurant,
etc.) in Portugal. Part of the investment will be wholly-owned by Mr. Valdez, part of
the investments will be made together with local Portugal investors. The development
of the various sites may take several years after the acquisition of land and property
and hence, the business operations are expected to commence after the development
of the sites has been completed (depending on the type of facility, after one to five
years).

Mr. Valdez is interested in structuring his investment in such a manner that:
1. the assets wholly or partly owned by him in Portugal are well protected
against various business, economic or political risks; and
2. the return of his investment after the commencement of the business
operations is tax effective.
Suggested solution:
Mr. Valdez could split the business operations and the real property by setting-up
separate companies for the various business operations and for the real property. The
real property companies are then renting out the property to the operational
companies.

The rental income will be subject to corporate tax in Portugal at a rate of 28%,
regardless as to whether the real property company is resident in Portugal or not.
Additional taxes will be due if the real property companies are established in "black-
listed" offshore jurisdictions. During the development phase, the operational
companies will have accumulated losses. If the real property companies are resident
in Portugal, both the real property companies and the operational companies can be
held by a Portuguese holding company. In this way, the entire group can claim group
relief under Portuguese law, as a result of which the profits of the real property
companies can be offset against the initial losses of the operational companies, thus
minimising exposure to Portuguese tax.

If the Portuguese holding company is owned by a foreign holding company under such
conditions that dividends will
1. Not be subject to withholding tax on dividends
2. Not be subject to corporate income tax upon receipt by the holding company
(or are qualifying for a credit for Portuguese underlying taxes)
3. Not be subject to withholding tax on dividends paid by the holding company
then this would result in an effective tax planning solution. The effectiveness is further
increased if the international holding company is owned by an IBC or a tax-exempt
company in an offshore jurisdiction.

These conditions would be met if the Portuguese company is owned by a UK holding
company, the latter being owned by a company on the BVI, as illustrated by the
diagram below.

Note: A holding company in, for example, Cyprus, would not work as long as Cyprus
is black-listed under Portuguese law.

For offshore company formation, we suggest you use a company like OCRA.com. For
U.S. company formation, we suggest you use a company like The Company
Corporation.

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Have Only Smart Debt
That Works For You And
Avoid Bad Debt
There are two kinds of debt. Debt that
works for you and debt that works against
you. Debt that works against you can have
a very constricting effect on your efforts to
become wealthy. Do you remember the
power of compound interest and how
amazing it is at creating wealth? Well, what
if that power was turned against you? That
is what bad debt is; debt that turns the
power of compound interest against you.
Good debt, on the other hand, allows you to
benefit even more from compound interest!
It gives you leverage.
Good debt is easy to understand, so we will cover it first, quickly. Good debt is
simply any debt that gives you cash to allow you to acquire assets that make you
more money than you have to pay back to your debt provider. So, if you are
borrowing at 9% interest rate (or much lower for derivatives trading accounts such
as with CFDs, etc), simply make sure that you earn more than 9% in whatever
investment you make with the money you borrowed. In essence, that debt will have
given you money that you didnt have, and then that money went on and made you
even more money. So you make money out of thin air, literally. With bad debt, you
simply borrow money and pay it back with interest. With good debt, you borrow
money, use it to earn much more money, and use that money to pay back the debt
and keep a profit. That is all. You can arrange mortgages, loans, margins and many
other type of debts in ways whereby they become good debt. So good debt is any
debt you arrange in a way whereby you profit from it, effectively making money out
of thin air. Very powerful! Why wait months or years to earn money to invest when
you can borrow it instantly!
Now, let us look at bad debts. To avoid bad debts, avoid believing most of the
messages you get from these three groups:
Advertisers and marketers. They are out to sell, and to sell they convince
you that you need what you dont actually need, that you are lacking
something that only they can fulfill, that they are solving your problems. All
they are doing is selling. And there is nothing wrong with that; that is the
business they are in. but dont believe them. Only get what you truly require,
and usually that is much less than what they tell you that you need. When
they sell you stuff you dont need, that is bad enough for you. But when they
put it on finance, then it is really bad.
Banks, lenders and credit card companies. Again, they approach you
telling you that they are serving your interests, but they actually make
phenomenal profits through the beliefs of the masses. They rake in billions of
dollars every month. Where do you think that money comes from? And why
dont you make phenomenal profits from them? They are also in business to
make money. Remember that. They will loan you money at rates that will
take years to pay back, and they turn around and use your money to make
40 100% profits.
Financial advisors. Well, the vast majority of them, anyway. Some advisors
are very good, very qualified, and have practical experience and a personal
track record of financial success and independence. However, most of the
others are only trained to sell you financial products that make money for
their employers. And did you know that about 80% of the financial industry is
owned by the banks?
Let us look at some examples of how these three groups take your money from you
(if you allow them to, you can't really blame them).
Lets start with credit card examples. If, for example, a person only has a $2,500
balance on a credit card at 21% interest and they pay a 2% minimum payment on
the remaining balance each month (which works out to $50 the first month, and
goes down as the remaining balance reduces), it will take this person over 63 years
to pay off this debt and cost them, get this, a whopping $14,699 in interest charges!
However, if they paid $50 each month, regardless of the fact that the minimum
payment was requiring progressively less than that, they would pay it all off in 10
years only and cost $3,493 in interest charges.
Lets say for example that a person has credit cards with a total of $20,000 owing.
His cards have an average interest rate of 20%, and he pays his monthly minimum
of 2.5% on the outstanding balance. Lets also say he has stopped using the cards
and is now only clearing the balance. Lets see what happens. At the minimum
payment level, he will pay off his credit cards in 39 years and will have paid $51,620
in interest charges plus his balance of $20,000! Now, we need to learn two things
from this example: (1) we know that compound interest works best on the long-
term. The credit card companies know this as well, so they make you stay with your
debt longer so they can get more from you. How? That brings us to lesson (2) As you
reduce your payment slowly by only paying the 2.5% minimum on the outstanding
balance, your monthly payments get smaller and this keeps you paying longer. At
the beginning, this person was paying 2.5% on $20,000, which is $500. When the
outstanding balance had fallen to $10,000, the new minimum payment was 2.5% of
$10,000, which is $250. However, if he had continued paying $500 a month
regardless of the balance, he would have paid it off far faster and used much, much
less money to finish off the debt.
Moral of the story:
Never pay only the minimum debt re-payment asked for.
What is the fastest way to get out of your debt? It involves two things:
Make the largest payment amount possible every month so as to reduce the
time you are in debt (because time is what gives compound interest its power
to increase your debt).
Consolidate your debts and move them to an institution that gives you the
lowest possible interest rate, again to reduce your total payments.
Lets look at the number of months it would take you to pay off a $10,000 debt at
various interest rates, just to show you the power of paying more than the minimum
asked for:
Monthly
Payment /
Interest Rate
4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20%
$50 330 431 Never Never Never Never Never Never Never Never Never Never
$75 177 195 220 259 331 Never Never Never Never Never Never Never
$100 122 130 139 151 165 186 216 Never Never Never Never Never
$150 76 78 81 85 88 93 98 110 130 166 Never Never
$200 55 56 58 59 61 63 65 70 75 83 93 108
$250 43 44 45 46 47 48 49 51 54 58 62 66
$300 35 36 37 37 38 39 39 41 42 44 47 49
$350 30 30 31 31 32 32 33 34 35 36 38 39
$400 26 26 27 27 27 28 28 29 30 31 32 33
$450 23 23 24 24 24 24 25 25 26 27 27 28
$500 21 21 21 21 22 22 22 22 23 23 24 25
$600 17 17 17 18 18 18 18 18 19 19 19 20
$700 15 15 15 15 15 15 15 15 16 16 16 16
$800 13 13 13 13 13 13 13 13 14 14 14 14
$900 11 11 11 12 12 12 12 12 12 12 12 12
$1,000 10 10 10 10 10 10 10 11 11 11 11 11

Let us look at cars now. Just as with credit cards, car finance adds a big, big new bill
to the cost of owning your car. With car finance, you get a bigger debt than with a
credit card. Car finance and leasing can add literally up to a few hundred thousand
dollars more on the true cost of the cars you own or drive during your lifetime. Yes,
an extra several hundred thousand dollars over your lifetime! Money you would have
used yourself or invested to make millions. And the car companies know this all too
well. Most of them are in the car business to get into the finance business! For
example, look at General Motors (GM). GMs credit arm, GMAC, posted record third
quarter profits this year of $656 million. Meanwhile, its car divisions lost money, not
making any profits. GMs profits are rescued by its credit arm (which makes half its
money in mortgages and half in car finance) and its car insurance arm. GM is
practically in the car business to make the phenomenal profits available in giving
credit to car buyers.
And now let us briefly look at mortgages. It is true that you can use mortgages to
finance a property acquisition and have that property make you profits over and
above your mortgage payments. Used wisely, mortgages are great tools. However,
the way most homebuyers use them is something akin to the enslavement of
themselves. They set up their mortgages in a way that leads them to bleed money to
the banks. No, not bleed. Hemorrhage. We have already seen that the typical home
under a mortgage is not an asset to the homeowner but a liability (unless they use
creative financing to fix this situation). It is instead an asset to the bank, a great
asset. Let us see just why. You see, mortgages are long-term liabilities. And we
know now that compound interest works best the longer it is in place. So when you
get a 30-year mortgage at 9% compound interest per annum, guess who is laughing
all the way to the bank? The bank itself! For example, on a 25 year $100,000
mortgage at 8% interest, you would end up paying about $64,833 in the first 7 years
alone, but only $11,789 of that would be going towards repaying the amount you
borrowed (the principle). Over $53,000 of it would be going to the bank purely as
interest charges, pure profit for the bank. And do you know what work the bank has
to put in to earn that money? Absolutely none! They just sit there and wait for you to
work and send them a check. Thats how good they have it going. And there is
nothing wrong with that. They have simply bothered to understand how money
works and they apply that knowledge. You can easily do so as well. So, after paying
the bank $64,833 in the first 7 years of a 25 year $100,000 mortgage, you would
still owe them $88,211 plus 9% compound interest on that amount per annum for
the remaining 18 years of the mortgage. Is that bleeding money or hemorrhaging it?
And is it slavery or freedom? Interestingly, the word mortgage is made up of two
words mort (stemming from the word that means death - mortuary, morgue) and
gage (stemming from the word that means engaged), literally translating to mean
engaged till death.
The point here is not that debt is bad. Debt is not bad, nor is it good. It is simply
debt and you experience its effects depending on how you use it. The key is to
become a master of leverage, a master of debt and compound interest, a master
that understands how it works and how to apply it. Because on the other side, good
debt, leverage, can enable you to gain wealth faster than you have ever dreamt
possible.
There is nothing wrong with debt, when used healthily as a tool. But when it arises,
as it mostly does, from fear, feeling of lack, and negative self-worth beliefs, then it is
a control game being played, a painful one at that. Additionally, what most people
don't know is that debt, in our current civilization's money system, is designed to
collapse for a certain number of its holders.
Before cash money was invented in it's present form, people used to trade by barter.
They would exchange goods and services. Finally, one day, a powerful merchant
family such as the Medici family of Italy (powerful merchants and later bankers who
ruled through influence between the 13th and 18th century) said, "We have another
way we can do this. We can make promissory notes we shall call money. They are
more convenient to carry than goods and gold." The first paper money worked as
follows. A trader would go exchange his or her goods for gold. They then take this
gold to deposit it with the Medici, and the Medici write up a paper with their
signature and family seal, a paper that would represent the gold that was deposited
with them. This paper, upon return to the Medici, would be exchanged into its gold
equivalent. That concept is where the gold standard came from.
Now let us look at debt. Imagine that the Medici have just opened up their first bank
and announced the new scheme to the traders. So one trader, let us call him Alan,
goes to the Medici and deposits $100 worth of gold. The Medici make up a paper
saying that they promise to exchange that paper for $100 worth of gold upon its
return (less a banking fee, plus an interest, whatever). Alan takes this paper and
goes home. Alan can use this paper to buy things, but let us assume he does not. So
far, he is the only customer at the Medici's new bank. Now James, another person,
wants to start a new business, a hotel. He has the land and building but needs some
pots and pans. He does not have any goods to trade in exchange for pots and pans,
but he hears that the Medici are giving "loans".
So James goes to the Medici and asks for a $100 loan. The Medici say they can do
that, but James has to pledge his land and building as a security, collateral, in case
of default. The Medici make up money (money that did not exist) by writing up a
new paper, sign and seal it, and give it to James. (Yes, they could just write up the
money out of thin air, and as you will see soon, that is exactly how the Federal
Reserve makes U.S. dollars, contrary to most people's imagination that it is backed
by something.) The condition is that on return, James has to give back $100 plus
$10 interest. Now freeze that right there. Imagine that James and Alan are the
Medici's only two customers at the time. This means that the economy only has two
paper notes out there, one with Alan and one with James. And James has to return
his plus $10. Where will James get that $10, unless Alan comes and rents a room at
James' hotel for $10? The Medici did not print the extra $10! So even if James is
hyper-careful with his loan, even if he does not spend it at all but returns it after a
year, the $100 intact, it is physically impossible for him to pay the $10 interest. This
is because he cannot print the extra $10 money and Alan does not want to spend his
money at the hotel, yet Alan is the only one with the only other note printed! Do you
see the error in this system? Even if James now has goods to trade, he cannot trade
them for paper money because there is no more out there - and the Medici wants
cash money or the collateral. James will have to lose his hotel to the Medici simply
because of a paper shortage error. He has the original $100 they gave him because
he did not spend it, but he cannot possibly get the $10 they want in addition as
interest, because he can't print money nor does the only other person with bank
notes want to stay at his hotel and pay cash. His hotel may be highly successful,
renting rooms in exchange for goods, but he still would not have the printed paper
for $10 that he has signed to give back to the Medici as interest. So his hotel would
have to be seized by the bank. This example shows exactly how our modern
civilization's debt system works. But because there are millions of people playing this
game, the players don't realize there is a problem because only 8% of people are
caught by this error (about 8% of all debts are un-payable). And those that are
caught by this error think there is something wrong with them only - they never
imagine that the system itself is flawed!
Debt, by its very nature, in our current financial system, is designed to fail for a
certain percentage of the population, no matter how much effort or care they put.
And it is so simply because there is not enough money created (printed) for the
interest requested. The only reason this illusion has managed to run this far is that
there are millions of players rotating the money and it looks like it works for most
people, which makes the few it doesn't work for look like something is wrong with
them and not the system. Every now and then, the debt bubble bursts, but someone
somewhere comes along and rescues it, again with more debt and more conditions of
control. It happens to individuals, companies and countries. And it keeps rising,
getting bigger and bigger.
So what? What does this mean to you? Simple. As you are about to see next,
inappropriate use of debt is a function of control and fear. Unhealthy debt is a
product of fear, and a deep-seated belief in not having and not being able to have.
And fear is a means of control. We all play the control game. We play it with our
spouses, family, friends, competitors, customers, and so on. What happens when
you feel that you are in control of another person? You feel powerful, and they feel
drained. Fear, were you to observe it at an energy level, leads to the victimizer
literally (really) sucking the energy out of the victim. It is an energy game. When
one is in fear, they lose energy to those who put fear into them. Isn't that the way
any abusive relationship works? It does not matter whether this relationship is
between people, institutions or countries, or what the forms and symbols used are.
Intimidation is an energy-sucking and draining game - like a vampire sucking the life
out of its prey. This is not a metaphor - energy is literally sucked out of the victim
and taken by the victimizer in an intimidation scenario. You can even observe this on
an energy level. Fortunately, the victim has to choose to accept the draining for it to
happen - and that is why in reality there really aren't any 'victims' as such, just
willing players in a co-created game.
Now let us get back to you and debt. What does debt make you feel; especially when
you cannot pay it or you are worried about how to pay it or missing a payment? It
makes you feel fear. Whatever is scaring you is attempting to control your thoughts
and actions and is stealing your energy for its own growth. There are two ways to
grow. Out of fear and out of love. The fear-based growth works, but it is destined for
eventual collapse, simply because it is not real. Nothing real can be threatened, and
nothing that is unreal exists but as an illusion. This is not the time to blame the
issuers of debt, or anyone else for that matter. There is no judgment or guilt in the
matter. Only energetic facts. The minute you start playing a blame and judgment
game, you enter into a victim position, and that is no good for you. Nevertheless, the
unhealthy type of debt is a function of fear and self-worth issues. You will find that
people with more love of their own self, and high self-esteem, are very wealthy and
prosperous, especially on the long-term, and if they choose to be. True Prosperity is
a natural result of self-love and self-worth. Look at the rich. Even if they have debt,
their asset column is longer than their debt column. They only use debt as a tool.
And they always have more assets than debt. And what is their demeanor like?
Confident, stable, of high self-worth and self-esteem, and their love column is often
longer than their fear column. They may have fears, of course, but their fears do not
outweigh their love and passion for who they are, what they do, the world they live
in. These are the people who have acquired wealth through love, not fear. But of
course, there are those who have acquired wealth through fear. Yes, you can get
wealthy through fear, but that path is very hard, uses plenty of personal energy,
requires much manipulation and perpetual juggling to maintain, and often requires
the control of others. Wealth through fear is not only hard to come by, it is also not
sustainable.
Now consider people with debt problems, or countries with debt problems. What is
the personality of such people? Chaos, fear, never having enough, support issues,
and so on. These do not arise because of debt. The debt arises because of these
mental states. That is not a bad thing. Remember, we are not judging anything here.
We are merely observing energetic facts. There is no need of tying a thought and an
emotion to that fact. Now, the debt merely represents them losing their life energy
to an external entity. But they only lose it because they accept to do so. They give it
away. Only they can say, "I accept". And only they can say "OK, I have had it with
this crap, I put my foot down, and I am now seeing myself differently."
The debt rope is always being thrown at us all the time. You don't have to grab it.
The world has built a very large global fear-ego, and this fear-ego is expressing itself
in various physical means to maintain itself. Our world is now a world of contracts
that try to commit you into debt (we now even have phone contracts that penalize
you for not using the service for a certain amount of time!); credit cards that do the
same; jobs that scare you towards that end. But none of these is to blame. Only you
can accept them. And they can only work on you when you accept them. These
apparently big bad monsters are actually just little rubber ducks, powerless shadows,
because they depend on your agreement with them for their own functioning. Take
responsibility, and you will find then, and only then, that you have response ability.
And avoid these debt traps. You must unplug yourself from the group consciousness
of fear, and join the Love Ones. It may be scary as you make the switch, for there is
a gap to cross. Things may fall off to make space for new ones of the new way. But
once you cross it you will wonder how you ever had agreed to live any other way.
There is nothing wrong with debt, when used as a tool. But when it arises, as it
mostly does, from fear and negative self-worth beliefs, then it is a control game
being played, a painful one at that. A game we created and continue to create.
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Pay Minimal Taxes Using
Simple And Advanced
Strategies
The great Sir Winston Churchill once said
that, No man has the moral or legal
obligation to arrange his financial affairs
so that the state can put the biggest shovel
in them. For most people, taxes are the
biggest expenditure they face. Most people
pay almost 50% of their income in taxes
(income tax, corporate tax, sales tax, fuel
tax, and all the other taxes they pay all add
up to almost half their income). Cut your
taxes down to about 10% of your income. If
you can put in place strategies to save
about 30 90% of the taxes you are
presently paying, and this is what most
wealthy people do, you will have a lot of
money left over to invest. Mathematically,
our economies can do very well with 10%
taxes. The reason why we pay so much is
government mismanagement, waste and
expenditures that dont make sense. The
fastest way to double your income,
whatever level it is at, is to cut your taxes if
you are paying the full rate.
Look at this table showing various tax rates around the world:
Country Corporate Income
Tax
Individual Income
Tax
VAT/GST
Argentina 30-35% 6-35% 17%
Australia 30% 17-47% 10%GST
Austria 34% 21%-50% 20%GST
Belgium 33.99% 25-55% 21%
Brazil 34% 20% -
Bulgaria 19.5% 15-29% 20%
Canada 36.6% 31% 7%
China 33% 5-45% 17%
Cyprus 10-15% 20-30% 15%
Cyprus
(offshore)
4.25% 4.25% -
Czech Rep. 28% 15-32% 19%
Denmark 30% 41-60% 25%
Egypt 40% 20% -
Estonia 0%(Accrued) 26% 18%
Finland 29% 12-35% 22%
France 34.33% 10%-48.09% 19.6%
Germany 25% 0-45% 16%
Greece 35% 0-40% 18%
Hong Kong 17.5% 15% -
Hungary 16% 18-38% 25%
India 36.75% 20-40% -
Indonesia 30% 10-30% 10%
Ireland 12.5% 20-42% 21%
Israel 36% 10-49% 17%
Italy 33% 23-45% 20%
Japan 30% 10-37% -
Latvia 15% 25% 18%
Lithuania 15% 10-35% 18%
Luxemburg 30% 6-46% 15%
Malta 35% 15-35% 18%
Mexico 33% 3-35% 15%
Monaco 33% 0-33% 20.6%
Morocco 35% 0-41.5% 20%
Netherlands 29-34.5% 36-60% 17.5%
Pakistan 35% 7.5%-35% 15%
Philippines 32% 5-34% 10%
Poland 19% 19-40% 22%
Portugal 27.5% 15-40% 17%
Romania 25% 20-60% 19%
Russia 24% 13% 20%
Saudi Arabia 45% 2.5% -
Singapore 22% 2%-22% -
Slovakia 19% 19% 19%
Slovenia 25% 17%-50% 20%
South Africa 30% 17-45% 14%
Spain 35% 0-56% 16%
Taiwan 25% 6-40% 5%
Thailand 30% 5-37% 7%
Turkey 33% 15-40% 18%
U.K. 30% 0-40% 17.5%
U.S.A. 35% 0-35% -
Vietnam 28% 0-60% 20%
Zambia 15% 10-30% -

As you can see, taxes are usually the single most expensive outlay of money for
most people. And cutting your taxes 30 90% is the easiest way to double your
income! It is that simple. If you are earning $50,000 and paying half in income and
sales tax, cut your taxes and you will keep most of your money. As an added bonus,
if you start investing the money you kept, you will grow very rapidly! How much do
you pay in taxes a year? Get a dollar figure. Now, go look at the compound interest
tables and see how much you may have made if you instead invested that money.
In just about ever case, the average taxpayer can retire a millionaire if they invested
their tax check instead of paying it to the government. Instead, most retire almost
broke. Well, you do have to pay some taxes, its only fair, but 10% of your income is
what is mathematically adequate for any economy if certain wastes are eliminated.
(For example, I personally dont see any reason why the world spends at least $3
billion a day on the military during peacetime, and more when at war. I dont wish to
have my money spent on multi-billion dollar bombs.) Anyways, look at the
compound interest charts we saw earlier in this book. Then consider how many years
you have paid taxes, what amount, and try to see whether you can estimate how
much you would have today if you had instead invested 90% of your tax bill. You will
be quite surprised at the wealth possible. You are, after all, already paying the taxes
so all you would have done is write the check to the mutual fund or broker instead of
to the government.
So how do you save 30 90% of your taxes? Well, there are two means:
1. Simple strategies like claiming deductions. These only save you a relatively
small percentage of your tax bill, but they do count so use them.
2. Complex strategies involving asset protection strategies (see the part on
asset protection in this book for an idea of what is involved). This is what
corporations and wealthy people use to save the bulk of their taxes
automatically, annually, and simply.
Now, tax planning is a very wide area and we wont go into the details of it here. The
point was just to show you (a) that taxes are the biggest expenditure most people
have in their lives and (b) by saving most of your taxes and investing them, you can
create a great deal of wealth.
You now have to do your own homework to find out how to save your taxes. I
suggest you start by first going to amazon.com and purchasing these asset
protection books for an understanding of the major strategies you can use (at least
look at the first three books because the first two cover big strategies including
offshore ones, and the third covers smaller strategies like deductions):
Lower Your Taxes

Asset Protection

Wealth Protection

Own Your Own Corporation

Loopholes of the Rich

Then, if you feel you need one, you can get a professional advisor to structure your
tax strategies. Choose your professional advisor well; verify them. A badly done
structuring will blow up on you rather than help you.
Here are a few case studies extracted from OCRA.com, a company that specializes in
offshore business services (case studies copyright OCRA (Isle of Man) Limited):
Holding Company
Oscar Valdez, a Mexican high net-worth individual is planning to invest in new recreational
and tourist facilities (spa resort, golf links, holiday cottages, restaurant, etc.) in Portugal.
Part of the investment will be wholly-owned by Mr. Valdez, part of the investments will be
made together with local Portugal investors. The development of the various sites may take
several years after the acquisition of land and property and hence, the business operations
are expected to commence after the development of the sites has been completed
(depending on the type of facility, after one to five years).

Mr. Valdez is interested in structuring his investment in such a manner that:
3. the assets wholly or partly owned by him in Portugal are well protected against
various business, economic or political risks; and
4. the return of his investment after the commencement of the business operations is
tax effective.
Suggested solution:
Mr. Valdez could split the business operations and the real property by setting-up separate
companies for the various business operations and for the real property. The real property
companies are then renting out the property to the operational companies.

The rental income will be subject to corporate tax in Portugal at a rate of 28%, regardless as
to whether the real property company is resident in Portugal or not. Additional taxes will be
due if the real property companies are established in "black-listed" offshore jurisdictions.
During the development phase, the operational companies will have accumulated losses. If
the real property companies are resident in Portugal, both the real property companies and
the operational companies can be held by a Portuguese holding company. In this way, the
entire group can claim group relief under Portuguese law, as a result of which the profits of
the real property companies can be offset against the initial losses of the operational
companies, thus minimising exposure to Portuguese tax.

If the Portuguese holding company is owned by a foreign holding company under such
conditions that dividends will
4. Not be subject to withholding tax on dividends
5. Not be subject to corporate income tax upon receipt by the holding company (or
are qualifying for a credit for Portuguese underlying taxes)
then this would result in an effective tax planning solution. The effectiveness is further
increased if the international holding company is owned by an IBC or a tax-exempt company
in an offshore jurisdiction.

These conditions would be met if the Portuguese company is owned by a UK holding
company, the latter being owned by a company on the BVI, as illustrated by the diagram
below.

Note: A holding company in, for example, Cyprus, would not work as long as Cyprus is
black-listed under Portuguese law.

International Trading Companies

Yuri Ivanov lives in Russia. He is purchasing and selling shoes. He buys the shoes from Italy
and sells them to department stores in France, Germany and Spain.

Mr. Ivanov wonders whether he can structure his business in a tax-effective manner, for
example by using an offshore company.
Suggested solution:

Mr. Ivanov can set up a trading company in a low tax country, thus ensuring that his trading
profits will not be taxed in Russia (his country of residence), nor in France, Germany or
Spain (because the tax authorities argue that he has a taxable presence in these countries).

As all the transaction concerned are European Union transactions, Mr. Ivanov must obtain a
VAT registration. A good location for conducting trading activities where one can obtain such
a registration is the Isle of Man. Thus, if such an Isle of Man company intends to ship the
shoes from Italy to Spain, the Isle of Man company would inform the Italian company of its
VAT number, so that it could zero rate its sales invoice. The Italian company does not have
to charge VAT to the Isle of Man company. The Isle of Man company would then obtain the
Spanish company's VAT number and subsequently issue a zero rate invoice to the Spanish
company.

For setting-up the Isle of Man company, there are a couple of possibilities: an LLC (taxed as
a transparent entity, so effectively no tax in the Isle of Man on the profits obtained) or a tax
exempt company. None of these companies are required to withhold tax on dividends.

Licensing Company

Zoomcopter Ltd., a company established in Taiwan, has developed a new widget which is
used as a spare part in the assembly of helicopters. By using this widget when producing the
helicopters, the operational costs of the helicopters can be substantially reduced.

Zoomcopter holds the worldwide patents on this invention and it wonders how the
exploitation of the patents can be arranged in a tax-effective manner.
Suggested solution:
The patent should be transferred to a company in a low tax country from which the patents are
licensed to one or more licensing companies in countries with a dense tax treaty network and which
does not levy a withholding tax on royalties paid abroad.

The set-up of a licensing company in Mauritius could meet these objectives. Mauritius has an
expanding network of double taxation treaties, thus substantially reducing the withholding taxes on
royalties paid to the Mauritius company.

Although the Mauritius company is subject to tax in Mauritius at a rate of 15%, the spread between
royalties received and royalties paid to the offshore patent-holder can be minimised (Mauritius has
not adopted any transfer pricing regulations which could have an impact on the amount of the
spread).

Royalties paid by the Mauritius company are not subject to a withholding tax in Mauritius.

Note: If there is no double tax treaty between Mauritius and the country from which the royalties
are paid, the set-up of a sub-licensing company in a third country might be considered, e.g.
Luxembourg. Luxembourg has a good tax treaty with Mauritius.


Personal Service Company

Albert Smith is currently working in Luxembourg as an independent IT consultant through a
Luxembourg management company. Therefore, he is currently paying Luxembourg taxes
(rates up to 38%).

Mr. Smith is going to conclude a new service contract to work in Italy for a US-company.
The US company has a European office in the UK. It is contract work and the US company is
using Albert's services by sub-contracting him out to one of its clients in Italy.

Mr. Smith wonders whether he can reduce his Italian income tax exposure (rates up to
45%), for example, by using an offshore company which is directly or indirectly controlled
by him.
Suggested solution:
Mr. Smith could set up a new personal service company in country which has a good tax
treaty with Italy, thus ensuring - with some proper structuring - that any fees paid for
Albert's work in Italy are taxed in the country of residence of the service company. The
company makes Albert available for working in Italy.

The personal service company is fully owned by a personal service company set up by Albert
in an offshore jurisdiction. Thus, it is necessary that the service company is established in a
country which does not levy a withholding tax on dividends paid abroad.

A country meeting these conditions is Malta. Although the Italian-source fees received by
the Maltese company are subject to tax at a rate of 35%, two-thirds of the Maltese tax will
be refunded upon the distribution of the dividends offshore, thus reducing the tax burden in
Malta to 11.67%. Malta does not levy a withholding tax on dividends.


Real Property Companies
Ferenc Kiss, a Hungarian high net-worth individual living in Budapest, is investing
substantial amounts of his wealth in real property, both in Hungary and in other Central and
Eastern European countries.

Mr. Kiss wonders how the return on his investment can be arranged for in a tax-effective
manner. The same question arises in case he sells the property in these countries and he
realises a gain.
Suggested solution:
Assuming that Mr. Kiss is not engaged in developing real property, the nature of his income
is rental income or, in the case of sale, a capital gain. In many countries, this is considered
"passive income" for tax purposes.

The acquisition of the real property in the countries concerned can be made through local
companies directly or indirectly controlled by Mr. Kiss. These local companies can be wholly
owned by a holding company in a country with a favourable holding company regime. Any
dividends distributed by the companies in the countries where the real property is situated
should:
1. Not be subject to withholding tax on dividends (or only at a low rate)
2. Not be subject to corporate income tax upon receipt by the holding company
Moreover, if the holding company sells the shares in the real property companies, any
capital gains resulting there from should not be subject to corporate tax.

A country meeting the above conditions for the holding company regime is Luxembourg. A
Cyprus company holding the Luxembourg company and directly or indirectly owned by Mr.
Kiss would be a tax-effective solution. See the diagram below.


Did you know?
The IRS was created shortly after the Federal Reserve
Bank was created. It is a perfect vehicle for the
government to use to pay back its 'debt' to the Federal
Reserve Bank. Even in congressional hearings, the Fed
has admitted several times to the fact that it creates
money out of thin air and loans it to the government with
usury (interest). If the government goes back to printing
its own money, this interest would cease to be created,
and the budget would, for once, balance. Did you know
that for the last 50 times that taxes have been raised, the
budget has only been balanced once? 15% of the national
budget goes towards paying the interest on the national
debt, while another 15% goes towards the military (a
primary reason for much of the national debt in the first
place). You do not need such a high level of taxes to run
a good economy. In fact, you have a better economy with
low taxes that give people a chance to be free instead of
bound to 3 jobs just to make ends meet. The IRS is
shrouded by a lot of controversy about its creation. It was
initially a private trust called the Bureau of Internal
Revenue, Puerto Rico (or Philippines - it is unclear which
of two vehicles was converted). This private trust bureau
was set up to regulate international trade coming through
the possessions of Philippines and Puerto Rico by
imposing and collecting taxes on narcotics, alcohol,
tobacco, and firearms. Its name was later changed by the
then Secretary of the Treasury to the IRS. At no point
was congress involved in the creation of the bureau or the
IRS. The creators of the IRS only started involving
congress a year later, to pass some laws to give some
'legal' support to their new structure. The IRS history is
too long to go into here, but many in the legal profession
question the legality of its origins, code and enforcement.
In fact, its concept was ruled unconstitutional several
times before it was finally implemented in a rather
controversial way. A national income tax was found
unconstitutional in 1895 by the Supreme Court, and
several times again after that. To this day, it is unclear
whether the IRS actually has the legal right to enforce tax
collection in the states (it only has that power in federal
areas such as D.C. and insular possessions but
questionably not in the individual states).
Did you know that most taxes are paid by the working class people and not by the
rich or by the corporations? Although corporations make the bulk of the money made
all over the world, they pay only a fraction of the taxes. The ultra-wealthy also pay
very little in taxes. In fact, a recent Wall Street Journal article raised quite a furor
around the world when it revealed that most corporations dont pay any tax at all, or
they pay a very small amount, even when they are profitable, due to the creative tax
strategies they apply. You have to realize that the tax planning industry is very, very
big. There are a lot of tax specialists out there, and even big global accounting firms
like KPMG and PriceWaterhouseCoopers are deeply involved in tax planning at a very
high level. And guess who pays for their services? The poor or middle-class? No.
They pay hefty taxes and earn little! The people who pay for tax planning services
are people who recognize the importance of saving on their tax bill. They just dont
fork out whatever the government tells them to fork out. You can't blame them,
really. This way is open to anyone who wants it. Here is an example of just two
billionaires and their tax arrangements just to illustrate.
Australia's richest man pays no tax
By Jason Nicholls
15 October, 1998
[Article extracts obtained from the wsws.org website]
Professor Russell Mathews, who headed an Australian government
inquiry into taxation in the 1970s, observed that the problem facing
governments was not getting business to pay more tax, but getting
companies to pay any tax at all. The truth of that statement was
illustrated on Tuesday.
After a seven-year legal battle, Australia's richest man, Kerry Packer,
won a Federal Court ruling absolving him of paying any personal income
tax for the three-year period 1990-92. Packer, who owns Australian
Consolidated Press and runs a media and gambling casino empire, has a
personal fortune of over $A5 billion. Last financial year, he made an
average of $3.56 million per day.
In effect, the company will pay only $25,000 in tax for the two years--
giving Packer a windfall of some $218 million.
That was not all. Packer also won a $40 million victory on his personal
income tax. Before the opening of the court hearing last month, the ATO
dropped its bid to recover that amount for his earnings over three years
between 1990 and 1992. Incredibly it offered Packer a settlement in
which he would pay just $2.87 in tax for 1990, $6.56 for 1991 and
$21.12 for 1992. Even that was too much for Packer. He refused the
offer.
The press baron had made his attitude clear during a government print
media inquiry in 1991. He told the parliamentary committee: "Anybody in
this country who does not minimise his tax wants his head read--I can
tell you as a government that you are not spending it so well that we
should be donating extra." For Packer, even the ATO's offer of $30.55
was too much of a "donation".
The court case dealt with financial transactions arising out of Packer's
involvement in the $28 billion takeover of British American Tobacco plc in
1989. Through a complex shuffling of loans, shares and dividends
throughout the world, including Australia, the Bahamas, Bermuda,
Britain, Switzerland and the US, the Consolidated Press group of
companies set out precisely to minimise taxes.
.
Packer stated in 1991: "I pay whatever tax I am required to pay under
the law--not a penny more, not a penny less." As this case
demonstrates, it is perfectly legal under the present order for an
individual with a multi-billion dollar fortune to pay absolutely no tax.

Murdoch Empire Finds Business Not So Taxing
A World of Loopholes, Havens Boosts News Corp.'s Profits
By Paul Farhi
Washington Post Staff Writer
Sunday, December 7, 1997 ; Page A01
. But through the deft use of international accounting loopholes and
offshore tax havens, Murdoch has paid corporate income taxes at one-
fifth the rate of his chief U.S. rivals throughout the 1990s, according to
corporate documents and company officials.
There is no suggestion from U.S. authorities of any impropriety in the
way the 66-year-old Murdoch has done business as he has risen from
obscure press baron to the global village's de facto communications
minister. The international tax and accounting strategies employed by
News Corp. may, in fact, make Murdoch a model for the 21st-century
entrepreneur -- a captain of industry who operates under so many flags
at once that it's hard to know where his allegiances lie or how his
businesses function.
News Corp., in its most recent fiscal year, reported paying $103 million
in worldwide taxes on operating income of $1.32 billion, an effective tax
rate of 7.8 percent, according to company documents.

That pattern has persisted through the 1990s. News Corp.'s tax rate has
averaged 5.7 percent in this decade
.
"Each country has its own [tax and accounting] rules and regulations,
and Murdoch has the organization and talent to figure out the best way
to work all of them," said William Markell, former chairman of the
University of Delaware's accounting department and an expert on
international accounting. "He's an operator. If there are advantages, he
can find them."
.
Second, News Corp. has mastered the use of the offshore tax haven. The
company reduces its annual tax bill by channeling profits through dozens
of subsidiaries in low-tax or no-tax places such as the Cayman Islands
and Bermuda. The overseas profits from movies made by 20th Century
Fox, for instance, flow into a News Corp.-controlled company in the
Caymans, where they are not taxed, according to an executive familiar
with the operation.

Some other multinationals adopt similar tax strategies, of course. For
example, American drug companies for years reduced their U.S. taxes by
assigning huge research costs to their American operations -- and huge
taxable profits to tax-exempt subsidiaries in Puerto Rico and Ireland,
according to Bob McIntyre of Citizens for Tax Justice, a Washington-
based advocacy group.

News Corp.'s annual tax bite in the 1990s -- swinging between 1 percent
and 8 percent -- is well below Australia's 35 percent corporate rate, as
well as the rate paid by large U.S. competitors. In recent years, the
company's taxable income has been offset by "tax-loss carryforwards" --
primarily credits saved up from losses made during the company's near-
bankruptcy in the early 1990s. It is those losses, coupled with the
creative use of offshore tax havens and international accounting rules,
have permitted News Corp. to pay a fraction of the Australian rate, while
minimizing taxes paid elsewhere.
The extent of News Corp.'s current tax shelter activities isn't publicly
available. But as of June, News Corp. listed more than 60 subsidiaries
incorporated in the Cayman Islands, Bermuda, the British Virgin Islands
and the Netherlands Antilles, all nations that have low or no corporate
taxes and limited financial disclosure laws.
Among others, Star TV -- the company's satellite TV service in Asia --
was incorporated half a world away in the British Virgin Islands. This was
done, one former News Corp. executive said, primarily to shelter
eventual profits.

"Rupert will never violate the law. He will not do anything unethical," said
George Vradenburg, a former executive at Fox Inc. "But he will take
advantage of all the rules allow. . . . Rupert is willing to take
controversy."
News Corp.'s Siskind said, "Suffice to say, everywhere we do business,
as large multinationals, we are subject to constant scrutiny by tax
authorities. As far as I know, we have had no material assessments [for
back taxes] in any of the countries in which we operate."

Here are some details on offshore companies (extracted from OCRA Worldwide):
Jurisdiction Type of
entity
Shelf
company
availability
Our time
to
establish
a new
company
Minimum
government
fees
(excluding
taxation)
Taxation
on foreign
income
Double
taxation
treaty
access
Minimum
paid up
share
capital
Anguilla IBC Yes 1 hour US$230 Nil No US$1
Belize IBC Yes 2 days US$100 Nil No US$1
British Virgin
Islands
IBC Yes 2 days US$350 Nil No US$1
Seychelles IBC Yes 2 days US$100 Nil No US$1
Isle of Man International
LLC
Yes 1 day 450 Fiscally
transparent
No Not
applicable
Isle of Man Limited
Exempt
Yes 1 day 450 Nil No 1
Isle of Man Limited
Resident
Yes 1 day Not applicable Normally
10%
Only UK 1
Hong Kong Private
limited
Yes 10 days US$350 Nil on
Foreign
Profits
China -
Corporate
and
Personal
Income
Tax.
Other
countries -
for
shipping
and
aviation.
HK$1
Mauritius GBCI No 4 weeks US$1,500 to
FSC
US$200 to
ROC
Varies from
0% to 3%
(maximum)
Yes US$1
Mauritius GBCII Yes 3 days US$135 to
FSC US$65
to ROC
Nil No US$1
United
Kingdom
LLP Yes 1-8 days Not applicable Fiscally
transparent
Fiscally
Transpare
nt
Not
applicable
United
Kingdom
Private
Limited
Yes 1-8 days Not applicable 19% to
30%
Yes 1
United
Kingdom
Public
Limited
Yes 1-8 days Not applicable 19% to
30%
Yes 50,000
Luxembourg 1929
Holding
No 2 days 0.2% of
capital
Nil Varies Euro
31,000
Luxembourg 1990
SOPARFI
Holding
No 2 days Not applicable Normal
rates
Yes Euro
31,000
Seychelles CSL No 2 weeks US$ 1,000 1.5% on
worldwide
income
Yes US$1
Singapore Resident/No
n Resident
Yes 5 days S$ 315 Varies Yes S$ 1
Delaware,
Wyoming,
Oregon, New
Jersey, New
York,
Washington
DC and
Arkansas.
LLC with no
US Tax
Residents
as owners,
no US
presence
and
undertaking
no business
in the US
Yes 2 days Varies Fiscally
transparent
Normally
No
Not
applicable
Bahamas IBC Yes 10 days US$350 Nil No US$1
Cayman
Islands
Exempt Yes 2 days US$575 Nil No US$1
Cyprus IBC Yes 5 days Not applicable 10% Yes CYP
5,000
Delaware C
Corporation
Yes 2 days Varies Yes Yes US$1
Gibraltar Exempt Yes 5 days 225 No No 100
Jersey Exempt No 8 days 600 Nil No 1
Labuan Offshore -
Non Trading
No 8 days RM 2,600 Nil Yes US$1
Labuan Offshore -
Trading
No 8 days RM 2,600 3% or RM
20,000
Yes US$1
Madeira Limitada Yes 60 days US$1,000 Varies Yes Euro
5,000
Madeira SA Yes 60 days US$1,000 Varies Yes Euro
50,000
Netherlands BV No 6-8 weeks NLG333 35% Yes NLG
40,000
Panama Non
resident
Yes 2 days US$250 Nil No US$1
Samoa International Yes 5 days US$300 Nil No US$1
Uruguay SAFI No 30 days 0.3% of
capital
Nil No US$2,500

entity
Minimum
number of
directors /
managers
Local
directors /
managers
required
Publicly
accessible
record of
directors /
managers
Location
of
directors /
managers
meetings

Minimum
number of
members
Publicly
accessible
record of
members
Anguilla IBC 1 No No Anywhere 1 No
Belize IBC 1 No No Anywhere 1 No
British Virgin
Islands
IBC 1 No No Anywhere 1 Optional
Seychelles IBC 1 No No Anywhere 1 No
LLC
Normally 1
manager
No Yes Anywhere 2 Yes
Isle of Man Limited
Exempt
2 Yes - one Yes Anywhere 1 Yes
Isle of Man Limited
Resident
2 No Yes Anywhere 1 Yes
Hong Kong Private
limited
Mauritius GBCI 1 Yes, but 2
required for
tax treaty
access
No Anywhere,
but in
Mauritius
for treaty
access
1 No
Mauritius GBCII 1 No No Anywhere 1 No
United
Kingdom
LLP 2 No Yes Anywhere 2 Yes
United
Kingdom
Private
Limited
United
Kingdom
Public
Limited
Luxembourg 1929
Holding
3 No Yes Anywhere 2 No
Luxembourg 1990
SOPARFI
Holding
3 No Yes Anywhere 2 No
Seychelles CSL 2 No No Anywhere 2 No
n Resident
1 Yes - one Yes Anywhere 1
(Corporation
or Individual)
Yes
Delaware,
Wyoming,
Oregon, New
Jersey, New
York,
Washington
DC and
Arkansas.
LLC with no
US Tax
Residents
as owners,
no US
presence
and
undertaking
no business
in the US
1 No On
formation
Anywhere 1 No
Bahamas IBC 1 No Yes Anywhere 1 No
Cayman
Islands
Exempt 1 No No Anywhere 1 No
Cyprus IBC 1 No, but
advisable
for
purposes
of tax
residency
Yes Anywhere,
but Cyprus
advisable
for
purposes
of tax
residency
1 Yes
Delaware C
Corporation
1 No No Anywhere 1 No
Gibraltar Exempt 1 No - if local
secretary
Yes Anywhere 1 Yes
Jersey Exempt Normally 2 No No Anywhere 2 No
Labuan Offshore -
Non Trading
Labuan Offshore -
Trading
Madeira Limitada 1 No Yes Anywhere Normally 2
(1 is
possible)
Yes
Madeira SA 1 or 3,
must be an
odd
number
No Yes Anywhere Normally 5
(1 is
possible)
Yes
Netherlands BV 1 No Yes Anywhere 1 No
Panama Non
resident
3 No Yes Anywhere 1 Optional
Samoa International 1 No No Anywhere 1 No
Uruguay SAFI 1 No Yes Anywhere 1 No

entity
Location
of
members
meetings
Company
secretary
required
Local or
qualified
company
secretary
required
Requirem
ent to
prepare
accounts
Anguilla IBC Anywhere Optional No Yes
Belize IBC Anywhere No No Yes
British Virgin
Islands
IBC Anywhere Optional No Yes
Seychelles IBC Anywhere No No Yes
LLC
Anywhere Not
applicable
Not
applicable
Yes
Isle of Man Limited
Exempt
Anywhere Yes Local Yes
Isle of Man Limited
Resident
Hong Kong Private
limited
Mauritius GBCI Mauritius -
by proxy
Yes Local and
qualified
Yes
Mauritius GBCII Anywhere Optional No Yes
United
Kingdom
LLP Anywhere Not
applicable
Not
applicable
Yes
United
Kingdom
Private
Limited
Anywhere Yes No Yes
United
Kingdom
Public
Limited
Anywhere Yes No Yes
Luxembourg 1929
Holding
Anywhere No No Yes
Luxembourg 1990
SOPARFI
Holding
Anywhere No No Yes
Seychelles CSL Anywhere Yes Local Yes
n Resident
Anywhere Yes Yes Yes
Delaware,
Wyoming,
Oregon, New
Jersey, New
York,
Washington
DC and
Arkansas.
LLC with no
US Tax
Residents
as owners,
no US
presence
and
undertaking
no business
in the US
Anywhere Not
applicable
Not
applicable
Yes
Bahamas IBC Anywhere No No Yes
Cayman
Islands
Exempt Anywhere No No Yes
Cyprus IBC Anywhere Yes No, but
Cyprus
advisable
for
residency
and
complianc
e
Yes
Delaware C
Corporation
Anywhere Not
applicable
No Yes
Gibraltar Exempt Anywhere Yes No Yes
Jersey Exempt Anywhere Yes No Yes
Labuan Offshore -
Non Trading
Labuan Offshore -
Trading
Madeira Limitada Madeira
(by proxy)
No No Yes
Madeira SA Madeira
(by proxy)
No No Yes
Netherlands BV Netherlan
ds
No No Yes
Panama Non
resident
Anywhere Yes No Yes
Samoa International Anywhere Yes No Yes
Uruguay SAFI 1 AGM
p.a. in
Uruguay
(by proxy)
No No Yes

entity
Requirement
for audited
accounts
Requirement to
file accounts
Publicly
accessible
accounts
Requirement to
file annual
return
Anguilla IBC No No No No
Belize IBC No No No No
British Virgin
Islands
IBC No No No No
Seychelles IBC No No No No
LLC
No No, but must be
available for
inspection in the
Isle of Man
No Yes
Isle of Man Limited
Exempt
No No, but must be
available for
inspection in the
Isle of Man
No Yes
Isle of Man Limited
Resident
Yes but small
company
exceptions
Yes No Yes
Hong Kong Private
limited
Yes Yes No Yes
Mauritius GBCI Yes Yes No No
Mauritius GBCII No No No No
United
Kingdom
LLP Yes but small
company
exceptions
Yes Yes Yes
United
Kingdom
Private
Limited
Yes but small
company
exemptions
Yes Yes Yes
United
Kingdom
Public
Limited
Yes but small
company
exemptions
Yes Yes Yes
Luxembourg 1929
Holding
Yes Yes Yes Yes
Luxembourg 1990
SOPARFI
Holding
Yes Yes Yes Yes
Seychelles CSL N/A Yes No Yes but not
public
n Resident
Yes but there
are exemptions
Yes Yes but there
are exemptions
Yes
Delaware,
Wyoming,
Oregon, New
Jersey, New
York,
Washington
DC and
Arkansas.
LLC with no
US Tax
Residents
as owners,
no US
presence
and
undertaking
no business
in the US
No No No Yes
Bahamas IBC No No No No
Cayman
Islands
Exempt No No No Yes
Cyprus IBC Yes Yes No Yes
Delaware C
Corporation
No No No Yes
Gibraltar Exempt Yes but small
company
exceptions
Yes but small
company
exceptions
Yes but small
company
exceptions
Yes
Jersey Exempt No No No Yes
Labuan Offshore -
Non Trading
Normally yes Normally yes No Yes
Labuan Offshore -
Trading
Normally yes Normally yes No Yes
Madeira Limitada No, but larger
companies must
Yes Yes No
Madeira SA Yes Yes Yes No
Netherlands BV Yes Yes Excerpts for
small
companies, full
details for large
companies.
No
Panama Non
resident
No No No No
Samoa International No No No No
Uruguay SAFI Yes Yes Yes Yes

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Turn Your Home Into A
Profitable Investment
As we have seen in our definition of what
an asset is and what a liability is, if your
home is still under mortgage, it is a liability
and not an asset to you. It is the banks asset
and the bank is using it to make money off
you. Well, its now time to turn that around
and start making some money out of it
using simple creative financing. Turn it
from a liability into an income-generating
asset. And if you have already cleared your
mortgage, you can really take it further and
turn it into a real income generating cash
cow. Relax, you dont have to move out and
rent it out. You will instead be using creative
financing to achieve your goals while you
sleep safe and sound in it.
There are many ways you can turn your home into a profitable investment, and
many real estate advisors, books and seminars are available to teach you the various
strategies. We will look at a couple of ways here, very briefly. A lot of people are
afraid of using these strategies for fear of losing their home, but if you do your
homework and structure your affairs right, you can greatly reduce the risks involved
and sleep well at night in your own income producing home.
We will cover the simplest strategy first. If you have any equity at all in your home
(and most people do), you can use this strategy. In fact, you may even want to
increase your equity first by making minor home improvements like new paint and
so on and having your home revalued upwards to increase the equity (e.g. make
$4,000 improvements that would lead to an increase of, say, $10,000 or more in
your home valuation). What you do is, you go to your home finance institution and
get a line of credit based on your equity. This will be at, say, 9% interest rate
(depending on country). Depending on the value of your home and how much equity
you have in it, you can get anywhere from tens of thousands of dollars or even a few
hundred thousand dollars. Then, take this money from your line of credit and invest
it using some of the high-yield strategies we have talked about. If you can average a
return of more than the 9% interest rate, you will be making a profit. Now, this is
your home we are talking about so make sure you have your money management
strategy well laid, and you are following sound investment strategies. There is
nothing to worry about, really, if you have done your homework.
Ok, let us look at one more strategy you can use, and then you can find out other
strategies on your own. This one is based on the home price increase trends that we
all know about. (Keep in mind always that although the past can be used to predict
the future, such predictions are not always right and sometimes things happen that
are very much out of the normal pattern.) Did you know that the average value of
UK and Australian properties doubles every 10 - 15 years and has done for many,
many decades? It is a similar case in many, many other countries of the world. Keep
in mind, however, that the world population in 1950 was about 2 billion and it has
grown to over 6 billion today in just the last 50 years (it was about 100 million in 0
A.D.) This growth rate is slowing down greatly, along with other factors, so there is
no guarantee that property will keep doubling in this manner. But other factors that
drive prices up, other than population growth, are still in play so this trend may
continue for long enough to allow you to benefit from the strategy you are about to
see.
This strategy attempts to take advantage of two things:
1. The doubling of property prices every 10 years or so
2. The fact that a line of credit is viewed by tax authorities as a loan (not
income) and is therefore non-taxable.
This strategy is used to create a tax-free income stream with which you can spend,
invest, or whatever. Let us follow it step-by-step:
It doesnt matter how much your home is worth because you can use this strategy
for any home value, but lets say your home is currently worth $100,000 and you
have an $80,000 mortgage still owing on it. You therefore have $20,000 equity in it.
Let us call this year one. In ten years, given the trends of the last 100 years or more
(depending on where you live), the value of that home will be worth double,
$200,000. Let us say, for simplicity, that your mortgage will have reduced to about
$58,000. Your equity, in year ten, will therefore be 200 58 = $142,000. And in
year twenty, your home will have doubled from $200,000 to $400,000, the mortgage
will be something like $32,000, and the equity will be something like $368,000. See
the trend? Ok, lets move on
Now, for this strategy to succeed you will need to buy another residential property in
year three or four. If you take the time to study some good real estate books or go
to some good seminars, you will realize that this is very easily done especially if you
have a property already; in fact, you can do so with almost no money down if you
use creative financing. Anyway, you get a second property in year 4. It will also
increase in value just as we have illustrated it above with your first property,
doubling every 10 years and the equity increasing geometrically with time.
Now, here is the sweet part of this strategy. Imagine now that you are in year 6.
Your first property (we will call it Property #1) is up in value and your equity has
increased. So what you do is, you get a line of credit based on that equity. Look at
this chart showing its increase:
Year 1 2 3 4 5
Value $100,000.00 $112,000.00 $124,000.00 $136,000.00 $148,000.00
Mortgage $80,000.00 $77,500.00 $75,000.00 $72,500.00 $70,000.00
Equity $20,000.00 $34,500.00 $49,000.00 $63,500.00 $78,000.00

Year 6 7 8 9 10
Value $160,000.00 $172,000.00 $184,000.00 $196,000.00 $200,000.00
Mortgage $67,500.00 $65,000.00 $62,500.00 $60,000.00 $57,500.00
Equity $92,500.00 $107,000.00 $121,500.00 $136,000.00 $142,500.00

In year 6, you draw out perhaps $35,000 from your line of credit. That money is fully
tax-free because the government doesnt count it as income (it is a loan). But you
can use it for whatever you wish, including investing, taking a holiday, living off,
whatever. In year 7, you take out another $35,000 for your use (investing and
living). And you do it again one last time in year 8. Obviously, this will end up
eroding your equity in Property #1. But remember, you also have Property #2,
which you bought in year 4, and so in year nine, it will have appreciated in value and
equity will now be ready for picking. So you now switch over to Property #2 from
year 9 and start using up its equity. You do so for three or four years, and switch
back to Property #1, which will have by then appreciated and will have more equity
for you draw from. You draw from it for three years, and switch back to Property #2,
draw for three years and switch back to Property #1, and so on. And as time goes
by, the properties double every 10 years in value and your equity gets bigger and
bigger, meaning you can draw out more and more. As you may have already
observed, when using this strategy, it is not your aim to clear your mortgage
completely. You dont really care about that. The mortgage goes down and then goes
up again. Your only concern is that you have now created an income stream of
purely tax-free money that you dont even have to work for; all you do is show up at
the bank and draw on the equity. Money out of thin air. To people who believe that
money is only acquired through hard work, this strategy may sound like fantasy. But
these kinds of creative finance techniques are exactly what the rich and wealthy
people use. Money is just an idea.
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Create Automatic Money
Systems
Look at nature. It is perpetual. It feeds itself.
Keeps going and growing automatically.
The solution is in the system. You can turn
your financial affairs into a natural, self-
sustaining, dynamically growing, minimum
effort system. And all systems are
collections of smaller systems working
together. Right now, your finances may be
all over the place, like a disordered room
that you have to keep re-arranging and
preventing from collapsing. Lets see how
you can turn them into a system that works
for you and sustains itself. This is where you
put all you have learnt so far together, tied
together in systems, and those systems tied
together to form your money machine.
A system is something that is ordered, that has its processes clearly spelled out, that
uses minimal efforts to produce results that anyone applying the system can
duplicate. For example, a franchise business is a system, while the regular mom-
and-pop shop is not. In the mom-and-pop shop, when the business owner is not
there, things start to collapse. The business owner is the business. The business
processes have not yet been systemized and so the owner has to be there to think
and do, think and do, everyday. A franchise like McDonalds, on the other hand, has
laid down all the processes needed to operate the business. Anyone can operate a
McDonalds outlet successfully as long as they follow the system manual. Even the
tools, the shop layout, the colors everything has been systemized. A 14 year old
straight out of high school can run a McDonalds if they had to. The solution is in the
system. Look at natures water cycle. It has been running on its own for billions of
years. No one comes down from space to fix it. It is a system that uses the laws of
nature to perpetually work on its own. The solution is in the system. Systems not
only ensure better success rates, they also free up people and allow them more time
to do other things. Now, lets see what systems can help your finances. These are
the systems you will need to create. This section of this book is about systemizing
what we have already learnt about in other sections of this book.
Automatic Personal Finances Management System. This one is for
helping you keep track of your money, know where it is coming from and
going, what the financial cash flow future looks like, and so on. You need a
budget, income statement, and cash flow statement for this. To make it
automatic and systemized, get either Microsoft Money or Quicken software,
and make sure you bank with a bank that has online banking with the ability
to export your transactions to Quicken. Then, try to make all your
transactions electronic (pay by check or debit/ATM card) so that they are
recorded itemized in your bank statement, and when you import them into
Quicken or Money they will be itemized. If you pay cash for most things, you
will then have to keep the receipts and enter them manually into Quicken or
Money, and then go through the hassle of reconciling them with your bank
statement. The idea here is to minimize the work, the dependence on you,
and maximize automation. This system is a must; so do set it up now.
Automatic Savings and Investment System. The first step is to save 10%
of every paycheck you receive. You can automate this by asking your bank to
set up an automatic deduction from your regular account and into your
savings account. Tell them to set up a scheduled deduction of X amount of
dollars every week or whatever, and transfer it into your savings account.
Most banks will be able to do this for you, or you can even set it up yourself
online if you have Internet banking. Schedule the payment to be on the day
(or day after) you receive your paycheck, so that you have it taken out ASAP,
before you have a chance to spend it. By the way, your savings account is
only for investments you do not dip into it for emergencies, paying bills, or
whatever. If you wish to have a separate account for emergencies or holiday
spending or whatever, open a different account and set it up for that. But you
never, ever eat your investment savings. OK, now that your 10% or more is
getting into the savings account automatically, link that savings account with
your brokerage account (or wherever you invest). You can then set up
instructions with your brokerage account to fetch X amount of dollars from
your savings account. For example, many mutual funds can set up a direct
debit system whereby they automatically take a pre-set amount of money
every agreed upon number of days, from your savings account, and add it
automatically to your investment fund in the mutual fund. That way, you
dont even have to think about anything; your money just grows
automatically. Now, if you are investing in real estate or something else, then
you obviously have to figure out the best way to automate your investment
phase (at least moving your money into the investment so that it begins
earning money as soon as it is saved, rather than sitting in the bank and
earning peanut interest rates). This savings and investment account is a
must for your wealth building efforts, which means you should set it up today
or tomorrow! Not next week. Now. It will cost you nothing to get it set up. If
you dont save, you wont invest, you wont grow rich, under normal
circumstances. So it is a must. Your expenses and bills are not an excuse. Set
it up, go without the 10%, and make yourself re-adjust your life so that it
accommodates this. It is not negotiable; you must start paying yourself first.
Everything else will have to change to accommodate this. The 10% you
save for investment is not to be consumed under any circumstances
except for a critical, life-threatening situation! Your money will not
grow unless you let it grow! You must also re-invest almost all of
your gains. Of course, you can use up some of your investment gains,
because the whole point of gaining money is to enjoy it, but you
cannot use the capital portion of it (what you put in), and you cannot
use up all your gains. You can only use a percentage of the gains only
(say, 10-20%) and re-invest the rest! Even if you have a bill that is
overdue and your creditors are calling you daily, you do not eat up your nest
egg! This system is a must; so do set it up now.
Automatic Income Substitution and Emergency Plan. Sometimes, the
unexpected happens or you may need to take a break. You can be faced with
an emergency expense, or you may wish to take a holiday. When people are
faced with these situations, they usually use up part of their savings to
finance the holiday or emergency. Lets get one thing clear once and for all,
because it is so important we should repeat it. The 10% you save for
investment is not to be consumed under any circumstances except for
a critical, life-threatening situation! Your money will not grow unless
you let it grow! You must also re-invest almost all of your gains. Of
course, you can use up some of your investment gains, because the
whole point of gaining money is to enjoy it, but you cannot use the
capital portion of it (what you put in), and you cannot use up all your
gains. You can only use a percentage of the gains only (say, 10-20%)
and re-invest the rest! Even if you have a bill that is overdue and your
creditors are calling you daily, you do not eat up your nest egg! So, you need
to start building another account for emergencies and holidays. This one
should be roughly the size of one or two months worth of your pay. If, for
example, you earn $5,000 a month, your income substitution and emergency
savings account should be built up to about $5,000 to $10,000, and then
halted there. Again, you can set up an automatic deduction with your bank so
that, say, 5 10% of your income goes towards it until it reaches its target
level. Now, this account is not a priority. You may wish to wait on setting it up
until you have stabilized the savings and investments account. Meaning, if
you are finding it hard to save 10% of your income, focus on that first. Once
you get that going, you can then start with this one. Or you can choose to
fund it with a portion (not all) of your investment gains. The point of having
this account is that you always have one or two months worth of your pay in
case you wish to take a break from work or you are faced with an emergency.
You then have the luxury of handling such a break or expense with ease.
Now, once you have it built up, try not to take it to zero. Lets say its usual
capacity is, say, $5,000 as with our example. Always leave at least 10%
($500) in there at the least, and when you draw it down, refill it, but dont
leave more than the capacity dont put $15,000 in there because that is
wasting money you could be investing at higher returns. Obviously, as you
get richer and your monthly income rises, your capacity will rise.
Automatic Investment and Money Management System. We have
already looked at this in the investment and asset protection sections of this
book so we wont repeat it here. But this is one of the most important
systems you will be building so dont do a hurried job on it! Before you invest,
you must already have a trading plan that tells you under which conditions
you will enter and exit a market, what percentage of your money you will use,
and so on. The system will increase your success rate dramatically, while
trading on emotions, tips, spontaneous and sporadic research and so on,
especially without a money management plan, is almost sure to get you
burnt. The system will ensure that you win because it will play the game
purely based on the numbers, the results, not on hope. If you are investing in
financial instruments like stocks, futures, shares, CFDs and so on, these
systems are a must (at least the money management system).
Automatic Debt Elimination Plan. As we saw, the faster you pay off your
debt, the less of your money you will use in paying it, and so the more you
will have to invest and live on. So, first, see if you can consolidate your debts
into an institution where you pay the least amount of interest. Then, over and
above your minimum debt repayment amounts that you are required to pay
back, add even more money. So set up another automatic payment reduction
from your paycheck when it gets banked. You can say, for example, that 5-
10% of your pay goes towards reducing your debt (this is over and above the
minimum monthly debt repayments that you are required to pay), transferred
automatically towards the debt. Again, while this system is desirable and very
helpful, first set up your savings and investment system (which is the critical
one) before setting this one up.
Automatic Giving Plan. To help you with your giving (because sometimes
we get lazy and ignore this), you can set up another automatic deduction
system whereby 10% of your paycheck is deducted and taken to your giving
bank account. Then, whenever that account has enough, you can then see
how to apply it in your giving. Or, you can set up a mini-foundation once you
get good at investing. You then keep putting in your 10% giving contribution
into your foundation. Meanwhile, you invest the foundations money, and then
give 40% of the gains the foundation makes to charity and reinvest the rest.
That way, the foundation will keep a growing capital base, which is generating
an increasingly large amount of charitable money.
Self-Improvement Plan. This one takes care of you, ensuring that you are
continuously increasing your abilities, your health, your knowledge, capacity
to earn more, and even your relaxation. Automatically save 5% or so of your
income and use it to buy things like books, seminars, monthly short
vacations, and so on. Anything to improve your mind, body and soul. You are
like an F1 Ferrari you have to stay maintained and primed to perform at
optimal performance levels. You must refresh yourself; take regular breaks
away from your home. Go to seminars and listen to new points of view, things
you had never considered. And so on.
A word about these systems. I know that many people will say, God! I will be left
with nothing to spend on, with all these automatic withdrawals and all! Yes, it may
be tough at the beginning. You may hold a belief (with your own evidence that you
can readily show anyone) that it is impossible to live at less money than you are
already living on. You are not alone. People at all income levels have this belief
(even those earning more than you are). It is not true. You can take a pay cut and
still live. Deep within you, you know that you can. Your habits will have to change,
that is obvious. So change them. You see, as long as you keep doing the same thing,
you will keep getting the same results. You have to be realistic. At first, yes, it may
be uncomfortable to live on less, but you will get used to it, and then when your
wealth starts increasing you can have even more luxuries than you have now! For a
short period, you may be uncomfortable maybe, if you choose to experience it that
way, but afterwards it will be all good, better than it is now! At first, you may have
to go through the experience of calling your creditors and arranging things
differently, changing the way you shop and use your phones and all that, and so on,
but that is the process of change. Accept it. It can be rocky at first, just like birth or
new rain or whatever, but afterwards the fruits of the change come.
A note on the power of giving
The universe is about giving and receiving. Watch nature and you will notice that
everything gives itself to everything. The food, water and air give themselves to you,
and you give out your outputs to nature. You share your intelligence in a give and
take fashion. Love is give and take. That is how it is. You see, you cannot give
what you think you dont have; yet giving is what makes you experience
having. You cannot get out of life what you havent put in, yet you cant put in what
you think you dont have. For example, to give happiness, you have to have it; yet
you can only experience having happiness when you are sharing it with someone or
something. Same as love, laughs, anger, and so on. And same as abundance. You
learn abundance by sharing, by giving, and this experience of giving is what enables
you to experience having. So, when you give your money away in whatever form you
choose (as cash, education, food, conservation efforts, whatever), you are
experiencing abundance, training your nervous system, your mind, your emotions, in
the ways of abundance. So, find whatever it is you are passionate about. It doesnt
matter. And it doesnt have to be the church (the cultural myth is that giving is to
the church only or the poor or something like that) unless you genuinely wish to do
so. There is no religion in giving and receiving; it is simply natural law. If you are
passionate about, say, the rainforest and you wish to help conserve it, find a way
you can get involved (hopefully, beyond just sending a check every month and thats
it) which involves your wealth, time, efforts and mind. You cannot see how now, but
as time goes by that involvement, that giving, that sharing, will show you more than
you can imagine in terms of the abundance, power and awe of life. It will expand
your horizons, your confidence, your drive, and much more. Giving, literally, allows
you to experience wealth. Now, remember, the idea that giving means sending your
10% check to your church or the poor is a misconception, a cultural myth. A very
new one at that. You can give anywhere you like; all of life is about giving and
receiving. All that is required is an interest, a love and a passion for where you give.
Does the idea of setting up your own charity foundation sound too big of a plan? It
really isnt. In fact, it is a great challenge. Many, many people have created
foundations that continue to benefit the planet long after these people have gone.
Setting up a massive world goal for yourself is one fantastic way of creating a
challenge for yourself that will make you stretch and grow amazingly. That is what
massive world goals do. Yes, you too are capable of having one. It doesnt take a
special person; anyone can do it. You can, for example, decide that your massive
world goal is to create a $10 million foundation to feed the world, or protect the
environment, or promote eradication of anti-personnel mines, or whatever it is that
makes you happy. You can then, slowly, step by step, over the years keep placing
your charity contributions into your foundation and then invest the foundations
money in compound interest investments. Without a doubt, these investments will
grow and you will end up, eventually, with your foundation, your legacy! Of course,
over the years, you will be giving away about 40% of the investment gains of your
foundation and re-investing the rest so that the foundation keeps growing. The thrill
and the journey, over the years, as you build such a legacy, will give you growth,
satisfaction and enjoyment opportunities you have never dreamt of! Try it and see
where you get.
Great goals make you stretch. They can take you well
beyond anything you could possibly imagine! The most
important part of setting great goals is not the goals
themselves, but the person you become, in the stretch.
Fran Anne Briggs

Do unto others what you would like done unto you.
Jesus

He that does good to another does good also to himself.
Seneca

He who wishes to secure the good of others, has already
secured his own. Confucius

Help your brothers boat across, and lo! your own has
reached the shore. Hindu proverb

I believe you can get anything you want in life if you just
help enough other people get what they want. Zig
Ziglar

Men exist for the sake of one another. Marcus Aurelius

Without deep reflection, one knows from daily life that
one exists for other people. Albert Einstein

You reap what you sow. Jesus

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Increase Your Ability To
Earn And Create Wealth
If you wish to continuously increase your
wealth, it follows that you have to
continuously increase your ability to
increase wealth. And you do so by
continuously learning more. Money is
value, and value comes from within you.
You must therefore increase your value, and
then apply that increase and you will
experience an increase in wealth. You
increase value by learning what you didnt
know before.
For example, you have read this book and gathered some new inner value. If you
apply this value (act on it), you will profit from it.
The faster you increase your own inner value, the faster you create wealth. If you
are only aware of one way to make money, that is the only way you will find yourself
using. You will be enslaved to that one way. If you are aware of 100 ways, then you
have true opportunity. You become aware of new opportunities by taking your
mind where it has never been before. Meaning, you read new books, talk to new
people, and so on. That is far more effective than what most people do, which is
sitting on the couch, staring into space and trying to think of a money-making idea
using the same old data they have had in their mind, nothing new. You simply have
to upgrade your data consistently if you wish to keep seeing new opportunities that
you have never seen before.
Here are some of the best places to learn more and increase your abilities:
Bookshops
Libraries (which are free anyways, so you have no excuse at all for not going
there)
Home-study courses
Mentors
Business clubs
Seminars (you can even just be going to the free introductory presentations
they always give, even if you dont want to pay for the whole thing)
Look around for how you can learn:
New ways of creating income and wealth.
How to improve how and how much you save.
The details and workings of the various investment options available. There
maybe something out there that you are unaware of but would be perfectly
suited for, something you would absolutely have the passion for if only you
knew it existed.
How to use better tax strategies to keep more of your money away from the
hands of big government.
How to use estate planning and asset protection.
How to handle miscellaneous activities such as budgeting, insurance, and so
on.
Any other skills you feel are necessary.
If you dont learn them, who will? You see, you can't just sit on the couch and expect
to absorb totally new material out of thin air. You will need to get up, go places, talk
to people, listen to stuff, read things
As you learn, set yourself up for success. Realize that sometimes you will make
mistakes, and that is OK. Dont stress yourself out by thinking that you have to be
perfect from the very first step. Learning goes in the following normal stages:
Step 1: Unconscious incompetence. Here, the person has fear versus
excitement. The fear of the new, unknown world, and the excitement of going
to this new world. At this stage, the person doesnt even know what it is that
he or she doesnt even know (they are unconsciously incompetent).
Step 2: Conscious incompetence. Frustration versus confusion dominates
this stage. The frustration of trying to learn, stumbling, trying to understand,
and so on, and the confusion that this entails. Here, the person becomes
conscious of the fact that he or she doesnt know and they start to see exactly
what it is they dont know.
Step 3: Conscious competence. Here, being not integrated versus using
the new knowledge successfully is what is involved. In other words, the
person is starting to be able to apply the new skills or wisdom, but they
havent yet fully integrated them into their being, thinking and way of life.
They still have to apply some effort to push things along.
Step 4: Excellence. This is the stage of mastery. This is where the person
has become the new; everything is integrated, effortless and natural. They
dont even have to consciously think about how to do it. For example, once
you learn how to ride a bike or drive a car, after a while you can do it without
even paying attention. Even with the creation of wealth, you do reach
mastery in the various areas that you apply yourself. It gets easier! It even
gets to the point where you are just naturally spinning new wealth without
even really trying, more than you can possibly use. We all know or have
heard of such people in society. You can get there. In fact, it is inevitable that
you will master whatever you apply yourself to with enough dedication.
So these are the four steps. Expect to go through them and dont beat yourself up
for being in any one stage; it is natural. There is no shame in not knowing. Be
patient and remember that everything has a process. It is your task to look and find
the process, then apply yourself to the process, knowing that processes go one step
at a time (hence the need for patience with the process as rushing only creates
imbalance and puts you out of the process).
Man can learn nothing except by going from the known to
the unknown. Claude Bernard

We learn to do something by doing it. There is no other
way. John Holt

In the middle of difficulty lies opportunity. Albert
Einstein

Do not fear mistakes; there are none. Miles David

I learn by going where I have to go. Theodore Roethke

Problems are only opportunities in work clothes. Henry
J. Kaiser

Contrary to popular belief, my experience has shown me
that the people who are exceptionally good in business
aren't so because of what they know, but because of their
insatiable need to know more. The problem with most
failing businesses I've encountered is not that their
owners don't know enough about finance, marketing,
management, and operations - they don't, but those
things are easy enough to learn - but they spend their
time and energy defending what they think they know.
The greatest businesspeople I've met are determined to
get it right no matter what the cost. Michael Gerber,
author The E-Myth Revisited

Let a man radically alter his thoughts, and he will be
astonished at the rapid transformation it will effect in the
material conditions of his life. James Allen

A particular train of thought persisted in, be it good or
bad, cannot fail to produce its results on the character
and circumstances. A man cannot directly choose his
circumstances, but he can choose his thoughts, and so
indirectly, yet surely, shape his circumstances. James
Allen

I bargained with life for a penny, and life would pay no
more, however I begged at evening when I counted my
scanty store. For life is a just employer, he gives you
what you ask. But once you have set the wages, why, you
must bear the task. I worked for a menials hire, only to
learn, dismayed, that any wage I had asked of Life, Life
would have willingly paid. Anonymous

The good news is that, the moment you decide that what
you know is more important than what you have been
taught to believe, you will have shifted gears in your
quest for abundance. Success comes from within, not
from without. It begins by listening to your inner calling
and wisdom. Ralph Waldo Emerson

The most successful people in the end are those whose
success is the result of steady accretion. It is the one who
carefully advances step by step, with his mind becoming
wider and wider progressively able to grasp any theme
or situation persevering in what he knows to be
practical and concentrating his thoughts upon it, who is
bound to succeed in the greatest degree. Alexander
Graham Bell

Practice makes perfect. Common English saying

Whats my secret? I never stop practicing. Bruce Lee

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

More Reasons Why
People Never Become
Wealthy
As you have seen so far, wealth is simple,
but it has its ways. And as you have seen by
now, if you dont follow the way, you wont
get there. If you dont follow the road to
your destination, you can't get there. If you
wish to go to Paris, for example, but you
are driving on the road to Damascus, you
will get to Damascus, not Paris. Now, in
addition to all you have seen so far in this
book, here are some more reasons why
people never become wealthy.
These reasons are taken from Anthony Robbins Get The Edge program and are what
he has personally experienced to be some major causes for peoples lack of wealth:
They never decide and really define, very specifically, what wealth means for
them.
They make wealth a moving target instead of a fixed one (this is related to
point one above).
They define it in a way that seems unreachable.
They never start.
They never make it a must.
They dont have a realistic plan.
If they have a realistic plan, they never follow through on the plan.
They give responsibility to others (experts) instead of to themselves. This
way, they never really learn how to do it, and if there are failures they never
learn why the failures happened and so they are bound to repeat them. It is a
good idea to get advice, but do it yourself. At least understand it yourself
even if you will delegate the actual doing.
They give up when they face challenges. Going through the challenges is what
has made people rich, not giving up.
They fail to conduct their lives as a business; they never ensure that they
make a profit year by year.
They allow other peoples ideas to affect their decisions unreasonably. There
will always be people who dont believe in your way, or who are pessimistic,
who try to pull you down, or whatever. And they will sometimes be your
closest friends and family. You cannot change that they have a right to be
who they are. It is OK. Allow them their thoughts, dont judge them for that,
but dont feel obligated to accept their thoughts or follow their way. Dont
allow other people, now or from the past, to unreasonably affect your
decisions. Allow them their way, and you live your way.
They dont get quality coaching.
How many of these reasons can you identify with? Well, now that you see the
reasons, you now can look at yourself and make sure that you dont follow ways that
are known to not lead to wealth.
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

You The Financial
Warrior
What is The Way of the Financial Warrior?
If finances are your game, get ready for the
ride of your life.
First, let us begin with the obvious. In your business, you either make the sale, or
you don't. You do or you don't, there is no try. You get the customer or you don't,
there is no try. Your business makes a profit or it doesn't, there is no try. You have
personal financial surplus or you dont, there is no try. There is no in between. You
can swing between the two sides, but you cant sit on the fence. Why? Why do things
work this way?
There is an order by which all things arise and work. Every moment is a moment of
new creation. On and off states, called dualities, is what we experience in all of life,
including finances. Day and night, hot and cold, plus or minus you get the picture.
Here is a question for you. Do you think our moments arise by accident or as an
exactly perfect outcome of a series of natural laws? Remember, there is no middle
ground. It is either all accidental or all perfection, but not a mixture of the two.
If it was all accidental, none of the laws of physics would work, biology would not
work, nothing would work. Therefore, it is all a precise outcome of set laws. The Way
of the Financial Warrior is the one that gets you on the path to discovering the truth
behind what happens in your finances.
You can make your life a glorious adventure financially by understanding the totality
of experience and creation.
Michael Gerber, author of the best-selling business book, The E-Myth Revisited, says
in that book that Contrary to popular belief, my experience has shown me that the
people who are exceptionally good in business aren't so because of what they know,
but because of their insatiable need to know more. The problem with most failing
businesses I've encountered is not that their owners don't know enough about
finance, marketing, management, and operations - they don't, but those things are
easy enough to learn - but they spend their time and energy defending what they
think they know. The greatest businesspeople I've met are determined to get it right
no matter what the cost.
Here is another interesting bit of information. Harvard Business School and INSEAD
(arguably the top European business school) have concluded from research that the
two most effective new business tools for twenty-first century executives are
meditation and intuition. These are metaphysical subjects! Why?
Robert Kiyosaki, in his best-selling book Rich Dad, Poor Dad, says that money is just
an idea.
In fact, money is merely an energy exchange system, a means of exchanging
complimentary values built within any two participants. The Way of the Financial
Warrior looks under the hood to know how this all works, and uses that knowledge to
create exact outcomes, to create and thrive instead of react and survive.
Henry Ford once said, Whether you think you can or you can't - either way you are
right.
Everyone has things that they can do now that they could not do before.
You can now walk while as a child you could not. The ground never changed, but you
did.
You can now read while you once could not. The English language never changed,
but you did.
At one time, Bill Gates could not write software, now he can. The world did not
change, Bill did.
At one time, Oprah Winfrey did not have the attention of millions of people
worldwide, now she has. The world did not change, Oprah did.
At one time, Jesus could not perform miracles, and then he did. Miracles did not
change, Jesus did.
At one time, the Buddha was not enlightened, and then he was. The ways of the
universe did not change, the Buddha did.
As Deepak Chopra says, Within every desire is the mechanics of its fulfillment. And
of course there is the famous quote by Jesus Christ that says, If you can? Anything
is possible for him who believes.
Do you get the picture?
There are a million things that a great person can do now that they could not do
years ago. Why is that?
It is never those things that changed. What changed was the idea that this person
had of himself or herself. Have you seen the movie The Matrix? When Neo changed
his idea of himself, he was able to do the undoable. It is so with everyone.
Capability is nothing more than a shift in what you think you are. What You Really
Are is a being with infinite possibilities. Everyone is. We are all literally an idea.
As such, success is not something we can chase and get, it is something that we
attract by the persons we become. We become those persons by changing the idea
of what we think we are.
The problem is not with the world. The problem, if there is one, is with your
recognition of yourself and your world. The way you perceive and interpret yourself
and your world is a system. Change that system, through seeking new truths, and
you change your world. This is The Way of the Financial Warrior.
Think now of a Karate dojo. In a dojo, the sensei (teacher) gives you an opponent to
fight with. But your opponent is not really an opponent. He or she is there simply to
give you a framework through which to test yourself. In a dojo, you get to discover
and learn about yourself, your flexibility, focus, potential, and so on. You rapidly do
so using the illusion of having an opponent to beat, go back and train, so you can
come back and beat. But in reality, the dojo is merely a place where you can work on
your inside, your self. The externals, such as the opponent, merely give you a frame
of reference to work on your inside. And the better you get inside, the more you
master outside.
Finances are the same. It is an inner work mirror, an inner training harness.
Whatever successes you see in your finances are a reflection of your inner state in
that regard. Whatever challenges you face in your finances are a reflection of the
illusions or fears you still hold and believe in. In fact, even childhood fearful events
that you never resolve can show up in your finances in the form of negative financial
matters until you resolve them. The essence will be the same, but the context and
form will change.
Carl Jung, one of the founding fathers of modern psychology, put it well when he
said, The psychological rule says that when an inner situation is not made
conscious, it happens outside, as fate. That is to say, when an individual remains
undivided and does not become conscious of his inner contradictions, the world must
perforce act out the conflict and be torn into opposite halves.
And James Allen, author of the timeless classic As A Man Thinketh, points out that
What you are, so is your world. Everything in the universe is resolved into your own
inward experience. It matters little what is without, for it is all a reflection of your
own state of consciousness. It matters everything what you are within, for
everything without will be mirrored and colored accordingly.
The Way of the Financial Warrior is to look at all things in her or his finances as fun
challenges for inner work. The Financial Warrior recognizes that things are not good
or bad, blessings or curses, but all opportunities either for enjoyment or for finding
new truths to break through to new levels. Even a really hard challenge has fruit
hidden within it just change your perspective, look at it differently and you will see
the fruit staring at you right in the face. In other words, all problems appear
simultaneously with their solutions ready, but you only see the solution when you
change your approach and perspective, let go of old ideas and embrace change.
The choice is simple. You can either remain in the rat race or join the eagles. A rat
and an eagle have different cognitive systems, different ways they perceive the
world.
The Way of the Financial Warrior is to continuously change their cognitive system,
for it is the only way to move from the rat race to the eagle's open skies and beyond.
The way of transformation. It is a choice to go through to the end without retreat,
detached and open, asking why at all turns and observing the Truth of the
movement of Life, how life works, asking for help, being unstoppable by refusing to
stop, and moving forward with nothing to defend. As Carlos Castenada says, Every
living thing has been granted the power, if it so desires, to seek an opening to
freedom and go through it.
There is a science of getting rich, and it is an exact science, like algebra or
arithmetic. There are certain laws which govern the process of acquiring riches, and
once these laws are learned and obeyed by anyone, that person will get rich with
mathematical certainty. These are the words of Wallace D. Wattles, author of the
famous timeless classic The Science of Getting Rich.
You may have often wondered why some people seem to have all the financial luck
and others do not, even though they may outwardly look to be more deserving.
Now you are beginning to see that The Way does not discriminate. The Laws work
precisely, no matter who applies them. All that matters, therefore, is to know The
Way.
We meet ourselves time and again in a thousand
disguises on the paths of life. Carl Jung

What we achieve inwardly will change outer reality.
Otto Rank

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Thank You!

Part 2: The Nonphysical
The nonphysical world is first cause. Before
anything happens in the physical world, it
must first happen in the nonphysical. Hence
the great, great importance of
understanding the nonphysical.
Action is a part of the physical world. But
all action follows thought. You always act in
accordance with your thoughts, your
beliefs, your emotions, and your
consciousness. If you wish to change your
habits, you change them at the level of the
nonphysical. The physical world is the
effect; the nonphysical is the cause. If, for
example, you find that you are facing
internal resistance to saving money, or you
believe it is difficult to save money, and so
on, you are best advised to investigate your
conscious and unconscious beliefs, for that
is the source of your resistance and
difficulty.
Let us begin

The World Of Money Is
Simple It Is All The
Other Stuff That Gets In
The Way
As you have seen so far in this book, getting
wealthy can be quite easy. The world of
money is, literally, quite simple. The
difficulties we face are not because making
money is hard. No. They are because we
throw in a lot of other stuff into the game,
and it is this stuff that we experience as
difficulties in making money, as money
problems. This stuff is our own stuff, our
neurosis, our emotional issues, habits,
fears, and so on. In other words, people
dont have money problems; they have
psychological-emotional issues super-
imposed on money. If for example you took
a person who says they have money
problems and you give them a million
dollars, they would find a way to transfer
their psychological-emotional issues onto
something else. Or onto the million dollars.
If you wish to end your money problems,
end your psychological-emotional issues.
The psychological rule says that when an inner situation
is not made conscious, it happens outside, as fate. That is
to say, when an individual remains undivided and does
not become conscious of his inner contradictions, the
world must perforce act out the conflict and be torn into
opposite halves. Carl Gustav Jung, one of the founding
fathers of modern psychology

What you are, so is your world. Everything in the universe
is resolved into your own inward experience. It matters
little what is without, for it is all a reflection of your own
state of consciousness. It matters everything what you
are within, for everything without will be mirrored and
colored accordingly. James Allen
You are a being that is a trinity of mind-body-soul. Your financial situation is not a
purely physical affair. You cannot only do your way to wealth. You have to be. You
cannot do happiness, you can only be happy. You cannot do sadness, you can only
be sad. You cannot do love, you can only be love. The same goes with conditions,
although sometimes it is hard to see things clearly. You are not happy because you
found happy conditions; happy conditions arise because you are happy. You are not
sad because you found sad conditions; sad conditions arise because you are sad. You
are not wealthy because you found wealthy conditions; wealthy conditions arise
because you are wealthy. State comes first before conditions. State creates
conditions (even when this looks like it cannot be so). The sequence of creation is:
Being, Thought, Word, Action. However, the illusion that conditions come first before
state is very persistent and convincing until you learn how to recognize the way
things really are.
So, lets get on with it
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Vital: Cultivate Wealth
Consciousness and Know
How Wealth Creation
Works
Money represents an aspect of a persons
internal value, but that does not mean that
it represents a persons entire internal
value. That is very important. It is not about
self-worth. Money only represents an aspect
of that internal value that pertains to
wealth. You cannot therefore say that a
wealthy person has a higher self-worth and
value than a poor person, but you can
correctly say that in matters that relate and
pertain to money, the wealthy person has a
higher internal value in that aspect of value
or that the person chooses to exercise a
higher proportion of this internal value.
This section of internal value that reflects
on the outside as money, when exercised, is
called Wealth Consciousness, a foundation
in abundance and an unshakable certainty
in abundance. The opposite of wealth
consciousness is poverty or scarcity
consciousness. To become wealthy, you
must develop wealth consciousness and
drop scarcity consciousness.
Wealth consciousness is available to all people equally and can be developed by and
within all people equally. Like everything else that is important to our being alive,
such as air, wealth consciousness is free to all. But you can choose to develop it or
not develop it, or to exercise it or not. At any time, you can change your choice, and
nothing outside of you can stop you.
You require nothing outside of yourself to increase your wealth consciousness, and
therefore your money. All you need is within you right now. You may have forgotten
it, but it is right there. You will now remember it.
And here is another secret: Wealth consciousness is simply the expansion of your
consciousness and awareness into the wealthy parts of your Self. That is why all that
you need to increase your wealth consciousness is within you already. You are
already wealthy, but you have been taught to choose to not experience your wealth.
This insight changes everything. Like the wealthy people, you can now know how to
and choose to start experiencing the wealthy you.
You have more wealth capability within you than you can possibly experience in a
lifetime. You need not worry that you have reached your limit of becoming wealthy in
any way or because of any condition. Neither do you need to know how to convert
wealth consciousness into paper cash money as you will see, it will happen
automatically. All you need to do is expand your wealth consciousness and exercise
it, act on it, be it, and the situations and opportunities for the equivalent conversion
into cash money will present themselves automatically to you. None of the extremely
wealthy people today could have, at the time when they were not wealthy, possibly
predicted and planned the exact sequence of events that would lead to their
immense wealth. They most probably had a set of goals and a plan, but any one of
them will tell you that they met countless coincidences and opportunities that
joined the dots for them in ways they could never have predicted. Their goals were
their own doing, but the paths that led to them coming into being, and exceeding
them, were amazingly intelligent yet unforeseen. You shall now see how to make
them happen in your life you may not be able to predict their sequence, but you
can certainly make these fortunate coincidences happen to you every day of your
life.
By the way, it is not only paper money that is not real. A lot of the things around you
that you hold so real are really not real at all either. You are about to embark on a
beautiful, empowering and liberating journey that will show you exactly what your
world is in a way that you have never looked at it before. It is a journey that will
open your eyes and free your wings. You are about to look under the hood of Life,
you are about to learn how to customize your world to your liking.
You are about to attain Wealth Consciousness. Once you do, avoiding success and
wealth will become very difficult. Yes, you read that correctly. Once you have wealth
consciousness, it will be very difficult for you to not have success and wealth.
Success and wealth will follow you automatically wherever you go. You will not need
to concern yourself with their quest, yet they will find you. You will be free to
experience other aspects of life that you may not have even dreamt of before,
dimensions of Self and Life that are truly amazing. The same goes with happiness,
for you will see it here in this book as well.
Let us now get started on the real stuff, if you are still interested
The Steps To Wealth Consciousness
You are now on a journey, at the end of which you shall know how to create all the
wealth and happiness you ever wished for, Now, without any limits. You shall soon
also know many timeless truths about who you really are, what you are doing here,
and what this game of life is all about. Here are the steps of the journey you are now
about to take:

1. You shall first take a simplified look at Quantum Physics, for knowing what
you and the world are made of is the first key to knowing how to make it your
way. After this, you will never look at the world in the same way again. You
shall have an amazing sense of involvement and power in the universe
2. Then the secrets of time shall be unveiled, beginning with the fact that time
does not exist. You shall learn how to use this illusion instead of being used
by it. There is only Now
3. You now will learn how to create your universe out of the quantum field using
images of your mind. This is the first part of the creation lessons.
4. You then learn how to create using your thoughts. You will learn the right
way to think, and what the mind is really for, and when to shut it down for
your own benefit
5. You will then look at the power of true goal setting in the thousands, in a
way you may never heard before, a most powerful way
6. Next will come the most powerful creation tool of all, your state of Being
7. The final creation tool, action, will then be uncovered in its true position and
purpose to you
8. You shall then learn the magical and vital ingredient of certainty, and learn
how to have it in plenty
9. Now, it will be time to look at the prime Law of the Universe and how to use it
to have happiness and wealth in abundance. The is the law of Cause and
Effect
10. While still in this law, we shall look at what conditions really are. This will
shock you, make you laugh, empower you, and free you
11. While still on conditions, you shall see how you are and shall realize ever-
present success and never fail
12. Then, you shall look at a prime killer of wealth and happiness and how to
totally avoid it
13. You will then move on to progressively larger things. You will start with your
self-chosen Purpose here on earth. Why did you come here? You shall see
14. Then the gift of giving and the gifts it brings in return will be fully given to
you
15. The power of gratitude Now shall be unveiled. This will prove to be
extremely powerful for you
16. Finally, it will be time to look at Consciousness, what makes you Here, Now,
awake
17. And then it shall get really interesting when you have a look at your Self, the
First Cause of all that is in your world. Get familiar with your Self and your
world will change dramatically
18. After that, you shall see what is larger than the Self, that which you and all
else are part of. It is the One. Knowing how you relate to All That Is, The
Source, then experiencing this, will put you in a position of immense joy and
abundance
19. And on that note, you shall see how abundant you really are
20. From there, you shall look at your real nature and how to reclaim it. It is the
nature of pure joy
21. Then, coming around full circle, you shall see how to best handle paper
money, as you know it now, to increase wealth
Wealth consciousness is absolutely essential for building wealth.
Are you ready to begin on building wealth consciousness? Well, you can, but we
wont cover that in this book. There is already a very good, highly acclaimed book
written on that topic with over 300 pages dedicated 100% to wealth consciousness
and how to build it. That book is called A Happy Pocket Full of Money and it is
available from Images of One. The above text that you have just read introducing
wealth consciousness is actually extracted from that book.
A Happy Pocket Full of Money

See some success stories from people, just like you, who have read A Happy Pocket
Full of Money:

I love what you are doing!! Fantastic!! You have been a great help to me. I have
purchased "Happy Pocket Full of Money" through Bob Doyle's site. One of the
greatest reads EVER!! ...Since that time, December 8th, 2002, a lot has changed. The
universe has been delivering all kinds of incredible new insights and direction. So
much information that I am having difficulty processing it all. EVERY SINGLE BIT
OF INFORMATION RESONATES WITH MY SOUL. Bingo. I was lead to Lynn
Grabbhorns book " Excuse Me, Your Life is Waiting" TALK ABOUT RESONATING
WITH MY SOUL!! This book unlocked a HUGE door for me. It change my spiritual
belief system completely. Authors I have read since this book: Eckhart Tolle,
Abraham-Hicks, U.S. Anderson, Wayne Dyer, Deepak Chopra, Stuart Wilde,
yourself, Joe Vitale, Ernest Holmes, and a host of others. I attended a recent Deepak
Chopra and Wayne Dyer seminar and I was blown away!! BLOWN AWAY! Then I
came across Bob Doyle's site. I don't remember how. I signed up for Wealth Beyond
Reason and another flood of dynamite truth came my way. Your book solidified
everything [A Happy Pocket Full of Money]. ...You are amazing!! You have been a
God send to me!! Thank you for the wonderful work you do !!!!! - Bruce R. Royer,
http:// www. creationcaptured .com

First off, I want to thank you, from the bottom of my heart, for writing, "A Happy
Pocket Full of Money"... It has changed my life forever! I've always enjoyed reading
books on the subject of personal development, and have become enthralled in some
of the great ones of all time, such as: "The Science of Getting Rich", "Think and
Grow Rich", "Excuse Me, Your Life is Waiting", and "The Power of Your
Subconscious Mind", But your book really inspired me! I cant describe the feeling
that came over me, numerous times, throughout the reading of your book... I guess
that was the feeling of living in the Here and Now! - Kent Glass, kglass1@
telusplanet.net

I love your work. You have made an enormous difference to my live and no doubt
hundreds of others and I thank you from the depth of my being. - Alana Sheldon,
innerpeace _alana @yahoo.com

My life has been shifting as of late. (in a good way!!) The Universe has been bringing
me all kinds of information that is answering the questions I have been asking for
years. Who am I? Why am I here? What do I do? How do I find my true self? How do
I override what my ego is saying to me so I can live and act from my true self? I came
across your work through Bob Doyle's site. "Happy Pocket Full of Money" has
answered all my questions, and more importantly it resonates with my soul. - Bruce
Royer, brroyer @socal.rr.com

Dave, just another big THANK YOU for the software and book. It is amazing.
EVERYTHING I have been studying the past few years you have managed to capture
so logically and wisely, anybody that ever crosses your site and for some illogical
reason decide not to purchase your products could not do themselves any bigger
disfavour, by missing the most concise source of info anywhere on the Net (Planet?)
they are going to have to buy many, many different books and spend thousands of
dollars just to, ONE DAY, get to maybe 60% of the info they could have had by
buying just one (Happy Pocket Full of Money) or some of the other books. "You shall
seek the Truth and the Truth shall set you free" is one of my very favourite quotes and
many people totally misunderstand it. I have been studying this field for some time
now, and have read many, many books. There are NO other book I have come across
that puts the TRUTH in more detail at the fingertips of the reader. JUST READ IT
and follow the process, IT DOES WORK! - Jannie Loots, www.ichc.co.za

After reading A Happy Pocket Full of Money, reading I was so impressed that I
bought the life and wealth packages as well as the ProvaLife Achiever software. I'm
not writing this testimonial because I am trying to advertise a website, nor am I
writing this because I stand to benefit monetarily from it. If you look at my
occupation, I actually have more to lose than gain by going public with my
endorsement of these products, as my field of work tends to be conservative. So why
am I writing an endorsement? Because the information in Mr. Cameron's books are
life changing! After going through the material, my realtionships with people in
general have improved, I am less frustrated at work, and I have learned to enjoy life
again. I am so positive about the future now. But don't take my word for it, download
his free ebook samples and check it out for yourselves, you WILL NOT regret it!
Thanks David! I wish you the best! (I wish I could write better, but I just can't
describe how much this material has changed my outlook on life) - Leandro X.
Centenera, M.D. Ob-Gyn

I just have to tell you that it has ALREADY exceeded expectation! The section on
vibrations has ONCE AGAIN made more "accessible" to me, the information that I
already "knew" at one level, but now have a totally new and powerful level of
integration of it. There is real power in your assemblage of words. Your greatest gift
is the ability to communicate these concepts in such a powerfully understandable
way. My life has had a significant shift within the past 60 minutes by going through a
few sections of this software. Anyone who commits to going through the entire
program is going to totally change their world, and quickly. Again, it could be that it
is so powerful for me because I'm already ahead of the game" in some aspects,
being very familiar with your earlier work, and ACTIVELY working to design a new
reality for myself. Still, its fabulous for the total "beginner". David, I'm telling you
that you have pure gold here, once again. - Bob Doyle, bob@ boundlessliving.com

As a member and publisher I have so greatly benefited from your thought processes
that my entire life is changing. I am currently working on a major project. At first I
was absolutely unsure of the reason for me as a woman to undertake such great task.
Later I read a quote by Margaret Thatcher "It may be the cock that crows, but it is
the hen that lays the eggs", which convinced me marginally. Then your spiritually
scientific encouragement changed my life to the degree that I consider myself
important enough to actually do it. May you inspire millions with your purpose. - Ina
Bliss, http:// www.inabliss.com

I just read the Pocket Full of Money ... amazed and astounded with the energy of
expression. ...just the clarity and joy of the truth of old in the language of today. We
are grateful. James

Just finished your book on "happy pocket full of money". The name itself brings joy
and happiness. You have done the wonderful work of a master weaver bringing the
invisible elements that works behind manifestation of true prosperity and wealth in
our lives. In my individual work of creating awareness of self and society at many
levels I often encounter great fear -- fear of unknown. People do not want to know
beyond what they know because it shifts their worldview dramatically. I was looking
for a way to give them universal tools that awakens the self-power and what better
way to get attention than something that every individual is struggling with - having
enough money to get by. Your book is simply amazing and I recommend it to
everyone, including those who have plenty of money but little joy or passion for life.
Mita, http:// www.seek2know.net

Iam sooooooo excited. Today is a very special day in my life. I thank you and God!
Maybe its just me, but I feel change already. Again David Cameron, thank you for
such a wonderful blessing. I feel such a great desire to be able to communicate with
others that are on the same path. Thank you for providing an opportunity such as this
for me! Thank you, thank you, thank you. Dee

I loved your book .... so deep and bang on mate!!! congrats on a job well done... I
have been following much of what I learnt..as a result, took a meditation class last
month called the art of living and do the practice on most days. Things have really
changed...the amount of creation I am doing is incredible...I even bought a car the
other day....by being more of the person for such....What can I say Dave....Thanks for
the insights, the knowledge, the chance to better appreciate what life is all
about...and how to shape it to design...it has been profound to say the least....!! -
Moses Kemibaro, www. dotsavvyafrica .com kemibaro @yahoo.com

I decided to resign from [previous company] to focus on my own business, DotSavvy
Limited. The web site will be up in a few days so promise to email you details when
its ready. You know what? I would'nt have had the balls to do what I am doing if it
was'nt for the books your gave me as well as the meditation. Its really a game is'nt it
:-) Later - Moses Kemibaro, www. dotsavvyafrica. Com kemibaro @yahoo.com

I must tell you that your material, site, and insights are... well I don't find the word ...
are Life Changing! It's like reading and meditating on what we 'always' knew but this
time in a clearer, focused language. ... such deep spiritual insights into the origin,
order, and laws of the Universe. Anyway I am enjoying "Marcus Aurelius," and
"Ralph Waldo Emerson" at the moment. David If you happen to read this message,
Have a Great Day And thank you again for you were the one the hand of Providence
chose to send me what I needed to replenish my soul at this time of my life. - Joel
Bomane, http:// www. start-work-home. Com

Thank you ever so much for the great opportunity you gave me to read your e-book,
"A Happy Pocket Full Of Money". I will definitely be returning to read it again...and
again. What an awesome read! I am extremely lucky to have you in my inbox! Wow! -
Diana O'Gorman, DianaArt http:// www. Mnsi.net /~dianart/ index.html

I just want to say that this book is what I have been waiting for for a very, very long
time. It compresses the information into one book and one does not have to read 20
to get the message. I cannot wait for the others to come now. ... my site is
www.ichc.co.za Best wishes, I am supporting you VERY strongly here in South
Africa. I would also like to chat to you soon about affiliating with you to present your
work in course material here (as you will see from our site). - Jannie Loots,
www.ichc.co.za

Recently I had the pleasure of reviewing an eBook by David Cameron entitled A
Pocket Full Of Money, I was moved tremendously by it. I was so sure the book was
going to read like so many other money and self-help books I read in the past,
another author instructing readers with misunderstood biblical quotes and closing
statements of "think positive and everything will be alright". If only I had this book
twenty years ago, all of the hardships I could've avoided, well that's water under the
bridge now. I was pleasantly surprised how David managed to delve deep to explain
the gloriousness of the universe and how we, as humans, have been blessed with
unlimited access to the universe's unlimited power. ... Who would've thought humans
and our experiences are tied to the ever expanding universe? Not I. [David] has the
magnificent talent of translating what was once considered to be complex knowledge
into simple reasonings that even a 10 year old could understand. You will have more
"aah hah, I get it moments" than you could've ever thought was possible while
reading this fantastic eBook. A Pocket Full Of Money has really influenced my life in
the most enlightened ways possible since being exposed to it a month ago. I
discovered after my third read of the eBook I paid closer attention to my "inner"
dialogue which revealed to me my "money" issues. Thanks to this publication I was
able to discover and work on my ingrained negative expectations associated with
money. I wish I could share with you all the emails I get on a daily basis from souls
looking for relief. These people are looking for solace from their mediocre lives of
dreams never manifested, failure, loneliness, and feelings of being "lost". A Pocket
Full Of Money is what I urgently recommend anyone, doesn't matter how successful
(unsuccessful), happy (sad), or contented (discontented) anyone may think they are,
to read this book. Lives could be made more glorious and exciting with just being
exposed to the information David Cameron shares in this eBook soon to be
paperback. For a long time I felt there was some hidden knowledge the average
person was destined to not ever know or understand, and I was right. This eBook lays
this hidden information at your footstep for you to act on or push away, it's up to you.
It's my prayer you purchase this book and apply the uncommon knowledge to your
life everyday, designing it filled with passion and purposeful living, setting yourself
free from the limited and impossible thinking thought to be true by the misguided
masses. - Regena English, editor St.Mary Publishing Company of Houston http://
leatherspinsters .com

The book is fantastic. It is a unification of Deepak Chopra and quantum physics.
Very well written that is where the whole world is going these days they
[wealth] come from the source. That is the theme of the book. - Dr. Odhiambo,
Radiologist

I am enjoying the Quantum Physics chapters. I have read a lot about quantum
physics, but I am NOT a mathematician, and I could totally wrap my mind around it.
You write about it in a very clear and succinct manner. I am going slow here because
I am taking time to think about it. Have a good evening. - Suzan Caroll, Phd.,
psychotherapist, www. multidimensions .com

I am going thru your book and it is really challenging my thinking...I had just started
going thru Think and Grow Rich and I am fascinated with the role our subconcious
mind plays a role in our lives. I have also read a couple of books by Joseph Murphy
on this subject...but your book is helping to explain WHY this works, which is
especially appealing for those of us who are scientifically inclined. - Patrick
Githuku, bond analyst @ ING Investment Management and webmaster at www.
gapwealthsolutions .com

Thanx so much for everything you're doing! You really have pulled the information
together from many different places so it's all in one place-this is what makes the
difference for me! Keep up the great work! - Carol M.

I have discovered the key in the surface level, what I just discovered at your Book "A
Happy Pocket Full of Money" has scratch the surfaced I have discovered! This is
really the Most Scientifically Explained Book about Wealth and Success and the One
I will love the most... Nothing can stop me promoting your book "A Happy Pocket
Full of Money" and you as the Author. Your book scratch the surface of what I have
discovered as the key to wealth and success ... It covers all the surface. Most I have
read about success have something in common but nothing dissects into a sub-atomic
level .. I am planning to create a publishing website that is tribute to your Book and
to you as the Author ... I believe it happens that I discovered you and your book with
purpose and my subconcious mind act in a nano second to grab an oppurtunity. -
Richard Alcebar, www. bizamulet .com

I am sitting here with tears of joy at your absolute generosity. Everything about
finding your site, getting your newsletters/emails and now this priceless gift from you
has been a miracle, because it was just what my soul was yearning for. More and
more these days, my hearts desires are becoming manifest spontaneously. I have read
some of the books in your site a few years ago. I have always been blessed in that I
would always find just the right book to answer the need I had at the time. This time,
I have found the ultimate book site, yours. Every fiber of my being, resonates with the
wisdom you share through your site and books. Everyone should have this
knowledge. So I am forwarding your email articles/newsletters to as many people as
possible. Also I will be submitting your articles to local newspapers and magazines
with your signature file at the end, showing your name, website address, etc. In this
way, you will get lots more visitors to your site and also more purchases ... Bye for
now. I am going to feed myself to overflowing with all the knowledge you have made
available. Love and warm regards - Selvie Roos, http:// cashforyou. cashevolution
.com

Your work is awesomely careful, succinct, and complete in both details and
examples. Your 'Happy Pocket' is most clearly and magnetically presented to the
reader. Kindest regards. - Ken Roberts, kroberts @core.com

As I suspected, I am completely thrilled with your material. And that is putting it
mildly. I could go on and on about it, but I want to get right to the point. I am a
teacher. I have given several workshops on "Reality Creation" around the country.
Your material has added to my arsenal of knowledge in a huge way ... The Universe
is delivering a wide variety of material to me that shows me very definite ways to
"teach" what I know - and better still, to LIVE it. Your material is by far, some of my
very favorite. It has brought be clarity and understanding on several key points. In
essence, it has given me "permission" to fully experience what I have known to be
true all these years ... I'm extremely interested in doing workshops based on your
material. Quite frankly, I feel the WORLD needs to hear these messages - and this is
what I do. I teach as I am learning myself. I am a "conduit" if you will. I have no fear
of putting myself in front of people and sharing the information that the Universe
funnels my way, and in fact, I believe it is a large part of Who I am, and Why I am
here ... Finding your site was a DIRECT response to a request I submitted to the
Universe - on many levels... Thanks again for making this material available to me. It
is quite a Gift, in my mind. - Bob Doyle, bob@ boundlessliving .com

I have been looking for this for YEARS! It contains all the info I ever wanted. - Anon

Love the material! It has really help me. - Anon

I am experiencing everthing that your sales letter talked about. I am ready to move
from a poverty mentality to a wealth building mecca. - Anon

After completion of Happy Pocket full of money, I could take very bold decisions in
my life. I could leave the job and started my own new business, which is definitely
going to be very prosperous and very successful. Your book is one of the best gift, life
has given to me. Thanks David ! - V.Nandhivarman, nandhivarman @hotmail.com

David, I am so grateful to have found your work (^o^). They are simply priceless!
You words are like beacon of light that shine brightly to guide my path. When I was
introduced to your work, it felt as though suddenly all my innate knowing had been
articulated and translated into words. It was like finding a key to puzzle of life.
Thank you David to reminding us of our magnificence and infinite possibilities that is
always waiting to manifest through our next thought - Mariko, http://www.
ProsperityPromises .com

For now, David Cameron, I just want you to know that I am so greatful for your
words and that this site exist; For, I am now able to really help myself. - Sophia,
Sophia@ pathcom.com

On paper our income is higher than average. However, through mismanagemnet
and indifference, we were living payday to payday. I started to hate and resent work.
grew anxious over our mortgages (yes, there is an "s" denoting plural), over bills. I
aspired to be a housewife/domestic goddess. I (These days, this is not an option and
considered a sign of laziness) Our son had been jailed several times over the past few
years since graduating high school. Our creditors were calling, accounts were sent
to collections. My car was repo'd. Stuff I saw on TV, but didnt think would happen
to me. (keyword:comparison) Throughout my life I have practiced bits and pieces of
the info presented . However, I chose to escape the "real" world of disappointment
and resentment and hurt through reading fiction. Nothing wrong with reading. Lots
wrong with trying to escape from living your life. (keyword:ungrateful) Last
December, I did my version of feng shui to our home. I budgeted, signed up with a
credit management company, and gained control of our finances. By August this
year, we only had 4 creditors, down from 18! I became optimistic & searched
websites regarding stocks/investments, retirement planning etc. I dont even
remember where I encountered your banner. I only know I felt inclined to click
on...something I usually avoid when it's "self improvement...at a $ price." I
immediately purchased a package. Even though it's at a wonderful, affordable
price...please realize we had spent the last eight months tightly monitoring every cent
to pay our creditors. Although I'm resistant to "clap your hands & can I get an
Allelujah thrown in" type of seminars...yours struck me as 1) straightforward &
simple, 2) easy to understand, and 3)sincere. I absorbed the material with glee.
Bottom line for me was that if it was so easy to be gloom & doom and be living the
life...how hard would it be for me to believe for one moment that "it's all good". My
life truly felt like it was headed for Rx drugs for major depression or worse. For that
one moment, for that one shining moment, I felt ...good...happy...not fretful, anxious,
angry, or resentful... I took that feeling a step farther and.... well, Bob...my husband
stumbled across a position in the UK; the.moving,housing, utilities paid for (Govt
job). COLA included too. Our home sold in 24 hrs (4 different offers). We have
enough to pay off the remaining creditors, the mortgages, and still have cash in hand.
We are living in a country that I only dreamed of visiting. We have travel/lodging
discounts to explore Europe. I sent my son all the info from WBR. He calls me to say
how helpful and encouraging WBR has been. He uses the affirmations. I know he will
be allright. My husband met people who share WBR's outlook. I "confessed" to him
that I was studying WBR. What have I learned? It is all true. It is all possible. I
started out looking for a way to bring cash into my life, and I am waking every
morning with more...I am truly grateful, I am forgiving, I am loving, I am joyful, I am
courageous. My affirmations used to begin with I am wealth...abundance...joy. My
sincere gratitude for what I have now set my spirits soaring. I promised a condensed
version... this is as condensed as I can contain myself. Conceive, believe, and be
ready to receive. It's better than good...all is perfect and joyful. Amazing but
true...my desires have manifested so quickly and effortlessly. And amazingly enough,
they coincide with my husband's desires too. Bob, I extend my gratitude and smiles to
you for putting together and sharing the WBR website. Aloha and Tally ho: Evie cc:
David Cameron. - E.A.

Your books are great. I read them when I'm having trouble getting out of a funk, like
this morning (I've just about kicked the 'ego' out but it's smell is still lingering so I'm
airing the room each time I read your stuff) and I feel great. - Andrew,
andrew.jansen @vodacom.co.za

Your book Happy Pocket Full of Money, was a big life-changing experience for me.
After I read it, I felt compelled to have it translated into Polish and get it published
for you in Poland. There is currently a strong market there for books on personal
growth and metaphysics. I firmly believe that your book will be a great success there
- Ela Terakowska, Toronto, ela.terakowska @ sympatico.ca

In all seriousness, I am well read in the areas David writes about. But I have never
found any resource or book that lays things out the way his do. EVERYONE should
read this stuff! It gives one a whole new perspective on life, success, love, and the
world. There isn't a day that goes by I don't read several pages and review the
material. Thank you for your insights and the work you are doing. David, I cannot
get enough of your material. It is evident we have read the same books, have had the
same questions, but you have explored things in more depth than I did. CUDOS to
you! Love this info...I EAT it for breakfast, lunch, and dinner. I would love to live
close to you to be able to have some trully in-depth conversations. Most people I
speak with have either no interest or its over their head. I could explore this stuff
forever.... The material is very profound, life altering. Imagine if just 10% of the
population took these teachings and concepts to heart...what a difference the world
would be, huh? All the best, Dave Mullins - Dave Mullins

My name is Sam Rosen, and my partner, Jimmy Davis, and I have left both of our day
jobs to focus on creating abundance in our lives. Your book, A Happy Pocket Full of
Money, which we read as part of the Wealth Beyond Reason seminar, has provided
more clarity on wealth consciousness than any other text we've read...and we've read
a lot. We were so inspired that we purchased ProvaLifeGoals and ProvaLifeMap,
and have been amazed, to say the least, by both products. - Sam Rosen and Jimmy
Davis, samrosen1 @yahoo.com

Anyway, ordered his product (since he was raving about Happy Pocket) and read it
first. Awesome! Inspiring. Amazing how one book can open up a whole new world.
Thanks. - John Huver, jhuver@ comcast.net

... I, as others, am truly blown away by the complete and comprehensive TRUTHS
that are in your books, seeming to encompass all of my study over the past 40 plus
years!...So far, all of the rest of what you have written in this first book (Happy
Pocket is next on my list, and I saw somewhere it is an expansion of the one I'm
reading now) is a very succinct and wonderful explanation of all of the principles I've
been learning over the past 20-30-40 years! I hope more and more readers will
become open to these understandings - Jannette Robert Murray, jrmurray
@icehouse.net

I cannot express my gratitude enough for your most generous offer. Thank you sooo
much. What a wonderful gesture!!! I am truly touched!!! :-) What you teach is so
true - what goes around comes around!!! I had been in denial about everything for
so long :-( and just a few short months ago I started turning my life around thanks to
you, Bob Doyle (where I orignally found out about your website and wonderful
materials!!) a wonderful Medical Intuitive, and an equally wonderful Energetic
Healer. I started doing forgiveness work and really reading your work and articles.
Watch out world here comes the new Val!!! - Val Sherman, valsher@ adelphia.net

I have been a little cynical lately about all of the personal and mind development.
The reason was that after going to seminars, reading books, lessening to tapes, etc. I
was getting a little bit disappointed to keep hearing over and over again the same
think: "You can do and have anything you like..." or "I went from bankrupt to
millionaire in one year...." How? Nobody would tell you the step-by-step of how this
things work or how they did it step-by-step. David Cameron is the first author who
explains step-by-step how all works in a simple manner. He must be a natural
teacher. I couldn't put the book down although some things I read I would need to
read it again as they sound to extraordinaire to me. Thank you again for writing such
a nice and simple book but with such depth. ... I spend till 5am going through
everything. I felt like an sponge. I wanted to absorb everything. - Maria
Schmolmueller

I purchased the "Wealth Pack" a few weeks ago and am having such tremendous
gains from reading your material. A whole new world has opened up for me and my
stress level is practically zero. This is an astounding as in the past, I've been such a
constant "worry wart". My entire family is benefiting from this... it just trickles
down into all their lives. I have such appreciation and gratitude for your gift of
wisdom. And our financial life, which had been in the pits, is now turning around
(or, more correctly, "WE ARE WEALTH".) I just wanted to relay a most amusing
story which happened yesterday. I have a dog named, "Sparky" who is very attached
to me. This past week, I went on a beach trip with my children and their school for a
few days. My husband was home in the evenings, but Sparky missed me very much
and wormed his way out of a barricade my husband had put up. He was off to find
me. Now, Sparky has had a very large benign tumor growing out of his ear for the
past couple of years. It didn't appear to be hurting him, but it was very unsightly
and odorous. We even named it ("Ashley" ha ha). The cost of getting it removed
was going to be between $500-$700. Because of our financial condition, I just
couldn't justify spending this money on the dog when my children were in need of so
many things. Nonetheless, I had saved up $700 for the operation and had it sitting
in the bank for the past two months. I was waiting for our finances to turn around
before I would be comfortable using it. However, I had a lot of attention on Sparky
and kept visualizing the tumor being gone and how much happier he and all of us
would be. So, Sparky ran down the street to a very busy road and was nearly hit by
a car. Two women got out of their car, stopped traffic, and drove him about a 1/2
hour drive to the nearest animal shelter. When I got home that night and Sparky was
gone, my first instinct was to just put up signs and wait until morning to see if
anyone in the neighborhood had picked him up. But the funny part of it is, I KNEW
THAT IT WAS GOING TO ALL BE FINE. My husband was astounded at my
equanimity. I was not even worried for one second! Again, this is not my "usual
behavior pattern" (thanks to reading your work, David). My husband and I posted
signs all around the neighborhood that night, but I didn't receive any calls that
morning. Now it was time to check out the animal shelters. I found the one on the
internet that serviced our area, and in moments, there was a picture of Sparky in the
shelter. I found my dog! I was going to call them to tell them I was on my way, but
decided not to. I was going to leave right away, but something told me to stay home
a little longer and not to rush. When I got there, I was told he was not in the kennel,
but in the hospital. And when I arrived in the hospital, the vet said, "Sparky JUST
got out of surgery. I removed that tumor that was in his ear." WOW! This was
amazing!!! This was beyond belief!!! I thanked the vet profusely and blew him
kisses of gratitude. And the whole thing, with impound fees, vaccinations, etc. only
cost $107. To show my appreciation to the shelter, I drove across town to a place
that makes the best gourmet cookies and brownies on planet Earth and surprised
them with a box of goodies. Right now, I am trying to get ahold of the ladies who
brought Sparky to the shelter so that I can send them a reward (they just haven't
been home, and the shelter has been calling them for me since they cannot give out
personal info.) EVERYONE WON! And it's because I let go. I stopped stressing. I
listened to myself. And I kept visualizing the ideal scene. Oh, and one more thing.
We just moved to this area a few months ago. I had ordered Sparky a new collar
with our info embroidered directly on the collar. I had been waiting for it for over
two months. Guess when it arrived? The day he ran away. Amazing. Had he had
it on, he never would have gotten the operation. Anyhow, just wanted you to know
how your loving words have touched our lives. This is just the beginning. Thanks
so much. I will write you more successes as they occur. I look forward to your e-
mails and am grateful each day that I read your words. Much love, - S.H.

I recieved and was able to download my Program Software today, and I just
"WISHED" TO THANK YOU FOR THAT! And YES, you may use ALL THAT I
related to you IN MY EMAIL AS HAPPENING TO ME, after READING, AND
READING, AND READING ALL YOUR NEWSLETTERS BY EMAIL, WHAT
SEEMED LIKE A MIRACLE JUST SUDDENLY HAPPENED OUT OF THE BLUE;
I WAS RECRUITED TO WORK IN A WONDERFUL COMPANY THAT IS WELL
KNOWN FOR THEIR HIGH ETHICAL STANDARDS IN THE REAL ESTATE
BUSINESS, AND THE OPPORTUNITY CAME TO ME, FROM PEOPLE THAT I
HAD NOT KNOWN BEFORE! YOUR MATERIAL HAS LIFTED ME INTO
ANOTHER WORLD, I WILL NEVER BE ABLE TO THANK YOU ENOUGH FOR
ALL THE INCREDIBLE INFORMATION THAT YOU WRITE, AND "HOW YOU
DESCRIBE" AND BREAK EVERYTHING ALL DOWN, SO THAT WE THE
READERS FEEL THE INCREDIBLE REALITY OF "ALL THOSE WORDS", IN
YOUR NEWSLETTERS! - Nicole

First of all I would like to congratulate you for the really great job you made with
your book "a happy pocket full of money" for someone like me who speak english as
a second langage (I'm french) your book is very easily understandable. I also bought
your lifegoal software and enjoy it. If I can just say something about it , you should
add some examples when you speak about some concepts in the software to make
some things clear. Anyway, I write to you today to ask your opinion on something
puzzling that has happened to me as soon as I used to software. Two of my biggest
goals are to buy my own house and to have sufficient wealth to make my own
business on jewelry making. Using the software, I made this goals clear, used images
and started to imagine them using the heart assemblage system. Soon, the imagined
images were so clear that I could even see myself, the clothes I was wearing etc on
the imagined sequences and I can stand them for more than 68 seconds. In fact when
I open my eyes I can't believe how time has passed so quickly... - Nadia

I thank you IMMENSELY for emailing me ALL OF YOUR AMAZING
NEWSLETTERS! Their incredible Information!!! When I first started reading your
Newsletters, I thought, "WOW, what is this; how can this be?" BUT I found myself
having to go back and read, and read, and read, every single Newsletter; even
though it all sounded so unreal to me. Well, in the midst of all that reading and
reading and reading, SUDDENLY, 2 Wonderful people appeared and offered me
an Opportunity in their Prestigious Company with excellent Compensation and
Business Structure, and I was finally able to leave an Office that had become such a
hardship to endure. It all happened so SUDDENLY and EASY, and I was able to
leave just like you described in your Newsletters! I am so amazed at the way it all
came to me. I had not experienced something happening so EASILY, like this before!
It is so very Special to me! I feel very previlaged to be on your Mailing List, and to
be receiving your Newsletters filled with all that Incredible Amazing Information!!! -
Nicole

A Happy Pocket Full of Money

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

A Little Faith (Belief) Can
Move Mountains So
Discover And Design
Your Beliefs
To your subconscious mind the solutions
to your problems of poverty is to become
rich, but it is logically invalid for it to
pursue this course of action if it has been
told that it will make you a bad person.
Simon Hall. Question: Do you really know
what your conscious and unconscious
beliefs are? It would be a good idea to find
out. Then, it would be an even better idea to
create new beliefs that support your desires.
To be ambitious for wealth and yet expecting to be poor;
to be always doubting your ability to get what you long
for, is like trying to reach east by traveling west. There is
no philosophy which will help man to succeed when he is
always doubting his ability to do so, and thus attracting
failure. Charles Bandouin

If you dont change your beliefs, your life will be like this
forever. Is that good news? Dr. Robert Anthony

Your beliefs are the mother of your experience. And so, it is all about beliefs. That is
what structures your world. It has been said that anything is possible to one who
believes. Here is the secret: You are always believing in something! And that belief is
always creating your experience. Knowing this, it is of great importance to
understand the nature of beliefs, is it not? Let us look at the nature of beliefs.
The following text on beliefs is extracted from the book Who Am I?, which is
available from Images of One.
Who Am I?

***
It is important to realize that with all things in your life situations, you are dealing
with beliefs. All your life situations spring forth from your beliefs and nothing else. It
is therefore very important to understand that to affect anything, all the work is
done in the mind on the belief level. It is pointless to try to change things by trying
to manipulate the physical world if your beliefs are still the same. And as you change
your beliefs, do not look for immediate results in the physical but instead recognize
that (1) as surely as you created situations from your old beliefs, the new ones will
just as surely arise and (2) it will take some ' time ' for the old to give way to the
new and you do not know how long this time should be so don't bother working it out
and stressing yourself about it - have patience and trust. If you change your mind
(beliefs), you can be assured that the results will follow, but do not constantly check
for them or else that will introduce anxiety and actually delay them. Your beliefs
color all aspects of your life.
***
Your beliefs can be walls around your experience because you will tend to see and
experience what you believe and filter out everything else. As such, they can act as
barriers to new experience especially if your mind is not open and willing to see
alternatives. Now, unless you are able to see and recognize these barriers (beliefs)
you will not even realize that you are enclosed and not free. If your mind is closed,
you will not see beyond the barriers that your beliefs have formed. You must
therefore learn to recognize these beliefs, first and foremost.
***
You create your reality. Your emotions and imagination always follow your
beliefs. Always and all ways. This is because almost every belief has certain
emotions and imaginations (thoughts) that are associated with it (there are very,
very few beliefs that are purely intellectual). The belief comes first, however. So to
change your emotions and imagination change your beliefs and the rest will follow.
***
All beliefs are ideas about reality and not facts or aspects of reality. An open mind
knows this, while a closed mind mistakes a belief for a fact. All facts are accepted
fiction. The mind is capable of creating heaven and earth, life and death, and its
experience of that (and it does). When it is said that if you have faith to move a
mountain it will move, that is another way of showing you just how powerful the
mind is, despite what we think of it and the limitations we place on it and thus on
ourselves.
***
Your imagination follows your beliefs. If you do not recognize this you can find
yourself in a vicious cycle whereby you consistently imagine negative outcomes,
which produce negative events, which further reinforce your negative belief, which
further gives off negative imagination. The same applies to your emotions, as your
emotions follow your beliefs.
***
Although many of your core beliefs were formed in childhood, you are not at their
mercy (unless you believe that you are). The present moment is always your point of
power, and you can change any belief now, whether or not you remember where it
was formed or why. You are not at the mercy of any belief, no matter where it was
formed.
***
You must understand that you are not your beliefs. Make a clear distinction between
you and your beliefs. You are not your beliefs. For example, the statement, "I am
fat" is not a fact of reality but a belief about reality, and it is not a statement about
you but a statement of belief. You are not fat, but if you believe you are then you
will experience that. You are Spirit. You must learn to make a clear distinction
between you and your beliefs so that you can learn how to work with them
deliberately and comfortably.
***
Your beliefs are physically materialized. That is how it works, and it is so to enable
you to experience your beliefs. Be-live. Beliefs are a statement of being, and as
you are (be), so shall you experience (live).
***
Imagination follows beliefs and cannot ever be in conflict with your will. You may
imagine that your imagination is running against your will, but closer inspection will
show that it cannot possibly do that. Your beliefs can conflict, but your imagination
can never be in conflict with the belief that gives rise to it, nor to your will power. So
the statement that, "No matter how much I try I cannot seem to stop thinking
negatively" assumes that your thought is going against your will, and this is
impossible. Your will is in line with your belief and this is springing up the negative
imagination. Once you change the belief, the rest will follow automatically.
***
It is useless to blame an outside situation or get angry at a part of your body or an
illness and not recognize that your body and your world always faithfully mirror your
beliefs, as they were designed to. Remember, however, that one belief can take on
the manifestation of many forms. A person who has cancer did not necessarily get it
because they believed they would get cancer. In fact, they may not even have a
belief that is directly about cancer. However, the cancer may be the manifestation of
a belief that leads to great resentment of life, which is mirrored back as cancer.
Although the connections may not be so apparent, your conscious mind, if you ask it
and listen, will always have an accurate answer as to the link between an experience
you are having and the belief behind it.
***
All information coming from your inner Self and arising to the surface of your
conscious mind will be interpreted and served to you according to your beliefs.
***
If you do not learn to work with your beliefs consciously and directly in your mind,
you will be forced to work with them indirectly and unconsciously as you react to the
physical manifestations that they create. The conscious and direct approach is far
easier and more efficient. It also allows you to quickly create the reality of your
choice since you will be deliberately creating reality by first creating it within you by
forming specific beliefs, emotions and imagination.
***
Every illness arises from a belief. All dis-eases are symptoms of an error in thought,
a false belief about life and self. Western medicine primarily focuses only on the
symptom, and the symptom is only the effect and not the cause. If medication is
used to eradicate the dis-ease (which is the symptom of the true problem), the belief
behind it must also be healed or transformed otherwise the body will simply
substitute the disease with something else (as it must to keep its reflection with the
inner self). Your body, mind and soul are all self-correcting and self-healing if left on
their own without interference from limiting beliefs. You limit your natural healing
abilities to the extent that you don't trust and believe they work. As long as you
believe that you can only be saved by an outside power, you will deny your own
power and experience that.
***
When you alter your beliefs today you also reprogram
your past. As far as you are concerned the present is your
point of action, focus, and power, and from that point of
volition you form both your future and past. Realizing
this, you will understand that you are not at the mercy of
a past over which you have no control. - Seth
***
The only thing that separates people is beliefs. The only thing that separates you
from anything is yourself.
***
Your memory is also structured by your beliefs. You will tend to remember only what
fits your beliefs and those memories will justify and prove, to you, your beliefs.
***
Transparent beliefs: A belief is transparent when you are operating through that
belief yet not noticing it. Transparent beliefs are often mistaken to be facts of life if
at all they are noticed, or sometimes just not even noticed at all. Transparent beliefs
appear to you to be unquestionable truths. It is only after you pull away and observe
with detachment (not defending your belief with ' proof ' , not seeking to be ' right ' )
that you see that the ' proof ' you have is actually being produce by and because of
the belief!
***
Invisible beliefs: These are beliefs that you are fully aware of but choose to ignore
because they are within areas of life that you have a problem with that you have not
been willing to work on and face. Whenever you are willing to see the full and
complete contents of your conscious mind, you easily start to see these beliefs. One
great way to see them is to list all your beliefs in certain areas of your life. Do so
over a period of time and you will notice that even within particular areas you do
hold conflicting beliefs. At different times, you believe different things about the
same area of life. Look at these conflicts in belief and see what unites them. You will
notice that there is an invisible belief that is holding together the conflicting ones.
This underlying invisible belief spawns these others.
***
Bridge beliefs: These are beliefs that bridge the gap between some of your other
beliefs. Bridge beliefs are usually charged with great emotion and energy. To find
your bridge beliefs, first hold the intention of seeing them. Tell your mind to expose
them and let them emerge. Then, look for similarities between your beliefs (the ones
that you know about). See how these similarities are bridging (connecting) your
beliefs together. The similarities that connect your beliefs (even the ones that seem
to contradict) will show you what your bridge beliefs are. You are not normally
consciously aware of bridge beliefs unless you consciously examine your mind for
them. You can also find bridge beliefs by looking at areas in your life where you are
in conflict with yourself with great emotion. For example, it is normal to like to be
neat in appearance. However, some people have exaggerated emotions about being
neat (or appearing in a certain way) and feel almost devastated when they think that
they haven ' t matched their neatness expectations. Such inner conflicts that are
charged with great emotion indicate the presence of a bridge belief. In our example
with the compulsively neat people, the bridge belief may be an assumption they
have made about themselves and life, and this assumption underlies many other
beliefs they hold. Before being aware of a bridge belief, a person assumes that their
thoughts are facts of life and never think they are dealing with a belief. Once you are
aware of a bridge belief, you are in a powerful position of being able to see how
many of your other beliefs work together, where they came from, and even be able
to easily change them. Once the bridge is discovered, examined and changed, then
all the other beliefs connected by it are automatically altered. Also, once discovered,
they allow you to see invisible beliefs that you may not have seen before.
***
Core beliefs: These are exactly what their name suggests they are. They are the
fundamental beliefs behind your identity and perspective. They are also beliefs that
you recognize as "facts of life"- you do not see them as the beliefs they really are.
From them, many other of your beliefs, assumptions, judgments, etc arise. In other
words, core beliefs are the foundations of your identity and perspective, of the way
you create your world. Until they are recognized, they remain invisible or
transparent. They are covered by all the other beliefs on top of them. They are the
reasons behind "why does this always happen to me no matter what I do?" type of
events in your life. Until you change them, they work behind the scenes to continue
maintaining your life as it is, with only minor variations.
***
An image conclusion is a conclusion that a person makes about an experience in life.
It is made at a level beyond words and sometimes beyond rationality. Most of the
time, it is made unconsciously but sometimes the person is very aware they are
making one. For example, let's assume that a person is going to try public speaking
for the first time ever. Let us also assume that this person has spoken to no one
about public speaking and hasn't read any books about or thought much about it. So
they are pretty clear on it - having no experience or beliefs about it. Just like a child
having the first experience of something. Now, if they get up on stage and make
their speech and everything goes very well, they will make an image conclusion
(consciously or unconsciously) that will say and feel something like "public speaking
is energizing, easy and fun". This image conclusion is not necessarily in words; it is
more of a feeling and a mental image. Now, if that public speaking event did not go
well, the person would make an image conclusion that may be something like "public
speaking results in humiliation".
***
Most people convert their image conclusions into beliefs. They may even not
recognize them to be beliefs based on a limited experience; they may assume their
image conclusion is actually a fact of life (which it isn't). The person then usually
lives their whole life, in similar situations, by this image conclusion. In other words,
they react from the perspective of the image conclusion. Their image conclusion then
colors all similar experiences. The Truth is that each experience is new and unique
and doesn't have to be at all like the last one; however, a person who strongly
believes their image conclusion will not experience this new variety but will instead
experience redefinitions colored by the image conclusion, the past repeating itself.
Their reactions and responses will also not be in line with present circumstances but
will instead be based on the past (they will be out of line and exaggerated, having
nothing to do with the present).
***
Most major image conclusions are formed between conception and the age of 7. For
example, imagine a child who is growing in the womb of a mother who fears life,
doesn't want to have the baby, and doesn't nurture herself well. This child while in
the womb may (depending on its soul patterns) make a subconscious image
conclusion that says, "Life is threatening and I don't belong". This child would then
live their lives from that perspective, assuming it is a fact of life. They would then
always try to ' defend ' themselves and act as if they are unwanted and under
attack. They would set themselves up in situations that prove this belief to them and
they would tend to face situations that seem to attack them and abandon them. And
this cycle would continue unless it is broken through awareness and going within to
find truth. They would literally treat themselves as if they were under threat and
abandoned, and the universe would reflect back their beliefs to them, naturally.
***
Behind beliefs lie image conclusions. That is why it is so important to
understand what your image conclusions are (and to a lesser extent
although not necessary, how you got them). Through this understanding, you
are able to easily free yourself and change them, thus forever releasing yourself
from repeating a past if you don't like it.
Old Beliefs Do Not Lead You To New Cheese. Examining Your Money Beliefs.
Your beliefs create your reality. There is no other rule. It is therefore wise to
examine your beliefs and choose those that will get you where you wish to go. Dont
cling to your beliefs, have a healthy amount of detachment from them. If they are
based on truth, you dont have to defend them, they can defend themselves. In Zen,
they say empty your mind, have a beginners mind.
Examine your beliefs about the following (they all tie in together to produce the
various financial experiences you have):
Money
Security
Trust (in yourself and in life)
Freedom
Rich and poor people
Self
Life
Power
People
Value
Sex
Good vs. bad
Reward and punishment
As you examine your beliefs, dont just examine from the mind. Most of your insights
will actually come from your feelings. So pay attention to how you feel. Use your
feelings to point you to your beliefs. Often, you cannot see your beliefs directly but
your feelings will show you what your beliefs are.
Here are some questions that will help you examine your beliefs. Get some paper
and make notes as you go along. Writing things down is extremely powerful when it
comes to self-analysis work. Dont do this purely on a mental level. Write down all
your observations and keep those notes because, often, it is only after reviewing
your notes in the coming weeks that you will get insights into your self. Here we go:
What are the feelings attached to your three earliest memories regarding
money?
What are the one-sentence lessons you learnt about money (e.g. money
doesnt grow on trees, money is the root of all evil, a penny saved is a penny
earned, easy come easy go)? Who told you these lessons? Which ones did
you accept and which and which ones did you reject? What feelings arose in
you when you heard these lessons?
What are your family stories about money (e.g. about your aunt and her
money experiences, or your grandfather, or your uncle)? Were they told with
an air of positivism and approval or negativity and disapproval? When you
heard these stories, what feelings arose in you?
What are your three earliest memories regarding money?
What did your mother say about money? What about your father?
What difficult feelings do you experience about money now?
As you were growing up, did you ever make any vows about money? What
were these vows and what incidents gave rise to these vows? What feelings
were you having at the time?
Did you worry about money when growing up? What did you tell yourself?
What forms did your worries about money take?
How has your pain around money hurt your life and caused you and others
suffering, as you perceive it?
What do you feel when you watch a TV commercial for loans, cars, houses,
mutual funds, and other big ticket items? What do you feel when you are
solicited for charity, go shopping, are confronted by a sales person, are fired,
think about your finances, have to negotiate for who pays for drinks or
dinner?
What feelings did your mother express towards money? And your father?
What is your first memory involving money and your close relatives? And with
your neighbors? And with shopkeepers?
What were your first money experiences with cars, homes, stocks, insurance,
bonds, lawyers, financial planners, brokers, bankers, legal papers, and banks?
What messages did you carry from these first experiences? What feelings are
attached to them?
When and how did money first enter your relationship with your father? And
with your mother? How did it change the emotional tone between you and
him? And her?
When did you first realize that you had to work for money, or marry for
money, or lie for money, cajole for money, fight for money, or give up in
resentment and despair?
When did you first discover you were richer than some people and poorer
than others? How did that make you feel?
These are just a few questions to help you get started. As you go about your life,
notice what beliefs you are operating under. Remember to keep notes, as these are
extremely helpful; you will only realize the tremendous power of keeping notes when
you start to do so. It cannot really be communicated enough; you just have to do it
to see. Keep notes, note down your observations, and review them in a few days, in
the coming weeks and months. Each review will bring new insights.
Here are a few great tools you can use to transform:
Use The Journey Techniques To Move Past Old Patterns
The Journey, developed by Brandon Bays, guides you directly to the root cause of
longstanding difficulties and gives you the tools to finally and completely resolve it. It
is a beautiful, yet simple and fast-working process. Have a look at it from her book:
The Journey

Use Personal Transaction Analysis (TA) To Change Your Ways
I would like to quickly give you a tool that will help you uncover some of your beliefs.
It is called Transaction Analysis (TA) and it is best covered in a book called Im OK,
Youre OK by Thomas A. Harris, M.D.
Im OK, Youre OK

Get this great book for more details. But here is a summary of what TA is all about.
Basically, the basis of social interaction is a transaction. When you relate with
someone, you are transacting. Now, all your beliefs were formed as a result of
transactions, especially transactions you had between the ages of 0 and 7 years.
Also, everybody has three components in their psyche: Parent, Adult, and Child
(PAC). You have all these three within you. Have you noticed that sometimes your
thoughts (or the voices in your head that carry on a conversation inside) tell you the
exact same thing your parents used to tell you, and sometimes you react just like
you did as a child, and sometimes you have an adult side that seems independent of
the parent and child? That is because you have three selves within you, your PAC.
Your PAC was formed as you grew up based on your transactions with others in life.
Your beliefs are very much part of your PAC. What you believe about life, money,
wealth, and so on, is held in these areas. Transaction analysis (TA) is literally the
analysis of the transactions that formed your PAC. Once you get clear on why and
how you think as you do, you have a new amazing power to change what you wish
to change.
Let us look at this more closely.
The Parent is that immense collection of unquestioned, imposed, and conditioned
recordings, of external events, in the mind that were collected in the early years of
life. Everything you experienced is recorded; that is how powerful the mind is. Now,
those tapes keep running until they are stopped or changed. A particular recording
is erased automatically when, for example, you come across evidence that proves to
you without doubt that your old ideas are incorrect. Until such a thing happens, you
tend to operate on the basis that everything in your Parent is true and so it still
influences your life today. The Parent is referred to as the taught concept of life.
The Child is the recording of internal events (feelings) that the person had in
response to the external events in the early years of life. The conclusions that you
made as a child in response to what you were experiencing are not necessarily
accurate. You may, for example, have felt imposing and unwanted if you ever asked
for what you needed, and so you taught yourself not to ask for what you need. Until
you change this mistaken concept, you would find that it still determines how you
live today. The Child is referred to as the felt concept of life.
Once the growing person gets to be about 10 months of age, they begin to develop
some independence. The person now starts to develop an Adult, in addition to their
Parent and Child. Finally, the ability to consciously choose response and reason
starts to grow. Self-direction and self-actualization starts to bud. They also start to
record a new set of data: the data acquired and computed through exploration and
testing. They can also begin to test and validate, progressively, the data stored in
the Child and Parent. The Adult is referred to as the thought concept of life. It is
the Adult that updates and validates the Parent and Child data.
Here is how a balanced person looks like:

However, most people dont have their PAC put in such balance as above. Instead,
they have various combinations of the following (and this shows up in various ways
such as difficulties in relationships, financial independence, and health):
Prejudice (contamination):

Delusions (contamination):

Blocked Out Child (prevents creativity, play, spontaneity, rest, etc):

Blocked Out Parent (prevents conscious and regard for safety):

Decommissioned Adult (out of touch with reality):

In addition to the above imbalances, there are stored tapes (beliefs) in the Child
and Parent that are contrary to the creation of wealth. For example, some people
formed a belief that money is bad, or that rich people are bad, or that power is bad,
and so on, and these beliefs actually work against their goal to be wealthy. So one of
your lifes tasks is to rise above limiting beliefs that you may have acquired. And the
first step towards that is actually discovering whatever limiting beliefs you hold.
Well, that is a very quick and brief introduction to TA. It might prove helpful to you
in uncovering your own PAC and assist you in changing whatever self-sabotages you,
and thus help you achieve your life goals, including your wealth goals. For more
information including how to do TA on yourself, please get the book Im OK, Youre
OK by Thomas A. Harris, M.D.
Use Your Physiology And Movement To Change Beliefs
Another great way to change beliefs and habits is through movement. Your beliefs
are your self-image, the image of self that you have built up over the years. You
think, perceive, speak, move, act and feel according to your self-image. Therefore,
to change your actions, thoughts etc, you need to change your self-image.
Let us remind ourselves of how the self-image is formed. As a person grows up, their
perception and reaction to all their various experiences slowly get recorded as the
self-image and that person starts to form their unique way of thinking, walking,
speaking, listening, feeling, relating, and so on. So it is the perception and reaction
to experiences that form the self-image. Ok, here is the key thing to know: each
experience contributes to the self-image, and the whole experience is recorded as a
unit that comprises the thoughts, feelings, senses and movements that were
involved in that experience!
Thus, each part of the self-image is composed of four components: movement,
sensations (sight, sound, smell, taste, touch), feeling and thought. These are the
four components that you find in every action. For example, if you observe people
you will notice that each person tends to have a habitual response to a particular
event. It is almost as if they were replaying a tape. For example, watch your own life
or that of your family members. You will notice that you tend to react in a rather
predictable way to certain things. For example, you tend to say hello to strangers in
your own way. You smile a certain way, feel a certain thing, and so on. Or whenever
certain topics of discussion come up, your face tends to take on a particular look,
you tend to think the same stuff basically, your body tends to take a particular
stance (maybe you cross your legs and fold your arms or whatever), and so on.
So, in all ways, each belief (thought) is linked to a certain set of movements of your
body, feelings and emotions, and sensations. This cluster is pretty much held
together by and because of all the components. It is recorded in your system by all
these things, called anchors. In other words, your belief in a certain thing is
anchored in your system by the emotions attached to that belief, the sensations
programmed in your nervous system, and the cellular memory behind the movement
your body goes through and the stance it takes when you bring up that belief to
mind. If you upset any of these anchors, the belief itself collapses. The easiest
anchor to upset is movement. And this is why people tend to see the world in a
fresh, new expanded way when they start a new physical activity or start to exercise.
When they start a new physical regime, they no longer move in the same old ways,
and their mind shifts. You see, your mind is all over your body and beyond. Your
mind is in your every cell. The brain is the minds interface to your body, but the
mind is literally everywhere, just as the nerves are literally everywhere. Your body is
the denser part of your mind, and your mind is the lighter side of your body. That is
the mind-body connection. You are a triune being with three seemingly separate
parts: mind, body and soul. Your body is also your soul in chemical clothing.
To change your beliefs, change how you move. Change your anchors. We will not
cover the how-tos of that here because this is a field all of its own. But two fields of
knowledge that cover this very well are NLP (Neuro-Linguistic Programming, the
technique favored by Anthony Robbins in his personal transformation seminars and
products) and the Feldenkrais exercises system. Here are two great books you can
get that cover these very well:
Awareness Through Movement by Moshe Feldenkrais:

Habit Busting by Pete Cohen:

Accept Yourself, Know Yourself, Be Yourself
In your life, you go through very many different experiences, and very many people
come in and out of your path. You go through ups and downs. You are literally
surrounded by change. But have you noticed the one thing that is always there no
matter what else changes? It is you. You are always there. Therefore, it makes great
sense to know who you really are so that you may understand why you tend to have
certain experiences and what you can do to have the ones you prefer to have. It
makes great sense to be yourself because that is what you are and this is where
your power lies. And it makes great sense to accept yourself as you are because it
takes no time and no effort to be who you really are, and once you accept yourself
you then have the ability to re-create yourself, but not until you accept yourself. You
are a sovereign being. Take back your power now and create your life.
You need to claim the events of your life to make yourself
yours. Anne-Wilson Schaef

Always fall in with what you are asked to accept. Fall in
with it and turn it your way. Robert Frost

One should as a rule respect public opinion in so far as it
is necessary to avoid starvation and to keep out of prison,
but anything that goes beyond this is voluntary
submission to an unnecessary tyranny. Bertrand Russell

Knowing others is intelligence; knowing yourself is true
wisdom. Mastering others is strength; mastering yourself
is true power. Lao Tzu
Part of accepting yourself is accepting your current financial position as it is.
Embrace it, love it, and allow it to be. Dont fight or resist it. It is only once you
accept it that you can know it, understand it, and then re-create it to the way you
would love it to be, grow it. You cannot know what you deny; you cannot get rid of
what you resist because what you resist persists. Your emotions are your children,
and so is your current state of affairs. Learn to see your current financial state as
your own child. Love it, accept it, listen to it, understand it, and nurture it. These are
the conditions under which it will grow into a strong, independent, mature adult.
Dont curse and deny it; that will only stunt its growth.
To get a great head start at discovering who you really are and why you are as you
are, see the book Who Am I? by David Cameron, available at Images Of One.
Who Am I?

Myth: Money Is The Root Of All Evil. Is It Really?
To your subconscious mind the solutions to your problems
of poverty is to become rich, but it is logically invalid for it
to pursue this course of action if it has been told that it
will make you a bad person. Simon Hall.
Do you hold the belief that money is bad? Have a look at the following beautiful
piece of text extracted from Atlas Shrugged by Ayn Rand (the second most
influential book in America after the Bible):
Atlas Shrugged

Standing unnoticed on the edge of the group, Rearden heard a
woman, who had large diamond earrings and a flabby, nervous
face, ask tensely, Senor dAnconia, what do you think is going
to happen to the world?
Just Exactly what it deserves.
Oh, how cruel!
Dont you believe in the operation of the moral law, madame?
Francisco asked Gravely. I do.
Rearden heard Bertram Scudder, outside the group, say to a
girl who made some sound of indignation, Dont let him disturb
you. You know, money is the root of all evil and hes the
typical product of money.
Rearden did not think that Francisco could have heard it, but he
saw Francisco turning to them with a gravely courteous smile.
So you think that money is the root of all evil? said Francisco
dAnconia. Have you ever asked what is the root of money?
Money is a tool of exchange, which cant exist unless there are
goods produced and men able to produce them. Money is the
material shape of the principle that men who wish to deal with
one another must deal by trade and give value for value. Money
is not the tool of the moochers, who claim your product by
tears, or of the looters, who take it from you by force. Money is
made possible only by the men who produce. Is this what you
consider evil?
When you accept money as payment for our effort, you do so
only on the conviction that you will exchange it for the product
of the effort of others. It is not the moochers or the looters who
give value to money. Not an ocean of tears nor all the guns in
the world can transform those pieces of paper in your wallet
into the bread you will need to survive tomorrow. Those pieces
of paper, which should have been gold, are a token of honor
your claim upon the energy of the men who produce. Your
wallet is your statement of hope that somewhere in the world
around you there are men who will not default on that moral
principle which is the root of money. Is this what you consider
evil?
Have you ever looked for the root of production? Take a look at
an electric generator and dare tell yourself that it was created
by the muscular effort of unthinking brutes. Try to grow a seed
of wheat without the knowledge left to you by men who had to
discover it for the first time. Try to obtain your food by means
of nothing but physical motions and youll learn that mans
mind is the root of all the goods produced and of all the wealth
that has ever existed on earth.
But you say that money is made by the strong at the expense
of the weak? What strength do you mean? It is not the strength
of guns or muscles. Wealth is the product of mans capacity to
think. Then is money made by the man who invents a motor at
the expense of those who did not invent it? Is money made by
the intelligent at the expense of the fools? By the able at the
expense of the incompetent? By the ambitious at the expense of
the lazy? Money is made before it can be looted or mooched
made by the effort of every honest man, each to the extent
of his ability. An honest man is one who knows that he cant
consume more than he has produce.
To trade by means of money is the code of the men of good
will. Money rests on the axiom that every man is the owner of
his mind and his effort. Money allows no power to prescribe the
value of your effort except the voluntary choice of the man who
is willing to trade you his effort in return. Money permits you to
obtain for your goods and your labor that which they are worth
to the men who buy them, but no more. Money permits no
deals except those to mutual benefit by the unforced judgment
of the traders. Money demands of you the recognition that men
must work for their own benefit, not for their own injury, for
their gain, not their loss the recognition that they are not
beasts of burden, born to carry the weight of your misery
that you must offer them values, not wounds that the
common bond among men is not the exchange of suffering, but
the exchange of goods. Money demands that you sell, not your
weakness to mens stupidity, but your talent to their reason; it
demands that you buy, not the shoddiest they offer, but the
best that your money can find. And when men live by trade
with reason, not force, as their final arbiter it is the best
product that wins, the best performance, the man of best
judgment and highest ability and the degree of a mans
productiveness is the degree of his reward. This is the code of
existence whose tool and symbol is money. Is this what you
consider evil?
But money is only a tool. It will take you wherever you wish,
but it will not replace you as the driver. It will give you the
means for the satisfaction of your desires, but it will not provide
you with desires. Money is the scourge of the men who attempt
to reverse the law of causality the men who seek to replace
the mind by seizing the products of the mind.
Money will not purchase happiness for the man who has no
concept of what he wants: money will not give him a code of
values, if hes evaded the knowledge of what to value, and it
will not provide him with a purpose, if hes evaded the choice of
what to seek. Money will not buy intelligence for the fool, or
admiration for the coward, or respect for the incompetent. The
man who attempts to purchase the brains of his superiors to
serve him, with his money replacing his judgment, ends up
becoming the victim of his inferiors. The men of intelligence
desert him, but the cheats and the frauds come flocking to him,
drawn by a law which he has not discovered: that no man may
be smaller than his money. Is this the reason why you call it
evil?
Only the man who does not need it, is fit to inherit wealth the
man who would make his own fortune no matter where he
started. If an heir is equal to his money, it serves him; if not, it
destroys him. But you look on and you cry that money
corrupted him. Did it? Or did he corrupt his money? Do not
envy a worthless heir: his wealth is not yours and you would
have done no better with it. Do not think that it should have
been distributed among you; loading the world with fifty
parasites instead of one, would not bring back the dead virtue
which was the fortune. Money is a living power that dies without
its root. Money will not serve the mind that cannot match it. Is
this the reason why you call it evil?
Money is your means of survival. The verdict you pronounce
upon the source of your livelihood is the verdict you pronounce
upon your life. If the source is corrupt, you have damned your
own existence. Did you get your money by fraud? By pandering
to mens vices or mens stupidity? By catering to fools, in the
hope of getting more than your ability deserves? By lowering
your standards? By doing work you despise for purchasers you
scorn? If so, then your money will not give you a moments or a
pennys worth of joy. Then all the things you buy will become,
not a tribute to you, but a reproach; not an achievement, but a
reminder of shame. Then youll scream that money is evil. Evil,
because it would not pinch-hit for your self-respect? Evil,
because it would not let you enjoy your depravity? Is this the
root of your hatred of money?
Money will always remain an effect and refuse to replace you as
the cause. Money is the product of virtue, but it will not give
you virtue and it will not redeem your vices. Money will not give
you the unearned, neither in matter nor in spirit. Is this the root
of your hatred of money?
Or did you say its the love of money thats the root of all evil?
To love a thing is to know and love its nature. To love money is
to know and love the fact that money is the creation of the best
power within you, and your passkey to trade your effort for the
effort of the best among men. Its the person who would sell his
soul for a nickel, who is loudest in proclaiming his hatred of
money and he has good reason to hate it. The lovers of
money are willing to work for it. They know they are able to
deserve it.
Let me give you a tip on a clue to mens characters: the man
who damns money has obtained it dishonorably; the man who
respects it has earned it.
Run for your life from any man who tells you that money is evil.
That sentence is the lepers bell of an approaching looter. So
long as men live together on earth and need means to deal with
one another their only substitute, if they abandon money, is
the muzzle of a gun.
But money demands of you the highest virtues, if you wish to
make it or to keep it. Men who have no courage, pride or self-
esteem, men who have no moral sense of their right to their
money and are not willing to defend it as they defend their life,
men who apologize for being rich will not remain rich for
long. They are the natural bait for the swarms of looters that
stay under rocks for centuries, but come crawling out at the
first smell of a man who begs to be forgiven for the guilt of
owning wealth. They will hasten to relieve him of the guilt
and of his life, as he deserves.
Then you will see the rise of the men of the double standard
the men who live by force, yet count on those who live by trade
to create the value of their looted money the men who are
the hitchhikers of virtue. In a moral society, these are the
criminals, and the statues are written to protect you against
them. But when a society establishes criminals-by-right and
looters-by-law men who use force to seize the wealth of
disarmed victims then money becomes its creators avenger.
Such looters believe it safe to rob defenseless men, once
theyve passed a law to disarm them. But their loot becomes
the magnet for other looters, who get it from them as they got
it. Then the race goes, not to the ablest at production, but to
those most ruthless at brutality. When force is the standard, the
murderer wins over the pickpocket. And then that society
vanishes, in a spread of ruins and slaughter.
Do you wish to know whether that day is coming? Watch
money. Money is the barometer of a societys virtue. When you
see that trading is done, not by consent, but by compulsion
when you see that in order to produce, you need to obtain
permission from men who produce nothing when you see
that money is flowing to those who deal, not in goods, but in
favors when you see that men get richer by graft and by pull
than by work, and your laws dont protect you against them,
but protect them against you when you see corruption being
rewarded and honesty becoming a self-sacrifice you may
know that your society is doomed. Money is so noble a medium
that it does not compete with guns and it does not make terms
with brutality. It will not permit a country to survive as half-
property, half-loot.
Whenever destroyers appear among men, they start by
destroying money, for money is mens protection and the base
of a moral existence. Destroyers seize gold and leave to its
owners a counterfeit pile of paper. This kills all objective
standards and delivers men into the arbitrary power of an
arbitrary setter of values. Gold was an objective value, an
equivalent of wealth produced. Paper is a mortgage on wealth
that does not exist, backed by a gun aimed at those who are
expected to produce it. Paper is a check drawn by legal looters
upon an account which is not theirs: upon the virtue of the
victims. Watch for the day when it bounces, marked: Account
overdrawn.
When you have made evil the means of survival, do not expect
men to remain good. Do not expect them to stay moral and lose
their lives for the purpose of becoming the fodder of the
immoral. Do not expect them to produce, when production is
punished and looting rewarded. Do not ask, Who is destroying
the world? You are.
You stand in the midst of the greatest achievements of the
greatest productive civilization and you wonder why its
crumbling around you, while youre damning its life-blood
money. You look upon money as the savages did before you,
and you wonder why the jungle is creeping back to the edge of
your cities. Throughout mens history, money was always seized
by looters of one brand or another, whose names changed, but
whose method remained the same: to seize wealth by force and
to keep the producers bound, demeaned, defamed, deprived of
honor. That phrase about the evil of money, which you mouth
with such righteous recklessness, comes from a time when
wealth was produced by the labor of slaves slaves who
repeated the motions once discovered by somebodys mind and
left unimproved for centuries. So long as production was ruled
by force, and wealth was obtained by conquest, there was little
to conquer. Yet through all the centuries of stagnation and
starvation, men exalted the looters, as aristocrats of the sword,
as aristocrats of birth, as aristocrats of the bureau, and
despised the producers, as slaves, as traders, as shopkeepers
as industrialists.
To the glory of mankind, there was, for the first and only time
in history, a country of money and I have no higher, more
reverent tribute to pay to America, for this means: a country of
reason, justice, freedom, production, achievement. For the first
time, mans mind and money were set free, and there were no
fortunes-by-conquest, but only fortunes-by-work, and instead
of swordsmen and slaves, there appeared the real maker of
wealth, the greatest worker, the highest type of human being
the self-made man the American industrialist.
If you ask me to name the proudest distinction of Americans, I
would choose because it contains all the others the fact
that they were the people who created the phrase to make
money. No other language or nation had ever used these words
before; men had always thought of wealth as a static quantity
to be seized, begged, inherited, shared, looted or obtained as
a favor. Americans were the first to understand that wealth has
to be created. The words to make money hold the essence of
human morality.
Yet these were the words for which Americans were denounced
by the rotted cultures of the looters continents. Now the
looters credo has brought you to regard your proudest
achievements as a hallmark of shame, your prosperity as guilt,
your greatest men, the industrialists, as blackguards, and your
magnificent factories as the product and property of muscular
labor, the labor of whip-driven slaves, like the pyramids of
Egypt. The rotter who simpers that he sees no difference
between the power of the dollar and the power of the whip,
ought to learn the difference on his own hide as, I think, he
will.
Until and unless you discover that money is the root of all good,
you ask for your own destruction. When money ceases to be the
tool by which men deal with one another, then men become the
tools of men. Blood, whips and guns or dollars. Take your
choice there is no other and your time is running out.
Francisco had not glanced at Rearden once while speaking; but
the moment he finished, his eyes went straight to Reardens
face. Rearden stood motionless, seeing nothing but Francisco
dAnconia across the moving figures and angry voices between
them.
There were people who had listened, but now hurried away, and
people who said, Its horrible! Its not true! How vicious
and selfish! saying it loudly and guardedly at once, as if
wishing that their neighbors would hear them, but hoping that
Francisco would not.
Senor dAnconia, declared the woman with the earrings, I dont
agree with you!
If you can refute a single sentence I uttered, madame, I shall
hear it gratefully.
Oh, I cant answer you. I dont have any answers, my mind
doesnt work that way, but I dont feel that youre right, so I
know that youre wrong.
How do you know it?
I feel it. I dont go by my head, but by my heart. You might be
good at logic, but youre heartless.
Madame, when well see men dying of starvation around us,
your heart won't be of any earthly use to save them. And Im
heartless enough to say that when youll scream, But I didnt
know it! you will not be forgiven.
The woman turned away, a shudder running through the flesh
of her cheeks and through the angry tremor of her voice: Well,
its certainly a funny way to talk at party!

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

How To Overcome
Money Panic Easily and
Immediately
You worry because you worry. Does that
make sense? You create your world by your
thoughts, words, and actions. Worry creates
that which is worried about. You worry
about things because you worry about
things. People worry because they think it
helps. It actually does the opposite. It
creates the very problem itself. Panic and
worry dont help; they hinder. How would
you like to learn how to stop worrying and
start living, very easily? It can be done,
simply.
Here are the guidelines to follow:
Recognize when you are anxious and identify the panic triggers. The next
time you feel anxiety, stop and ask yourself, What triggered this anxiety?
What thoughts did I just have that triggered it? What kind of situation
triggered it? Identify all the panic triggers in as much detail as possible. Be
aware of your thoughts, the situation, how you perceive the situation (your
perception of the situation is often very different from the situation itself), the
emotions, and the bodily sensations you have (where do you feel the anxiety,
how does it feel like in your body, how does it move, what is its temperature
and texture, how big does it feel, and so on). This is most important: note all
your observations down on paper!
Look at your notes. First, look at all the physical and emotional sensations
you noted down. These are the easiest to deal with. You see, you may not
have considered this up until this moment, but you have a fear of
experiencing these sensations (e.g. the coldness you feel, the heart
palpitations, the feeling of being enclosed, and so on). Sometime in your
past, a real event occurred where you felt these things, and in that real event
there may have been real danger imminent. Your nervous system therefore
associated these feelings and physical sensations with danger. Now, even
when there is no real danger, when your mind imagines a similar situation, it
adds imagined danger to it, and your nervous and emotional system reacts
just as if the danger was real. You then get the emotions and sensations all
over again, and you believe you are in danger. You are not in danger this
time around. Stop now and notice that all around you everything is OK. Any
danger that you may perceive is in your mind, in some projected future. You
may be convinced of it, sure that you are right, that the danger will come. But
stop and notice that you are safe, now. Then, as you feel these sensations
and emotions (and that is why you have to do this exercise in the moment,
when you are in the panic, not later), tell yourself that even if your skin feels
cold, you are here, now, OK, whole. Look around you and notice the world is
still the same, you are still the same. Allow yourself to feel the sensations and
emotions, and get used to them. You see, in the past you may have been
trying to escape them, avoid them, just as you would try to escape danger.
Now, notice that you dont need to escape anything. You can feel the cold, the
trembling, the palpitations, the fear, and still everything is OK. Allow yourself
to feel and notice it is still OK. Before you resisted, now allow. Get
comfortable with the sensations and emotions by naming them, looking at
them directly and naming them. And as you do this, make a conscious
decision to keep breathing normally, deeply, calmly, deep into your lungs and
belly and back out, not forced but comfortably. This will assist greatly
because many of your panic patterns are anchored in the shallow breathing
pattern that you get into when you panic. Do all this and you will see that
within minutes, you will have a smile. You will step out of the hypnotic trance
of panic and into the real world.
Next, look at the situations that are triggering your panic. For example, if you
panic whenever you have a low bank balance or you get a bill that is too high
or whatever, take responsibility and see how you can change these situations.
For example, you may decide to start saving a percentage of your money,
never touching it under any condition, so that even when you are broke,
you still have some savings (of course, you dont use these savings up to
make emergency bill payments or whatever, you keep them to invest). The
point will be for you to start to feel safe again when you dont have spending
money or money for bills or whatever, because you know if worst came to
worst, you have your savings and investments. You can use this prop until
your relax completely, which will happen naturally over time. Or, if you panic
whenever you get your phone bill because it is too high, choose to start
changing your phone usage patterns and carriers and so on so that your bill
drops. In summary, change the lifestyle factors and situations that are
contributing to your anxiety. (In truth, it is your perception of these situations
and factors that is causing the anxiety, not the situations and factors
themselves, but sometimes it is difficult to see that when you are in it, and so
it is easier to change the situations and factors. Anxiety is a choice of
perception, and that is why some people are highly anxious about a thing
while others see the exact same thing as nothing to even think about, let
alone worry and get stressed.)
Change unhelpful thinking styles. Thought is the first level at which your
panic starts. Remember how we said that anxiety, panic, is a choice of
perception? This is why you need to change unhelpful thinking styles. Here
are some guidelines you can use:
o Recognize limiting, fearful thoughts that you have. Then, challenge
them for evidence. Before you used to take them as facts. This time,
challenge them for evidence in the real world (not evidence in your
imagination, but in the real world). Get other peoples perspectives,
preferably people outside of your family (people in a family tend to
think alike on some core issues) and outside of your closest friends
circle. Do your own testing as well by choosing not to run away but to
get involved in that which you feared and acting and seeing what
happens (e.g. if you ran away each time a creditor called you and you
avoided your phone, pick it up this time, tell your truth, negotiate and
see what happens challenge your fears and get your own evidence).
o Substitute your fearful, limiting thoughts with loving, supportive,
expanding thoughts. Just do it until it becomes a habit. At first it will
require vigilance and effort but soon it will take on its own life.
Remember, substitute but dont fight. Never fight yourself. You can
allow the fearful thought to drift by if you notice it. Dont fight it but
dont engage it and start running with it. Instead, watch it come and
allow it to move on, and meanwhile, put in your own loving, supportive
thought. Dont resist, allow, but add your own.
o Avoid black and white thinking (e.g. It is either I get this check paid
or am in a real mess!).
o Avoid generalizing (e.g. All landlords are out to get their money on
time or else they kick you out. All debt collectors dont understand
human situations.)
o Avoid magnifying or focusing on the negative or the unpleasant, on
what you dont want. What you focus on is what you manifest. And by
the way, your fears are always much bigger than the reality. Now that
you know that, stop doing it; it doesnt serve you and you are simply
wasting your attention and denying your own power. Put your
attention instead on what feels good, what you wish to have and it
shall be so.
o Avoid overestimating failure and underestimating success. You are far
more successful than you think, but you may tend to be ignoring
recognizing your successes and focusing and blowing up your
perceived failures. For whatever reason (shame, fear of
embarrassment, egoistical superhuman/subhuman self-image,
superiority/inferiority complex, etc), you may be focusing on what you
perceive to be failures and overestimating the imagined future ones
even, and doing the opposite with your successes. There is no failure,
only successive moments of learning before mastery is achieved. No
one starts out perfect. We all learnt to walk by falling several times. If
we gave up, we would never walk. Thomas Edison tried about 10,000
different failed experiments before he discovered the right material
for the light bulb. It is part of nature. If you think failure exists, then
you are under some superman/subhuman delusion. Failure is
natural, it is the way we learn what works and what doesnt, and
everybody and everything has these learning experiences; you are not
the only one or only thing. Even your cat or dog has them so take it
easy on yourself.
o Avoid setting unrealistic expectations and then beating yourself up for
it when you cant, naturally, meet them. Life has processes and you
cant go around the process. Before you set yourself an expectation, if
you must, then look at the process involved (the truth about it, not
just what you imagine it to be) and see what it takes and how long
and so on. If you just pull a date out of your behind, to get to
something you have no clue as to what it takes, and then assume your
date is correct and your preparation is adequate, and then beat
yourself up for it for failing, you will of course look at yourself poorly
and panic. Be reasonable, and all things are possible.
o Avoid taking responsibility for other peoples feelings and thoughts.
Look, you cannot possibly get into the mind of anyone and force him
or her to have a particular thought. It is impossible. You can influence,
cajole or whatever, but you cant make them think in a certain way.
Similarly, you can't make them feel a particular emotion. These are all
their own choices. They will perceive the world as they choose to, and
will think and feel as they choose to. You cannot live your life trying to
please everyone. Even the most popular figures such as Buddha,
Jesus, Gandhi, Kennedy people who had many people liking them,
even they couldnt get everyone to like them or agree with them so
why would you assume you can achieve this impossible feat? Be
responsible for your own thoughts and feelings and let everyone else
be responsible for theirs. That will relieve you a lot of stress, the stress
of trying to be the general manager of the universe. How can you be
responsible for what you cannot affect, the thoughts and feelings of
others? Be loving, be fair, but honor your thoughts and feelings and
leave others to theirs. You can't take away their life lessons.
o Avoid assuming and mind reading others thoughts (e.g. I did this,
and he must have thought this and that and so I should do this now to
fix that. ) Look, you can be intuitive, yes, but intuition is a far cry
from the assumptions and mind reading that many people go around
trying to do. Just because someone looked at you a certain way
doesnt mean he knows you havent paid your mortgage this month
and it doesnt mean he thinks you are a bad person or a failure or
whatever. The person may have been reacting to his or her own life
issues and in that reaction they had a certain face. The face wasnt
meant for you. Most people are concerned about themselves, just like
you are. They dont go around looking and analyzing your life; you do
that well enough on your own. When you walk around assuming
people are thinking this or that about you, you will end up walking in
stress, reacting to your own assumptions, and the more you do it the
more you bring it out, until you do something in the real world that
manifests your fears (e.g. you attack someone in a certain way,
having believed your mental assumptions, and this person now has to
react back to your attack, or you act and speak or dress in a certain
way based on your mind reading and the other person is forced now
to respond to that, making it real). Intuition is the communication
from Spirit in a loving, non-divisive, supportive way, and it is always
true and accurate, otherwise it wouldnt be called intuition (it would be
called guesswork). Assumption, mind reading, on the other hand, is
your own internal judgments on yourself by yourself, based on what
you fear and in an attempt to avoid what you fear, and these
judgments you then project out into the world and give them the voice
and body of other people to make them real. Sure, some people will
truly think negatively of you, but most of the time its only happening
in your thoughts. And even if they do think ill of you, so what? They
are reacting to their own issues, you can't change that, you can't have
everyone like and agree with you, and it doesnt affect you at all
unless you choose it to.
Here are some more traps that many people set up for themselves. These traps
trigger money-panic and financial self-sabotage. See if you employ any of them
yourself in your life and if you do, decide now how you will stop and do something
helpful to you instead:
Overspending
Hoarding
Selling out your integrity, self and values for money
Avoiding facing the facts about money
Refusing to accept the duality of abundance (money cycles, the yin and yang,
the inflow and outflow of money, the up and down of it,
dependence/independence, having/not having, which, like everything else in
life, is natural)
Refusing to accept the duality of your beliefs (for example, if you believe in
superiority, then by matter of fact you will experience superiority and
inferiority because every belief you hold has its opposite and you tend to
experience both sides)
Resentment
Blame
Guilt
Magical thinking (e.g. trying to solve your financial problems by not taking
responsibility and acting, but instead thinking that you will win the lottery or
get a big check out of the blue). There is a big difference between faith and
magical thinking. Faith works, magical thinking is a personal delusion.
Living in the past/future
Being possessive. If you are possessed by nothing and you seek to posses
nothing, then you will have it all. Let go and allow. Change happens. When
you possess something, it possesses you. You then try doing the impossible,
trying to prevent change, yet change is the only universal constant.

To live a creative life, we must lose our fear of being
wrong. Joseph Chilton Pearce

Expect your every need to be met, expect the answer to
every problem, expect abundance on every level, expect
to grow spiritually. Eileen Caddy

For peace of mind, we need to resign as general manager
of the universe. Larry Eisenberg
(For more details on overcoming panic in general, see the book Overcoming Panic)
Overcoming Panic

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

How To Become A Super
Optimist And Stop Being
A Pessimist
Think positive, think positive, think positive.
How many times have you heard this
phrase before? Everybody has, and we say
it because we know it works. Yes, it works
wonders. But what if you somehow keep
finding yourself thinking negatively? Is
there a part of you that is pessimistic? Can
you turn it into a vibrant optimist? Yes, you
can become an amazing optimist very
easily! Here is how.
First, let us recognize the difference in thinking styles between optimists and
pessimists:
Optimists Pessimists
Have a temporary view of negatives
and limitations (e.g. "I am temporarily
broke. I am learning about life and
money and I will soon master it. It is
OK."
Have a permanent view of negatives
and limitations (e.g. "I will never make
it, I will never get wealthy, I am just
not good at it. All is not OK."
Have a permanent view of positives
and strengths (e.g. "I am talented, I
have understood and now know what
to do. I can relax as I succeed."
Have a temporary view of positives
and strengths (e.g. "I must try hard
and struggle, or else I will fail. There
is no room to relax."
Look at things specifically (e.g. "This
particular investment is risky without
the right know-how, or conditions, or
whatever.")
Look at things using generalizations
(e.g. "Investing in the financial
markets is risky and should be
avoided.")
Approach life from a creator
perspective (e.g. "I am responsible for
my life outcomes, choice of thoughts
and emotions, results, etc. There is no
judgment, only choice and results of
each choice.")
Approach life from a victim
perspective (e.g. "Its not my fault
If I get lucky When I get I am
always unlucky in If only...")

Start observing your thoughts and start to train yourself to think in the optimistic
style rather than the pessimistic style. As you train yourself to become increasingly
optimistic, you will occasionally encounter your old pessimistic beliefs and thinking.
Here are some tools to help you overcome them. Just a quick note for you to keep in
mind. Never fight yourself! Dont resist, just allow but choose differently. If a
pessimistic thought comes up, allow it to be, but dont get involved with it. Just
watch it rise, watch it with loving detachment. It will drift away as long as you dont
engage it. If you resist, you will simply help it persist and grow in strength. Just let it
go, let it be. Ok, here are some tools you can use:
Distraction Wear a rubber bank on your wrist and whenever you notice a
pessimistic thought come up, snap your rubber band so it gives a light (not
painful) snap on your wrist. And then, stop what you are doing and write
down that pessimistic thought. Writing it down will take it out of your mind,
and allow you to review your mind later. Dont leave things in mind; take
them out onto paper.
Disputation Challenge your pessimistic statements. Before you used to
take them as facts. This time, challenge them for evidence in the real world
(not evidence in your imagination, but in the real world). Get other peoples
perspectives, preferably people outside of your family (people in a family tend
to think alike on some core issues) and outside of your closest friends circle.
Do your own testing as well by choosing not to run away but to get involved
in that which you feared, and acting and seeing what happens (e.g. if you ran
away each time a creditor called you and you avoided your phone, pick it up
this time, tell your truth, negotiate and see what happens challenge your
fears and get your own evidence). Here are some points to help you in your
disputation:
o As we said before, get true evidence (not make-believe evidence) and
get it not from just one instance but from various different instances.
Dont rely on your memory for evidence; it has a tendency to select
memories that support your belief. Start getting evidence now, not in
the past.
o Find alternative causes for the failure or problem you are having. Your
pessimistic thoughts may be saying that a problem is caused by XYZ.
Dont believe that. Research, talk to people, watch life, do whatever
you need to do to list down at least 20 possible alternative causes for
your problem, other than the one you imagine it to be.
o Test the implications, call the bluff. If your pessimistic thought is
preventing you from doing something because it is saying you will go
through some fearful event if you do, call the bluff. Say, Oh yeah, Ill
do it anyways and see what happens because I have a suspicion that
you, Mr. Pessimistic Thought, are not telling me the truth, mate.
Maybe, just maybe, I will actually get a lot of goodness out of this, and
not the fearful event you keep talking about.
o Ask yourself, how useful is this thought to me? If it isnt useful, have
one that is useful.
o Ask yourself, what would I do differently if I wasnt afraid?
o Test your pessimistic thoughts for the three laws of life, which are
functionality, sustainability and adaptability. In life, everything has to
be sustainable (otherwise it dies), functional (otherwise it dies) and
adaptable (otherwise it dies). If your thoughts dont pass that test,
what is the point of entertaining them? Choose differently.
Distancing Realize that your pessimistic thoughts are not you. You are not
your thoughts. You are not your emotions. You have your thoughts and
emotions, but you are not them. See the difference? If you observe yourself
carefully, you will notice that, if you are a pessimist, you often unconsciously
believe that you are your thoughts and emotions. You are not them; you
simply have them. And you can choose another, differently. Your pessimistic
thoughts are just thoughts. Step back from them and start to watch them.
See how they form, learn to observe your mind. You are not what you think.
Your mind is a tool; you can exist separate from it. Beliefs, thoughts, no
matter how convincing they may be to you, are not necessarily true. Many
are illusions maintained only by you, and when you stop, they stop. So step
back and start to watch yourself and soon you will see that you are at choice
over what you think.
Externalize Your pessimistic thoughts come up as voices in your head,
right? Well, externalize them. Get a friend and tell them, Look, I want to tell
you exactly what my mind is saying to me. It may be embarrassing to do but
dont worry about that. Who cares? Now, when you have your friend listening
to you, say to them exactly what your mind is saying to you! I have a friend
with whom we did this exercise once with and he was surprised by the power
of this exercise. He started to say what was in his mind, and this is how it
came up (as usual, such thoughts are quite random in pattern), You are so
silly, you always get things done last minute, you will never get this ready,
what are you doing with your time Would you consistently tell your best
friend or a stranger such things? Most people are kinder to strangers and
friends than they are to themselves. Do it yourself and you will see how
shocking it will look once you externalize it. The shock is good. If you keep
these thoughts private, you will find it hard to get out of them. And you can't
say, OK, now I know about this, I can handle it myself. Maybe you can, but
the point is, when you externalize them, you get more energy and they
loosen their grip from you more. Why? Because your friend will be there
smiling at you and you will see just how ridiculous these thoughts are. So
your whole system will have an anchor to remind it not to do it again because
it is ridiculous. But if you keep it private, you wont get this extra boost.

If you wish to learn more about optimism and how it can be learned, see Learned
Optimism.
Learned Optimism

Also, go to the School of Thinking, a free, fantastic online school that teaches
thinking as a skill. Get daily, interactive training in thinking and intellectual capital
development.

Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Go Forth And Be Wealthy
It Is Simple. Enjoy
Yourself
Now, you are ready to be wealthy! Creating
wealth is quite simple. It follows definite
processes and clear guidelines. There is no
mystery, hocus-pocus, or voodoo involved.
Dont worry; you too can do it. So get
started! Here are just a few short final
words to help you along.
Record And Celebrate Your Success
Learn to see yourself as a success. Too often, people focus on their failures and
ignore their successes. From now on, pay attention to your successes. If you fail,
dont dwell on it. Just notice it, see how you will do better next time, and forget
about it. What you put attention on grows! So dont put attention on the
mistakes. Place it on the successes! Isnt that logical? Whatever you put attention on
grows, so put your attention on your successes. In fact, record them in a diary or
journal so that you can review them later in coming months and years! This will train
you to see yourself as a success. And always, always, celebrate all your successes,
all of them, even the little ones!
Join A Peer Group
Find groups of like-minded people who are successful at whatever it is you are
interested in. Join them. There is great power in being two or more in a common
interest. Joining up is what creates revolutions, what inspires and encourages people
to greater heights, what brings forth many new ideas that one would never have
seen. So join such a group. You dont have to form a business or company together.
Just join the group and hang out with them at. Its good for you.
Have A Morning Hour Of Power Every Morning
Take the first hour of your day and keep it to yourself. Take a walk, meditate, relax,
go within, write in your journal, look at your goals, exercise just make it your hour.
It is your day. Listen, the day belongs to you. Not to the government, or your
employer, or your family they will all get your attention later. But the day belongs
to you. You can use it to serve others and so on, but it belongs to you. Every
moment of your day is yours. If you give your moments away, that is your choice.
But they are yours. Everyones day belongs to him or her. So, take a part of your
day, when you are most fresh (not at night when you are tired), and pay attention to
you. Pay yourself first. It will work wonders. You are the most important person to
yourself.
Make A Contract With Yourself And You Can Become Wealthy Easily
Decide and commit to yourself. If you truly wish to be financially independent, decide
and commit. Sure, you may be afraid, and there may be many things to learn, and
you may stumble often, but that doesnt matter. If you stick to it, you will make it.
Everyone goes through a learning curve; it is natural. To decide means to cut out all
other possibilities and probabilities and leave just the one you desire. If you are just
thinking about it, that is not a decision. A decision is when you say, there is no
two ways about it, this is a must, and I am acting now on that must, right now. Cut
out all other probabilities and possibilities and make that one you desire happen,
here, now. That is decision. Commitment is sticking with your decision despite the
normal ups and downs that one faces in any journey. The challenges are
opportunities for growth, not reasons to quit. Look at challenges as if they were
weights in a gym. When you go to the gym, you lift weights so that your muscle can
grow. Challenges are the weights you have to go through to grow past old, smaller,
zones. Once you go through the challenge, any other similar ones in future will no
longer be a challenge! The first time you lift a big weight is going to be hard, but
after your muscle grows, that weight becomes an enjoyable piece of cake. Look at
challenges like that. So, commit to yourself, make a contract with yourself and say
something like this:
Starting today, right here and now, I am committed to doing everything it takes to
get wealthy and financially independent. Starting right now, I will put aside 10% of
my income every week, no matter what! No excuses. I will start keeping track of my
money right now, and I will enter all my income and expenses from last month into
Microsoft Money or Quicken so that I can immediately have a budget for the next
month. I will also start learning how to invest, right now. Not next week, but right
now. I will go to the library or whatever, and get some books or tapes. And I will
start investing, too. I will learn about myself as well and get to know what drives me
and so on. I will practice all I have learnt in this book. Starting right now, right here.
I may be afraid or doubting, but I am willing to at least test these things and get my
own evidence instead of relying on my fears and assumptions. I will not quit before I
start. I am willing to give myself a chance, and so I am committed to doing
everything it takes. I will not quit. If I stumble, that is Ok. I will be kind to myself,
not judge myself, and I will get up again.
Enjoy! It has been a great pleasure taking this journey with you! Be well and
prosperous! You can do it!
Rich
Saint-Exupery
Proverb
must do." Bruce Lee

Thank You!

Appendix

Have Multiple Streams of
Income
Every wealthy person knows that this is a key part of acquiring riches. In fact it is
common sense if you think about it for a moment. Instead of having just one source
of income, have many! How? Well, we will give you the help you need here at our
other two web sites:
VeryRichGorillas.com - http://www.veryrichgorillas.com - One of
the easiest ways to start your own international business.
Complete Guide To Making Money -
http://www.completeguidetomakingmoney.com - We continuously
update you on new, proven ways of making money if you sign up for
our free newsletter.
Recommended Books,
Software and Courses
More Titles From Images of One and David Cameron:
If you enjoyed and found this book useful, there are many others that are waiting
from you from the same author and publisher. Please see Images of One for a
complete list of all the available books, software and audio files available to you for
your growth, health, and abundance.
Books:
In addition to the books mentioned throughout this book, here are some more books
that would be of great help to you in creating your financial freedom and prosperity:
The Richest Man in Babylon

Rich Dad, Poor Dad

Lateral Thinking

Software For Your Brain by Michael Hewitt-Gleeson

The Hedge Fund Edge: Maximum Profit/Minimum Risk Global Trend Trading
Strategies by Mark Boucher

The TradingMarkets.com Guide to Conquering the Markets by Mark Etzkorn, Editor
(with Kevin Haggerty, Jeff Cooper, Mark Boucher, Dave Landry, Larry Connors,
Manuel Ochoa, and Bob Pisani)

Street Smarts by Larry Connors and Linda Raschke

Elements of Successful Trading by Robert Rottela

Trend Following: How Great Traders Make Millions in Up or Down Markets

The Education of a Speculator by Victor Niederhoffer

Reminiscence of a Stock Operator

The New Investment Superstars by Lois Peltz

Fractal Market Analysis by Edgar E. Peters

When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger
Lowenstein

How Nature Works by Per Bak

Soros on Soros by George Soros

The Alchemy of Finance by George Soros

Software:
Personal finances management software:
Microsoft Money

Quicken

Trading software:
Wealth Lab.
Trading Recipes.
Metastock
Trendsetter
TradeStation
Courses:
Optionetics A great course for option trading, which shows you everything
about the basics of options and onto advanced strategies and actual
application. You get a kit and a pretty well put system and strategy on using
options. They make it simple to understand options and option strategies and
apply that knowledge practically, and that is their greatest strength.
School of Thinking A free, fantastic online school that teaches thinking as a
skill. Get daily, interactive training in thinking and intellectual capital
development.
Disclaimer
We do not guarantee that future performance (of any example, real or hypothetical,
mentioned in this book) will equal the past performance. We can make no
representation of any kind that your trading will result in profits. Past results are not
necessarily indicative of future results. Investing in securities involves a degree of
risk and reward. The authors and publishers have made their best effort to provide a
high-quality, informative, useful and helpful book. However, they make no
representation or warranties of any kind with regard to the accuracy or completeness
of the contents of the book. They accept no liability of any kind for any losses or
damages caused or alleged to be caused, directly or indirectly, from using the
information in this book. Screenshots and extracts used in this book are directly from
publicly accessible file archives. They are used as fair use under 17 U.S.C. Section
107 for news reportage purposes only to illustrate various points made in this book.
Text and images available over the Internet may be subject to copyright and other
intellectual rights owned by third parties.

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