Are You Are Wealthy? It All Depends on Your Standard of Living

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John D. Rockefeller Sr. was, at one time, the richest man in the world. He spent the last 40 years or his life giving his money away to family and various charities.

He owned two homes, one in Sleepy Hollow, New York and one in Ormond Beach, Florida. His Sleepy Hollow home, known as the Kykuit Rockefeller Estate, was very large and very expensive to maintain.

Because he had given away most of his wealth, he was forced to borrow money from his son, John D. Rockefeller Jr.. He only had about $7 million left ($131 million in today’s dollars), and that money did not generate enough income for him to maintain his standard of living.

I do quite a few media interviews on my Rich Habits research. Almost every time, I am asked the same question – How much money do you have to have in order to be considered wealthy?

But, what does wealthy mean?

Wealthy means your invested assets generate enough income to fund your standard of living and pay the taxes on that income.

Alternately, if you have no invested assets, but are one of the lucky few who have a pension, you would be considered wealthy if your pension generates enough income to fund your standard of living and pay the taxes on that income.

Fine. But if you’re not one of the lucky few who receive a pension, what is the amount of wealth you need? What is the number?

While there is no easy answer to that question, I am fairly certain that the most correct answer is $3.2 million.

$3.2 million, if invested prudently, should generate about $150,000 – $160,000 a year in passive income. Even in expensive states like California, New York and New Jersey, $150,000 should be more than enough to enjoy a comfortable, financially-free, lifestyle.

So, $3.2 million, I would argue, would make just about anyone “wealthy”.

But you don’t need $3.2 million to be considered “wealthy”.

If your standard of living is low and your monthly nut is less than, say, $3,500, you could be considered wealthy if you had $1.2 million in invested assets. If invested prudently, $1.2 million should generate between $50,000 – $60,000 a year in passive income.

So, at the bottom level of wealth, $1.2 million is the number.

For John D. Rockefeller Sr., $131 million was not enough to maintain his standard of living. And, no matter how much money you have, if you’re John D. Rockefeller and you have to borrow money to maintain your standard of living, you won’t consider yourself “wealthy”.

The key to being wealthy, therefore, is standard of living costs that are less than your passive income. Your standard of living can make you wealthy or it can make you poor.

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Don’t Treat Your Assets Like Liabilities

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We all have assets. Some are obvious, like a home, a business, money, investments.

But others are not as obvious.

Your spouse is an asset. Your children are assets. Your friends, are assets. The people you work with are assets.

When you are your spouses biggest cheerleader, when you love them unconditionally, you are treating your spouse like an asset. When you demean, or treat your spouse as if they were incompetent, ignorant or worthless, you are treating one of your most important assets as if it were a liability.

When you encourage and support your children and act as a success mentor to them, you are treating them as assets. When you berate and yell at them too often, you are treating them as liabilities.

When you stay in constant contact with your friends, lift them up when they fall, devote time to maintaining and building relationships with them, you are treating your friends like an asset. When you ignore your friends, belittle them, gossip about them or hurt them is any way, you are treating one of your most important assets as if they were a liability.

When you treat the people you work with, with respect and appreciation, you are treating them like assets. When you treat them poorly and undermine them, you are treating one of your most important assets as if they were a liability.

When you have an asset, you should devote a lot of time and money preserving, nurturing and growing it. Those who occupy your inner circle are your greatest assets and need to be treated as such.

Don’t treat your assets like liabilities.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

The Persistent Eventually Get Lucky

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There are 4 paths to wealth:

  1. Saver-Investor Path
  2. Senior Executive or Big Company Path
  3. Virtuoso Path
  4. Dreamer or Entrepreneur Path

The Dreamer or Entrepreneur Path is the most difficult, and yet, the most lucrative path.

When entrepreneurs succeed, the rewards are often disproportionate to the investment in money and time. The average self-made Dreamer in my Rich Habits Study accumulated $7.4 million in wealth, which dwarfed the average wealth of each of the other three paths.

The life of the entrepreneur, however, is not for everyone.

Most Dreamers put everything they own on the line – their life savings, their retirement savings, the equity in their homes.

The enormous investment they make, is not only money.

They must also invest their time, which affects their relationships – family and friend time is sacrificed during the pursuit of their dream.

Probably the greatest burden these Dreamers must shoulder, on an almost daily basis, is the uncertainty that their investment will pay off. This uncertainty causes chronic stress.

Chronic stress, if not diffused through good health habits, will depress your immune system and invite in all sorts of diseases, impairing your health (This is one of the reasons why I spend so much time expounding on the need to forge good health habits).

So, another investment Dreamers must make, is maintaining good health, especially during their success journey. Good health keeps you in the game – you can’t achieve your goals and realize your dreams, laying in a hospital bed.

One common theme that kept repeating itself in the many stories told to me by my Dreamers, was how important luck was to their success.

For many, they couldn’t escape the feeling that their fate was in the hands of certain variables that were outside their control. They often felt as if they were sitting on a wall, dependent on the winds of fate for their success. And success, for too many of my self-made entrepreneurs, was very much dependent on which way that wind blew.

I learned from my Dreamers that the key to good luck was survival – surviving the roller coaster ride long enough, until good luck finally arrived.

This is why I consider those who succeed as an entrepreneur, heroic. What makes them heroic is how they react when the winds blow the wrong way and they find themselves face down on the wrong side of the wall. It happens to almost every successful entrepreneur. There are very few exceptions.

The successful entrepreneurs, the ones we call self-made millionaires, somehow find the resilience to climb back onto the wall. They persevere. They survive. Those who are able to do this, over and over again despite all of the adversity, are able to survive until the winds of fortune finally blow their way.

The persistent, eventually get lucky.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Good Habits Attract Good Luck

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I have a childhood friend, who was raised in a family of five. His father was a NYC school teacher, at a long ago time when public school teachers did not make much money. His mother was a homemaker. While they were not considered “poor”, they did struggle financially.

This friend of mine worked as a lifeguard during the summers in his high school and college years. He save nearly everything he made and was able to pay for college with those savings.

He worked for three years, after graduating college, in a large, prestigious CPA firm. He lived at home and commuted to NYC and saved a significant amount of his income. He decided to invest his savings in law school.

After graduating NYU law school, again on his own dime, he met his future. wife, who was also paying her way through NYU. Like my friend, she shared his savings Rich Habit. Thanks to frugal living and their savings Rich Habit, my friend was able to buy himself the freedom to leave his big company law position, along with its grueling hours and stress, to take a lower paying job with a smaller, publicly-held company.

After many years of working at this smaller company, it was acquired by a private equity company and my friend received a windfall. That good luck acquisition gave my friend the freedom to retire. He was only 52. All thanks to one Rich Habit – saving.

Good habits create a unique type of good luck called Opportunity Luck. The Opportunity Luck for my friend was the unexpected acquisition of his company. My friend, because of his smart money Rich Habits, was able to make choices that put him in a position to become the recipient of good luck.

One of the individuals in my Rich Habits study had the Poor Habit of spending too much money. In his case, he spent a lot of money gambling. His gambling Poor Habit forced him to liquidate all of the college savings his children had inherited from a deceased Uncle, in order to pay the bills at home. With the loss of that college money, his kids were unable to afford to go to college and became stuck in dead end jobs, as adults.

This person was eventually forced to turn his home over to the bank in foreclosure. He now rents a very small and very inexpensive apartment, alone and all but abandoned by his children. He still gambles what little money he has. His life is miserable and lonely. All thanks to one Poor Habit – gambling.

Bad habits create a unique type of bad luck called Detrimental Luck. The Detrimental Luck event that occurred for the individual in my study was the the foreclosure of his home and the loss of the love and affection of his children.

Habits, good or bad, create luck. The type of luck created depends on your habits. Good habits attract good luck and bad habits attract bad luck.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Cryptocurrency is Changing the Very Definition of Money & Wealth

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When you think of wealth, what comes to mind?

Over the course of 5 years I interviewed 233 millionaires in order to better understand wealth – specifically, what it is and how it’s made.

What is inescapable, is that when ordinary people think about wealth, they automatically think about money. Any discussion about wealth, therefore, leads to a discussion about money.

So, if wealth and money are interchangeable, what then is money?  

Contrary to what you may believe, money is not currency, like a dollar bill. There are three characteristics of money:

  1. Unit of Account
  2. Medium of Exchange and
  3. Store of Value

At its core, money is a token or symbol built on trust, that facilitates an exchange of one’s products or services for that token or symbol. That trust is gained by virtue of the backing of a government entity.

As the world population grew and trade expanded, trade, via barter, became too complicated. A better, more efficient system was needed, in order for world trade to continue to grow.

Initially, letters of credit, backed by certain financial institution, functioned as a form of currency. But, not everyone qualified for those letters of credit.

Enter The Bank of England

In 1694, in order to help England build a fleet of boats as a counterweight to France’s dominance of the seas, King William III backed the creation of the Bank of England (BOE).

BOE was a privately-owned enterprise. It lent $1.2 million to the King. BOE then created banknotes against that debt, effectively re-lending that same $1.2 million. The King then agreed to accept those banknotes in payment of taxes.

BOE had, in effect, been given a license to print money that was backed by England (the government). This newly created form of paper money, endorsed by the government of England, also permitted, for the first time in history, fractional-reserve banking, which is still used to this day.

This was the dawn of modern banking.

Fractional-reserve banking allows a bank to hold, in reserve. a small percentage of currency to meet the demands of its depositors.

For example, if Tom Corley and 1,000 other depositors deposited $1 million into Bank XYZ (lent $1 million to Bank XYZ), under the fractional-reserve system, Bank XYZ  would only be required to keep, say $75,000, in currency in order to meet the withdrawal demands of Tom Corley or any of its other depositors. It could then lend out $925,000.

This system ushered in an explosion in world trade and helped fund the Industrial Revolution. It completely changed the way the world did business.

Enter Bitcoin

During the throes of the 2008 financial crisis, Bitcoin was born. That financial crisis took down the global financial system. The flow of money came to a standstill.

The libertarian cryptocurrency underground took notice. And their response to the world’s flawed centralized financial system, was Bitcoin.

Bitcoin runs over a network of computers that belong to many people, spread out across the globe, who are collectively charged with maintaining and validating its ledger of accounts.

No government, no banks, no financial institutions, no middlemen. Just like-minded people with computers, Gorrila glued together with a common purpose – to create a financial system that was independent and decentralized.

The mechanism for validating that ledger is something called Blockchain.

Blockchain is encrypted software, or an algorithm. Thousands of individual computer systems must all validate each transaction that occurs on the Bitcoin Blockchain ledger. Because that validation process is foolproof, meaning always 100% accurate, it has slowly built trust for those who use it.

This trust in Bitcoin represents a counterweight to the need for traditional currencies backed or guaranteed by a government entity and run by a complex labyrinth of financial partners that, together, represent the global financial system.

Slowly, Bitcoin has become a new token or symbol built on trust to facilitate an exchange of one’s products or services for that token or symbol. In other words, Bitcoin has become a form or currency, or, if you like, money.

If that trust continues to grow, so too will Bitcoin and other cryptocurrencies using Blockchain’s trust-building algorithm.

And, if that happens, the world’s financial system, as we know it, will drastically change. Money, will no longer be the sole province of individual governments and the centralized financial system supporting it.

Bitcoin is changing our perception of money because it is changing the very nature of money. It may be the most important technological advancement since the birth of the Internet. If Bitcoin, or some other cryptocurrency succeeds, it will render our current financial system unnecessary and obsolete.

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Full Disclosure – Thank you Paul Vigna and Michael Casey for writing your amazing book on Cryptocurrency. I found it invaluable and  very informative, particularly for this article. Here’s a link to the book: The Age of Cryptocurrency

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Regaining Control of Your Life – 4 Triggers That Set Habits in Motion

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Every habit begins with a trigger.

The basal ganglia is constantly vigilant in looking for environmental triggers in an effort to subconsciously initiate a habit.

Why does our brain go behind the back of our conscious mind (prefrontal cortex) to set habits in motion? Or, put another way, why does part of our brain have a hidden habit agenda that our conscious mind is unaware of?

The simple answer is that unconscious brain functions, like habits, are less taxing on the brain and, thus, use less brain fuel.

Part of the job of the basal ganglia is to create habits and engage in habits, in an effort to allow the brain to work less and, thus, consume less fuel. The basal ganglia is, in a real sense, the brain’s fuel efficiency manager, using habits as its main energy savings device.

Unless you’re aware of those triggers, you will unconsciously engage in the habit.

There are 4 environmental triggers that set most habits in motion:

  1. Visual Triggers – Visual Triggers are like unavoidable neon signs that grab the attention of the basal ganglia and stimulate you to engage in a habit. The McDonalds golden arches are an example of a powerful Visual Trigger. Once your see those golden arches, the next thing you know, you’re eating a hamburger with fries.
  2. Time of Day Triggers – We all have habits that we engage in during the morning, afternoon and evening. Waking up in the morning sets in motion all sorts of habits. You see the coffee pot and the next thing you know, you’re making coffee. While getting ready to shower, you see your toothbrush and that triggers you to brush your teeth. Brushing your teeth may itself be a trigger to shave or put on your makeup.
  3. Stress Triggers – Stress overwhelms the brain, consuming far too much fuel. To compensate, the basal ganglia changes it’s game plan, using stress as a trigger to get you to engage in a habit in order to conserve fuel.
  4. Association Triggers – People who you associate with are habit triggers. One friend can be a trigger for hitting the bars, another for exercising, another for gambling, another for reading and another for cheating on your spouse. Who you associate with can be a habit trigger, setting in motion all sorts of good or bad habits.

The key to breaking any bad habit is self-awareness of the habits you have, and also, self-awareness of the triggers that set those habits off. Being aware of the triggers to your habits is critical to understanding what is setting off your habits.

Once self-awareness enters the picture, habits lose their power over you. By identifying the external triggers that set a habit in motion, you are able to consciously stop that habit in its tracks.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Always Believe That Something Wonderful Is About To Happen

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Back in February of 2016, I was feeling down. I had worked very hard for close to two years months on a book called Change Your Habits Change Your Life.

It was a hard book for me to write because it incorporated complex brain science. I poured through over 200 hundred studies on habits, neuroplasticity neurogenesis, epigenetics, the latest habit change strategies, and many other complicated brain-related subjects.

I was feeling down because after the release of that book, not much happened.

Book sales are often driven by media exposure. For some reason, everyone in the media, some I knew, some I didn’t know, ignored my requests for interviews. They also ignored many of the articles I had pitched them about habit change, from my research.

As a result, sales were anemic, and that negatively affected me.

Evidently, I wear my emotions on my sleeve, because when one of my very nice clients called, she sensed something was off and asked me if I was OK. I told her what was going on. I vented for about ten minutes. When I was done, she said, “Always Believe That Something Wonderful Is About To Happen”.

I thought what she said was so profound, I typed it up and put in on my wall where I would see it every day.

Her words really picked me up and pulled me out of my depression.

Amazingly, later that same day, I received an email from one of my contacts at Business Insider, Kathleen. Kathleen, said she wanted to do a story about my book and asked me to email her the Ebook version.

So, I did and two weeks later we did the interview.

The Business Insider article was released on March 17th, St. Patty’s Day. It was an immediate hit. Within a 24 hour period, it had over 1 million hits. By month-end it had over 5 million hits. As I type these words, the article has been read by close to 12 million people.

Thanks to that viral article, my book sales went through the roof. I must have sold 6,000 copies in a two-week period. It became an instant bestseller on Amazon. The Business Insider article generated many other articles from people in the media, which helped keep book sales robust through 2018.

Life responds to positivity. I don’t pretend to know all of the answers as to why. No one really does. But, in my experience as an author, and from all of the entrepreneurs I interviewed for my Rich Habits Study, I’ve learned that good luck is attracted to a positive mental outlook and retreats from negativity.

Whenever you find yourself in the dumps, find something positive that works for you to pull yourself out of those dumps. It’s in your own best interest to stay positive.

To this day, whenever I feel down, I look at the sign on my wall: ALWAYS BELIEVE THAT SOMETHING WONDERFUL IS ABOUT TO HAPPEN.

Do your best to stay positive. Life rewards the optimists and punishes the pessimists.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Pivot Until You Reach Your Destination

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Tom Corley boats - cropA typical airplane flight is off course 90% of the time during its flight. Pilots and the onboard computer systems continuously focus on the end, the destination, and make constant course corrections during the flight in order to arrive at the destination.

Successful entrepreneurs learn how to pivot – to shift gears, change direction and alter their course or the path they take in order to achieve success. This may be the real secret to their success.

Successful entrepreneurs are successful because they mastered the art of pivoting. Pivoting is what successful entrepreneurs do after they fail to achieve the results they desired.

The key to the art of pivoting is to find out what works and what does not work.

The Pivoting Process

Step #1 Experimentation – Doing things differently and evaluating the results.

Step #2 Documentation – Writing down exactly what worked and what did not work.

Step #3 Formalize a Process – After documenting what to do and what not to do, the next step is to formalize the process – get what works, in writing.

Step #4 Implementation – Institutionalizing the process by implementing it throughout your business organization. This ensures adherence to doing what works and avoiding what does not work.

Step #5 Tweak – Constantly improving upon the process, as the business environment changes.

When the people successful entrepreneurs work with are unable to help move them forward, they find others who can do the job.

When a product or service fails to deliver, successful entrepreneurs pivot, or continuously tweak it, until it succeeds.

They constantly alter what they are doing, find another route and then take that route. They do this over and over again until they realize success, which is the achievement of their goals and realization of their dreams.

Success is a process. A big part of succeeding, as an entrepreneur, is figuring out what works and what does not work and then pivoting.

Keep pivoting until you reach your destination.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

A Life of Significance

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When I decided in 2009 to write my first book, Rich Habits, I confess that I entertained visions of grandeur. I thought, fantasized, about selling many books and becoming rich, like so many of the millionaires I studied.

That desire to become rich lit the fire and provided the initial motivation I needed.

Since then, I’ve written and sold many books. The money’s nice but it’s no longer the reason I keep at it.

I learned something along the way. My desire to help others lift themselves up, to achieve great things in their lives, is now my driving force.

Not a day goes by where I don’t receive emails or social media messages from readers thanking me for my work. I even got a Linkedin message from a woman who wanted to thank me for helping her save her child from life threatening brain cancer.

While riches may be one of the reasons you decide to pursue a dream, there is usually a deeper, more meaningful reason, hidden beneath all of the piles of imaginary dollars.

Significance.

When you find your calling or main purpose in life, both lead to the same place – a feeling of significance.

Significance is the ultimate reward for pursuing a dream. Not money.

When you live a life of significance, you are doing much more than making money. You are helping others by adding value to their lives in some way. When your short existence on this planet leaves a positive imprint on the lives of others, your life has significance.

If a dream is a rainbow, at the end of that rainbow is a life of significance. That’s the real pot of gold that’s waiting for you. And the feeling that your life has significance, is the feeling we call happiness.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!

Everything You Want Exists in the Unknown

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Humans herd because inside the herd is safety. We’re just hardwired to seek safety. In the herd, there is no uncertainty, no risk.

But uncertainty is boring. It’s a zombie existence.

Fortunately, humans were also hardwired for adventure, or to pursue the unknown.

Inside the unknown is where opportunities lurk. Inside the unknown is where your natural gifts and talents lie, waiting to be discovered.

Venturing into the unknown is scary. The unknown will knock you down. That is because, inside the unknown is also where mistakes and failures reside. But while those mistakes and failures cause pain, suffering and cost you money, they also accelerate your growth. And, the more you grow, the better you become.

Growth causes you to stand out in the crowd. It eliminates the competition. It transforms you into a person of significance.

Everything you want resides in the unknown. Don’t fear it, embrace it.

My mission is to share my unique research in order to help others realize their dreams and achieve their goals. If you find value in these articles, please share them with your inner circle and encourage them to Subscribe. Thank You!