You Tube Challenge

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Success requires change and one of the seven steps to change is growth. You grow by learning. This learning can be knowledge-based, skill-based or both.

One of the advantages our generation has over all other generations is easy access to information. Information that can accelerate change, leading to success and producing wealth.

If you were to peruse YouTube, you’d find a lot of videos. Many of those videos do nothing but feed time-wasting habits. But many of those videos also educate.

When I decided I wanted to build a horse shoe pit in my back yard, I visited YouTube. There, I found an abundance of videos explaining and showing exactly how to do that. I watched a few videos, took notes, and after about an hour, went outside and began building my horse shoe pit, based on my notes.

Although I had never built a horse shoe pit before, the education I acquired from those YouTube videos helped me to build the perfect horse shoe pit.

What new knowledge or skills would you like to acquire?

See if you can make a list of twelve. This will become your Growth List.

Next, find a binder and put your Growth List into that binder. This will become your Growth Binder.

Then, each month, focus on one of the twelve items on your list. Visit YouTube and watch at least three videos about the item on your list. Take copious notes. Review your notes. Try to summarize your copious notes into a one-page summary. Then put all of your notes and summary page into a Growth Binder, with a slipsheet or topic separator, in order to separate it from the other items on your Growth List.

If an item on your list is skill-based, make sure you practice what you’ve learned, after reviewing the notes. This will help reinforce what you’ve learned and help you develop a brand new skill.

Do this for each item on your Growth List. After twelve months you will have advanced your knowledge and your skills enormously.

Ideally, if your Growth List is tied to your dreams and goals, it will help move you forward towards the realization of your dreams and goals.

Good luck!

The Advantages of Growing Up In Poverty

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Those who struggle with poverty, while growing up, see the world as a very different place than those raised in the middle-class or in wealthy households.

In my Rich Habits Study, 41% of the 177 self-made millionaires were raised in poor households. Yet, somehow they managed to break out of their poverty as adults.

Ironically, according to my research, being poor actually endows you with certain advantages over the middle-class and the wealthy.

More Willing to Take Risks

One of the common denominators among all of the self-made millionaires in my study, was the need to become comfortable with taking risk. Growing up poor forces you to take risks in the pursuit of wealth. Overcoming the fear of taking risks, therefore, becomes a habit.

With respect to my Rich Habits self-made millionaires, the fear of taking risk resurfaced only after they accumulated their wealth. At that point, the fear of losing their hard-earned wealth motivated them to hire wealth advisors, insurance agents, CPAs, Estate Planners and other financial advisors to help them preserve their wealth. So, becoming rich actually lowered their tolerance for taking risks, risks which could potentially decrease their wealth.

Desire to Change is Great

Poverty can either beat you down or make you stronger. For the self-made millionaires in my study, it made them stronger. That’s why they were in my study – poverty motivated them to achieve.

Their desire to become successful and rich drove them to transform themselves. This desire to change motivated them to learn what they needed to know in order to succeed. It also forced them to develop and perfect superior skills in order to earn more than their competition.

Superior Work Ethic

A hard work ethic is a prerequisite to success. Those who are raised in poverty, have no choice but to work hard. Thus, the poor develop a hard work ethic. When you are able to combine that hard work ethic with your dreams and goals, what a powerful combination!

If you grow up in an environment of comfort, you might be less willing to do the hard work success requires.

Failure Doesn’t Scare You As Much

One of the downsides of failure, is that failing at something can put you in the poor house. When you grow up poor, you don’t fear poverty as much, because it is something you are familiar with and something you survived. Therefore, failure does not frighten you as much and, in fact, emboldens you to take risks.

Poverty Removes Rose-Colored Lenses

When you grow up poor you see things through a much different lens. You know life can be very hard when you are poor. Things can and do go wrong. You know that because you experienced that growing up in poverty. The experience of poverty allows you to see things as they really are and not allow yourself to be blinded by unrealistic rose-colored optimism.

Being anchored in reality, allows you to see potential pitfalls ahead of time, which enables you to navigate and pivot around those pitfalls. Those who are not raised in poverty, might see things as they wish them to be and be blind to reality, until it hits. And when it hits, it’s always a surprise, leaving you ill-prepared to deal with that reality.

Comfortable With Failure and Setbacks

Those who struggle with poverty become familiar with failure and setbacks. Consequently, when things go wrong, as they often do in the pursuit of wealth, those raised in poverty don’t raise the white flag and surrender. Rather, they see failure and setbacks as normal and something that can be overcome.

Accustomed to Sacrifice

Growing up poor means you are unable to possess the things non-poor people take for granted. Poverty forces you to become accustomed to doing without. This actually is a great advantage. The pursuit of wealth always requires sacrifice. Sometimes for many years. If you’re accustomed to sacrifice, it’s less painful and more tolerable.

Frugality is a Habit

The poor have no choice but to be frugal with their spending. They forge the frugality habit at a very young age. And, as you know, habits are hard to break. This frugality habit, therefore, follows the poor into their wealthy adult lives.

Growing up poor is not necessarily a disadvantage. Poverty forces you to develop certain traits that can actually be leveraged to your advantage, helping you in the pursuit of your dreams and goals.

Why Bad Things Happen

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Do bad things happen to you?

How often?

Seldom, occasionally, more than occasionally, all the time?

If bad things are a part of life for you, it’s time for some serious introspection.

We are creatures of habit. That means we do things without consciously being aware that we’re doing them.

When life goes wrong too often, that’s a red flag that your repetitive behavior, thinking and choices, also known as habits, are to blame.

Relationship Problems

Relationships are the currency of the wealthy. Wealthy people build strong, powerful and lasting relationships with upbeat, optimistic, enthusiastic, can-do people.

If you’re having relationship problems, there are two main causes:

#1 Your Relationships Are Toxic

You have surrounded yourself with toxic people. Toxic people have Toxic Traits that throw wrenches into our lives and those Toxic Traits eventually become intolerable:

  • They constantly complain
  • The constantly criticize
  • They are negative
  • They are pessimistic
  • They are on an endless search for problems
  • They struggle financially
  • Their lives are filled with drama
  • They have addictions

#2 You Are Toxic

You possess Toxic Traits and those Toxic Traits eventually become intolerable to others, destroying or impairing your relationships.

Job Problems

Wealthy people make themselves Un-Fireable. They do this in three ways:

#1 They Become Virtuosos

Every day they invest in themselves by growing their knowledge and perfecting their skills via daily practice. This transforms them into Virtuosos, experts in some particular niche. And because they are Virtuosos, they are indispensable to their employer or customers.

Those who struggle keeping a job have not invested the time in improving their knowledge or developing superior skills. As a result, they are expendable, and among the first to be fired.

#2 They Are Likeable

Successful, wealthy people are likeable. People want to work with them and do business with them. As a result, they have strong relationships with the people who matter the most – superiors and customers.

Those who struggle keeping a job may be victims of their own lake of likeability.

#3 They Build Relationships With Decision-Makers

Wealthy people work hard in building strong, powerful relationships with decision-makers. They talk to them regularly, they make an effort to learn more about their lives and their interests and they do whatever they can to help make their job easier. They acknowledge birthdays and life events.

Money Problems

There are essentially three ways to create wealth:

  1. Save/Invest – These millionaires reduce their standard of living in order to live off 80% or less of their income. Then they prudently invest that 20% prudently, every year, for many years.
  2. Become a Virtuoso – These millionaires either have a unique knowledge-based expertise or developed some expert skills that set them apart from their competition. As a result, they are able to charge a premium for their products or services or are able to rise up the corporate ladder and become beneficiaries of wealth-building stock-based compensation.
  3. Entrepreneurship – These millionaires pursue a dream and keep pursuing that dream until they succeed.

If you’re struggling financially, it is most likely because you are living beyond your means. You could be living beyond your means because you don’t earn enough to meet your living expenses or you make a good living but spend too much money.

Health Problems

The wealthy in my Rich Habits Study habitualized good health. They did this a number of ways:

  • Eating Healthy
  • Daily Aerobic Exercise – Aerobic exercise has five important benefits:
    1. Improves Mental Functioning
    2. Improves Health
    3. Boosts the Immune System Which Helps Prevents Disease
    4. Reduces the Effects of Chronic Stress
    5. Makes Us Feel Happier
  • Sleeping 8 Hours a Night – There are many benefits to a good night’s sleep:
    1. Sleep Repairs Cell Damage
    2. Sleep Creates Memories
    3. Sleep Clears Out Waste Material Within Each Cell
    4. Sleep Helps Grow & Repair Muscles
    5. Sleep Erases Bad or Unimportant Memories
    6. Sleep Grows & Distributes New Brain Cells
    7. Sleep Restores Willpower
    8. Sleep Reduces Inflammation and Helps You Think Clearer
    9. Sleep Cleans Brain Cells

If you want to get off the problem treadmill, you have to make yourself aware of the habits that are causing those problems. Self-awareness is always the starting point of change.

NEW JERSEY EXIT TAX

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When a home is sold in New Jersey, sellers have to make an estimated tax payment at the time of closing.

This estimated tax payment is actually the “exit tax” that so many New Jersey homeowners have questions about.

New Jersey imposes this tax to make sure homeowners pay what is owed on their final state tax return even if they no longer live in the state.

State rules say the estimated tax payment shall not be less than 2 percent of the consideration for the sale as stated in the deed.

To qualify, the home would have had to be your principal residence for 24 of the previous 60 months.

Effective Aug. 1, 2004, the state enacted P.L. 2004, Chapter 55, which requires nonresidents of New Jersey to pay an estimated tax on the income from the sale of New Jersey real property.

This estimated tax is an enforcement tool to enable the state to collect tax from nonresident sellers, and it’s collected when the deed is recorded, he said – MEANING AT CLOSING.

The state wants to make sure you don’t actually skip town without paying the tax.

In conjunction with the sale of your New Jersey property, you will need to complete Form GIT/Rep-1 (Nonresident Seller’s Tax Declaration) and it should be given to the buyer or buyer’s attorney.

Along with the form, you will need to include the applicable estimated tax payment. This would be equal to the greater of 8.97 percent of the gain on the sale of the property or 2 percent of the consideration received for the sale, Bloom said.

The estimated tax payment that you make at the time of the sale would be reported on your State of New Jersey Income Tax–Nonresident Return that you file for the year of sale. If the estimated tax payment exceeds your actual tax liability, you would receive a refund.

A New Jersey nonresident who sells a home in New Jersey which they previously lived in, and which still qualifies for the personal residence exclusion, would still be required to make this payment but may not have any taxable gain on the sale on their tax return due to the personal residence exclusion. After filing their New Jersey tax return, they may not have a taxable gain at all, thus resulting in no New Jersey exit tax AND IN FACT A REFUND OF THE TAX YOU WERE REQUIRED TO PAY AT CLOSING.

Rich Habits News

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I am happy to announce that the Rich Habits brand is expanding.

This past month I have signed the following foreign publishing agreements: [Read more…]

Good Luck is Critical to Success

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After I completed my Rich Habits Study, one thing became very clear – the rich, at some point during their success journey, get lucky.

Luck was so critical to the success of many of the self-made millionaires in my study, that I felt it imperative to address it right out of the gate in my book Rich Habits. I’ve updated that preamble for the 2nd Edition of Rich Habits and thought I’d share it with you.

The Rich Have Good Luck and the Poor Have Bad Luck

Many unsuccessful people rationalize that they don’t have “good luck” or just aren’t “lucky.” They argue that in order to be financially successful you need good luck.

So, is good luck important to becoming successful? The answer is a resounding “Yes!” All successful people pursuing some dream, have experienced good luck. In fact, no one will ever become successful if they do not have good luck. But let’s elaborate on this hard truth.

There are four types of luck. The first type of luck is “random good luck.” This is a type of good luck we have no control over, like winning the lottery or receiving an unexpected inheritance.

The second type of luck is “random bad luck.” Like random good luck, we have no control over this, either. Events creating this type of luck are outside of our influence for the most part. Examples include coming down with a genetic-driven disease, getting hit by lightning, random accidents, a tree falling on your house, etc.

The third type of luck is “opportunity luck.” This is good luck that is a byproduct of good daily habits. Think of opportunity luck as an apple orchard. You prepare the land, plant the apple seeds, and diligently nurture the trees as they grow. After some time the apple trees blossom and bear fruit. This fruit is the byproduct of doing the things you needed to do over a long period of time. These apples represent the fruit of good habits – opportunity luck.

Successful people do the things that are necessary over the long term in order for opportunity luck to occur in their lives. They live the Rich Habits every single day. Rich Habits are like a magnet for opportunity luck. Many of the opportunities are completely unexpected. Some people refer to this as “the law of attraction.” Opportunity luck follows the law of attraction for those who live the Rich Habits.

The fourth type of luck is “detrimental luck.” Detrimental luck is the evil twin of opportunity luck. Unsuccessful people have bad habits. Like the Rich Habits, bad habits are also seeds. They will take root and grow until they too bear fruit. Unfortunately, the bad fruit birthed by bad habits brings detrimental luck into the lives of the unsuccessful. This detrimental luck might be a job loss, investment losses, foreclosure, divorce, illness, or something similar.

To bring success into your life you need to attract the right kind of luck. Living the Rich Habits guarantees you will attract the right kind of luck, and opportunities will appear, seemingly out of thin air. As with low-hanging fruit, all you have to do is reach out and pick it.

Not All Goals Are Good Goals – How To Distinguish a Good Goal From a Bad Goal

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You hardly ever hear anyone talk about goals in a negative context. Goals are almost always perceived to be good. But as I learned from studying wealthy and poor people since 2003, not all goals are Good Goals.

So, how do you know when a goal is a Good Goal or a Bad Goal?

Good Goals have 12 things in common:

  1. Good Goals create long-term benefits, that pay dividends for many years. These benefits very often take many years before they show up in your life.
  2. Good Goals create a unique type of happiness, known as fulfillment. Fulfillment is a type of long-term happiness. It greets you in the morning and lulls you to sleep at night.
  3. Good Goals force you outside your comfort zone. They force you to learn what to do and what not to do. Good Goals make you grow as an individual.
  4. Good Goals force you to create good daily habits; habits that stay with you the rest of your life.
  5. Good Goals keep you moving forward. They get you from point A to point B. Point B being a better place, such as rising from poverty to the middle-class or from the middle-class to millionaire class.
  6. Good Goals make you smarter. They boost your IQ by challenging you to think your way through problems and obstacles. That learning results in the creation of new synapses in the brain. The more synapses you have, the higher your IQ.
  7. Good Goals attract and build relationships with the right kind of individuals. They force you to associate with can-do, optimistic, success-minded people.
  8. Good Goals improve the quality of life for you and your family.
  9. Good Goals allow you to maintain or improve your relationships. They don’t force you to isolate yourself from the ones you love.
  10. Good Goals allow you to maintain good health or improve your health.
  11. Good Goals expose you to more opportunities.
  12. Good Goals boost your confidence. The more goals you pursue and achieve, the more confident you become.

Examples of Good Goals:

  • Become an Expert – Eighty two percent of the professionals in my five year study on the wealthy were niche experts or virtuosos at what they did for a living. They devoted time on the side, every day, to developing an expertise in a specific area within their industry. Virtuosos have more value and, thus, make more money. Even better, because they make more money, they don’t have to work as many hours.
  • Start a Side Business – Forty eight percent of the business owners in my study started their business while working for someone else. It is possible to grow a side business while still maintaining your full-time job. Not only does a side gig create supplemental income, it could eventually give you the freedom to leave you job and devote yourself full-time to your business.
  • Improve the Way You Look – Thirty nine percent of the wealthy in my study lifted weights three days a week. Lifting weights to build a stronger, healthier body will improve the way you look. Healthier people have a better quality of life and fewer sick days, which translates into more productivity, more money and a longer life.
  • Become a Speaker – Twenty three percent of the millionaires in my study were also speakers. Joining Toastmasters or some similar speaker organization in order to develop your speaking skills will benefit you in the long term. Being a good speaker sets you apart from the competition and could eventually lead to paid speaking engagements, creating an additional revenue stream.
  • Become a Writer – Eighteen percent of those wealthy individuals in my study wrote for industry magazines, newsletters, blogs, etc. Becoming a good writer stamps you as an expert on the topics you write about which opens the door of opportunity for promotions at work, new job opportunities or eventually getting paid for articles or books you write.
  • Lose Weight – Setting a weight loss goal often involves a daily regimen of exercise, healthy eating and encourages a healthy lifestyle. It may also motivate you to moderate your consumption of alcohol or to quit smoking. When the weight eventually comes off you enjoy the compliments, feel healthier and are noticeably happier.
  • Saving/Investing – Opportunities knock for many, but go unanswered when you don’t have the money to take advantage of them. When you decide to live below your means, you are able to save money. When you are able to save money, you are able to invest that money or take advantage of opportunities that present themselves.

Bad Goals have 3 things in common:

  1. Bad Goals Solve Some Immediate Need.
  2. Bad Goals Create No Long-Term Benefit When Achieved.
  3. Bad Goals Borrow From Your Future.

Examples of Bad Goals:

  • Win the Lottery – Becoming rich by gambling in any way is a bad goal. The odds of winning the lottery are remote and costs you money that could otherwise be saved or invested prudently for future wealth creation. Seventy-seven percent of the poor in my study gambled on the lottery regularly. The mortgaged their future savings for a shot at instant wealth.
  • Buy a Bigger House – Unless this is a need (i.e. expanding family), buying a bigger house is a bad goal. Bigger houses require more upkeep, higher utilities bills and more in interest that you pay to the bank. A bigger house means that house owns more of your future income.
  • Buy a Boat or Luxury Car – This is another example of a bad goal. Boats and luxury cars are costly to won and costly to maintain. Plus, the money you spend to own them could be have been used to fund your retirement plan or build assets that create a revenue stream down the road.
  • Take an Exotic Vacation – While traveling to exotic locations can have some educational benefits, saving your hard earned money just to spend it on an expensive vacation means not having that money to build future wealth.
  • Destroy Your Competition – When you focus on destroying your competition as a means to increase your market share, rather than improving upon the products or service you offer, you ultimately hurt your business model. Engaging in competitive warfare often accomplishes only two things: reduced profits and enemies.

When the achievement of a goal does not improve your life for the long-term, it’s a bad goal. Goals pursued to own more stuff or to create some immediate, momentary pleasure are almost always bad goals.

Be very careful of the goals you pursue. Not all goals are good goals.

Success is a Lonely Business

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One of the lessons I’ve learned from studying self-made millionaires is that dreamers are almost always on their own in the beginning phases of pursuing a dream.

It’s very hard, initially, to find individuals who buy into your dream and are willing to grit it out.

Pursuing a dream is all risk. There is no guaranteed payoff and the effort requires an enormous investment in time, very often money and most definitely emotions.

Finding individuals who buy into your dream is difficult because, until you experience success, very few are able to stomach the risk and uncertainty pursuing a dream requires.

It is truly a rare breed of individual who will join you and stick with you during the journey to success. You’ve no doubt read about some of these rare breeds in books:

  • Paul Allen (Bill Gates partner)
  • Steve Wozniak (Steve Jobs partner)
  • Charlie Munger (Warren Buffet’s partner)
  • Jamie Dimon (Sandy Weill’s partner) and
  • Todd Wagner (Mark Cuban’s partner)

These mostly silent partners never quit on their famous billionaire-dreamer partners and they were handsomely rewarded for their loyal devotion.

Don’t lose faith when people quit on you. Keep working hard every day, pursuing your dream, even if you have to go it alone.

Dreamers change the world. And when you experience success, loneliness will forever be in your rear-view mirror.

Spending Smart During the Holidays is a Rich Habit

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The holidays are right around the corner. While we may enjoy the holidays, that enjoyment comes at a cost.

We spend more money on holiday-related things like gifts, dining, electricity for outdoor decorations, etc. What follows are a few Rich Habits to make sure you make the most efficient use of your money during this holiday season:

Stick to a Gift Budget

Set a maximum amount you will spend on gifts this holiday season. Even better, make a list of everyone who will be getting a gift and then budget how much you will spend for each person. This ensures you do not go over your budget. As a rule of thumb you should limit your holiday gift spending to 1.5% of your income. To find unique gift ideas within your budget visit sites like Gifts.com. These sites give you great gift ideas that are within your budget.

Use Credit Card Reward Dollars

Many credit cards have attached to them Rewards Programs. Typically, these Rewards Programs generate Reward Dollars that you can use at participating vendors. For example, the American Express Reward Program gives you about .88% back on every dollar you spend using an American Express credit card. One of the participating vendors with American Express is Barnes and Nobles. 50,000 American Express Rewards Dollars translates into $500 in Barnes and Noble gift cards. You can buy 20 $25 Barnes and Noble gift cards and give them out as gifts during the holiday season and it will cost you nothing.

Send e-Cards

Want to save on the cost of buying holiday cards and postage? Then send out a holiday e-Card this year. There are numerous websites that offer free cards such as BlueMountain.com. These sites offer templates and also allow you to customize your Ecards.

Unplug Holiday Lights After 10pm

Most everyone is asleep or in bed by 10pm so it makes no sense to keep your holiday lights on after this hour. This cuts down on the electricity costs for the holidays.

Interest-Free Financing

Sears, Home Depot, Best Buy, Lowes and certain Amazon partners offer up to 24 months of interest free financing. You must ensure that you pay off the interest free purchase within the free interest period and you must make your monthly payments on time. If you don’t you risk being back charged for ALL the interest you were saving on the purchase.

Dine at BYOB Restaurants

BYOB is an acronym for “Bring Your Own Booze”. Having your holiday meals at BYOB restaurants can save you and your family hundreds of dollars in liquor dining costs during this holiday season. You not only save up to 50% on the lower cost of the liquor but you also save on sales taxes and the gratuity. It’s a triple savings.

Holiday Parties

Transform this year’s holiday party into a culinary surprise holiday party. Ask each one of your guests to bring a special dish for the evening. You can even give out Awards such as a $25 Barnes and Noble gift card for the best dish. This will save you money on your party and add an element of fun and excitement.

Online Comparison Shopping

Thanks to the Internet you now have the ability to comparison shop without ever having to leave your home or office computer. Sites like PriceGrabber.com and PriceBlink.com will scour the Internet online retail sites for the lowest price for your gift.

Coupon Sites

There are many old and new coupon websites that offer coupons you can use to purchase gifts or for dinning. Some offer as much as 60% off the retail price you would otherwise pay.

Re-Gift

I know it sounds tacky but just because you didn’t much care for a gift you received last year doesn’t mean someone else won’t like it. After all it’s the thought that counts. Re-gifting is an obvious money savings strategy. If you feel embarrassed about re-gifting don’t. According to MSN Money, 68% engage in re-gifting. So, you’re not alone. For all you know the gift you are re-gifting may have been a re-gift of its own!

The Most Powerful Word in the World

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I’d like you to indulge me for a moment.

Imagine a life in which you have no obligations, no need to work, zero pressing matters to attend to.

As you open your eyes to face another day, what will be the first thought to greet you every morning?

What will I do today?

Do.

Do is the most powerful word in the world. Do is responsible for everything.

Do makes plants grow, flowers bloom and acorns rise into giant oaks.

Do creates families.

Do forges nations.

Do builds homes, skyscrapers, bridges and tunnels.

Do put a man on the moon.

Without do, nothing changes or moves forward in life.

The very essence of a life worth living owes its debt to the word do.

If you had no obligations, no need to work and no pressing matters to attend to, what would you do with your life?

Each individual has a special, unique purpose life. It’s usually wrapped around some innate talent; something that is easier for you to do than others. Something that makes your heart sing when you engage in it. It is a special gift hardwired into your DNA at birth.

But it only reveals itself through experimentation.

Experiment with different, diverse activities. Given enough time, enough experimentation, your special gift will be revealed.

And when you find it, DO it every day.