You should buy, borrow or steal a copy of this book if you get the wrong answer to the following question:
What is the maximum number of normal-sized grains of rice you can pour into a normal-sized cereal bowl?
- Less than 3,000
- More than 50,000
Okay. What is your answer? I have asked this question of many students and friends. It is used to illustrate that people tend to approach their lives from narrow perspectives and as a result they frequently overlook some of their options. Whether we’re talking about a bowl of rice or our finances, the lesson is the same. If we fail to see all the possibilities, we are less likely to get the best results. In this case the answer was your bottom choice. I’ve never known anybody to get it correct.
You see, your eyes read the question correctly, but your mind had a bias. That good ol’ brain of yours probably assumed I wanted to know how many grains of rice you can fit into the bowl, but that wasn’t the question. Look at it again. It was how many grains can you pour into a bowl. There’s a big difference between “fit” and “pour”. You see, you can empty out the bowl and pour more rice in there an infinite number of times.
People make the same mistake when they deal with their finances. They view them from one perspective. They think that their money must come from their work and paychecks. In that event, there is only so much money available, just as there is only so much rice in the bowl. When that is gone, they are broke and forced to check the calendar for the next payday. But, what if they had unlimited income potential? What if there was truckloads of rice just waiting to get in that bowl?
Well, that is precisely the case. There are trillions of dollars out there, but most of us don’t know how to draw them toward us, except by working. But there’s another way: By creating passive income. That is money that lands in your pocket, whether you work or not. Let me illustrate my point.
I know a chiropractor who looks upon his finances like most people do. He does not understand compounding. He has opened two offices, one on each end of town. That’s a good start. But, the problem is he can only be in one place at a time, so he works at one building on Monday, Wednesday, and Friday, and the other on Tuesday, Thursday and Saturday. That means he is paying twice as much rent as other chiropractors and working an extra day per week.
He’d be better off if he’d hire a coworker to run one office while he runs the other one. Then build both businesses. He could peel off twenty percent or so from the office that the other person runs and thereby increase his income and cut back his own workload to five days per week. Four more offices and he wouldn’t have to work at all.
Here’s another example:
In my case, I own a rental house. After I pay everything and everybody. I make about fifteen cents per hour. That doesn’t sound all that impressive until we start talking about compounding, or multiplying our efforts. You see, I collect that fifteen cents per hour twenty-four hours per day, seven days per week. That adds up to $108 per month.
Oh yeah, I have another rental house, too. It spins off the same amount. And so does another one. In fact, the last time I counted, there were 51 of them and 220 apartments that are doing it as well. All of that adds up to something close to $30,000 per month. Not a record, to be sure, but certainly enough money to live on, especially since I have hired other people to do most of the work for me.
The point is, I could get more if I wanted to, but why? I had enough to retire when I was 49. Now, I can use my time to work on things that bring me new types of compensation, such as the pleasure I get by sharing this book with you.
I hope you now understand that if an unspectacular person like me can figure out how to avoid wasting money and instead invest it, and eventually become financially secure, that you can do it too. You just have to start thinking about finances differently and I will use some unique ways to show you how to do that.
But, before you can make investments in chiropractor offices or rental real estate or anything else, you first have to find some money to invest. That means “First Things First” and we’re back to the point of this book: How to Stop Flushing Your Money Down the Drain. After you learn how to capture and keep more of the dollars you already earn, you can begin growing your lifestyle by leaps and bounds.
Finally, and before we move on, let’s see if you’re making any progress by trying a similar question to the one about rice above:
Suppose somebody gave you a hundred bushels of green beans and told you that they were worth three dollars per bushel down at the farmer’s market. How much money can you get out of those beans?
I hope you didn’t say three hundred dollars. That’s what somebody else would say. However, if you realized that you can use the seeds in those beans to grow even bigger crops, then you are on your way to making money work for you rather than the other way around. This book will show you how to get an endless supply of seeds and lots more rice for your bowl.
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