 
Everything You Know About Money Is Wrong!

Published by Jonah Jones at Smashwords

Copyright © 2012 by Michael Jonah Jones

All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from Michael Jones, except for brief excerpts in reviews or analysis. "Economic Comic" is a term coined by Michael Jones and is used to describe the four ways to make money in America.

"Unfair Edge" is a term trademarked by Michael Jones and represents the methods described in this book for creating and retaining wealth.

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First edition

Disclaimer: This book is published for the purpose of general reference only and is not intended to be taken in as a substitution for independent verification by the reader. Although the author has made every effort to ensure that all the information contained in these pages was 100% accurate at the time of publishing, the author does not assume and hereby disclaims any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result for negligence, accident, or any other cause.

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Table Of Contents

## What You've Been Told About Money That's Flat-out Wrong!

Debunking the common myths that are passed down from generation to generation as valuable wisdom, but are really detrimental to becoming rich.

## What You Don't Know Will Cost You

Exposing the secrets of money that conmen and the elites don't want you to know. Example after example of how certain things are not how they sound or seem. When it comes to money, ignorance is anything but bliss.

## Avoiding the Five Financial Traps

Step by step guides on how to avoid (or get out of) the five biggest pitfalls that condemn good, hard-working people to the dreaded rat race.

## Debunking Every Myth You've Ever Heard About Money

From the most common clichés to supposed "conventional wisdom", every single one of them is dead wrong and believing in them will prevent you from ever being rich.

## Money is not a Physical or Tangible Thing

When you look at money this certain way, your view on it and feelings toward it will change dramatically.

## The Honorarium Theorem

Exposing the laws of compensation, earnings, rewards and returns.

## The Formula of Fortune

Wealth is not a matter of fortune, but formula. After reading this, you'll never again believe the lie that getting rich is all about luck or fate.

## The Four Ways to Make Money in America

Everyone tells us that in order to make money, you have to get a job. But that's only 1 of 4 ways to make money. See the four things that keep the economy moving and how you can capitalize on all of them.

## How to Raise Your Earnings

You work hard enough at your job already, and your employer is probably underpaying you. It's time you learn how to right that injustice, because your time is too precious to spend it earning far less than you deserve.

## The Most Important Word for Your Wallet

There is one word that sums up the most powerful vehicle of investment. This is one that everyone can have and benefit from. This is something that the rich have kept secret all to themselves.

## Not All Debt is Bad & How to Clean Up Your Credit Report

The secret inside information the credit card companies and the three credit bureaus don't want you to know.

## Conclusion: Now that You Know the Rules...

## About the Author
#  What You've Been Told About Money That's Flat-out Wrong

Ask your parents, teachers, bankers, financial advisors or just about anyone, "How do you get rich?" Here's what they'll tell you:

" _Oh, you have to go to school, get good grades, then go to college and get more good grades. Also, do lots of unpaid internships in college so you can get a good job, and make sure that job is safe, secure and loaded with good benefits. Then once you start working it, you need to live below your means, cut back on the Starbucks, keep a budget, and contribute 20% of your income to a 401k that's well diversified in stocks, bonds, and mutual funds. Then when you're 65, you'll be rich!"_

When they say that, what I hear is "be a slave to some employer for 40 years that has no reason to care about you and is just using you to make himself rich and never have any freedom or fun until you're too old to appreciate freedom and have fun."

First off, who's going to stay at the same job for 40 years? What company will even stay in business that long? And that 401k is not diversified because stocks, bonds and mutual funds are all in the same market: the paper assets market. If there's a market meltdown the day before your retirement (we have market turmoil almost every year in October), you're screwed. What are you supposed to do then? Live off of social security? I guarantee you that it won't still be around in 40 years and it's not even enough to be social or secure.

There is an alternative route.

The people getting rich today did not get rich this way. Instead, they do it by selling stock files, eBooks and info-products, by having monetized blogs and by affiliate marketing.

The fact is, the new rules for riches are very unfair. But there's not one thing in life that's fair. Why would money be any different? Fairness is really just a concept we made up to keep children in line. There isn't a solid standard for it. And when it came to money, even Jesus Christ himself was unfair. He said "Whoever has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him." (Matthew 13:12). This series is all about giving you that unfair edge.

# How to Use This Book

One thing I skip past that I probably should read is instruction manuals. Gentlemen, you back me up on this one; isn't it easier and more fun to just put stuff where it looks like it belongs and then relax?

But the box said only "Some Assembly Required."

But bear with me for a moment. When it comes to your money, you want to know everything there is, because what you don't know will cost you. There are five things that make up everything when it comes to money; the five forms of financial aptitude:

Throughout much of the time I spent learning these five forms of financial aptitude, I had an ongoing argument with myself. The cynical side of me kept saying things like this:

" **YOU'LL NEVER BE RICH, EVER! ALL OF THE EXPERT ADVICE IS SO GENERIC, NONE OF IT IS PRACTICAL, THEY'RE JUST A BUNCH OF CONMEN CAPITALIZING ON YOUR IGNORANCE AND ENVY!"**

Perhaps you hear a voice just like that inside of your head. Say hello to your number one obstacle in your financial life: yourself. Your own cynicism can be your undoing, as it almost was mine. But there are many ways to combat this inner voice and eventually shut it up. Throughout the book, you'll see this voice appear (maybe even at the same time you hear your own cynicism), and I'll show you how to put it to rest.

Are you a skeptic? I hope you are. Cynicism is bad, but skepticism is quite good. Firstly, because if you take anything I've written in here as gospel, you're a knucklehead. Secondly, skepticism is a principle of wealth.

New Rule for Riches #1:

It is highly appropriate and beneficial to be very skeptical of everything when dealing with the financial services industry because of possible conflicts of interest.

The reason it is a principle of wealth is because it's nobody's job to make you rich but your own. So the logical conclusion to that is that everyone else is only out to make themselves rich and possibly off of you.

For example: a guy on CNBC going crazy about a particular stock, encouraging you to buy it, and yelling that you're a fool if you don't. You may think, "It's not every day somebody goes nuts on TV about a stock. It must be a good buy," but what really may be happening is the guy is pulling a little scheme called "pump & dump."

The scheme works like this: he buys a lot of shares of a stock that's cheap, then goes on TV encouraging others to do so. Others watching him on TV buy the stock, which causes the price of it to go up (pumping up demand). Then the guy on TV sells all of his shares of the stock (dumping supply) and the price dramatically goes down, so the poor folks who bought the stupid thing can't get any gain out of it. This is what a conflict of interest looks like.

People you should be highly skeptical of are the following:

  * A student loan office advising students

  * An agent selling a life insurance policy

  * A money manager recommending a stock on TV

  * A broker suggesting a good mutual fund

  * States offering college savings plans

" **WHAT ABOUT YOU, MR. JONES! WHY SHOULD WE TRUST YOU? I BET YOU WROTE THIS BOOK JUST TO MAKE MONEY!"**

How much did you pay for this book? Nothing, which is a lot less than the price of stocks getting pumped and dumped, I bet. However, if you have serious skepticism, now is the time to hit it on the head. What are some of your doubts?

**Can anyone be rich?** I don't think so. If making money were easy, everyone would be doing it. It requires you to make sacrifices and change your life, but I argue for the better. It forces you to become more productive, more intuitive, and much friendlier.

**Do I have to take great risks?** In the old days, yes. In today's world, no. The risks have been greatly reduced with advances in information technology. All that is necessary is for you to be able to read, write and think of things others hadn't thought of yet.

**Do I have to be a single twenty year old?** While that is who this book is targeted to, no. This is for anyone is sick and tired of deferring what they really want to do because they have bills to pay. Do you want to start living or keep postponing?

**Do I have to be smart?** Of course not. Many of the people I researched for this book didn't go to Ivy-league schools or college in general. All you need is basic math skills and logic. I, for one, truly despised my college experience as the biggest waste of time in my life. I didn't fail school, but I feel that in the long run, school failed me.

Institutions of higher learning, for the most part, give you a piece of paper that supposedly "guarantees" employment (tell that to the unemployed grads moving back in with mom and dad) for the rest of your life. I sought out the skills that guaranteed I'd never have to work again. Furthermore, most of the jobs that college prepares you for are 80 hours a week, 30 years of torturous labor, causing you to grow to hate the field you were once so passionate about studying. Who wants that?

The rich among us don't do a good job for themselves as far as public relations goes. You may remember the Occupy Wall Street protests that occurred world-wide, starting in September of 2011. The genesis of these protests was simple to understand. The rich may not being lighting their cigars with $100 bills, but they're not making themselves very likable or someone that people would aspire to be like. When there's a giant gap between the rich and the poor, history shows that trouble arises, such as in Germany in the 1930s or Greece in the 2010s.

**What they say:** "You're just jealous because I made it and you didn't!"

**What You hear:** "All complaints about unfairness in the system are just like a high school drama queen complaining about rumors spread about her."

**What I say:** "The system is absolutely unfair. The world is unfair. Life is very, very unfair. But there's a way you can even up the odds of success for you. I'll show you how to have it."

**What they say:** "I'm not some lazy bum, rich-for-nothing like Paris Hilton or Kim Kardashian. I work hard for 80 hours a week to get what I have."

**What You hear:** "I make 100x more than you because I work 100x harder than you."

**What I say:** "We all work hard. The flow of money doesn't go to those who work the hardest, but to those who understand the new rules for riches and can spot an undervalued asset or opportunity the moment they see it."

**What they say:** "If I can get rich, so can you."

**What You hear:** "Every one of my golf buddies at the country club got rich. What's stopping you?"

**What I say:** "It's not as simple as doing, but rather knowing what, when and how to do. Specific attention to detail and hard sacrifices are mandatory. That's why most don't make it. And first, you've got to have something to sacrifice. Let me show you."

**What they say:** "Don't punish me for my hard earned success! Stop calling for higher taxes on me!"

**What You hear:** "Because I didn't inherit or cheat my way to riches, no one deserves a damn thing from me. Not even starving kids in poverty."

**What I say:** "I want you to be just as rich as me, if not more. Because an increase in your wealth will help everyone around you. I'll show you how."

I don't believe that the secrets of the rich should be kept and hoarded only for the benefit of the elite. I believe that when someone gets rich, it benefits everyone around them. Here's how I come to this conclusion, if there are more rich people in this country:

  1. The government will collect more in tax revenue, be able to provide more helpful programs to the less fortunate and not need to raise taxes on the fortunate.

  2. Home values will go up for everyone.

  3. More people will have the ability to create more jobs, thus more people will be able to find jobs.

  4. More charities can be started and funded.

  5. More expensive medical research can be done, which can lead to saving and improving lives.

  6. Expensive technological development can be funded and possibly make our lives easier.

  7. Less people will have to rely on government assistance and entitlements to live on when they can no longer work, thereby ensuring that government help will go to those who truly need it.

Furthermore, if everyone in this country knows how to make big money ethically and legally, why would anyone ever feel the need to commit crimes and steal?

My message to you is this: if you buy groceries, wear clothes, watch TV, listen to radio, drive a car, or even just surf the internet, a lot of people are making a lot money off of you. Want to get in on the action? I'll show you how.

#  Information Yields Power. Ignorance Yields Profit.

And that's profit for someone else, not you.

Is ignorance really bliss? Not for your wallet.

You've heard the phrase that when you assume, you make an "ass" out of "u" and "me". When it comes to money matters, assuming does worse than that. It can clear out bank accounts and tear up wallets. The smallest detail or overlooking can make a drastic difference in dollar bills.

New Rule for Riches #2:

What you don't know will cost you.

Here are just a few examples of how that works:

**At First:** Credit card companies will try to sell you an insurance policy for a monthly fee in case your card is stolen so that you're not legally liable for fraudulent transactions.

**But Really Now:** Under law, the most you can be liable for is $50 per card, and most credit card companies will cover that because they want to keep you.5a

**At First:** You receive a letter from a branch manager that appears to be nothing more than a customer-relations effort, such as, "Hello. I am the branch manager. If you have any questions, call me."

**But Really Now:** It means your broker may be mishandling your account. The branch manager is required to contact you to legally protect himself. It may seem that he's just being nice, but really he's only covering his butt.5b

**At First:** Part-time students aren't eligible for financial aid.

**But Really Now:** Part-time students do qualify for federal financial aid, but the calculations for this group look a little different.5c

**At First:** A dollar saved is a dollar earned.

**But Really Now:** A dollar saved is taxed on interest earned and eaten up by inflation. Your money is losing value when it just sits in a savings account.

**At First:** It's safe to assume that the car dealership knows your credit score, thus they can properly determine your interest rate.

**But Really Now:** If you know your own credit score, you can bargain better and not be at the mercy of a dealer.

**At First:** Supposing that when you buy gas with your debit card, the amount it says at the pump is the exact amount taken from your account.

**But Really Now:** Some gas stations put holds on your account.5d They'll at first charge you as high as $50, even if you only bought $10 worth of gas. Then the charge goes down to $10 when it clears. But this could cause an overdraft on your account, forcing you to pay a $35 fee! That's $45 for a mere $10 of gas!

**At First:** It's safe to assume that insurance rates are set in stone.

**But Really Now:** Rates are constantly changing. In fact, in certain states and for certain policies, rates have actually dropped significantly since 2011. And, if your record has improved, you may even be eligible for additional reductions. You can be sure, however, that your insurance company isn't going to call you up and let you know their rates have dropped.5e

" **STAYING ON TOP OF ALL THIS SOUNDS SO EXHAUSTING!"**

Sounds like it is, but it doesn't have to be. Perhaps you think you'll feel like a pest, making sure you get the most bang for your buck. But that's far from the truth. The way the American economy is set up, the businesses are the ones pestering you about how they'll give you the most value for your dollar.

It only takes a little bit of time and research to make sure you're not spending more than you should, especially with how easy the internet has made research for consumers. So reverse the roles and make it so that the businesses are the ones under the pressure to get your almighty dollar bill.

BEAR IN MIND:

Every business has a competitor. If it seems like they're out to screw you, remember that they'd much rather screw their competitors. They will bow down to you for your money before they bow down in defeat to their competitors. Take full advantage of this.

Being thrifty was once a virtue in our society, then somehow it became stigmatized as being cheap. I for one don't understand why economizing is looked down upon so much. We call people who do that penny pinchers, cheapskates, and stingy. But why? Do you not work hard for you money? Do you not want the effort and fruits of your labor to be respected? Aren't your earnings worthy of respect considering what you had to do to get them?

New Rule for Riches #3:

Thrift is demanding respect for your money and how hard you had to work in order to get it.

One of the greatest things about the business world is that businesses are willing to negotiate. Some stores will match competitors coupons and prices just to make the sale. Consumers on the other hand rarely negotiate. You just have to remind yourself that you have the money, thus you make the rules.

A WISE MAN ONCE SAID:

" _He who has the gold makes the rules."_

A fitting analogy is to liken your life to the life of a business. Individuals have cashflows, expenses and revenues just like businesses do. Be more like a business with your life and it will operate smoother. When businesses spend money, the expense is proposed, reviewed, analyzed, weighed and then approved or rejected. If all of us did this, we might not have the debt problems we have today.

" **THERE'S STILL GOING TO BE PEOPLE THAT ARE OUT TO GET YOU! WHAT DO YOU DO ABOUT THOSE?"**

Oh, yes. There are crooks out there, make no mistake about that. They set up some ugly traps to rip your wallet to shreds. So it's time now to show you how to avoid these miserable bastards' traps

#  Avoiding the Five Financial Traps

Many of these traps are ones that people fall into every day without ever even knowing it. It has been said that "Broke is temporary. Poor is eternal6." So this chapter is all about how to avoid being poor.

"Zordon didn't set me up with a Retirement Plan."

As the picture above suggests, poverty can come upon anyone. Not even all-star NBA players are safeguarded from poverty. The Chicago Bulls' Jason Caffey, who made an estimated $29 million during his eight-year NBA career, was in bankruptcy court seeking protection from his creditors, among them the seven women with whom he fathered eight children7. Sure he brought that financial trouble on himself, but he also fell for the traps.

You'd think that $29 million well-managed should cover everything. But the problem was that it wasn't well-managed. Thus, being aware of the five financial traps and knowing how to avoid them are two of your best ways to start your financial education.

## Financial Trap #1: Student Loans

The student-loan game has changed dramatically. The cost of college always goes up and loans are replacing grants, which is a bad idea. Always look for a grant first. Academic institutions are only worth attending if you can get someone else to pay for it. Some colleges and universities are complete wastes of time dishing out useless degrees that get you nowhere while sucking out your money like parasites. So it's best to try to get your higher learning for free in the form of scholarships and grants before looking at loans.

MOMENTARY TANGENT:

Option A: $100,000 Ivy League education.

Option B: $5 library card.

Catch: You'll get access to the same information either way!

Tragically, it has become common practice now for youngsters to get student loans. Like the credit card sharks, there are student-loan sharks that are aggressive at dropping debt on your shoulders. This debt is extremely tough to get rid of once it's amassed and it's very profitable for the sharks doing the lending.

Scholarships are always better than loans. Check these websites to see if you qualify for one: BrokeScholar.com, Educationgrant.com, Fastweb.com, and Fastscholarshipsearch.com.

Just the facts:

  * Federal and State regulators are investigating the possibility and frankly the likelihood that private lenders are buying college financial aid officers much like the way a lobbyist buys a politician. They buy them gifts and the aid officers then add the lenders to the "preferred lender" list. Well hello there, Mr. Conflict-of-interest. So nice to see you again... not.

  * Consumer advocates have found that some sharks are misleading students into taking out more expensive private loans when the borrowers are eligible for lower-rate federal loans.

  * Studies even show that more than half of these student debtors take out private loans without even exhausting federal resources and 24% receive no federal aid at all.

  * There's no way out. In 2005, lenders persuaded legislators to make private loans impossible to shake. You can't even declare bankruptcy.

Before taking one out, learn the 3 types of loans:

  1. Loans directly from the federal government

  2. Loans made through private lenders but subsidized and guaranteed by the federal government

  3. Private loans made by private lenders with no federal guarantees.

One reason students are turning to private lenders is because the amount of students allowed to receive the first two kinds of loans has been frozen since 1992. Private loans can be good, but there's a danger to them if you're naïve. You have to make sure that the career you're majoring for will pay off. There have actually been graduates with debt in the hundreds of thousands but their degrees (mostly in liberal arts) only qualify them for jobs that earn less than $50k a year.

The rates of a private loan are around 19% if you have no credit history. Compare that with the fixed rate of 6.8% for federal loans. And the rates aren't even disclosed before the student submits an application13. Thus comparison shopping becomes difficult and time-consuming.

<http://studentaid.ed.gov/repay-loans> \- If you graduate, can't find work, but still have to pay back a loan, go here to get a deferment (you don't have to make payments and the government may cover the interest during a set period of time). If you don't qualify, ask about forbearance, which lets you stop paying temporarily (but interest still accrues). There's also a list of steps you must take if your loan is in default.

The bottom line is that if you default on a mortgage, you can give back the house. If you default on a student loan, you can't give back your degree.

## Financial Trap #2: Credit Cards

When I first got into college, I felt like a little baby seal stuck on a melting ice berg surrounded by great white sharks. There were so many sharks mailing me letters, calling my cell phone (no idea how they got my number) and clogging up my email box, wanting me to sign up for credit cards. And they were more aggressive than any sales person I've ever seen. "Come get your credit card. You don't even need a job!" Nowadays, there is legislation that keeps these sharks off campuses, but they've made a fortune preying on vulnerable youngsters and are finding new ways to get to their little baby seal victims everyday.

The overwhelming temptation to get a credit card is understandable. They're convenient. They're a good thing to have in case of emergencies. And they're seemingly indispensable. You'll hear all this from the same sharks that make the $5,000 credit limit sound like they're giving you $5,000 for free. Whenever something seems too good to be true, it often is. While they push the positives, there are negatives they don't tell you about.

**Universal Default Penalties** : Half of people with these cards don't even know what those are. Lenders and credit card companies make their money on people's failures. When you sign up for one of these, you're putting a target on your back because the company will keep a keen eye on your timeliness. If you have more than one credit card (which is suicide), and you're late on a payment with one of them, the interest rates on both of them will go up because the company of the one that you paid for on time will have reason not to trust you.

MOMENTARY TANGENT:

Speaking of suicide, if I were ever to commit it, I'd sign up for a whole bunch of credit cards, max them out visiting every awesome theme park in the world, then leave a suicide note citing financial trouble as the cause. Then my family could sew the credit card companies for emotional damage. I'd be laughing my ecto-plasmic ass off!

**Interest rates are often hidden:** One of the tricky things these predators do is heavily boast about their low introductory rates. It seems like a bargain, but the problem is that over a period of usage, the rates go up astronomically without cause. And the reason why was hidden in the microscopic fine print that you may not have read. Most rates are even tied to the prime rate, which is one that can rise suddenly.

**Grace periods are more like grace minutes:** A grace period is the window of time between the initial charge and the moment interest is incurred on the charge. Supposedly, it's 25 days. But for some cards, the time period is shorter. And some transactions don't have grace periods, like cash advances and balance transfers.

**Balance transfer fees and inactivity charges:** These two are exactly what they sound like, very bad jokes they play on you.

" **Bait-and-switch" offers:** Once you have one card, other companies will send you crap in the mail, advertising low interest, and even if you're not approved, you'll be issued another. And that's the trick. It's written in microscopic print. So you sign up and switch, but the card you thought you signed up for, you weren't approved for, and you don't get it. Instead you get another one with higher interest. By the time the damn thing arrives, they hope you've forgotten what rate you were getting into. And most times people do. Until that first bill arrives.

**Two-cycle billings:** Most companies will compute your interest and charges monthly, but some do it bi-monthly. The latter figures your charges by averaging your daily balance over the last two billing cycles. Never apply for these cards.

" **MY PARENTS TOLD ME THIS ALREADY! THEY WOULDN'T LET ME GET A CREDIT CARD! WHY WOULD ANYONE WANT THESE LITTLE WALLET TERMITES?"**

Two reasons: one is instant gratification and the other is that it is a good way to build up credit. But only if you do it right. One last thing, credit cards from stores like Sears, JC Penny, Home Depot, Lowes, or other department stores are the absolute worst. Don't ever get those.

NerdWallet.com – When you are ready to get one and want to be sure you're not getting conned, this website compares credit card rates and rewards to find the perfect card to fit your personal or business needs. And using this site is free.

## Financial Trap #3: Early Marriage

It's important to know the fiscal situation of the person you're marrying. I don't mean just bad credit spouses or gold diggers. But marrying early in general could be a financial disaster for you as well.

By marrying early, I'm talking about under the age of 25, because 25's when everyone is likely to be all done with college and set on their chosen career.

They're happy, aren't they?

Let's look at the emotional aspect of this first. Psychotherapist Tina B. Tessina believes that romance has been blown out of proportion. "Many college students' brains haven't finished maturing yet," she explains. "Unfortunately, many couples part because they feel as though they've grown apart." The spouses might even start to say to each other "You're not the person I married anymore." This happens because the reasons you fell for them in the beginning (intelligence, sense of humor, sexiness) don't measure up to trash not being taken out or a stack of dirty dishes. And anything to do with physical attraction doesn't last for long.

Problems you didn't expect arise from nowhere. Household responsibilities, missing out on the fun of being young, sacrificing educational endeavors, and then not being able to get good jobs because of that limited education will certainly spark fights. And don't even think about kids.

Now for the financial effects of early marriage, it follows a cycle similar to this:

**Step 1:** The couple marries and moves in together.

**Step 2:** The combination of all their stuff creates a scarcity of space.

**Step 3:** Couple decides a bigger place is needed.

**Step 4:** Couple takes out a mortgage on a house.

**Step 5:** More space means they need more stuff to fill the emptiness. So they buy more furniture on credit cards.

**Step 6:** Couple starts reproducing.

**Step 7:** They finance a minivan.

**Step 8:** They end up struggling for the rest of their lives with all the bills and stashing savings away for their children's college fund and end up with nothing in retirement.

This is how their bank accounts go from green to red. They move in together in a one bedroom apartment, think that two can live as cheaply as one because there are two incomes paying for a one bedroom unit. But the couple either has the dilemma of cramming all of their possessions into a tiny unit and realizes the need a bigger place, or they have too much space (which rarely happens) and they go out and buy more stuff on their credit cards.

Once they realize they have too little space, they decide to look for a house. Perhaps they've moved up in their careers and are making more. Maybe they've even paid off most of their debt. So they take out a mortgage and buy a house. Now they have the problem of too much space again and buy more stuff on their credit cards, because you have to furnish a home. They may even decide to have kids. They start reproducing, but they realize that their sedan or sports car isn't big enough to carry them all. They finance a minivan.

Now they are in the rat race. They've bought two liabilities (a house and a car) thinking they're assets. Combining the mortgage, car payments, credit cards, electricity bills, water bills, maintenance (perhaps the only house they could afford was a money pit) and possibly left over student loans, they barely have enough to save for their children's college, let alone for themselves.

This is why the right age is often estimated to be 25. Early marriage is a key predictor of later divorce. Nearly half of people who marry under that end up divorced. It's only 24 percent for people who marry after age 25. Figures released last year from the National Center for Health Statistics found nearly half of marriages in which the bride is under 25 ends in separation or divorce within 10 years. For brides 25 and older, half as many marriages break up.

And I don't think I even need to go into what a financial mess divorce can be.

MOMENTARY TANGENT:

I'm not saying don't ever get married or go on dates (even expensive ones). But while we're on the subject of couples, I suppose I could show you a few ways couples can save money together. After all, a financial mistake when you're single doesn't hurt anyone but you. However, when you're married or seriously dating, it hurts others can cause more problems than just money problems. And if you've started a family already, there's more complications with that.

  1. **You can have fun without spending money, can't you?** Spending money on your significant other seems like a requisite in today's culture. You may exchange little gifts back and forth, or constantly eating out and seeing movies. How about instead of going out and spending, you stay in, cook a meal together and watch TV? Maybe play some board games or video games, because I don't think you bought them just to collect dust on a shelf. Feeling cooped up and need to get out of the house? Take a bike ride to the park or go to a community pool. Check out events that are going on in your local community. Churches are always having events like potlucks and Barbeques and some apartment complexes do movie nights.

  2. **Be honest with each other.** That probably goes without saying when it comes to relationships, but when it concerns money, there may be something that you absolutely love to do, a hobby or interest, and costs a little bit. This becomes a problem with your other if you weren't up front about it from the beginning. If you're honest about this hobby or habit that costs a bit and you can't give it up, you will avoid bigger problems down the road.

  3. **Agree on a Budget.** Remember the analogy on how your life is like a business with revenues and expenses? Well a marriage or a serious relationship is like two businesses merging together and forming a partnership. When businesses merge, they work very closely together on a budget. We go into greater detail on budgeting later on.

  4. **Keep gifts reasonable.** Does she really need a Godzilla-sized teddy bear on Valentine's Day? It's probably just going to get stuffed into a corner or closet a week later. Does she really need to buy him a gift at all? There's one gift all men like from women that's free, if you know what I mean.

  5. **Screw the Jones'.** One of the worst things you can do is try to keep up with the Joneses'. While they may appear to be happy with their little gadgets and awesome toys, the truth behind the showing off is that the Joneses' are going broke. Believe me, I know because I am a Jones.

MOMENTARY TANGENT:

"Keeping up with the Joneses" is one expression I was confused by during my childhood and adolescence. Because I'm a Jones, and my family was cheap. We used to water the lawn with the suds water in the sink after washing the dishes.

  6. **Understand that your debt hurts you both.** In a marriage, when you go into debt and your credit score starts to slip, it also hurts your spouse's credit score too, especially if you have them as an "Authorized User" of your account.

  7. **Keep separate checking accounts.** Opening up a joint-checking account together sounds like the ultimate gesture of trust and so romantic. Watch the movie Original Sin and see where this can all go wrong. I'm not saying never have one. It might be a good idea to have a joint account that you both use to pay the bills and each contribute to. But it's also a good idea for the both of you to keep separate ones for yourself so that you have the freedom to purchase some small items for yourself without dipping into each other's money.

  8. **Can you afford to start a family?** The financial impact of a child is far greater than just another mouth to feed. You have to take into consideration if she will be able to take paid-maternity leave and if not, can she afford the time off to give birth? Will one of you have to quit working to stay home and raise the kids? Then there's the cost of clothing, school, insurance and don't forget the demolition crew a kid can be.

## Financial Trap #4: Diversifying*

" **BUT EVERY FINANCIAL ADVISOR TELLS YOU TO DIVERSIFY! ARE THEY ALL LYING?"**

Did you notice the asterisk right next to the word? The question isn't "are financial planners lying to you", the question is "are you really diversified?" You buy a thing called a mutual fund, which your broker says is well diversified. And that's a bad joke.

Even though I'm saying you're better off staying away from mutual funds all together, it's important to know what one is in order to avoid things similar. A mutual fund is a professionally managed investment that's diversified in paper assets. It works like this, you give about 5 to 10 thousand dollars to a professional investor, and they put it work in a variety of different investments like stocks, bonds, and money markets and they manage it as well as they possibly can to keep the fund healthy and earning something in return. The idea sounds great. You may not know what stocks or bonds to pick, so you hire someone else to do that for you. But the problem is that if that someone else wasn't making a killing in doing it, they wouldn't be doing it. And the killing they make is at your expense.

MOMENTARY TANGENT:

You buy these mutual funds from a broker. A more appropriate name for them would be Joker. They care as much about your money as the Joker cared about the mob's money in _The Dark Knight_.

"Don't put all of your eggs in one basket" they often say. When a broker or manager tells you to diversify, it's because they don't know which investments will be successful and which ones to pick. It's a security measure they take. Diversifying is nothing more than admitting ignorance and playing it safe. They tell you it's safe because if one stock goes down, you're invested in another that could go up and balance out.

But what about a full system crash? Your 401(k) is invested all in paper assets. That's not really diversifying. And legendary investor Warren Buffet does not diversify. He says that "Diversificiation is a protection against ingnorance. It makes very little sense for those who know what they are doing."

Did you know that there are more mutual funds than stocks? So investing in multiple mutual funds is investing a lot in the same stocks, so if one goes bad, that hurts all the mutual funds. Consider this analogy: investing in multiple mutual funds could be just like drinking a variety of drinks that all contain alcohol. Too much of that and you know what happens.

Each vehicle you invest in must be different on both the inside and outside (by that I mean it must be in a different asset class). The vast majority of financial planners sell only paper assets because that's all they're licensed to sell you. They don't sell Real Estate, businesses or commodities. So it's not true diversification.

The great thing about stocks and paper assets in general is that they are all very high in liquidity. So why would you ever want to invest for the long term? High liquidity also means high volatility, which makes things risky. Liquidity and volatility are tied together because when something is so easy to buy and sell that anyone can do it, then anyone and almost anything can influence the price. There are 3 problems with investments in volatile markets, like the stock market:

  1. The wider the swings in an investment's price, the harder it is emotionally to not worry,

  2. When certain cash flows from selling a security are needed at a specific future date, higher volatility means a greater chance of falling short, and

  3. Higher volatility of returns while saving for retirement results in greater chances of the investment's final value disintegrating.

FINANCIAL JARGON TRANSLATED:

**Liquidity** \- the ability to sell an investment quickly and convert it to cash. Your savings account has high liquidity. Real Estate however is not so liquid because it takes time to get money out of it and sell.

**Volatility** \- a measure for variation of the price of a financial instrument over time. In a volatile market, prices go up and down dramatically, making the charts look crazy.

The reason so many people think the stock market is risky is because they do as their financial planner tells them to do¬: invest for the long term. By doing that, you expose yourself to more volatility than you would by investing for the short term with focus. While investing for the long term, you are at the mercy of this:

How can you predict and plan your way in and out of this?

This is why I say that the 401(k) is the gun used in the mugging of America. Financial planners tell you to stash away 15% of your income into it. That 15% can be quite a lot and when combined with your other expenses, such as necessities and bills for the cost of living, you're not left with much.

It's almost as if you spend your whole working life poor for the promise of being well off in retirement. But your 15% of earnings is exposed to the volatility of the stock market for 40 years. There are going to be many crashes and downturns in those years, thus your savings could be easily wiped out. Even if there is a substantial amount left when retirement time comes, it is taxed as earned or active income, which is a high rate. What are you left with? Social Security? If you're my age, you can forget about it.

New Rule for Riches #4:

Don't diversify. Instead, focus.

The people getting rich today did not get rich by investing in mutual funds and by being well-diversified in paper assets. Stocks, bonds and mutual funds are vehicles for preserving wealth, not for creating wealth. Instead, the people getting rich today focused on things they knew that could make money from, like eBooks and info-products, monetized blogs and affiliate marketing.

## Financial Trap #5: Saving

This final trap that I write of will probably anger many. But saving in today's world with today's money is losing in the long term. You know the rationale behind saving, that it's best to prepare for a rainy day. There are two problems with that kind of thinking. First, if you prepare for rainy days, guess what you'll have a lot of? Rainy days. Second, the Federal Reserve Bank is out to get you, sort of.

If you are familiar with economics, you know that the Federal Reserve Bank, aka the Fed, is the institution that controls the money supply. They are the ones that print the physical dollar bills on cotton and pass it out to the banks which then pass it out to businesses, home buyers, and perhaps even you in the form of loans. The problem this creates for you if you're a saver is that the value of your money is going down. As the Fed prints more and more dollar bills, the purchasing power of the dollar bill goes down, provided that the economy hasn't expanded enough to absorb those new dollar bills.

They measure the expansion of the economy through the M1, M2, and M3 counts. If this sounds like complex financial jargon, making no sense to you, don't worry. This will all be explained and illustrated in vivid detail for you. But remember, when new money is printed and the economy hasn't expanded enough to absorb it, what we have is inflation, and inflation is what turns savers into losers.

Figuratively, this is what inflation does to your savings.

Your bank doesn't pay you very generously in interest on your savings. At best, you can get about 2.5%. And you can take this fact to the bank with you, no savings account interest rate will ever be higher than the rate of inflation. Furthermore, you'll have to pay taxes on whatever money you make in interest on your savings. Here is one of the many areas where the government really screws you.

The people getting rich today are not doing it by saving either!

BEAR IN MIND:

Inflation is an unavoidable fact of economic life. The economy will always expand in the long run, thus more money must be printed to absorb that growth. And even in contracting economies, the Fed tends to print more money to keep the economy afloat during a recession. They call it quantitative easing (a very dumb idea). Bottom line, you can't change the Federal Reserve or monetary policy. But you can change yourself.

Your dollar bills are depreciating. And the government penalizes you for saving with taxes on what little interest you earn19. Furthermore, the businesses that want you to spend realize you are trying to save, so they have found ways to turn savers into suckers. I've listed them here:

**Free-falling.** The "for Free" thing is one good trap. I don't mean legitimate promos like Ben & Jerry's free cone day on April 12. I mean things like buy-one-get-one-free deals or "free shipping with a $100 purchase." These are just tricky gimmicks they use to get us to spend more than we should. When something is free, we falsely assume that there is no downside. It's a dirty trick on your mind.

**Bulk-crap.** It's conventional wisdom that buying in bulk is cheaper. The cost per-unit of an item at Sam's Club or Costco isn't marked up as high as it is at the grocery store. Here's the catch, though. Let's say you're buying food in bulk, with more food around you, you'll tend to overeat. Just like the financial thermostat analogy, there's one when it comes to food. You'll adjust to eat however much is in your fridge. The reason these stores exist is to serve the convenience store owners who will then mark up the price and charge you. The same goes for coupons. Yeah, their often not a problem, but you could end up with too much of something. And don't drive out of your way to use one. 50% off of something may not be worth driving 15 miles, burning up gas.

**Warranty rip-off.** When it comes to electronics, retail stores don't make very much money from them, because in order to compete with online retailers, the prices have been greatly reduced. The big retailers make their big money on warranties, service plans, and other protections. And the profit from those plans can reach at least 50%, largely because the consumer has little chance to make a claim on them. Andrew Eisner of Retrevo.com says "Electronics tend to fail either in the first 30 days or not at all." And the first 30 days is covered by the manufacturer's warranty. So there's really no need for extra protection from the retailer. However if you want extended protection, go through the manufacturer directly. They give you 30 days from the purchase date to buy extended coverage that you can actually make a claim on.

New Rule for Riches #5:

Don't save your money. Leverage your money.

Leverage simply means to do more with less, but not by being cheap. Remember Jesus' parable of the talents? That was leveraging money. Leveraging money is taking $100 and turning it into $150. A good idea that almost anyone can do is become a lender.

BEAR IN MIND:

Don't be stupid though! DO NOT just give your money out to anyone. Have you ever taken out a payday advance from places like AMSCOT? Do everything that they do. Use contracts and get as much personal information from the borrower as possible, as well as ID. For large sums, you might want to get collateral too.

In the UK, there's a peer-to-peer lending network website, Zopa, that has this set up already. For the US, there currently isn't one that I'm 100% sure about. I'm not saying that peer-to-peer lending is bad, I just don't trust it yet. The default rates on the loans are still high and there's hardly any recourse that can take place. In February 2007, 45% of the loans went bad23. But this eBay style approach to lending, I do believe, will be the way of the future as trust in banks is eroding. The market simply hasn't adjusted to this new fad, so I suggest staying away for now. It's better to make loans in person and get collateral.

This is a way you can legally print your own money like the Fed. The difference is you're figuratively printing, and actually backing it up with something if you get collateral.

MOMENTARY TANGENT:

There is one form of saving that is good for you: getting the most you can out of a depreciating item. Instead of buying a new car every five years, keep the same car for 15 years until it falls apart. According to Consumer Reports, if you are willing to drive your car past 225,000 instead of buying a new Honda Civic EX (their example car) every five years for that same span, you could save yourself $20,500 in costs. That's not chump change.

#  Debunking Every Myth You Ever Heard About Money

" _Money itself isn't lost or made, it's simply transferred,"_ – Gordon Gecko from the Movie Wall Street.

This statement spread the common myth that "when the rich get richer, the poor get poorer." If you believe that, you believe that creating wealth causes poverty. By that logic, you would also have to believe that shining a flashlight spreads darkness, and you're an imbecile. Money is not a finite resource anymore than man's ability to work, invent new things, and come up with new ideas. Ever since we left the gold standard in 1971, money has just become a certificate for something of value, an I-O-U. Is there a limit to the amount of value in the world? Do we need to gather up all the value on the planet, make it into one big pie and slice it up for everyone proportionately? Even if we could, that would just make us all equally miserable.

Why is it that when a third world country becomes a first world country, a first world country does not become a third world one? When the United States (or Singapore is a better example) gets richer, the poor nations now have someone they can borrow from and catch up on their economic development. When one gets rich, it helps everyone.

Do I even need to mention that millions of new dollar bills are printed every day? There is no set amount of money in the world.

That is just one of the popular beliefs about money out there these days. There are many others that are totally wrong. The following are the most widely held beliefs about money and all of them are false:

**MONEY IS THE ROOT OF ALL EVIL!** If you are a religious person, you've probably heard this. But the actual phrase is "the love of money is the root of all evil." The problem with this is that money is merely a means to a result, whereas evil itself is a result. Money is neither good nor evil. It only is what you do with it. Cars kill a lot of people, but in the end the car is not responsible, only the person driving it. Money is also the root of all charity. No church, charity, or hospital could exist without money.

**MOST RICH PEOPLE PROBABLY DID SOMETHING BAD OR DISHONEST TO GET RICH!** If being bad or deceitful was all that it required to get rich, wouldn't most people be rich? Because we all know how to be bad and deceitful. This belief is widely held because of media. Most rich people on TV and in movies are portrayed as evil, but the reason why that is isn't because that's true to life. It's just a more exciting story when the villain has a greater advantage over the hero and money is one hell of an advantage. But the only good guy I can think of on TV that was rich was Bruce Wayne/Batman.

**GETTING RICH TAKES TOO MUCH WORK AND STRUGGLE!** Whoever says this obviously hasn't heard of passive income. The paycheck you get from your job is earned income because you have to work for that. But passive income is money that you do little work for or none at all. It just keeps coming in each month. All you do is collect. And best of all, while earned income is taxed up to 50%, passive income is barely taxed, if at all. Later on, I will show you examples of passive income anyone can have.

**HAVING MONEY REQUIRES TOO MUCH RESPONSIBILITY!** While it is true that one must be responsible and disciplined to manage wealth, it requires less responsibility than that of working a job just to get by. The employee's lifestyle of showing up on time, meeting appearance standards, obeying rules to the letter, and meeting their deadlines for their bills requires more responsibility than simply sitting down with an accountant to manage wealth. Is the weight of responsibility and stress not greater when living paycheck to paycheck?

**GETTING RICH IS A MATTER OF LUCK OR FATE!** If that were true, how was Donald Trump able to get back to being a billionaire after being nearly one billion in debt? In order for him to recover, there must be a science to wealth. He must have known something that lottery winners gone bankrupt didn't know. We're conditioned to think this way because the rich are called fortunate and the poor are called unfortunate. I say it's not a matter of fortune, but formula. I will show you the formula.

**TO BE RICH, YOU HAVE TO USE PEOPLE AND TAKE ADVANTAGE OF THEM!** A lot of the rich are business owners and entrepreneurs. In order to succeed in business, you have to create a good or service that people voluntarily want to buy. Consumer purchases are not forced. Katy Perry gets a lot of my money. She doesn't steal it. I give it to her willingly, because she puts out music I want to hear (actually, music videos that I want to look at and the songs just end up catching onto me). So she's in a way, obeying the golden rule; do unto others as you'd have them do unto you. In order to be rich, you must obey this rule.

**IF YOU HAVE A LOT OF MONEY, THAT MEANS SOMEONE ELSE IS GOING TO HAVE LESS.** I think I debunked this one earlier, but this is the most common lie spun from complete ignorance of the monetary system, so it bears repeating. Everyone has the wrong idea that there is only a finite amount of money in the world, like a pie chart that you can only have a piece of. But the reality is that it's not a pie chart, it's a pie factory! How can you assume that the wealth of some causes the poverty of others? Does the health of some cause the illness of others, or the intelligence of some create the ignorance of others? Did Steve Jobs and his crew get rich by stealing iPad's from homeless people? Hell no! They're printing more and more money every day. The question is, are you creating or producing something equivalent in value to earn some of that new money printed every day?

**HAVING EXCESS MONEY MEANS YOU'RE GREEDY.** The idea of greed is quite unique because it seems only to apply to money matters. Look at it from this perspective, is the scholar not greedy for knowledge? Is the athlete not greedy for victory? Is the body builder not greedy for muscle? Or the hopeless romantic, are they not greedy for love? All of these things can be used for good or bad. And after debunking the last myth, you know that you're not taking away from others.

**MONEY CAN CAUSE A LOT OF PROBLEMS.** Only if you mismanage it. In The Recession Survival Guide, I will show you how to best manage it. Once you can do that, money can solve a lot of problems. Besides, doesn't having little or no money cause a lot more problems?

**IT TAKES MONEY TO MAKE MONEY.** This one is kind of true. You can't make money in stocks without putting up money to invest. You can't start a business without capital. In order to make big money, you do have to put money down. But not big money down. The fact of the matter is that money is just an idea and ideas alone can be sold for money. I've once saw an investor make $10,000 in one day with just a piece of paper, a contract. This trick he pulled is called Wholesaling Real Estate.

**YOU SHOULD NEVER HAVE MORE THAN YOU NEED.** Your parents probably taught you this; that you should never want more than you need. Ironically, didn't they always tell you to eat up and finish your plate because other kids were starving in Japan? Chances are you probably have way more than you need right now. Do you really need all the clothes you have, all the channels on your TV? All the furniture you own? Ladies, do you really need all the shoes you own? Gentlemen, do you really need season tickets? Furthermore, living on minimal means hurts the economy whereas going all out helps it expand, creating more jobs for people.

**IT'S DIFFICULT TO GET RICH IN A BAD ECONOMY.** This one is perpetuated by the fact that employees are less likely to get a raise in a bad economy. But an employee never gets rich as an employee. Most think it's risky to start a business in a recession. But the only reason you should ever start a business is in you can fill a need or solve a problem because otherwise the business won't last. Which economy do you think has more problems and needs, a good one or a bad one? In a bad economy, there are more problems and needs which equals more opportunities.

**MONEY IS NOT AS IMPORTANT AS LOVE, HEALTH AND HAPPINESS.** How can you make such a comparison? It's like asking what's more important, your lungs or your heart? While they both serve different purposes, they're both important!

MOMENTARY TANGENT:

An example of how counterproductive it is to think that money is not important: if you told your wife or husband, boyfriend or girlfriend that they were not that important, would they stay with you? No! Neither will money. If it's not important to you, why would you have any?

**YOU HAVE TO BE VERY, VERY SMART TO GET RICH.** Many rich people dropped out of college, high school, or never even went. I could write a very long list here for you, but I think it's all summed up best by this one fact: Sidney Weinburg, the managing partner of Goldman Sachs, also known as Mr. Wall Street, dropped out of the 7th grade.

**MONEY CORRUPTS ARTISTIC ENDEAVORS.** Can these endeavors be achieved without money? Probably not. Canvases and paint cost money. The movie industry spends obscene amounts of cash to make the pictures. Thus money aides them.

**IT'S NOT RIGHT FOR YOU TO BE RICH WHEN OTHERS HAVE NOTHING.** How does you having nothing help them? Wouldn't it be better to get some and share?

**MOST INVESTMENTS ARE RISKY.** Some investments are risky. But for the most part, that's just something investment brokers tell you so that you'll buy their investment. Very few brokers even invest themselves, and rarely in the same product they sell. They simply live on commission. But most of these investments like mutual funds, bonds, money markets, and certificates of deposit which yield about a 3% return are a con. The fund manager takes your money, puts it in an investment with a 10% return and takes more than half of it for himself. Wouldn't it be better to just know how to do it yourself? If risks made people rich, we'd all go to Vegas, not Wall Street.

**MONEY CAN'T BUY PEACE OF MIND!** This is widely believed and was embodied in a story that was spread around to millions through email forwarding about a decade ago. The story goes like this:

## Happy Feel-Good Story Time!

An investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large tuna. The banker complimented the Mexican on the quality of his fish and asked how long it took to catch them. The Mexican replied, "Only a little while." The banker then asked why didn't he stay out longer and catch more fish? The Mexican said he had enough to support his family's immediate needs.

The banker then asked, "But what do you do with the rest of your time?" The Mexican fisherman said, "I sleep late, play with my children, have sex with my wife, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life."

The investor scoffed, "I am an Ivy League MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, and eventually you would have a fleet of fishing boats. " The investor continued, "And instead of selling your catch to a middleman you would then sell directly to the processor, eventually opening your own fish market!"

The Fisherman asked, "How long will this all take?" To which the banker replied, "Perhaps 15 to 20 years." "But what then?" asked the Mexican. The banker laughed and said, "When the time is right you would announce an IPO and sell your company stock to the public and become very rich. You would make millions!" "Millions. Okay, then what?" wondered the Mexican. To which the investment banker replied, "Then you would retire. You could move to a small coastal fishing village where you would sleep late, play with your kids, have sex with your wife, and stroll to the village where you could sip wine and play guitar with your amigos."

******

That story makes it sound like money doesn't matter at all. If only that were true. If only everything else in life would remain constant and the only expense you'd ever have was providing food for yourself and your family. But what about unexpected expenses? Like sickness? Or tooth aches? Doctors and dentists don't work for free. How are they going to be able to enjoy their life of material nothingness when they have an agonizing ache in the mouth or blood clots in their legs? Also, he only caught enough to feed his family. Where does the family stay? Cause wherever it is, it must require paying rent or a mortgage.

They stay in a straw hut that the fisherman built from scratch and don't have any health concerns like diseases from bugs that could crawl in. Yeah, right!

There's no such thing as the "simple life" for poor people because you'll always be worrying about how you'll pay the bills. This is what living paycheck to paycheck is really like. You look at all your expenses like food, gas, phone, water, electricity and rent and wonder which one you can be late on without them cutting you off or kicking you out. And then you have to think about what you can survive without. Where's the peace of mind in that?

If you make just enough money to cover your current monthly expenses and not a cent more, what happens when your car breaks down? How do you have peace of mind when you have to pray after each time you buckle your seatbelt and turn the key in the ignition?

Isn't there peace of mind in knowing that if you lose your job, you have resources to fall back on? Imagine the peace of mind that comes with not needing a job, being unemployed by choice because you don't need employment.

**THE BEST THINGS IN LIFE ARE FREE!** There's been this saying that money can't buy the simple pleasures in life. So what exactly are those simple pleasures? A good night's sleep? A fun time out with your friends? Or true love? Let's look at all of them.

Starting with sleep, while the activity itself is free, in which scenario will you rest easier?

**Scenario 1:** Bills have not been paid, nor have you made enough money yet to pay them. Your food supply is running low. Your car is old and could go out on you at any time. And your house is in a poor neighborhood with just a mere lock on the front door. Anyone could break in to steal from you or do worse.

**Scenario 2:** Your bills are all paid on time and you have enough money to pay them 6 months in advance. Your fridge is filled, so much that you donate some food to the soup kitchen each week. Your car is new and under warranty and your house has locks, alarms and a guard dog, plus all of your valuables are in a safe.

Why, scenario 2 of course! How could you sleep in such a state of both financial and physical insecurity laid out in scenario 1?

A WISE MAN ONCE SAID:

" _It is better to go to bed sleepless than to rise in debt."_ –Benjamin Franklin

Also, the quality of your life largely depends on how well you sleep. Not getting good quality sleep can make you very irritable and grumpy. Which bed do you think you'll get better sleep on: a cheap old mattress where the springs are sticking right into you, or a tempurpedic?

If this girl came with it, I'm not sure I'd sleep at all.

Sure you can sleep on anything when you're young, even on the floor. But when you get old and starting dealing with chronic back problems, a comfy bed is the difference between a painful, miserable morning and a delightfully chipper morning.

Now onto spending time with your friends. Sure, that doesn't cost money, providing they live in close proximity to you. Let's say your BFF has to move across the state because of a job offer. Now all the sudden, seeing them costs you $50 in gas and you better hope nothing happens to your car on the way over there like a flat tire. Then there's also the matter of getting time off from work, and making sure the both of you can get the same time off.

The same goes for true love. Are you very compatible with many members of the opposite sex living within close proximity to you? Dating websites claim they can match you up with someone absolutely perfect for you. But what happens when that perfect someone turns out to be miles and miles away from you?

Imagine two people who met online and are totally in love with each other after various video chat sessions. The woman decides to move in with him, but that means moving to a state where she knows no one but him and has no job. He better have some damn money to support her! Sure, money doesn't make someone feel they're in love with you. Sure it brings you gold diggers. Sure, it causes a lot of divorce. But the lack of money can certainly prevent true lovers perfect for each other from getting together.

You wouldn't be able to do this if these two pages were in different parts of the book, just like two lovers in different parts of the world.

There are many movies and songs that tell you money doesn't matter. But you have to understand that they were written by people with money for other people with money to remind them that money won't solve all of their problems. But it still matters.

All of those bold statements are just that, statements. Nothing more. They only have the power you give them. They're only true if you believe them to be. Need an equation to settle this?

Consider the following:

This is the process of manifestation. What you think about dictates how you feel. As emotional creatures, the way we feel most often dictates how we behave which ultimately dictates the circumstances you find yourself in. The physical reality we exist in is like a giant hologram that is constantly reflecting and supporting the being you believe yourself to be. If you believe that life happens to you, that you're problems are bigger than you, and that you'll never be rich, you're right. If you believed any of the red statements to be true, then true they are, at least for you. If those statements mirror your thoughts about money, then they will influence your feelings toward it, which will manipulate your actions involving it and in the end, determine your results and situation when it comes to money.

A WISE MAN ONCE SAID:

" _Whether you believe you can or you can't, you're right."_ –Henry Ford

In order to change your relationship with money, you must change your mind when it comes to how you think of it. You can't solve a problem with the same mind that created it. Some things to remember when analyzing your thoughts:

  1. Nothing has any meaning at all except for the meaning you give it.

  2. Don't believe a thought you have. It's only a thought, not a fact. Scrutinize the hell out of it.

Your minds primary function isn't to make you happy, healthy or rich; it's only there to protect you and keep you comfy. Therefore, you're going to have to do some fighting with it.

#  Money is Not a Physical or Tangible Thing

The first and most important thing you must come to understand is that money, while it may be the lifeblood of your lifestyle and ability to function, it's really nothing more than a concept or a simple idea. One thing I pondered on for a long time: what exactly is it that makes money valuable, anyway?

Prior to 1971, money was a certificate for precious metals like gold and silver. You could take you money to the bank at any time and trade it in for gold and silver. This is known as the gold standard. But in 1971, President Richard Nixon took us off of the gold standard. Today, dollar bills, Euros and currencies of every sort are practically backed by almost nothing. So why are they valuable? Because they are certificates of exchange or trade. They are IOUs.

Originally, before there was money of any sort, the first system of trade was barter. Barter is a very simple system: trading a product or service for another product or service. If a blacksmith wanted a cow, he'd make something in his shop for the farmer who owned the cow and they made the trade. Obviously, this system has very tight constrictions. So as people evolved with wanting and needing different things, money evolved along with them.

To increase economic freedom, people mutually agreed that certain tangible items were of value to all. Among these items were food, cattle, colored gems, goats, gold and silver. Rather than the blacksmith making something in his shop for the farmer, he merely had to give the farmer silver coins for the cow, thereby speeding up the process of exchange. Then people came across a new problem. What happens when these circulated items become scarce in certain regions?

MOMENTARY TANGENT:

In Ancient Rome, soldiers were often paid in sacks of salt. The Latin word for salt is sal, which is the root of the word salary.

That was when certificates were made, which are like what dollar bills are today. The wealthy held the bulk of the gold and silver. Since they didn't want to constantly carry that around with them all the time and make themselves a target for theives, they'd leave it with someone they trusted, who'd write them a certificate or receipt that they could use for exchanges. This was the start of banking. It started out simple and was very convenient for all in speeding up the process of business. Then the process got complicated when fractional reserve banking hit the scene.

FINANCIAL JARGON TRANSLATED:

**Fractional Reserve Banking** – a form of banking where the bank maintains reserves that are only a fraction of the customer's deposits. Funds deposited into a bank are mostly lent out, and a bank keeps only a fraction of the quantity of deposits as reserves.

This is how banks "print" new money. As you can see, $100 can become $171.

Bank vaults then were filled up with commodities that ended up never being used. Why carry around heavy bars of gold when you could carry around light pieces of paper that were just as good? Banks decided that if people only needed the receipts, why not just issue receipts alone without taking in cattle, goats, and gold? That was the birth of lending. A bank would loan out money by printing more receipts, though there was nothing to back them. The loaned money would be paid back to the bank by interest accrued payments, which they thought was sufficient backing for the newly printed money.

MOMENTARY TANGENT:

Ever played the board game Monopoly? One of the rules of the game is that "the bank never 'goes broke'. If the bank runs out of money, it may issue as much more as may be needed by merely writing on any ordinary piece of paper." This is true not only of the game, but in real life. If the bank runs out of money in the game, the players won't be able to continue. If the banks in real life run out of money, the economy wouldn't be able to continue.

Today, the way a bank "prints" even more money is through credit cards. I put quotation marks around "prints" because it's not really printing. A lot of the money supply is digital and stored in computers. When you charge say $100 on your credit card, that $100 doesn't come from your bank account or anywhere. That $100 is literally created right there when the charge is made and added to the economy. So a big bang of financial expansion occurred when credit cards came about. Sounds like a house of cards, doesn't it? All this new money being made on the spot with nothing but promises to back them up? Well, it kind of is. But this ship has stayed afloat for quite a while. Of course it has been aided along by tax payer money, which is what the Troubled Asset Relief Program, or TARP bailout, was as I'm sure you may remember from 2008.

The banks also have someone creating money for them the way credit cards create money for us, the Federal Reserve Bank, which isn't Federal (it's privately owned), isn't a reserve (it has no money supply of its own), and isn't a bank. Its stated job is to make sure that the money supply matches the size of the economy, which is a very difficult task it never accomplishes perfectly, hence inflation.

While the Fed is the primary "creator" of money because they can print it in mass amounts, figuratively anyone can create money. Money is nothing more than a certificate for something of value, like goods or services. So if you can create a good or service that people want to buy, you have "printed" money of your own, because your good or service has expanded the size of the economy, thus the Fed must print more dollar bills to cover it.

But the majority of us do not create goods, but rather provide service as an employee for someone else, for which we receive a paycheck. However, if you can create something of value, you'll have a paycheck for life. This is why we have the old saying, "Give and you shall receive."

#  The Honorarium Theorem

Most people think that the golden rule is "He who makes the gold makes the rules." But I say it is "Do unto others as you'd have them do unto you." The honorarium theorem is similar: "give and you shall receive". This is the ultimate law of rewards. If you want to get what you want, you must give others what they want.

If I want someone to smile at me, I smile at them first. If I want my hand shook, I extend it out. If I want a friend, I have to first be one. If I want money, I have to first offer value. You perform work for your boss first, then collect your paycheck. This is the honorarium theorem. Give and you shall receive. When you buy a cup of coffee, the kid behind the cash register says "Thank you" and you say "thank you" right back. You both got something you wanted. You both won.

New Rule for Riches #6:

You do not amass wealth by taking. You amass wealth by giving (through producing and creating).

This formula of giving to receive works in exact parallel. An employee, such as cook or a clerk, provides service only to so many people a day. Since they can only be in one place at a time, they can only serve one person at a time. A waiter or mechanic knows this as well. However many people they serve dictates how much they will receive for their service. But their earning potential is limited because they can only serve one person at a time. A doctor cannot perform two surgeries at once. An anchorman can not cover two stories at the same time. That one patient or one story is figuratively their employer. So in order to expand their earning potential, they must find a way to serve more people.

A business owner obviously makes more than their employees because they are serving more people. Especially now with the expansion into the world market, profits are record breaking because businesses are able to serve more people going beyond borders and overseas. Mark Zuckerberg became a billionaire for this reason. Originally, Facebook was just for Harvard students. Then he decided to serve more people and now millions of people all around the world use Facebook.

Employees for the most part trade their time for money, but the real rich people, the business owners, create things of value and trade them for money. The trouble with trading time for money is that you have a limited amount of time, thus you have a limit on what money you can make from that. But there is absolutely no limit on what you can create. In some cases, you won't even have to create it, but just come up with the idea and sell the idea. That is why I saw money is just a concept, because concepts alone can be sold for money.

Napoleon Hill titled his self-help book Think and Grow Rich. The key word is Grow. The key is expanding your reach of how many people you can serve, how many needs you can fill, and how many problems you can solve. Expanding like the roots and branches of a tree. All of these things are directly proportionate to how much money you can make.

Some people assume that the rich work harder than everyone else. The truth is they don't. They just found or created something of value and sold it to the masses. Some people also assume that the rich are way smarter than everyone else. But they are not. They just have better money managing habits. They have it down to a formula.

#  The Formula for Fortune

Engineering majors and graduates often want the money making process put into a formula, because their field is a world of formulas and measurements. It's very hard to formulate the money making process because no rule always works. But the money managing process can be very formulaic.

Income > Expenses + Assets > Liabilities = Wealth.

This formula can be applied and kept track of with the help of an Income Statement, which looks something like this:

The income of course if probably your job or anything that puts money in your pocket. Expenses are any of the things that take money out of your pocket (bills and such). So it may look more like this:

Seems simple. But there's far more to this formula than simple budgeting. After all, you'll never build wealth by saving money. You build it by spending money, but spending it on the right things is what most people don't do. The key difference between the rich and poor is that the rich buy assets, the poor buy liabilities. What exactly is the difference between the two? Assets put money in your pocket, whether you work or not; liabilities take money out whether you work or not. The single greatest way to determine whether something is an asset or liability: stop working and your assets will keep you afloat, but your liabilities will try to drown you. That's where the balance sheet comes in, which looks like this:

For most people, what they do with their income state ment and balance sheet is this:

After their living expenses are paid, they use the rest to buy liabilities. These liabilities can be anything from new furniture, a cooler phone, a computer, a car and even a house. They don't sound like liabilities to most people because they are useful, but the bottom line is that they take money out of your pocket, depreciate over time, and probably have more costs rack up in the future. For example, a car requires maintenance, gas, insurance and tags. Those costs add up and take money out of your pocket. And a house, don't get me started. But what the rich do is the opposite.

They use their income to buy and build investments (such as monetized blogs, eBooks, info-products, tax lien certificates, etc.) and then use the money the asset gives them to pay for expenses. Then the mega rich do this:

They generate enough money from their assets and use it to supplement their income and retire. This is achieved with what is called passive income. This is where you want to end up. Because with a system like this in place, you never have to work again.

  * Active Income: Money that you earn by working. This comes in the form of a paycheck and is taxed at the highest rate.

  * Portfolio Income: Money made through capital gains, such as trading stocks, or selling a house that appreciated after you bought it. This money is taxed at a rate between 15 and 20%.

  * Passive Income: Money generated by a system you created such as book sales or website membership subscriptions. This money is taxed only up to 5%.

#  The Four Ways to Make Money in America

Too many people are taught that to make money, you need to get a good job, which is true, but it's not the whole truth.

New Rule for Riches #7:

There are four ways to make money in America.

1. Work for someone else.

2. Work for yourself.

3. Have others work for you.

4. Have your money work for you.

The last two ways make the most money.

In the interest of making this as non-boring as possible, and since I'm a huge comic-book geek, I'll use a superhero metaphor, and with lego men! Yes, I am that geeky.

Who do you want to be?

Take a good look at the picture. There are five sectors:

A. The X-Men

B. Batman

C. Professor Charles Xavier

D. Wayne Enterprises

C. &D. Bruce Wayne

Five different sectors for five different people, but all of them have the same goal: stopping bad guys. They are super heroes after all. All of them stop bad guys in their own different ways. Some are more effective than others. The effectiveness of their ability is measured entirely by the sector they inhabit. Let's explore each one. For the purpose of this illustrate, let's equate stopping bad guys with making money.

In sector A, we have the X-men. They are a team of many different and unique individuals with their own unique power. Wolverine can heal from any wound inflicted upon him, Cyclops shoots lasers out of his eyes, Rogue drains power from others, Storm controls the weather, etc. In essence, they are employees. They work for Professor Charles Xavier. Just like how all the employees of one company are all different and serve different functions, the same is true of the X-men. A company needs accountants, legal advisors, managers, and of course manual laborers. The employees of that company earn their money in the form of a paycheck or salary. Working for someone else, just as the X-men work for Professor Xavier, is probably what you already do if you are an employee.

The problem with both of these is there's a limit to how much you can make, just as there's a limit as to how many bad guys each individual X-man can stop. A salary is the same whether you work more or less. Hourly is trading your precious and limited time for dollars, and most employers forbid overtime so you're limited to 40 hours a week. An individual X-man cannot stop that many bad guys and an individual employee cannot make that much money, so they can't become rich.

Although Wolverine is heavily invested in precious metals.

In Sector B, we have Batman. He does the same thing the X-men does, stopping bad guys, but he does it all on his own. He doesn't work for anyone but himself just like someone who is either self employed or is a small business owner or a specialist like a doctor or lawyer. The good side is they have control over their work and income. Batman has full control over what bad guys he wants to pursue. These people are often very well educated and specially trained as we expect doctors and lawyers to be, and as we saw Batman was in Batman Begins when he learned from ninjas.

The downside is that most of them find they work themselves to death, just like Batman (remember early into The Dark Knight when he falls asleep during a meeting). Batman can only stop one crime at a time just as a doctor can only operate on one person at a time and a lawyer can only take one case at a time. They have limits as well. They have a tremendous amount of freedom, but little to no time to enjoy it. They may even make a lot of money too, but they end up having to pay more in taxes.

Sectors A & B are the only sectors that school prepares you for. They do not teach you how to be part of sectors C & D. That's what this book is for because that is where the real earning potential is.

In Sector C, we find Professor Charles Xavier. He is incredibly skilled and has immense power. He can read men's minds, control what they think, and make them do whatever he wants them to do. Now in order for him to stop all of the bad guys in the world, this is going to require a tremendous effort on his part if he's going to do this on his own, even with his great power. But what he does instead is he Leverages himself. He brings in others (the X-men) to work for him and do his will. He builds systems and machines (Cerebro and the Blackbird) to aide him and his quest of stopping bad guys. Just like an employer must train the employees under him, Xavier trains the X-men working for him, that's what the Danger Room is for. He works for himself by having others work for him, an entrepreneur and business owner.

This is a summary of just a few of the problems that Batman has to solve, all on his own. As you can see, it's a heavy load for any individual.

Here, you see all of the problems Professor Xavier has to deal with. But here's how he deals with them:

Xavier leverages himself by employing others to solve more problems, so he can take down more villains than just Magneto, who also leverages himself.

The key difference between Xavier and Batman is that Batman simply owns a job, but Xavier owns a system. Therefore, Xavier can stop more bad guys than Batman. And as you can see, the job that Batman owns really seems to own him as it takes up all of his time. But Xavier can literally sit back and relax in his wheelchair as the results of his efforts pour in, just like a business owner can sit back and relax as the money pours in from the business system he built.

"With all the X-Men out working for me, I can sit back, relax and spy on pretty girls with Cerebro!"

Who doesn't want this lifestyle?

Xavier doesn't even have to be out there supervising the X-men as they stop bad guys. It's a system that's nearly automated. That's a huge difference between big business owners and small business owners. The small business owner often has to do a lot of the work himself. Now some initial work was required on Xavier's part, and on the part of the big business owner's, but it is a small fraction of the workload that Batman and the small business owner carries. Xavier has passive income.

In Sector D, we have Wayne Enterprises. While that is a company, what I am using it to represent is having your money work for you. Bruce Wayne puts his money to work in Wayne Enterprises, which develops all of the gadgets that Batman uses to fight off bad guys better, such as the grapplegun, the utility belts, the suit and bat-mobiles. What Bruce Wayne is doing here is investing, having his money work for him, which is another way of leveraging yourself. And as you can also see from the chart, the older Bruce Wayne from Batman Beyond (because when I think of investors, I think of old men like Jim Rogers, Warren Buffet and creepy George Soros) is there because he not only invests in Wayne Enterprises, he also owns it. So he's both a business owner and an investor, making him super-rich! And he hardly has to do any work because it's passive income.

Now imagine just for a second if Marvel and DC comics merged together, and Bruce Wayne partnered with Professor Xavier and allowed Wayne Enterprises to supply the X-men with the crime fighting gadgets Wayne Enterprises devised. No bad guy could ever hope to stand a chance! That is the power of leverage. In the same way, someone who does both investing and creating business systems has unlimited earning potential because they have leveraged themselves.

So as you can see, the rich are on the top of the graph in sectors C & D whereas most of everyone else is on the bottom in sectors A & B. While taxes, debt and inflation are what keep people at the bottom poor, those things keep those on the top rich. Because businesses and investors provide things like jobs and housing for everyone else (sort of like private sector stimulus plans), governments make sure that their tax laws favor these people, the producers and providers. In almost every country, the tax code favors producers and providers because they either do or fund the work that people expect the government to do, thereby making the government's job easier. Those on the top know how to use debt to make them richer. Not all debt is bad. There's actually good debt. I didn't believe it first either. And inflation is on their side too because it's how they can justify raising prices.

MOMENTARY TANGENT:

I'm not saying any of this is fair, that the rules and tax laws favor the rich. After all, this is The Unfair Edge. But remember, he who has the gold makes the rules and the rules he makes will always allow him to keep his gold. That's how it got this way.

If you are on the bottom, don't feel bad or stupid. Firstly, all five sectors are needed for an economy to function. Secondly, you were conditioned to be on that side from day one. When you were 16 or so and asked your parents for money, I'm pretty sure they were like mine and said "Go get a job!" They didn't say, "Go build a system to provide some passive income." And the reason why my high school and college graduations meant nothing to me was because all that school ever taught me was how to be on the bottom, either to work for someone else or to work for myself. So it's not your fault where you start. But it's all up to you where you end up.

YEAH, WELL HOW DO WE CROSS OVER FROM ONE SECTOR TO ANOTHER? I'M ONLY MAKING MINIMUM WAGE AT MY JOB! I CAN'T HAVE MY MONEY WORK FOR ME IF I DON'T HAVE ANY!

Absolutely true. Upward mobility has to start somewhere and a job is most likely the first place you'll start. So let me tell you how to make your job worth working by showing you how to make more money at it.

#  How to Raise Your Earnings

You work your butt off enough already and your employer is probably underpaying you. So it's time now to show you how you can get more of what you already deserve when you're overworked and underpaid. Here's a way to make your current job more bearable.

There are two scenarios under which you could attain a raise. One is if you're very good at your job, another is if you're dramatically underpaid. Let's start with the first scenario.

If you're a good employee that performs your duties very well, the worst thing you could do is march into your boss' office and do this:

When you make demands of someone else, you are evoking what psychologists call reactionary resistance or "reactance". Ever had someone else tell you "You must never do this!" and you automatically want to do it? That's reactance. It works the opposite way with demands. When you demand something, the other person automatically wants to deny it. They start thinking up reasons why they should not give you a raise. So you've figuratively backed them into a corner, putting them under pressure. And people don't like to be put under pressure, especially employers who feel they should be the ones applying pressure onto their employees, not vice versa.

There is a more intelligent way to do this. Think about the stakes you're setting. If you're an hourly associate, an extra $2 an hour compounds over the length of time you plan to be at that job into hundreds, even thousands of dollars. Is that not worth spending more time and focus on into strategically getting that raise? If you're a salaried employee, we're talking about $5-10 thousand for the year. So a smarter method is well worth the time it takes to formulate. A better way to do it is this:

Do you see what you're doing differently here? Instead of demanding something for yourself by bragging about yourself, you're making a negotiation that is mutually beneficial. You're offering to do something that helps the company tremendously, and that's all they care about in the end, not your salary needs. Also, look at the last sentence again. Who can disagree with that? You've given your boss a way out, because if you don't perform extraordinarily, they don't have to pay you. All of the pressure is now on you to do an amazing job.

BEAR IN MIND:

Your negotiation power is increased when you replace "I'd like to do an extraordinary job" with "I'd like to be able to do X, Y, and Z." List specific things you think you could do that your employer would like to have done. The more specific you are, the more measurable your results can be and the more leverage you have on your side. If you say something like "I'd like to keep costs down by 10%, increase revenues by 15% and productivity by 12%", you're showing that you're not just another employee.

There's one more step to this process, keep checking in with your boss every two weeks or so. Keep them up to date with your progress in achieving these goals. It's okay to brag in these circumstances because the news you're delivering is news they'd want to hear, like "hey, we got this and that done. It was a very productive shift. So we're on track to raise productivity by 12%." When you make this a regular thing, your boss will start feeling the pressure to write you that check.

Now there's a large percentage of people out there that are just being underpaid. First step you should take is to find out if you yourself are being underpaid. You can do so at these three websites:

  * Payscale.com

  * Salary.com

  * Glassdoor.com

There you can figure out exactly how much you should be paid based on your geographic location, your field of work, and sometimes even the exact company you work for. Two people who are dramatically underpaid are college students and women because they simply don't negotiate or don't know how to. Sometimes it may even be a self-esteem issue, not feeling worthy of more. But how often do you feel stressed by your job? How much does it bother you that your are trading so much of your precious and limited time to make someone else rich? Money comes and goes, but time is gone forever. If you're going to spend it working for someone else, you need to make sure you're being paid what you're worth.

Just like before, you need to be respectful in bringing this to your boss' attention. He probably already knows, but if you kick down his office door with data that proves your case and shove it in his face demanding more, he's not going to give it. Here's how you do it:

First, take a look at the words in blue. The start off is very positive, talking about accomplishments, contributions and ones to be made in the future. Now look at the green words. Use phrases like "It seems that I'm being underpaid", not aggressive phrases like "I'm being shortchanged!" The black words present the data to back up that allegation, and qualify yourself for the money that the research says you should be making. Finally, the red words lightly phrase the demand. "I think we could make some adjustments," instead of "Give me more money, you greedy bastard!"

After you finish saying the red words (the implied demand) to your boss, that is when you must SHUT UP! Do not utter another word. The pressure will then be on your boss to speak next. The numbers and data you presented him with have already made him uncomfortable, now the silence will make him even more so.

" **BUT I ALREADY KNOW WHAT MY BOSS IS GOING TO SAY! HE'S JUST GOING TO GIVE ME THE OLD 'TIME'S ARE TOUGH' LINE OR TELL ME THE ECONOMY'S BAD."**

It's very typical for your boss to say that. So here's what you say back to him, very calmly and respectfully:

"I certainly understand the economy is tough. It's tough on me too. But I've been making extraodinary contributions and I'd like to be compensated. As of right now, I'm not even being compensated at the average rate of someone with my experience level."

After you say that, hush it again. Let your boss be the next one that speaks.

See, the economy being bad is not your problem. That's the company's problem. An addition to your compensation is most likely just pennies in comparison to a company's overall expenses. It is their job to retain you.

MOMENTARY TANGENT:

Negotiations are not supposed to be adversarial. They're supposed to be cooperative. Don't say "You promised me more money!" They'll say "The economy's bad," or "You underperformed," or give you any other reason they can think of. Instead, say "We're in the right ball park, but just a little far apart. I'm sure we can find a number that works for both of us. I just want to make sure we have something that's fair." Who can argue with fair?

In order to optimize your negotiation skills, you need to practice. Just reading these words on a page is not practice. But to actually hear yourself saying them and determining how to say them best will help prevent you from getting steamrolled by your boss, who probably is already good at negotiating. It is also a good idea to record yourself practicing. See how you're standing and looking. Make sure you're not blinking too much or gazing all over the place. A boss can tell when you're afraid underneath or a total mess on the inside and will not bargain favorably with you when they sense that.

New Rule for Riches #8:

Negotiation is a vital skill, because what you settle for is exactly what you'll get.

Once you know how to negotiate effectively, then you know for sure that the only person in control of your life is you.

## A Few Things to Keep In Mind

  1. **Put yourself in your manager's shoes.** What goes on in a manager's mind when a member of his staff asks for more money? Almost automatically, the first thing they think of is "Is this feasible? Will I lose this employee if I tell them no? What will this do to the overall salary structure?" and most importantly "How much do I value this particular employee?" Managers will gladly go out of their way to pamper someone they don't want to lose. But if they don't feel you make a difference, they won't make one in your pay.

  2. **Don't bring up personal reasons for wanting a raise.** Saying that your expenses have increased will not help you because that's not your employer's problem. That's your problem. While negotiating, you have to be explaining why you're so valuable to the company. The way pay scales work is that they are based on an employee's contributions, not on their needs. So only use reasons that are related to the business and how valuable your contributions are to it.

  3. **Don't compare your pay with co-workers.** Yes, it's very aggravating to see someone else do a half-ass job and get more money than you, who does a whole-ass job. But managers will not respond well to you bringing this up. It sounds childish and makes you look like you're not a team player. Base your pay requisites on the averages for your position (found on PayScale.com, Salary.com, and GlassDoor.com), and then build a case for why you've earned an increase in your compensation. Explain to your manager why your company is doing better because of you.

  4. **Keep a list of details that support you.** If you kept a file folder of compliments you've received from customers, or if you can show hard data that you've kept costs down by X dollars or your productivity is 2x the average rate, you've got facts on your side. And you can't argue with facts.

A WISE MAN ONCE SAID:

" _Facts are stubborn things."_

-John Addams

  5. **Don't threaten to quit if you don't get what you want.** Even if you can't live off of the pitiful earnings that your employer is paying you, it's better not to say that out loud. It's better to keep that as an implication. Managers will be wondering what you're thinking if you just leave the room saying, "Okay." They also understand that they risk losing you if they can't give what you ask for when you're asking for it.

  6. **Don't act entitled.** Nobody likes that. It's better to just imply that you're entitled by hitting your boss with the facts of your accomplishments and contributions instead of just saying, "I've been here a whole year now." Just doing the basic job requirements is not enough. You need to go over and beyond to earn more and be able to show that you have.

  7. **Rehearse what you're going to say ahead of time.** It's not easy to ask for more, but it's easy for your boss to say no. Managers are trained in dealing with unsatisfied employees. But employees are not trained in dealing with stubborn managers. It's a nerve-wracking thing sometimes. The normal fear that come into play is that your boss will react badly or think of you as a moocher from then on. But it's perfectly normal and absolutely okay to ask for one when you're performing at the top of the line.

OKAY, SO I'M EARNING MORE MONEY NOW. HOW DO I GET MY MONEY TO WORK FOR ME?

Here comes the big secret. If people were only able to remember one thing from this book, I'd want them to remember this the most: the meaning and power of the word "derivative".

#  The Most Important Word for Your Wallet

How do you serve more people like Mark Zuckerberg did? How do you leverage yourself like Professor Xavier and Bruce Wayne do? How do you expand your financial footprint? The secret is hidden within the tricky word "derivative".

FINANCIAL JARGON TRANSLATED

**Derivative** \- is a financial instrument whose value depends on underlying variables. A book is a derivative of the author. Harry Potter is a derivative of J.K. Rowling, the movie is a derivative of the book, and the theme park is a derivative of the movie. That's all it is.

At the start of the 2008 recession, derivatives were blamed as the cause. Warren Buffet calls them Weapons of Mass Destruction. To an extent, he's right. They are destructive when they are so far derived from something else that it becomes unstable. For example, in gardening, a plant is a derivative of the earth. The crop is a derivative of what is planted. If the crop is say tobacco, then cigarettes are a derivative of that crop. And because this is so far derived from it's original source, the earth, it's more unstable. Too many cigarettes, and you've got yourself emphysema.

In the same way, a mortgage is a derivative of a house, and a mortgage-backed securities are a derivative of the mortgage, a bit farther from the origination (the house), thus more unstable. When too many banks bought into these, their houses of cards collapsed and the banks had to be bailed out. They were expanding too far, too fast, and with nothing to back them up.

But creating derivatives with substance is a weapon of mass construction. A good example of this is Adam Carolla. He's a man of many derivatives. He has his podcast which reaches millions (derivative of him). He has his website, offering paid subscriptions to podcast archives (a derivative of his show). And he has his books, which are derivatives of his thoughts. The best part is all of these have substance, otherwise they wouldn't last in the market. They'd fall apart like the mortgage backed securities. They have substance because of how close they are to the original source, Adam Carolla's mind.

A musician does the same thing with the sale of their CDs, mp3 downloads, concert tickets, posters, t-shirts, and royalties from radioplay. They expand themselves to reach more people by creating derivatives of themselves. J.K. Rowling did this with her book series, Harry Potter, and poof! She became the first billionaire author.

Remember Rule #4: You amass wealth by giving (through producing and creating). It is what you can create that matters.

SO WHAT ARE WE SUPPOSED TO CREATE?

Anything that can be of value to others, but also doesn't have a supply issue, like needing to be manufactured. For example, my eBooks are derivatives of my mind. I don't need to mass produce a bunch of hard-covers and print millions of pages. It's all digital, so I only need to write the book once and then publish it. My website is in a similar category. It's basically a giant monetized blog, so all I need to do is publish content on it once and let it work its magic. In the last book of this series, Realistic Passive Income: 5 Proven Ways that Work, I'll show you 5 strategies for doing this.

Now creating and building derivatives takes time, and saving up the money to buy the tools necessary to do this takes time too, which is why most people don't bother. But there is a way to speed up the process: having good credit.

#  Not All Debt is Bad

This one was a big shocker to me. For 25 years, I never had any consumer debt or credit cards. I was scared to death of debt. So when I heard that there was good debt, I started looking at hearing aides. But a lot of us use debt without realizing it. We use service credit (when the mechanic at the garage fixes your car first, then calls on you to pay him). Many of our monthly bills are forms of credit. Making good on all of these debts is important to keep your credit clean. But one sure-fire way to establish credit when you don't have any is with a **Backwards Loan**.

FINANCIAL JARGON TRANSLATED:

A **backwards loan** goes like this: You have $2,000 in a bank or credit union, so you borrow $2,000 from that bank or credit union. They know you're good for it because you already have the money. With this type of loan you don't end up in debt and it shows as a positive on your credit (as long as you make your payments on time).

Another way to establish credit is with a **secured credit card** , which is just a credit card with the limit already deposited to the issuer of the card, so any balance you carry is already paid.

New Rule for Riches #9:

There's good debt and bad debt. Good debt helps you build up credit.

The purpose of the debt is what makes it good or bad. Are you using your credit card to buy something that depreciates (like furniture and technology) or to buy something that you're going to have to buy at some point anyway (like gas and food)? You should use your credit cards to buy things you'd normally buy anyway because you always have the money for those (which means you probably won't be carrying a balance) and it helps you build up credit.

Especially if you have a-cash rewards card. The myth that credit card companies want people to believe is that in order to earn rewards, you need to start spending more money, so you should look for more things to buy and make up excuses to buy them in order to earn those rewards. The problem isn't just that this is a quick way to debt hell, but it's kind of overlooking a very important fact: you already spend plenty of money!

Most people do their day-to-day purchasing with cash or debit cards. Why not just switch over and do this spending with your cashback credit card? You'll be raising your spending totals without destroying your credit situation. And how about those monthly bills that you have automatically withdrawn from your checking account? Can't you pay those with your cashback credit card? Absolutely!

" **BUT EARLIER, YOU SAID CREDIT CARDS WERE BAD!"**

I said credit cards can be a financial trap, if you use them to accumulate bad debt. But they can become an asset if you use them for good debt. Now a lot of people reading this may have already accumulated a lot of bad debt. Don't feel bad, because there's a way out it. I mean, you still have to pay the debts, but you can clean up your credit report so your score doesn't suffer.

## How to Clean up your Credit Report

You have 3 credit reports: Equifax, Experion, and TransUnion. Your scores might differ on all three of them but they'll likely be in the same ballpark. When you pay your credit card bills or loans on time or if you are late, the lender reports this to these three bureaus. Your score is lowered when the delay of payments lengthens. These low scores will make it harder for you to get future loans or cards with lower interest rates.

Payment histories of past cards, loans, and bankruptcies remain on the report for up to a decade. The past two years of payment histories are often the most important, but a bad record can last for 10 years.

The three credit bureaus make their money by selling your history to companies who want to check up on it before extending a loan. They are not some public service with an obligation to make sure that their information is 100% accurate. Not that they're filthy liars, it's just that they are in the business of making money and to them, time is money, so they don't spend too much time being fact-checkers. This works to your advantage.

Because inaccurate information maybe on your report, thus the law allows you to clear even accurate negative information off from your report. Pretty cool, hey?

According to Law:

Any item on a credit report can be disputed to the credit bureaus. And the best part is that the burden of the dispute lies with the bureau. Not you!

Furthermore, the bureau only has 30 days to investigate it. After 30 days, if they don't confirm the dispute with the lending company, then they must remove it from the report! Sometimes, they do it anyway because investigating it is a long and annoying process for them. What's really cool is that anything, and I mean anything, can be disputed even if it's true. Everything from open lines of credit, to inquiries and bankruptcies.

When writing your dispute, send a physical letter. Most companies offering access to credit reports now have online forms for disputes. DO NOT USE THEM! It makes their job too easy, and we want their job to suck as much as possible. A written letter implies that you've investigated the report and know something is inaccurate. Write that you have reviewed your report and found mistakes, then list them. Next to each item of dispute, simply write that the record is not yours and write nothing more. The more you tell them, the less annoying work they have to do and the easier it is to confirm it and leave it on the report.

**A Sweet Finish:** End each letter with this: "Please investigate these inaccuracies and remove them from my report. Under the Fair Credit Reporting Act, 30 days constitutes a reasonable time to remove the mistakes. In addition, if you confirm any of these items, you must supply the names and addresses of the people contacted." This tells the credit bureaus that you understand your rights under the law, and how serious you are.

**BIG SECRET HERE:** The best time to dispute items with the bureaus is between Thanksgiving and New Years. The bureaus have less time and fewer people to investigate disputes and so do the companies that they are inquiring about the disputes! If you fail at first, do what Aliyah said, "pick yourself up and try again." You can resend the same disputes a month later if the negative information is still on your report. They have to investigate, by law, every time a dispute is sent. Keep annoying them and they may take it off just to shut you up! Here are their addresses:

Experian P.O. Box 2002Allen, TX 75013

TransUnion P.O. Box 1000Chester, PA 19022

Equifax P.O. Box 740241Atlanta, GA 30374

#  Conclusion: Now That You Know the Rules...

This book was all about getting you to see and think about money a different way: a way that enables you to get more of it. Among the five forms of financial aptitude, this one focused on #5, Maximizing Wisdom. I want everyone to be equipped with that knowledge because the world needs more rich people. But what are you to do now with this new found wisdom?

In 135 Ways to Earn Money Online, I will show you many opportunities that exist out there for you to make more than what you currently have. There are 135 companies that will pay you to work for them in your pajamas, real and legitimate work-from-home jobs that pay you real money and you can do them in your spare time. Some of them can be full-time and others can be part-time. If you like your current job, you can hang on to it and earn extra money on the side.

I understand that in order to start out on you path to financial freedom, you have to be earning money already. You have to start somewhere. That's what book #2 in the series is all about. This book focuses on financial aptitude #1, Earning more Money.

In The Recession Survival Guide, I will show you how to manage the money that you are earning now so that you can retain more of it and make it grow. The reason many lottery winners end up going bankrupt is because they didn't know how to manage their money before and that's why they weren't rich to begin with. So giving them more money didn't solve the problem, it only further complicated it. In this book, I will show you the money management system that the rich use, which allows them to keep more of what they've earned and spend it wisely.

I will also show you the unnecessary expenses that everyone has and can cut easily. Believe it or not, there are ways in which even our own minds trick us into spending more money. It's time to become aware of them so they don't trip you up any more. Then I will show you ways that stores and retailers try to trick you into spending more money and convince you to buy junk. If you are aware of these, your over-spending will decrease dramatically.

Another thing I will show you is more myths that cost you money, specifically about cars. A lot of the rules about car maintenance handed down from generation to generation are wildly outdated and making you spend more money than you need to.

Do you want to get a good price when you do your shopping, but don't want to spend a lot of time shopping around? I will show you 10 ways to have an unfair edge when you shop, each will take you only a little bit of time to do and will save you endless amounts of money. Some of them are smart phone apps and where to get them, others are little tricks on the web that anyone can do, but most people are just not aware of.

In this free book, I showed you how to clean up your credit report. In book #3 of the series, I will show you how to really turn your credit card into an asset by giving you negotiation scripts for lowering your interest rate and increasing your limit. I will also show you the costly credit card services that you probably don't need and will never use, so you don't have the monthly payments for these services just eating away at your wallet. And if you have a Cash Back or rewards credit card, I'll show you the 5 ways to make the most of that without spending extra money.

In managing your money, you also have to manage the stuff you already have. Perhaps you have lots of junk that you want to sell off and make a few quick bucks from. I'll share with you the secrets of the best eBay sellers and yard sale gurus here just for that.

Finally, you might ask, "What am I supposed to do with all this money I'm saving?" That's where the next book comes in.

Lastly, book #4 of the series, Realistic Passive Income: 5 Proven Ways That Work, is where I get into the kind of strategies and tactics to get exponential returns on your hard-earned money. The keys to wealth are buying and building assets. Here, I will show you 5 different ways to earn passive income. I will go into great detail about each one of them. They are:

1. eBooks and Info-products

2. Selling Stock Files

3. Monetized Blogs

4. Affiliate Marketing

5. Filesharing

I hope this list has something for everyone. The main criteria I made for making this list was that each item on it had to be realistic and attainable.

You hear a lot from the big get-rich-gurus about real estate and rental property. The fact of the matter is that no one but the rich can afford to buy a property and rent it out. It requires more than just the money for the house. You need money for insurance, utilities, property taxes, property managers and lawyers to cover your butt. And a bank is probably not going to lend you money for all of that. Even if they did, the interest rate on a highly-leveraged deal would be so high, there's no way you could make a profit from it.

So I decided to focus mostly on passive income sources that are internet-based, because the playing field there is pretty equalized and almost anyone can do it.

In each of these passive income sources, you can be in complete control. That's moving up to sector C (with Professor X). We can't control what the banks, the stock market, the real estate market, or what the Federal Reserve does, but we can control ourselves and the passive income businesses and sources we create for ourselves.

So if you've enjoyed this free book, the start of the series, I hope you will continue through it with the rest of the great books remaining in the Unfair Edge series. And if you'd like to just get all three of the remaining books in this series as just one big book, you can. We combined the three other books into this one big fat book. Now that you know the rules, let's play the game.

# As a Way of Saying Thank You

For reading this book, a free audio-book is available to you at <http://www.anunfairedge.com/think-grow-rich-free-audio-book/>

Napoleon Hill's Classic

Think and Grow Rich

Click Here to Download

#  About The Author

Michael Jonah Jones is the founder of Unfair Edge Inc., a financial education company that teaches investment strategies and tactics for passive income as well as entrepreneurship in the digital age. Jones offers up weekly podcasts, articles, presentations and other media downloads free at AnUnfairEdge.com.

Jones is a graduate from the University of Central Florida and Saint Petersburg College with degrees in Mass Communication and Digital Media. He was born and raised in St. Petersburg, FL.

He had spent most of his working life in manual labor jobs like cooking in restaurants and working in retail. It wasn't until 2012, after his third college graduation, that he began more meaningful work such as market consulting and webmastering for Lavan: Body, Mind & Soap.

For a more in-depth look into Jones' unique story, click here.

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ONE LAST THING...

When you turn the page, Kindle will give you the opportunity to rate the book and share your thoughts on Facebook and Twitter. If you believe the book is worth sharing, would you take a few seconds to let your friends know about it? If it turns out to make a difference in their lives, they'll be forever grateful to you. And so will I.

Live long and prosper,

Jonah Jones
