3 Best Things You Must Do If You Want to Succeed in Anything

There is only one success – to be able to spend your life in your own way.” – Christopher Morley

3 fingers

 (Photo: Mutiara Karina)

Over the years I have spent a lot of time learning and thinking about why certain people succeed or become wealthy while others do not. Why do some reach their goals while others continue to struggle year after year? Why do some people climb to great heights while others quit or resort to mediocrity? After all my success, and many, many failures, I have summarized the 3 most important things I learned, mostly through trial and error.

So, if you want to become wealthy, be great with the opposite sex, lose weight, start a business, find your ideal mate or anything else you dream of, these are the 3 most important things I believe you must do if you want to succeed. Doing these things will help you reach your goal easier, quicker and with a lot less friction. So let’s get started: 

  1. Clearly Define What You Want.

Why this is important:

Most people never reach their goals because they don’t even know what it is they are after. A phrase like “I want to be rich” is too vague and meaningless, if you don’t clearly define it.

Life is a journey, you need to have a plan to go from here to somewhere else. Unless you know where that somewhere else is you will never reach it. When a pilot leaves JFK to fly to Heathrow he knows the exact coordinates of his destination.. He has a flight plan. No pilot ever flew out of NY trying to get to London with the vague idea that it’s somewhere East. By defining what you really want, it will help your conscious and subconscious to put a target on it and work towards it.

What to do:

Whatever it is your want, define it in the most specific ways that you can. The more detailed the better.

If you want to find an ideal soul mate, write out all the ideal traits you would want this person to have, write out how this person would react to you and how your life together would be. If you want to be wealthy write out exactly what that means. What are your possessions, how much money do you have in the bank what does your house look like.

Regardless of your dream, write out your ideal day. You wake up and open your eyes, what do you see? Who is next to you? Where are you living? What do you do next? How do you spend your day? Who are you with? What do you accomplish, what do you do in the evening? Write out in as much detail as you can. Spend at least an hour doing this. Now think about this every day before you go to sleep and when you wake up. At least once a week reread or edit what you have written.

  1. Remove any subconscious obstacles you have.

Why this is important:

If you put a gun to my head and said what is the one tip you can give me for becoming great, this would be it. Everything else is almost irrelevant. It’s only second chronologically; but it’s the most important obstacle to overcome.

Majority of the people never reach their goals because they are torn about actually getting it. They have two forces within them, a conscious one which wants them to succeed and another, their subconscious,which can prevent them from reaching their goals. This is the biggest obstacle that stands in your way. If you can take care of this one issue, you will succeed. If you do not, you will never succeed.

Your brain will keep you from becoming something that you hate. If you want to be rich, but on some level you believe that rich people are stuck up, or that they are evil or that they use people, then it will be extremely difficult for you to actually become wealthy.

If you want to be great with women but you look back at your high school or college days and believe that all the guys who were great with women where dumb A-holes then it will be extremely difficult for you to become great with women. If you want to be great with men but believe only fake, superficial bimbos are great with men, that will be a problem. Because you can’t become something you hate.

As a matter a fact, if you are struggling with money or do not have an abundance with the opposite sex, I can almost guarantee that you, at least on some level, have those beliefs.

You can read all the books about wealth or being social that you want, but unless you take care of this one huge roadblock you will just be spinning your wheels.

What to do:

Be as honest as possible. Write down all the negative beliefs you have about whatever it is you want and then tackle each belief through affirmations. The formula for this is very simple. Start with your belief then write out the complete opposite. So if your belief is “I think rich people are stuck up” your affirmation is “I believe rich people are giving and friendly” If you believe that “Guys who are great with women are brainless jocks” your affirmation is “Guys who are great with women are fun, thoughtful and caring”.

Then add affirmations that remove your particular road blocks about whatever it is you want. I call it “Blessing the thing you want”. You are thankful for the fact that others have what you want. For example, if you want to have a great social life you can write out “I love that there are guys who have abundance with women”. If you are lonely and want an ideal partner write out “I am happy that there are so many great couples who love each other”.

Pick one affirmation and write out 2 pages of it each day. Do the same affirmation or pick a new one whichever one speaks to you the most that day. And do this habitually and consistently every day.

  1. Quantify.

Why this is important:

You need to see the progress you are making in order to stay motivated and see what changes need to be made.

What to do:

Pick your goal and clearly measure your success (or failure) on a regular basis. Say your goal is to lose 50 pounds and you would like to lose 4 pounds a week. Take your goal and divide it by 2. Change losing 4 pounds a week to only 2 pounds a week. This is important because seeing slow progress is a lot more motivating than swinging for the fences and striking out. In the long run the difference between losing your weight in 4 months or 8 months will not be important but being frustrated and quitting after a month because you are not meeting your goals will surely derail you.

Now measure your progress on a regular basis to see if you are moving towards your goal or away from it. But remember as with any goal in life the progress is never linear. Sometimes it’s 2 steps forward 1 step back. Keep moving forward and you will succeed.

That’s it. The 3 most important things you need to help you reach any goal you desire. Give it a try and let me know how it works out.

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The Ultra Rich Dumb Money Bubble

“Never confuse the size of your paycheck with the size of your talent.” – Marlon Brando

balloon dog(Photo: Charles Nouÿrit )

Over the last 5 years while most of Americans have struggled, the wealth and lives of the ultra rich have gotten better and better. For example the Knight Frank Luxury Investment Index (which should really be renamed “Dumb Stuff the Ultra Rich spend their Money on Index”) is up over 40%. If we dive deeper into the numbers we will find that over the last 5 years expensive watches are up 33%, Chinese Ceramics are up 43%, Collective stamps are up 83%, Art is up 12% and classic cars are up 115%. The problem with all of the items is that their price is not determined by any intrinsic value but rather by what someone else is willing to pay for it. If someone wants to spend millions of dollars for a small ceramic bowl they have all the right to do as they wish, but what is interesting to me is at what point does this ego fueled party come to an end?

I believe what we are witnessing now is rather unique time in history. Just like during the dot com bubble when the newly made rich day traders all thought they were geniuses we now have hubris bubble among the ultra rich. There are now a great many newly made billionaires who all believe they are geniuses, failing to see that the rising tide of liquidity has been lifting all the boats for the ultra rich.

Nothing signifies this more than the art market. I find it so amazing that the same people who would never venture into penny stocks, for the fear of losing due to market manipulation, would not think twice about spending millions in the art market, which is tremendously more corrupt and manipulated than the stock market ever was.

I fail to see any intrinsic reason besides ego to spend tens of millions of dollars on a painting or over 50 million on a stainless steel balloon dog. Now you might call me a simpleton who does not understand high art, and you may be right. But if I do not understand art I find it hard to believe that some newly made Russian oligarch who owns a coal mine is that much more knowledgeable in it than me.

The rich buy art for the same reason hip hop artists buy expensive champagne. How many people would actually buy Cristal if the bottle said Yellow Tail or if there were no other people there to see them buy it and drink it? Just like I am certain that most people would not be able to tell the difference between a $2000 bottle of champagne and $50 bottle, I am more than willing to bet that some newly made Chinese billionaire can’t tell the difference between a $5,000,000 painting of blotches and squiggly lines from a $500 painting of blotches and squiggly lines.

The ultra rich have been bidding up prices among themselves for a while now, and sooner or later the party will come to an end. Make no mistake, the super rich have always overpaid for items that enhance their status and stroke their ego, this has been going on since the beginning of time. The only difference now is that there is a lot more self delusion as to why this is actually a good investment option.

This might be one of those rare times where a constantly rising stock market, low return on cash, tremendous liquidity and old fashion hubris is causing a lot of the onetime smart money of the ultra rich to become dumb money. And like all dumb money in the long run, it usually does not stay with its owners for very long.

Here is a great piece 60 Minutes did on the art world from a few years ago; the situation has become even worse since then.

Michael Page

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101 Tips on Becoming Great

“I am the greatest, I said that even before I knew I was.” – Muhammad Ali  

if you want to become great

(Photo: *Eddie)

Ever since I got out of high school I have been keeping track of anything I come across which I think could benefit me. Whether it is a saying, an insight, or a different way of viewing the world, I was looking for anything which might help me to become better. Over the years, I have accumulated notebooks and spreadsheets full of things categorized by different topics. I want to share as much as I can with you.

Many of these tips are things I figured out on my own, a lot are quotes and ideas I came across over years of reading, listening and thinking. I tried to give credit where credit is due, but many ideas are without attribution only because I did not write them down at the time and came back to them after some reflection.

I hope one or two ideas might change the way you view the world and your life and I hope that there is something in my writings which will help you become the best you.


 

1) To reach greatness I must let the Universe lead me to it, not me or my ego


 

2) “As long as you live keep learning how to live” – Seneca


 

3) “Dare to Be Naive” – Buckminster Fuller on becoming wise


 

4) “Courage is a muscle that can be built up” – Theodore Roosevelt


 

5) After success is the most dangerous time, because it allows you to rest and to believe that the formula is correct. It might not be. Always be willing to start from scratch after every success.


 

6) All the fears and challenges are not with anything in the world, they are inside of me. If I can battle them and win, my success will follow.


 

7) Always act confident and confidence will come.


 

8) Always be a graceful loser, people remember it.


 

9) Always be free to reinvent yourself.


 

10) Always give a positive label to whatever I am doing.


 

11) Always pretend that I am 7 and I don’t have to go to school even though it’s a school day. What would I do today? This creates more creativity and better thinking.


 

12) Always welcome change.


 

13) Anything I don’t fully enjoy I will never be great at.


 

14) Avoid extreme ideology.


 

15) Avoid people who use the word “Should”. Such as “The world Should be a certain way”. They are not mature and do not accept life and its circumstances.


 

16) Be an Artist. Create something even if it’s not very good.


 

17) Be aware of same race bias. We are more likely to believe someone of the same race regardless of the facts.


 

18) Be comfortable being uncomfortable.


 

19) Be comfortable in not knowing what will happen next.


 

20) Be open to anything, don’t dismiss any new idea right away.


 

21) Be patient. Anything that I want and don’t yet have is due to me not accepting it in my subconscious yet.


 

22) Before attempting something write down all the excuses I can come up with and then write down why those excuses are bullshit.


 

23) Big people talk about ideas, average people talk about things, small people talk about people.


 

24) “Biggest hinderance to reach greatness is ego sensitivity to finding out if you are right or wrong and identifying ones strengths and weaknesses” – Ray Dalio


 

25) Champions are made when nobody is watching.


 

26) Confidence comes from doing things that go against the grain of society and being comfortable with it. Break out of the “This is what is expected” routine.


 

27) Courage is feeling the fear and doing it anyways.


 

28) Don’t be realistic – dream the crazy dreams.


 

29) Don’t avoid things I fear. Admit it and take steps.


 

30) Don’t focus on things I can’t change.


 

31) Don’t mistake my traits for who I am. I am a fluid entity, be willing to change.


 

32) Don’t trade comfort for change. Be willing to let go of the comfort of the familiar (crappy job, bad relationship) for change. The ability to let go of toxic comfort quickly determines success.


 

33) Don’t try to be too perfect. That energy takes away from creative energy I need.


 

34) Embrace my fears fully. “Hug the Monster”.


 

35) Face your fear and the death of fear is near.


 

36) Fill my life with sensual pleasures of all kind.


 

37) God is in the uncertainty.


 

38) Hard work is only hard work if it has no meaning.


 

39) Ask how would I live my life if nobody ever told me how to live my life?


 

40) I can do a lot if I just look past the fear and see what’s on the other side.


 

41) I need to be open to all possibilities. Be open to other possible realities.


 

42) In any endeavor he who loves it the most usually wins.


 

43) In order to get something I first need it to feel natural.


 

44) It’s easier to avoid trouble than get out of it.


 

45) Key to life is to learn to be comfortable in the uncertainty of life.


 

46) Leaders need to know when to become followers, and followers need to know when to become leaders.


 

47) Live everyday like I just started over; be free and feel excited about trying new things.


 

48) Make eye contact with everyone especially people of authority.


 

49) Never be afraid to die because you’re born to die.


 

50) Never try to impress other people by imitating them, it just creates a weaker version of them and they will hate you since it represents their insecurities.


 

51) Nothing great ever comes into the world without enthusiasm.


 

52) People who are great always take the blame and know why things went wrong when they do. Average people lay blame. Always have a good idea and a plan and look honestly why a plan might not have worked.


 

53) People who are successful have a clear vision on what they need to do and can picture themselves doing it even if they have never done it before. Do the same.


 

54) Push myself hard and then tell myself I am the best.


 

55) Push myself outside my comfort zone each day.


 

56) Receive with simplicity everything that happens to you.


 

57) Relive each day and see what I would have done differently and replay the good version in my mind.


 

58) Resist Nothing.


 

59) See myself as the best person I want to become and commit to it fully.


 

60) Seek enthusiasm and passion for life.


 

61) Studies show that people perform better when relaxed. So try staying relaxed in stressful situations.


 

62) Surround myself with beauty.


 

63) Surround myself with people better than me and role models.


 

64) Take what I want to happen and in detail write in out to make in happen that way.


 

65) The abundance of things I receive is normal. It’s the way things should be.


 

66) The best predictor of success is optimism. Always focus on being optimistic.


 

67) The big stuff is just as easy to manifest as the small stuff. It’s all in feeling worthy of it.


 

68) The key to life is to lose larger and larger battles. It means I am learning.


 

69) The most dangerous circumstance is getting comfortable cheating a little, since it leads to big cheats.


 

70) The only thing that keeps me from getting anything I want is the story I tell myself about it.


 

71) The secret to life is not to take your life personally.


 

72) The voice that I talk to myself in my head determines my mood. So use calm positive voice.


 

73) There are no good or bad people only teachers.


 

74) There’s nobody here to save me. To get what I want I have to go out and get it myself.


 

75) Thinking you are the shit or a piece of shit, takes the same amount of ego energy.


 

76) To be a leader, strive for excellence have a vision be more passionate and be willing to take on the worst jobs.


 

77) To be good at anything you can’t rely on what you did in the past. You can never look back. Don’t get attached to the past.


 

78) To be great at something you must be clear and view it as something playful and fun with no negative thoughts.


 

79) To decide if I should do something distract myself and then think of the problem again and go with the gut instinct at that time. Scientists found this is the most accurate way to come to a correct decision.


 

80) To feel like I own the room. Walk in and pretend to touch all 4 walls with my hands. Breathe in the space.


 

81) To get something, picture it clearly in your mind while smiling and meditate on it.


 

82) To go anywhere first I have to be most brutally honest about my current situation because then I will improve.


 

83) To have a great life assume that everyone you meet is your friend and wants only the best for you.


 

84) To overcome fear of something, act like you are not afraid of it and soon it will be so.


 

85) Try new ways of thinking about what I want to improve. I can always go back to the old ways of thinking if it does not work out.


 

86) We are what we think. Think positive things.


 

87) Whatever I am lacking, write how grateful I am about it and that others have it.


 

88) Whatever I focus on will grow, focus on positive things.


 

89) When arguing appeal to interest not logic.


 

90) Whenever I gossip I pull myself down not the other person. If I catch myself gossiping always end with something positive to say about that person.


 

91) Whenever I am trying something scary. Stay with it until the fear and anxiety is reduced at least by half.


 

92) When someone gets what I want be happy for them. That’s the only way to get it.


 

93) When talking to a stranger, be positive in describing anyone, they will then assign those qualities to you.


 

94) Write down all things that hold me back.


 

95) Write down things that I want in personal terms and read it when I wake up and when I go to sleep.


 

96) You can always push yourself to do more. If someone else was pushing me (coach) I would do a lot more. Be that coach to myself.


 

97) You can only learn from a mistake you admit.


 

98) You can only take on a strong position when you can argue for the opposite of what you believe better than the person who supports that idea.


 

99) You have to be willing to get to the truth so badly that you are willing to humiliate yourself to get it.


 

100) You need to be able to give up freely the thing you want the most.


 

101) You only start living when you lose the fear of dying.


 

Michael Page

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You Are Already a Multimillionaire

 

“There is a gigantic difference between earning a great deal of money and being rich” – Marlene Dietrich

hood emblem

(Photo: Loco Steve)

I woke up in a cheap Motel 6 hotel room somewhere off the interstate in East Florida. I had been on the road now for over a month, traveling in an old Acura that I bought off my roommate for $1500 bucks. I had been out of work for months now with very little money in my pocket so I resorted to sleeping in my car or in cheap hotel rooms seeing how little I could live on each day. I spent my days sightseeing, hiking, seeing the country and trying to find myself. For the first time in my life I was completely free, accountable to nobody, and I was as happy as I had ever been.

The reason for me being in Florida was because it was now the middle of winter and Florida was one of the few places where it was warm enough that I could sleep in my car most nights without freezing to death. I’d been reading a book I picked up at a used book shop for a dollar called Victorian Florida and became fascinated by the life of Henry Flagler. Flagler built the railroad line into Florida along with a number of luxurious hotels over a century ago where millionaires would come from up north each winter to vacation. If you were rich and you were anybody you were in Florida staying in one of the grand hotels built by Flagler. Many of the hotels still stood and I was determined to visit them all. I took a tour the Casa Monica Hotel in St Augustine, explored the Old Ponce De Leon, now part of Flagler College, had a drink at Breakers in Palm Beach and toured the Flagler Museum. I tried to imagine what it must have been like all those years ago being a multimillionaire and arriving in your own private railcar at one of the majestic hotels.

One day while talking to one of the tour guides I learned what it was really like to be one of those multimillionaires staying at one of the Flagler grand hotels a century ago. The tour guide explained that many hotels just barely had hot running water and it was unreliable. The water in the room smelled like rotten eggs because of sulfur and air conditioning and refrigeration has not been invented yet. I realized something amazing that day, even as I was living like a vagabond staying in a cheap motel room. The quality of my life was better than that of multimillionaires 100 years ago. I had reliable hot running water in my room, I had a fridge, the water did not smell and I had a working air conditioner. All the luxuries that the rich did not have all those years ago I had for less than $30 bucks. I realized that being in that motel room; I had it better than the richest of the rich a century ago.

I then decided to look at other parts of my life to see how it compared. What would I do if I was a multimillionaire living all those years ago? Well, if I was living in the roaring 20s or early 30s I would probably buy a Duesenberg. It was the fastest and fanciest car and all the millionaires and celebrities from Rudolph Valentino to Clark Gable had them. The Duesenberg could do 0 to 60MPH in under 12 seconds at a time when most cars could barely do 60, and it could go over 100 MPH. Back then, a new Duesenberg would set you back over $200,000 in today’s money. At the time I was driving an old Acura with 110,000 miles on it. So I decided to see how my piece of crap jalopy compared to the mighty Duesenberg, the car of the super rich. Here’s the breakdown:

 

1930 Duesenberg 

1992 Acura Integra

 

 Duesenberg

(Photo: Jack Snell)

integra

(Photo: GB_Packards)

0 to 60 time

11.6 seconds

7.6 seconds

Top speed

126 mph

134 mph

Price New

(In Today’s Dollars)

Over $200,000

Under $30,000 (I paid $1500)

I realized that the car I had was faster and better performing than anything the super rich could have purchased all those years ago. I had what the gilded age multimillionaires could not even imagine having.

I then started to see other parts in my life where I was living better than the super rich did all those years ago. How many millionaires in the past died from health issues that now can be cured with a $5 dollar pill? How much better is our technology, our medicine and our transportation? From that time on, even when I felt poor, I started seeing myself as a millionaire. I just wasn’t a millionaire from the current age. I saw myself as millionaire who had a higher quality of life than any oil baron 100 years ago. All I needed to do was just go forward in time. I have made a lot of money since then, but I have never forgot that big realization.

One of the most valuable pieces of advice I could give you is to never, ever label yourself as “Poor”. Being poor is a meaningless phrase. You are only richER or poorER than someone else, you are never poor. If you are struggling with barely any money to your name you should still see yourself as a millionaire, because you are. If you are living in a developed country, no matter how poor you are, the things you posses and have access to multimillionaires at the turn of the century could only dream of having. Your quality of life would make the richest of the rich from a century ago jealous beyond belief. As you become wealthy, realize that those considered poor 50 or 60 years from now will most likely have a quality of life that is even better than yours.

There is no such thing as being rich or poor, it’s all depends on who you compare yourself to. So compare yourself to the millionaires of old and see your life as being richer than theirs, because you have what they could never afford. So if rich and poor are all relative words then why not use a word that empowers you instead of one that makes you feel defeated? You are already a multimillionaire, so start believing it.

Michael Page

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The Escape Velocity of Money

“You only need to get rich once” – Warren Buffett

rocket

(Photo: Steve Jurvetson)

Sometimes a simple quote can change your whole life. For me it happened over a decade ago when I was reading the book The Warren Buffett CEO, by Robert P. Miles. In the book, Warren’s quote “You only need to get rich once” hit me hard and altered how I viewed wealth forever. The quote was in response to one of his CEOs who wanted to short Internet stocks during the height of the dot-com mania, to which Warren advised against doing using that witty line.

To some that quote meant that there is no reason to risk something when you are already wealthy, but to me it was something much larger. To me, it was an understanding that becoming rich is a destination that you only need to arrive at once in your life. Even though what I am about to explain may seem obvious it will change how you view wealth and becoming rich forever.

So what do I mean by Escape Velocity and how does it relate to money?

Let’s say we wanted to shoot a rocket into space so we build one and launch it. The rocket goes up super fast but eventually slows down and then comes crashing back to Earth. We feel defeated so we now decide to build a rocket twice as powerful. This time we launch this multi ton super rocket and it flies to the edge of space but it eventually slows down again, and not able to escape the Earth’s gravitational pull, eventually comes crashing back to Earth again. This time instead of building a more powerful rocket, we build the same multi ton super rocket but simply remove a few pounds of cargo and launch it again. This time the same exact rocket breaks the Earth’s gravitational pull and goes into space and instead of coming crashing back down it escapes Earth’s gravity and travels into space. That rocket will be traveling in space forever and will still be flying long after our great-great grandchildren have passed away. A few pounds of weight is the difference between having our rocket crash back to Earth or having it travel billions of miles for thousands of years.

So how does this relate to wealth? The exact same way. The difference between being poor and always working versus never working and having your money work for you is what I call the escape velocity of money. The difference is tiny but it can make all the difference in the world because once you reach it, you no longer have to work ever again and your money will work for you forever.

How much money do you really need to never work again?

The escape velocity is different for each person but it is probably not as large as you would think. You can calculate it a few different ways, but a safe rule of thumb is that if you can live on roughly 3% of your net worth a year you will never run out of money if your money is invested in diversified low cost fashion. So if you could live on $30,000 a year you would need to have $990,000 saved up. The interest on your investments will never run out as long as you live on 3% of your money. You would never have to spend another day working at a day job ever again. Having $990,000 might seem like a big number, but it is not as large as you would think. If you are 40 years old or older you’ve probably had over 1 million dollars pass through your hands; you just didn’t hold on to it. If you held on to every penny you ever made, you would have enough now to never have to work again. Of course that scenario is only possible in theory not in real life but the concept is the same. The quicker you can derive at your escape velocity the quicker you never have to work.

Let’s take a far-fetched, over simplified example of two people, Bill and Todd. Both are the same age and both get a job making $75,000 a year and start working at age 19 and let’s say for the sake of this example neither one ever gets a raise. Bill lives well below his means and is able to put away $40,000 a year. Todd, on the other hand, lives much more comfortably, buying fancy cars and other luxuries. Todd saves nothing. Meanwhile, Bill invests his money wisely and is able to capture roughly the historic return of the stock market of around 9%. (We are being optimistic here)

By age 25 Bill has been living in a small apartment, driving an older car and has been living very thrifty never indulging and he has saved over $300,000. Todd, on the other hand, rents a huge house, is leasing a BMW and he has been living pretty comfortably spending $75,000 a year on his lifestyle.

Flash forward to 10 years later, Bill is 35 now, lives in a small but comfortable house but is still driving an older car. He has, thus far, managed to save over $1.3 million dollars; Todd has been living large but has not saved anything. Bill in envious of Todd, after all Todd for over 15 years has been living a great life. He has a two large Mercedes, a beautiful house with a big pool and takes fancy vacations. Bill wishes that some day he can do that, since he is living on almost half of what Todd is living on and although he is not struggling he is not enjoying all the luxuries that Todd is.

After another 5 years goes by, both are now 40 years old and something amazing has happened. Bill has over $2.5 million dollars saved up. Let’s look at that number more closely. Bill now can live on $75,000 a year (3% of his net worth) from his investments alone and never run out of money and he never has to work another day in his life ever again. Bill can now live the way Todd has been without lifting a finger ever again. Todd must keep working to maintain his $75,000 a year lifestyle. Bill has reached his escape velocity and he now retires at age 40.

Even though both are now living on roughly $75,000 a year and both can afford the same luxuries the only difference is that Todd must wake up each morning and go to work. Bill has all the free time in the world and can travel and have all the luxuries just like Todd by doing absolutely nothing. Bill has reached the escape velocity of money, where he can live on the interest on his savings forever.

Bill’s Age Bill’s Yearly Saving Total Saved (Assuming 9% Return on Investment) 3% of Net Worth (Amount he can live on each year without working)
       
19 $40,000 $40,000 $1,200
20 $40,000 $83,600 $2,508
21 $40,000 $131,124 $3,934
22 $40,000 $182,925 $5,488
23 $40,000 $239,388 $7,182
24 $40,000 $300,933 $9,028
25 $40,000 $368,017 $11,041
26 $40,000 $441,139 $13,234
27 $40,000 $520,841 $15,625
28 $40,000 $607,717 $18,232
29 $40,000 $702,412 $21,072
30 $40,000 $805,629 $24,169
31 $40,000 $918,135 $27,544
32 $40,000 $1,040,768 $31,223
33 $40,000 $1,174,437 $35,233
34 $40,000 $1,320,136 $39,604
35 $40,000 $1,478,948 $44,368
36 $40,000 $1,652,054 $49,562
37 $40,000 $1,840,738 $55,222
38 $40,000 $2,046,405 $61,392
39 $40,000 $2,270,581 $68,117
40 $40,000 $2,514,934 $75,448

 

If Bill had decided to retire at age 35 and start withdrawing $75,000 a year then he would eventually run out of money (his rocket would come crashing back to Earth), but since he waited till he was 40 he can now live on $75,000 a year and never run out of money. Since Bill has reached the Escape Velocity of money we can say that his rocket will travel forever. Waiting those extra 5 years meant the difference between eventually going broke and not having to work ever again.

If Bill lives to age 70 he never has to work again, if he lives to age 100 he never has to work again. Let’s now suspend all disbelief and pretend that Bill and Todd drink from the fountain of youth and both will now live to age 1000. Because Bill saved till age 40 he can live the rest of his 960 years without working single day. Bill can live like Todd for almost 1000 years because he chose to live on $35,000 a year instead of $75,000 for those first 22 years of employment. That is the power of compound interest and escape velocity.

Your escape velocity number is not as large as your think, as a matter a fact you probably have had the amount of money you need pass through your hands in your lifetime already.  

Find your escape velocity number and try to reach it smoothly and easily. In life you can have all the luxuries you want if you can put off the instant gratification of having them till after you are rich.

 Michael Page

 

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The Dangers of Surpassing Your Idols (and Dave Chappelle)

I care about the work I do, but I’m not going to say that money’s not an issue.” – Dave Chappelle

(Photo: Benjamingettinger’s)

A while back my good friend had a nervous breakdown. It lasted about a week. He was not hospitalized but spent day in and day out in his house crying and staring at the walls without reaching out to anyone. After that episode, we talked a great deal as I tried to help him find the reason for his breakdown and the possible catalyst.

We talked about what events took place right before his episode. As we rehashed his life, the only one event that stood out was that he got a raise a week prior. That seemed to be a strange catalyst for someone to have a nervous breakdown, especially since his job title did not change and no more responsibility was asked of him. He had also received many raises before without any negative consequences. What made this raise different? As we talked, I casually asked how much money his father, who still worked, was making at the time? This was when all the parts came together.

His father, whom he looked up to and who has worked all of his life, was making a comfortable living. Now with my friend getting his raise he realized that he was now making more money than his father. Even though it was not a conscious realization at the time of his breakdown we both agreed that it had to be the cause.

I have talked about this to Frederic Lehrman, whose opinion on the psychology of money I respect, he points out that these types of occurrences happen more frequently than people realize. The idea of surpassing our parents or idols whether with money or success is more monumental than many people realize.

So how might this apply to you?

If you are stuck making roughly the same salary year after year, you might find that you are probably making the same amount that your parents did at their prime without even realizing it. What’s more amazing is that not only is that subconsciously implanted in us, it is also as Frederic Lehrman pointed out inflation adjusted. So if your parents were making $20,000 a year 30 years ago at their prime you may find that you are stuck not making more than around $50,000 a year now, which is roughly what $20,000 is if we adjust for inflation. This is certainly not the case for everyone but it is a large component that often is overlooked. But why does this happen?

Why do some people hit road blocks when surpassing their parents? Whether it is in financial successes or overall success? My belief is that when we surpass our idols it transforms them from being idols to becoming regular people. There is something painful when we realize that our father is not superman but an average man with warts and flaws. During the years we had worshiped him we were worshipping our concocted fantasy and not reality. For some this is a very painful realization. By never surpassing our parents, we allow them to stay ideal in our minds.

(Photo: Sam.soneja)

This brings me to Dave Chappelle. At the high point of his career having just been offered a $55 million dollar contract from Viacom, Dave stunned the world when he abruptly left the show and more or less show business. That incident always stood out in my mind since things did not fully make sense. For example, Dave has stated that his reason for leaving was that he felt the sketches on the show had become “socially irresponsible”. Being the creator and writer he could have easily changed the direction of the show. The other reason given was that he did not like the working environment. But certainly when you are the star at the pinnacle of your career, you create the environment you want and the network will jump through hoops to make it happen. Something never added up about Dave quitting the show. It’s not till I started writing this article that I decided to look if “Surpassing your idol” might have been a hidden factor in Dave’s decision.

One of the biggest influences in Dave Chappelle’s career has been Eddie Murphy, not only did he greatly influence his comedy but Dave also cast Eddie’s brother as a regular on his show. Dave has spoken numerous times about the tremendous reverence he has for Eddie Murphy. If we look at Eddie’s career the most money he ever made was on the movie Nutty Professor II: The Klumps just a few years before Dave walked off his show. The contract entitled Eddie to a salary of $20 million dollars plus 20% of the gross. (It was very wise for Eddie to take 20% of the GROSS and not the NET since Hollywoods numbers are never to be trusted.)

So what do the numbers look like? Nutty Professor II made around $166 million dollars worldwide. This netted Eddie Murphy around $32 million dollars from the gross plus another $20 million as a salary for the total of $52 million dollars at most. Dave’s contract was for close to $55 million dollars, making Dave a larger star than Eddie Murphy as far as showbiz was concerned.

It must have been a very strange and surreal to all of a sudden be seen by Hollywood and the world as being more valuable and bigger than someone you had idolized all of your life.

Does this explain why Dave left? No, I am sure there were many factors at play. In my opinion, it’s hard not think that there is a very large possibility that being thrust into showbiz stratosphere and the surreal feeling of surpassing your childhood idol was at least a partial factor in Dave choosing to leave the whirlwind of Hollywood to live a more simple and humble life.

Most people never consciously realize the psychological baggage that they may be carrying around about money and how that influences their day to day decisions. I have stated numerous times that I believe our subconscious (and conscious) relationship to money plays a much larger role in our net worth than how intelligent, educated or hard working we are. Being able to look at your relationship to money honestly and openly should be the first step on your journey to financial independence.

Michael Page

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The Big Fallacy Of Believing That Your S#*T Day Job Will Somehow Lead You To Your Dream Life – How To Get From Here To Where You Want To Be.

“How in the hell could a man enjoy being awakened at 8:30 a.m. by an alarm clock, leap out of bed, dress, force-feed, shit, piss, brush teeth and hair, and fight traffic to get to a place where essentially you made lots of money for somebody else and were asked to be grateful for the opportunity to do so? ” – Charles Bukowski

(Photo: Mark Sebastian)

One of the worst times of my life, (besides high school) was in my early 20s, when I had day jobs that I hated. I always felt out of place. I was surrounded by people eager and excited to work and complete the job at hand and I could never understand how they did it. It’s not that I physically or mentally could not do the job, it’s just I never understood the enthusiasm and the drive they had to do something that never seemed very important to me. I could never trick myself into caring or thinking that meeting some arbitrary sales quota or goal was more important than a day out of my life. This is probably the reason I sucked at every job I ever worked at besides those that I had a direct stake in.

For many years I persevered in crappy day jobs. Jobs I despised and was bad at, dreaming of the ideal life I wanted to lead. One of the saddest things I remember from that time is seeing the cubicles of my co-workers, who also hated their jobs as much as I did, but somehow managed to trick and convince themselves into caring and giving it their all. Their cubicles were lined with posters and snap shots of things they really wished they were doing, their passions. It was pictures of them skiing or playing golf in some exotic location, or relaxing on some island get-away vacation they had. To me it all seemed so cruel, like being stuck in a prison cell with a view on the free and happy world. I never understood why these people put so much energy into their day job instead of putting their energy into making plans to escape and pursue their real dreams and passions. To me it was always a no brainer.

Things have not changed much. Every Friday I see so many people on Facebook posting “TGIF”. If you are in such a vortex of hell that the only sliver of joy you get in your life is the weekend, that is not a reason to celebrate it is a reason to be sad and reevaluate the decisions you have made from birth till now.

There are many arguments you can make and you can come up with excuses why you want to stay where you are. They are all valid and I am not here to argue with you. I’m here to ask you to look at the life you are leading now and ask you if the life you are leading now sucks, then why do you think tomorrow will be different?

Break the pattern. Below are the 5 steps I would recommend to get from where you are now to where you want to be.

  • Define the life you truly want.

Be as specific as possible. Try to picture what your life will be like when you get to where you want to be. Write it out in as much detail as possible. Be able to see it, smell it and taste it.

  • Feel that you are deserving of it and have the right to it.

Remove people from your life who are negative and who don’t support your goals and dreams. They unconsciously sabotage you into believing that you are not good enough to have what you desire. To get whatever it is you desire you have to believe that you are fully deserving of it. This is crucial.

  • Believe that you will be a lot happier once you achieve your goals.

Have absolutely no negative thought or emotions about what you want. See that your life will be a lot better in all aspects once you get what you desire and that any actions you take towards your goal is better than staying where you currently are. 

  • Come up with a plan to try to get there.

It does not have to be a perfect plan, as a matter of fact, when you finally arrive you will see the route you took will be a lot different than the one you planned. But having an imperfect plan is still better than having no plan at all and wishing that tomorrow will be somehow different.

  • Don’t get discouraged about how long it takes.

If tomorrow you are even an inch closer to the life you truly want you have succeed. Remember progress is never a straight line. It’s always 2 steps forward and 1 step back. Don’t get discouraged – every step gets you closer to your goal.

If you have a job you despise or maybe even tolerate don’t fool yourself into thinking that things will change without you taking steps to change it. Even if you go out and pursue your dreams and you fail, what have you really lost? You will always be able to find another crappy day job (which may even be better than the one you have now), but if you don’t you will suffer indefinitely. Take a chance, life is short.

Michael Page

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The Financial Happiness Plateau

It’s not enough. I need more. Nothing seems to satisfy. I don’t want it, I just need it.” – Tool

(Photo: Stuck In Customs)

In a previous article I wrote about what I learned from personal experience about money and happiness. The point being that increasing your wealth brings happiness, but only so much as it allows you to remove things that make you unhappy. Once you allow money to remove most of things that make you miserable (the job you hate, piled up bills, fear of going broke, etc.) then you reach a plateau. That point where more money does not make you any happier, at least not by any noticeable amount. What’s interesting is that once people reach that plateau, they usually take one of two paths. The first group realizes that money, the object that they have been placing on the pedestal for all these years, is indeed just “another thing”. These people usually go on to make a great deal more money because they now begin to see the accumulation of money is nothing but a game, a fun game. These people usually become a lot wealthier. Making money becomes more enjoyable than almost anything that money can buy.

The second group of people never learns and keeps looking for the next “happiness fix” which they think money will provide. They spend their lives believing that money will make them happy and now that they have it they can’t fathom that their ideology is wrong. They believe that their lack of happiness is caused by simply not having a faster, larger, shinier objects. They spend money on bigger and better toys, thinking that the next purchase will make them happy. Maybe it will at least make them appear happy to others, since they need the outside world to try to convince themselves. These people believe that happiness is just around the corner at the next Ferrari dealership or a yacht. Unfortunately, they usually never reach happiness or wealth but spend the rest of their lives chasing it.

This idea of pursuing happiness brings me to a fascinating article I read a few weeks ago about Lenny Dykstra. When I was very young I remember watching Lenny Dykstra play for the NY Mets in the 1986 World Series. He was quick, aggressive and fun to watch. After baseball Lenny’s life took a good turn as seen by this short bio.  

Unfortunately, no matter how successful or rich you become, if you continue to believe that your happiness is dependent on having the next great toy it eventually becomes the cancer that overtakes you. I think this is what happened to our friend Lenny. He just needed a bigger house, a bigger plane and bigger cars. Believing that happiness comes from having “things” was his downfall.

“I said, O.K., I know I’ll be happy when I buy my own Gulfstream,” says Dykstra, reflecting on the plane he purchased in 2007. “But I got down to the end of the nose, I looked back and I said, O.K., happy, come on, come on. So it’s not about the Gulfstream. But it is about the Gulfstream. Meaning it just wasn’t as good a Gulfstream as I wanted.”

Quote from Sports Illustrated Article.

That one quote really embodies what happens to millions of people who never learn to stop spending money, thinking that the next thing they buy will make them happy.

If you are poor money will make you happier than you are now. Probably a lot happier, but only so much as it lifts you from your discomfort of being poor, but after that you’re on your own.

So as you pursue and reach your financial goals, keep this in mind. There will be a point where you will have to take one of two paths when you realize that being wealthy is not all that you though it would be. But that realization is a start of something greater, it will be the next phase of your life. Use it wisely and take the path that will make you a lot wealthier and happier.

As for Lenny, our story does not have a happy ending. After being worth millions he got thirty one million dollars in debt and filled for bankruptcy and was later charged with embezzlement and theft. He is broke and serving 3 years in prison. Looking back now how much easier and less painful would his life have been if he simply learned to live a comfortable lifestyle and invested his money wisely? Instead he chased the illusion of bigger and better and thought that luxuries would bring him happiness. In the end he lost wealth and happiness along with his 1986 World Series Ring, which he was forced to sell to pay his creditors.  Money might not always bring happiness but financial stupidity usually always brings unhappiness.

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Does Money Bring Happiness?

“Money, if it does not bring you happiness, will at least help you be miserable in comfort.” – Helen Gurley Brown

(Photo: RubyRan)

Does money bring happiness? That is the universal question. People who try to answer that question usually fall into two categories. There’s the “Yes” crowd; comprised of people who usually have something to sell you. These are the people on infomercials who stand in front of sports cars and yachts and try to convince you that if you buy their product you will be rich and happy.

On the other end of the spectrum, you have the “No” crowd. This group is usually comprised of people who try to convince others, and themselves, that you do not need money to be happy. But unfortunately, most of these people are not rich now and will never be rich in the future. They can’t make a fair comparison which does not lend any credibility to their opinion.

So what is true answer?

I have been poor most of my life. I have slept in my car, lived in basements with nothing but a mattress on the floor. I lived on Ramen noodles and worried about every penny for many years. I have had a few successful businesses and I’m now financially comfortable and actually consider myself rich. I no longer have to work a regular day job. Having lived both lifestyles, I know I can answer this question honestly from experience. I am not trying to sell anything and I have no hidden agenda.

So does money bring happiness? The answer is “Yes” but not by as much as you would think. Or to put it more accurately, money does not make you happier it just makes you less unhappier.

In my experience, I found that money does not bring happiness but it simply removes a lot of the crap that makes you unhappy. If you were to write a list of the things in life that annoy and bother you, I can safely say than money would be able to solve a great deal of them.

The annoying problems that plague so many people are the same; the crappy job that you hate, worrying if your car is going to make it just a little longer, the inability to afford to take a real vacation, the constant worrying about expenses at the end of the month. The list goes on and on. All these problems add up and lower your standard of living and quality of life. Money does not necessarily bring happiness, but lack of it definitely brings unhappiness.

Money can help you solve and remove a great deal of those problems, but that is where its job ends. After you have taken care of the basic necessities and have the security of a financial safety net that is pretty much as good as it gets.

Having money also allows you to pursue things which can nudge you towards happiness such as hobbies, therapy or new experiences but overall having a yacht or a Ferrari will not make you any happier. I really wish this was not true. I wish that buying a new “toy” would make me happy, but it rarely did and when it did the happiness was fleeting.

This is not to discourage you to pursue riches and wealth, because your life will indeed be better with money than without it. But keep in mind that there is a plateau which you will reach where money will no longer be satisfactory in providing your “happiness fix”.

So the bad news is that being rich will not make you as happy as you imagined but the good news is that to reach the maximum happiness from money is a lot easier that you think. As you imagine your dream life of how happy you will be living in a mansion surrounded by fast cars, caviar and champagne the truth of the matter is that you will be just as happy as when you simply live a comfortable life with money put away for a rainy day. Having 10 million dollars in the bank will not make you 10 times happier than having 1 million.

The reason you pursue money is because you think it will make you happy, fortunately that happiness is a lot cheaper and closer than you imagined. 

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How Rich Would Warren Buffett Be If He Never Invested In Stocks?

“I always knew I was going to be rich. I don’t think I ever doubted it for a minute.” – Warren Buffett

(Photo:MarkGregory007)

Warren Buffett has had a big impact on my life, not only by shaping how I view investing, but also how I view the world around me. Over the years I have read dozens of books about him and I have attended the annual Berkshire Hathaway shareholder meetings for close to a decade.

I thought it would be interesting to look at Warren Buffett’s wealth in a little more detail.

Below is a table of how much wealth Warren Buffett accumulated by what age. I adjusted it for inflation so all the numbers are in today’s dollars.
(Sources: Warren Buffett Wealth and Fortune Magazine)

Warren Buffett’s Age Warren Buffett’s Net Worth
   
11 $1,784
14 $65,365
16 $70,795
19 $94,741
21 $174,670
26 $1,184,261
27 $2,579,245
30 $7,773,142
32 $10,666,192
33 $18,045,882
34 $25,235,129
35 $51,130,000
36 $56,811,111
37 $68,887,725
39 $156,733,650
43 $176,191,210
44 $88,673,730
47 $254,384,400
49 $443,690,000
52 $896,496,900
53 $1,432,256,000
56 $2,939,041,000
58 $4,473,334,000
59 $7,050,991,000
66 $24,196,300,000
72 $45,658,800,000
77 $68,800,600,000
78 $39,540,200,000
79 $50,406,200,000
80 $52,758,200,000
81 $45,006,600,000
 

What I really want to focus on is how much wealth Warren was able to accumulate between age 11 and 21. Even though he purchased his first stock when he was only 11, he really did not start to invest successfully and professionally till he was in his mid 20’s. So the wealth accumulated before age 21 was mostly done through jobs and businesses he started.

What’s most interesting to me is that even before he started investing successfully he was able to accumulate close to $180,000 by age 21.

Here is how Warren did it:

At age 13 he had 5 newspaper routes delivering 500 newspapers, which made him $175 a month (around $2300 in today’s money). He then started a business selling used golf balls. At age 14 he purchased 40 acres of farmland with $1200 he had saved and leased it out. By age 16 he had read over 100 books on business and decided that he would be a millionaire (almost 8 million in today’s money) by age 30. He reached that goal.

In high school he purchased a used pinball machine with a friend and started a business placing them in barbershops and splitting the revenue. Soon he had 7 pinball machines around town making about $50 a week ($480 in today’s money). He later sold the business for $1200 (around $11,500 in today’s money). This was all done before he went college.

Here is a chart of his net worth from age 11 till age 21 in todays dollars.

As you can see from the chart, even if Warren never invested in stocks, it is safe to assume that he would still be a multi-millionaire today.

There are a lot of ideas and concepts that help make Warren Buffett one of the richest men in the world. I believe one of the main reasons was that he simply loved accumulating money and watching it grow. From an early age, he loved accumulating money even more than spending it. I have found that it is almost impossible not to become rich when you have that mentality.

Michael Page

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