Jim Garland's Blog

Creating the Mind Set for Wealth

“I have been poor and I have been rich.   Believe me, honey, rich is better.”

Sophie Tucker (1884-1966)

Vaudeville Entertainer

As this series on your finance comes to a close I want you to think long and hard about your current financial situation.  Look at the quote above, how does it make you feel?  Some will argue that money is not everything.  I would agree, but it sure as hell makes life easier if you have it in abundance.

Do not expect over night results.  It has taken me 19 years to get my business to the point it is now, where I can enjoy free time and financial independence.  Answer the following questions honestly and then begin taking the necessary action to begin your path to financial success.

• What amount of money would you need to earn each year to feel financially stable?  At this level, you may not be able to have the vacation or car you want, but all of your basic needs would be met and all bills would be paid.
• What amount of money would you need to earn each year to feel financially satisfied?  At this level you can afford the home you want, all of your basic needs and bills are paid.  You are investing for college (if necessary); you are saving 10% and giving away 10% of your income.
• What amount of money would you have to earn each year to feel financially independent?  At this level, you can afford the home, vacation and car you want, all basic needs and bills are paid.  You are investing for college (if necessary); you are saving 10% and giving away 10% of your income.  You are also able to afford other luxuries like a second home, additional vacations, additional giving to charities or your church and you can do pretty much what you want without thinking too much about the financial impact it may have.
• Try to imagine how good it would feel if all of your bills were paid each month, your retirement plans were funded, you donated to the charities of choice and you still had an extra $2000, $5000, or $10,000 per month left over.  What would you do with the extra money?
• Finally, for those of you who have huge financial dreams and aspirations, what amount of money would you need to earn to feel truly financially free?  At this level, you could do whatever you wanted, whenever you wanted without ever having to consider the financial impact on your life.
• No matter what your level of earning right now, imagine and write down how it would feel if you did not have to worry about money ever again.
• Does or will your current job or business give you the income potential you need or the opportunity in the future to earn the income you desire and reach any or all of the levels described above?
• What else could you do to earn additional income at your current job, with your current business, or by starting something new?

As I have discussed several times in this series, most of our ability to create wealth lies in our thinking more than in our doing.  Some of the wealthiest people I know only have a high school education.  What they also had was the ability to think and act differently than the average person and in turn created huge fortunes for themselves.  They made a decision that they were deserved of great things and so the acted as such.  As Henry Ford once said “if you think you can or you think you can’t you are probably right.”

You must convince yourself that you are deserving of great wealth.  This decision alone will begin to change your thinking and automatically elevate your actions to a new level.  Good luck and I wish you strong financial future.

To learn more get my new book The Practical Guide to Exceptional Living now available online at

Amazon http://tinyurl.com/yhvjg8f

Barnes and Noblehttp://tinyurl.com/ya2ovxn

and Borders http://tinyurl.com/ycqjnkm

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My book The Practical Guide to Exceptional Living is now live on Amazon check it out http://htxt.it/kM8W

Look for me on the fox business network with Dagen McDowell and Tracy Barnes on Saturday March 20^th from noon to 1pm and again on Monday, March 22 at 5am.

http://www.foxbusiness.com/channel_finder.html

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The Financial Stability Table™

The Financial Stability Table™ will assist you in moving to the next step of financial stability and growth.  Picture a table with a flat, rectangular top and four sturdy legs.  When all four legs of the table are strong, you can sit on it, stack things on it, put your drink on it–you can get many uses from the table.  If you take away any of those legs and apply any amount of weight to the table, it will crash to the ground.  You still have some premium lumber that can be put to use, but it is no longer a table.  Your financial table is the same way.  If you are just starting out in your career, think of yourself as a carpenter:   you will need to start building your table.  If you are well along in your career and you already have a table, always think of ways to reinforce it and make it stronger.  Here is what make up the four legs of the table:

Leg 1:  Personal Income

This is the income you make every two weeks in the form of a payroll check from your company, the government or the company that employs you.

Leg 2:  Savings and other Financial Investments

When investing in these financial vehicles you should take two things into consideration:  short term investments in savings and CD accounts and long-term investments such as 401(K) and IRA accounts.  Your short term investments will be money that you want to have access to that can be quickly and inexpensively turned into cash.  Your long term investments will be investments that you make for retirement or for later in life.

Leg 3:  Real Estate Investments

This is equity in the home you live in and/or other properties that you own and any rental income that those properties generate.

Leg 4:  Business and Residual Income

This can be income from a business you own or residual income that is continually generated from something you created, as in the case of movie producers, software developers, authors, songwriters, inventors.

The Financial Stability Table™ does several things that will give you the financial stability you deserve:

1)    It provides you with multiple streams of income

2)    It can provide you with a reserve of immediate cash

3)    It gives you diversity in how you invest and how you earn and in short term and long term investment opportunities.

4)    It gives you flexibility to move income from one source (securities for example) and invest it into another (real estate or a business opportunity)

Your financial table has four different legs that provide four different income potentials.  You must look at each of these in different ways:

Leg #1 is the income you earn every day that enables you to pay your bills, put food on the table, and invest some of that money into Leg #2.  Leg #2 is where the money you have earned actually starts to go to work for you.  This will give you long term income through compound interest or dividends or securities appreciation.  In most cases, Legs #1 and #2 provide a degree of comfort and modest long-term stability if invested correctly.  For some people, the stability and comfort this type of income and investing provide may be enough to sustain a very comfortable lifestyle and support you into old age.  This may not be enough for those of you that desire complete financial independence and the freedom to do what you want, when you want, without having to think about the cost.

Most upper-level individual wealth (net worth of $1 mill +) in America and the world, for that matter, is created through one of two ways:  real estate (Leg #3) or owning a business and/or creating residual income (Leg #4).  These two avenues have created more millionaires and billionaires than any other wealth creation method that exists.  These people are willing to step out on a limb and take the necessary risk in hopes of having very big gains.

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The interview is posted at the following link: http://getyourbizsavvy.com/2010/03/jim-garland-interview/

Have a great week!

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My new book The Practical Guide to Exceptional Living is getting some national exposure, click this link and check it out

http://www.businessweek.com/managing/content/feb2010/ca2010024_614355.htm

You can buy the book right here on my site.  Our web site launches next week so look for an announcement.  Have a great weekend!!

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Time and Effort Versus Results

In today’s business world, you can be paid for your time and effort, or for your results, or for a combination of the two.  This concept applies to the business owner or entrepreneur as well as the daily employee.

At my company Sharp Details, Inc our entire management team gets paid a base salary that allows them to earn a living and then they get a bonus based on the quarterly results of our overall business and their specific location. As a result our Managers treat their site as if it is their own business: they manage their income, production, supplies, customer service, payroll and staffing. If they produce the desired results, they can increase their annual income by 30‐50% through bonuses.  This compensation structure, has allowed us to doubled revenue and profit in the last three years, and it has made my job and the job of my VP of Operations much easier.

The three examples below outline the different ways you can be paid as an employee or ways that you may compensate your employees:

1) Employee gets paid for their time and effort

Think of an hourly job. You show up, punch a clock and get paid for each hour that you work. If you are making $8 per hour and you work eight hours you make $64.

High Risk‐Low Reward: If you are sick, get hurt off of the job, or have a child‐care issue and cannot come to work, you get zero dollars. Most hourly jobs do not include benefits (health, 401(K), vacation, or sick leave).

2) Employee gets paid a salary

Think about a government job. You get a salary of $65,000 per year. You receive a paycheck every two weeks and you are expected to do a certain amount of work for the money you are being paid.

Low Risk‐Moderate Reward: You know what you are going to make every two weeks and this allows you to budget and have some stability. You typically get benefits with this type of arrangement (health, 401(K), vacation, and sick leave)

3) Employee gets paid a salary + commission/bonus based on performance

Think about a stockbroker, insurance broker, sales person, or executive. You typically receive a base salary plus a commission or bonus based on your performance. This gives you the freedom to work as much, as hard, or as smart as you want to and if you produce the expected/extra/additional results, your income potential can be unlimited.

Moderate Risk‐High Reward: You know what you will make as a base salary every two weeks, and you also have an unlimited upside opportunity to make more based on your output. You typically get benefits with this type of arrangement (health, 401(K), vacation, or sick leave). The other benefit of this type of arrangement, on many occasions, is the freedom to work when and how you want to in order to produce your results. You have some degree of control over how you spend your time.

You must find a way to convince your boss that getting paid for your results will improve her bottom line (the company bottom line), which in turn can improve your bottom line.  The effect will be two fold for you, more control over your time and more money in your bank account!  With a little creativity and thought it may be easier than you think.  Good luck!

Please join me again on Tuesday when we discuss The Financial Stability Table™

Enjoy your weekend and have fun!

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Take Responsibility for Yourself (Financially)

I have posed some powerful questions using The Money Myths™, Your Money Relationship™, The Money Beliefs™ and The Money Flow Rules™. What you have to understand today is that where you are financially and where you want to go financially are both 100% your responsibility.  It is more important than ever before to take responsibility for yourself and stop relying on a company, the government, or an institution to ensure your financial stability. The days of working for a company for 40 years, then retiring with full benefits and a lifetime pension, are coming to an end. The American car manufacturers are a good example. You used to be able to go to work at a car plant out of high school and work there for your whole career. They were going to take care of you no matter what. This is no longer possible or realistic. What about Uncle Sam? Even Social Security could be gone by the time some of us decide to leave the workforce.

You must get proactive and take control of your financial well‐being. It starts with your credit score, the income you currently earn, how you get paid and how financially responsible you have been to this point. You need to make the decision right now that you and you alone will take 100% responsibility for your financial security.

The first step in that responsibility is ordering your credit reports so you can find out exactly where you are from a credit score standpoint.  Did you know that cancelling a credit card can hurt your score?  Did you know that 80% of all reports have mistakes?  Did you know that you can order your own report as often as you like and that will not hurt your score?  To obtain your credit reports go to www.myfico.com.  You can establish an account and for less than $40 have your credit report on your computer within 5 minutes.  No matter what your score you should check the report thoroughly for errors.  If your score is anything below a 720 I recommend a program I used in the past called 7 steps to 720.  Because of several mistakes by the credit card companies my score was an abysmal 619, even thought I paid my bills on time and had not exceeded any credit limits.  Using a program called 7 steps to 720, www.7stepsto720.com I was able to raise my score to 741 in a short 8 weeks.  This educational program worked and I highly recommend it.

Good luck with you score and join me on Thursday when we discuss “time versus effort” and whether you currently get paid for your time or your results.  The difference can be worth $1000’s of dollars per month.

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This excerpt is taken from Chapter 5 of my book The Practical Guide to Exceptional Living.

Over the last 18 years, I have gone from making $20,000 per year working two jobs to starting my own business and earning enough to be in the top 1% of all wage earners in the US.  What I have discovered in that time is that money is a fluid medium that cannot be held onto or put into mason jars and buried in the backyard. Money behaves a certain way depending on how you treat it. You must treat money and the handling of money with respect and discipline.

The Money Flow Rules™:

1. You must treat your money with respect‐‐‐do not waste it on “long shot” business ideas
2. You must make your money work for you (maybe through investing in a business or real estate)
3. You must Find a way to earn money while you sleep
4. You must start a business, so that you can take advantage of the many tax benefits of having your own company
5. You must be creative in looking for ways to increase your income as much as you can each year
6. You must put at least 10‐15% of your gross income into savings that should not be touched. If you cannot afford this immediately, start with 2% or 5% and work towards the larger number. The most important first step is the discipline to save something continuously.
7. You must give 10% of your money away to charities and worthy organizations. Again, start with a smaller percentage if that is all you can afford and work towards a larger amount.

All of these practices will keep money flowing, and that money will eventually flow back to you in greater and greater quantities. For the past three years I have followed all of these rules and my personal income, the income of my managers and the business income have increased dramatically, even during the current recession.

Money must continually flow. If you are careful to keep it flowing, then it will continue to come to you. If you cut it off at any one spot, it is going to stop. There are three avenues that money comes from:

• The money you earn
• The money you save
• The money you give away

Just like the Law of Attraction, this is a Law of Money. The more money you make, the more you are able to save and the more you are able to give away. The more money you save and the more you give away, the more that money begins to flow back to you.  How could giving money away help me make more money? If you are freely giving money from the heart to a charity, your church or any worthy cause, you are in turn sending a message to the universe that you are a generous and that money is a good and positive thing. I also believe that giving money away freely gives you a feeling of gratitude and makes you understand there is a higher cause that needs the money more than you do. When you do this, it feels great and you start to think, “…if I made more money I could really have a big impact from a charitable standpoint…” In turn, you start to discover and the universe starts to deliver, more ways to make money. It is a perpetual cycle that continues to increase in quantity.

Tune in next Tuesday when we will discuss your financial reality and responsibility.

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