(Journey’s note: The content of this post is taken mainly from Paul McKenna’s I Can Make You Rich. I post it here out of deep appreciation and gratitude. Hope you will enjoy and benefit from it too. Please feel free to share your ideas in the comment section!)
If you want to create massive financial abundance, it is necessary to first recognize that your ability to make money is intimately linked to your ability to add, create and provide value, whether to a person, a project, a company or an enterprise. In fact, Money is one of the rewards you get for adding value to the lives of others.
The more value you add to the world, the more money you will be rewarded with. There are essentially 3 factors that affect your ability to make money from adding value:
- Uniqueness is whatever makes your product or service different from what’s already out there. It’s also about exclusivity – what your clients or customers can only get from you.
- Scope is the number of people you are able to impact with your offerings. Generally speaking, the more lives you add value to, the more money you will make.
- Impact refers to the amount of value you are adding to someone’s world. Making a significant difference to someone’s business, relationships and life will generally be rewarded at a higher rate than giving them a cup of coffee in the morning.
The more unique your offering, the more people it can reach, and the more it can impact them, the more money you will make.
A question of wealth
One thing that distinguishes the millionaires and billionaires is that they are continually asking themselves ‘wealth-creating questions’, and taking the time to answer them. An example of a wealth-creating question is this:
What unique product or service would I like to provide that will be of massive value to the world?
These kinds of questions make your brain sort for wealth creating information and put you in a more resourceful state. If you are not happy with the answers you are getting back, you can either change the question or keep asking until you are happy. Your brain will keep searching for you until a useful answer has been found. You might need to do this once or for several days before you get an answer that just clicks, that fires you up with enthusiasm.
To make a good fortune, you don’t have to be academically smart – a quick look at the biographies of the Times 100 Rich List will confirm that. You just need to ask smart financial questions, and keep asking them until you get the answer you need.
You may not get an answer straight away, which is why you keep asking. The human mind is infinitely creative- just think of all that exists in the world, all the art, science, technology, business, all created by the human mind. Stop for a moment and really think about these wealth-creating questions, and ask them over and over again:
- How can I add value to the lives of others and most easily make money?
- What will people pay for that I can easily and happily provide them with?
- What are the ways can I most easily and enjoyably reach financial freedom?
- What would I love to create that people would love to give me money for?
Spend the next few days asking yourself those questions over and over again until ideas just pop into your mind. The hypnosis CD that accompanies this book will further instruct your subconscious mind to go on a creative search for answers to the wealth questions.
Simple as it may seem, the exercise I am about to share with you is one of the most powerful in this entire book …
THE MILLIONAIRE NOTEBOOK
- Go out and get a special notebook or journal to use for this exercise – whatever makes you feel great about carrying it around with you and using it regularly. (Richard Branson said many of his best business ideas were written on the back of napkins or envelopes!)
- Each day for the next 30 days, write down at least 10 answers to the wealth-creating questions above and any others you may think of. Your answers do not have to be practical, or, for the purposes of this exercise, legal – just let your creative mind flow.
- At the end of the 30 days, you will have at least 300 ways to make more money by adding more value to the world!
Would you like to double your money, starting today?
If you woke up one morning in a place where you knew no one, with $100 in your pocket, how long would it take you to double your money and how would you do it?
While many people’s first answer is ‘I don’t know’ or ‘I couldn’t’, when I ask them to really take the time to think about it, nearly everyone comes up with something.
Some people decide that they would look for something to buy that would be of interest to the local populace (umbrellas if it’s rainy, suntan lotion if it’s hot, etc.) and then sell it at a profit. Another guy said he would rent a camera and take pictures of people who looked like tourists and offer to sell them to them. He worked out that after just a few weeks he would be able to buy his own camera and develop his business. Still others would offer a service – whatever it is they have a gift or skill for that if they needed to, could be easily translated into cash.
Let’s begin exploring your hidden wealth (those ideas and resources that are already available to you but up until now you haven’t thought of as ‘money makers’) with this same simple exercise …
DOUBLE YOUR MONEY
Let’s do it now …
- If you woke up one morning in a place where you knew no one, with $100 in your pocket, how long would it take you to double your money, and how would you do it?
To help you in exploring this further, think through your answers to the following questions:
- What are you an expert at? What do you know (or would enjoy knowing) more about than most people?
- What are your skills and abilities? What do you do (or could you do) better than most people?
- What have you accomplished up to this point in your life that other people respect or admire you for?
- What things do you have that other people would love to have?
- What do you currently do for free that people will pay you for?
- Once you’ve doubled your money, how long would it take you to double it again (i.e. from $200 to $400)? How would you do that?
The more often you do this exercise, the less dependent you will become on money as the source of your wealth.
When I asked this question of some of the rich thinkers, their answers were even more dramatic.
- Peter Jones said that he would find products he could buy and then sell them like a street trader. It wouldn’t matter what the products were, because he’d be doing it to accumulate enough money to invest in other things he could be more passionate about and that would have uniqueness, and greater scope and impact.
- The young property magnate Nick Candy’s answer was extremely bold. He said that he would find the richest entrepreneur in town and say to him: ‘Invest $1,000,000 in me and I will give you a 20 per cent return within a year.’
- Dame Anita Roddick’s answer was equally fascinating. At first, she said that in order to get by she would simply offer her services as a nanny, or cook. When I asked her what she would do if the goal was to make millions, her rich thinking business brain kicked into overdrive. She said, ‘Elderly people don’t use computers because they’re too bloody complicated. So I would find somebody smarter than I am, a really smart computer programmer and ask them to design a computer that works on only four buttons- on, off, files and internet. I would offer them an equal partnership in our new business. I would guarantee them that if they could design it, I would be able to sell it and make it into a great business.’
The point of the exercise is to demonstrate that we all have the capacity to create money using nothing but the ideas in our heads and the skills in our personal arsenal. Your true riches live freely inside your mind. This is one of the most important ideas you will learn on your path to riches:
You are your own money!
Penis jokes and Irish dancing
One thing that will help you with the above exercise is to understand that you can make money from doing pretty much anything. I remember listening to Howard Stern when he had a group of Japanese visitors on his show. One of them asked him how much annual revenue his controversial radio show generated. Stern took the time to actually add up not only his salary and endorsements, but all the money the radio stations brought in through advertising and publicity because of his show. The total was in excess of one billion dollars.
There was silence on the air as the men clearly pondered the implications of that. Howard Stern then punctured the silence by saying, ‘Who would have thought you could make over a billion dollars by telling penis jokes?’
Similarly, I recall a conversation with my friend Michael Flatley, creator and star of Lord of the Dance, one of the biggest musical sensations of recent years: ‘Who’d have thought that Irish dancing would make me hundreds of millions of pounds?’
Whether you think of such pop-culture sensations as beanie babies, cabbage patch dolls, pet rocks and sea monkeys or unplanned but wonderful inventions like marmalade, post-it notes and fax machines, the keys to wealth are most often found locked away in the files of our imaginations under the heading: ‘Well, I’d love to but it would never work … ‘
For example, two of the most successful products of the last 100 years, Coca-Cola and Levi’s jeans, were both ‘mistakes’. Coca-Cola was originally a not very effective headache syrup developed by an enterprising pharmacist named John Pemberton. When he caught a couple of stock boys mixing his new syrup with water and drinking it in the back of his shop, he tasted it and realized that if he mixed it with soda water, it might be something that people would be willing to pay for.
As for ‘blue jeans’, they were developed when a would-be gold prospector named Levi Strauss travelled to San Francisco with merchandise he planned on selling to raise money to buy a stake in a mine. He failed to sell two large rolls of blue tent canvas. So he hired a local tailor to make overalls out of the tent fabric and brass rivets. The demand for his new, sturdy trousers was so great that he never went back looking for gold again.
When you realize that there are no limits to the number of different ways people make money, the question changes from ‘Is there a way for me to make money?‘ to ‘I How would I like to make money?‘
The ‘real’ value of what you have to offer
Once you master the art of creating and adding value, you simply need to learn to exchange that value appropriately. This is another area where rich-thinkers do things just a little bit differently.
Exchanging time for money is ultimately a limited game- no matter how you charge, there are only 24 hours in a day. But when you learn to charge for the value you are creating, there are no limits to how much you can earn.
For example, what do you think is a reasonable mark-up on a product or service? 10 per cent? 50 per cent? 100 per cent? Would you be able to justify a 4,000 per cent mark-up?
A friend of mine is a very successful salesman. I remember being astounded by a deal he once did where the software that cost his company around £200,000 to research and develop and less than £50 to manufacture was sold for over £10,000,000.
When I asked him how he justified such an enormous difference between the cost and the price, he said, ‘I knew from the research we had done that using our software would save the company nearly £50,000,000. After some negotiation, we settled on a payment of approximately 20 per cent of their benefit.‘
The whole thing reminded me of one of my favorite stories:
There was a wealthy man who had a wonderful steamship. But one day, after a particularly difficult journey, the engine failed, and no one could get it going again.
The wealthy man tried one mechanic/engineer after another, but none of them could figure out how to fix the engine. Finally they brought in an old ship maker who had been fixing ships since he was a young boy. He carried a large bag of tools with him, and when he arrived, he immediately went to work. He inspected the engine very carefully, top to bottom.
The wealthy man stood there, watching the old ship maker, hoping he would know what to do. After looking things over, the old ship maker reached into his bag and pulled out a small hammer. He gently tapped against one of the pipes. Instantly the sound of steam rushing through the pipes could be heard and the engine lurched into life as the old man carefully put his hammer away.
When the wealthy man asked the ship maker what he owed him, the bill came to £10,000 pounds, a princely sum then.
‘What?’ The ship owner exclaimed. ‘You hardly did anything at all! Just your bill or I will have you thrown into jail.‘
The old man began to scrawl something onto a ragged piece of paper he pulled from his pocket. The wealthy man smiled as he read it and apologized to the ship maker for his rude behavior. This is what it said:
- Tapping with a hammer: £1
- Knowing where to tap: £9,999
- Think about a product or service you are currently involved in selling. (If you are an employee, you are the product; if you are not in business at all yet, think about the value you can provide doing what you want to do.)
Example: A stabling service for horses.
- Determine what you think is a ‘fair’ price based on how much effort you put in, how much it costs you to develop the product or service you offer, and ‘fair market value’.
Example: Between maintenance on the property, food for the horses and a reasonable hourly wage, it seems fair to charge £300 a month for stabling a horse.
- Next, work out as best you can what the value of what you’re offering is to the other party. If you come up with any unanswerable questions, write them down. By researching the answers to these questions, you will gather the critical information that allows you to set a price based on ‘value to them’ as opposed to ‘cost to you’. When all else fails, try asking them!
Example: Most people with horses are less concerned with cost than care. And some people will invest over £100, 000 in their horse over the course of its lifetime. If I knew that my horse was not only safe but would receive proper exercise, training and grooming while it was stabled, £1,000 a month would be well worth it to me.
- You now have two numbers to use in your negotiation. The ‘value to them’ number will give you a good idea of where to pitch your pricing; the ‘cost to you’ number will give you a clear bottom line, below which you would walk away from the deal.
Grow rich while you sleep
As you become more and more skilled at spotting opportunities to add value and exchange that value for money, you will begin to accumulate reserves of cash. If you use that ‘extra’ money wisely, you can create a lifetime of financial abundance without having to keep working harder, longer or even smarter.
When the Blackberry was first introduced, a friend of mine demonstrated how he could keep track of how much money he was making while sitting at dinner. Although he started his life working in a factory, he now travels the world and has made millions.
Another friend, who loved to cook, saved and saved until she had enough of a down payment to start a restaurant. For the first few years she worked there every day and loved it.
Now, she’s opened two more restaurants and only works a couple of days a week. Meanwhile, the restaurants have made her financially independent.
Another friend is a successful musician who has put his creative energy into writing music that brings joy to the world. One of his songs has become very successful – so successful that he refers to it as his ‘pension’. Even when he is asleep, radio stations around the world are playing his song and making him money.
This is perhaps the ultimate ‘secret’ to making money:
Don’t put yourself to work for money when you can put money to work for you!
The way you do this is by investing your time, energy and money in what are called ‘profit-generating assets’.
What is a profit-generating asset?
Anything you own that makes you money whether or not you show up to work. This could be a rental property or a piece of intellectual property; a business, product or invention; an effective employee or even an effective brand.
This is also one of the fundamental differences between how rich thinkers and poor thinkers spend their money:
- Rich thinkers spend their money on assets – things that will make them more money in the future.
- Poor thinkers spend their money on expenses and liabilities – necessities that cost them money now and pointless things that seem fun at the time but will cost them more money in the future.
This is also the crucial difference between using a job to make money and using an asset – the asset will continue to make you money long after you’ve stopped working. And these days, with the internet continuing to shrink the global market, creating and/or investing in profit-generating assets is easier than ever.
CREATING A FINANCIAL SNAPSHOT
- Make a list of any current or potential profit-generating assets you currently own. It’s OK if you don’t have many, but here are some of the commonly overlooked ones:
- My computer – I can use it to start an internet-based business.
- My home -I could rent out a room or create a home office.
- My telephone – I can use it to make sales calls and negotiate deals.
- Now, make a list of your current liabilities.
- Car payments.
- Timeshare property.
- Anything you own that is difficult and/or costly to maintain.
- Are your current spending patterns those of a ‘rich thinker’ or ‘poor thinker’? Evaluate any money you spend from now on according to these criteria.
- Brainstorm at least 20 ways to either increase your profit generating asset column or decrease your liability column in the next month.
- Take action on your best ideas!
If you aren’t yet getting excited about doubling your money, creating profit-generating assets and starting your millionaire’s notebook, chances are it’s because at some level you don’t yet believe you’ve got what it takes to really add massive value to the world and, in doing so, make a lot of money.
In fact, until you really begin to see yourself as someone capable of making a difference in the world around you, it will be difficult for you to make any real impact on your net worth.
The final exercise in this chapter (along with repeated listening to the hypnosis CD) will help you to accelerate the process …
AN EXPERT AT MAKING MONEY
- Think of something you already do well. It could be a hobby, a sport, or even something to do with your current job or occupation. When you imagine it, notice the location of the image you make. Where do you picture it – is it in front of you, to the left or right?
- Next notice the size of the image – is it life size, larger than life, or smaller? Does it have much colour? Is it bright or dim?
- Now, stop for a moment and imagine what it would look like if you had the ability to make money easily. What do you imagine, and more importantly where is the image located? In front of you, to the left or right?
- In a moment, move the picture of you making money and put it exactly where the picture of you doing something extremely well was located. Make it the same size and brightness too.
- In the future, each time you think about making money, take a moment to make sure your new picture is firmly in place!
Frequently asked questions about ‘How to Make Money’:
Q. What if I couldn’t think of any ways to double my money?
It’s important to remember that making money is a skill- and so is applying your creative imagination. While some people are able to answer this question almost immediately, other people get caught up in trying to get the ‘right’ answer and
consequently for a short time don’t get any answer at all. Go ahead and give yourself more time. When it comes to creativity, the harder you push yourself the harder it will be. Relax, don’t censor yourself and let the answers flow.
Q. I own my own home and my own car. Aren’t those assets?
Many people confuse an asset with a liability. An asset is anything you own that makes you money; a liability is anything you own that costs you money. While big houses, fancy cars, boats and planes may be some of the extremely enjoyable trappings of financial abundance, each one of them diminishes your bank balance over time. That same amount of money invested in a profit-generating asset will ultimately allow you to enjoy all of those same trappings at a fraction of the cost.
Of course, some liabilities are necessary. Such as the basic necessities of hearth and home. Other liabilities will ultimately help you to generate assets – such as a phone or access to the internet that aid your progressing in today’s marketplace. Perhaps the most useful ‘liability’ you can spend your money on is your education – not just school, but the kinds of knowledge and skills they don’t teach in school, like how to actually start a business, negotiate a deal, add more value and make more money.
Q. It sounds like if you already have money this could work for you, but I’m in debt and barely make enough to make ends meet. How am I supposed to invest in profit-generating assets?
One of the biggest surprises to me when I first began studying rich thinkers is how little of their own money they use in creating their wealth. As with most investments, profit-generating assets don’t have to be paid for all at once. This is the principle of leverage in action – using your expertise and other people’s money to get involved in investments that are beyond your current means. While some investments will require you to provide your own capital, in most cases you can get outside funding for some or all of the investment once you can demonstrate the soundness of your business plan. For example, if you want to buy a home that costs £300,000, the bank requires a survey to prove the house is a solid investment. Once the survey has shown the property is sound, they will put in the majority of the money to allow you to buy it.
In Chapter 10, I will share with you a simple template you can use to begin assembling your plan, and in Chapter 11 we’ll discuss the key skills and strategies you can use to get potential investors to back you.
(The end of chapter. To be continued…)
P.S. The text has been edited slightly from the original book. This website is NOT associated to Paul McKenna at the time of posting. If you like what you see here, and wish to support his marvelous work, please purchase I Can Make You Rich at Amazon. Thank you.
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