Change your mind, change your life podcast – How to be Rich Rich and Wealthy: the 90/10 Rule
In today’s episode I want to coach on money, specifically The 90/10 rule.
If you are having the goal of increasing your earning power in 2018, then you need to understand the basics of money – Economics
The reason that 10% of the population earn 90% of the wealth in this country, is because the rich understand the fundamentals. They understand the fundamentals of money.
So, let’s review
Money or currency, is anything used as a means of exchange.
Hence the rise of bitcoin and trading also called bartering.
Money circulates in the economy through the Federal Government.
The Federal government’s main customer is the U.S Treasury.
The Federal government collects tax payments and deposits into the US treasury.
The US treasury then pays the government’s bills e.g social security checks, interest payments on treasury bills and bonds and oversees the operations of the nation’s commercial banks.
But the main job of the Federal government is to establish U.S economic policy.
When the country is trending towards high inflation, the Federal government slows down the economy by selling securities, Bonds and Treasury notes. This removes cash from the market that would otherwise be available for lending.
In this way the Federal government slows borrowing, forcing interest rates up and cools the overheating economy.
On the flip side, if there isn’t enough money in circulation or there is low inflation i.e. nobody is spending money; the Feds stimulate the economy by buying securities and printing more money. Thus, allowing more money to be available for lending.
Another tool the Fed has at its disposal is interest rates.
When the Feds increases the discount rates to the banks, the banks borrow less and thus have less cash to lend their customers.
The government borrows by selling securities. The more the government borrows, the higher the interest rates.
Whenever prices rise because of the increased costs associated with production but production itself stays the same; inflation occurs.
Sometimes inflation can help create wealth, especially when investments increase in value faster than inflation rate, as can happen, in real estate.
One of the reasons for the real estate bust or meltdown of 2008 was because interest rates were rising, and everybody was trying to purchase homes before the interest rates go higher, driving up demand and prices!
When demand exceeds supply, prices rise; but when supply exceeds demand, prices fall.
Now that I have reviewed some fundamentals of economics let’s get into our topic for today.
The 90/10 rule
The 90/10 or 80/20 rule states that 90% of your income will come from 10% of your customers or
That 90% of the wealth will be made by 10% of the population or
That 10% of any effort generates 90% of the results.
Today I want to talk to the Millennials.
As a young person starting out in life you should make the determination not to be in the 90% bucket. The 90% bucket is the people who choose comfort and security instead of being rich!
You must choose to be rich!
As a coach I would like to teach you how to be a part of the 10% bucket.
But, like any skill, it takes practice to get the desired results. It takes reading, learning and coaching.
The starting point is always the mind.
Have the intention to make more than enough.
Have the intention to be more than enough.
Decide today that you are going to have a quality life that allows you the freedom to travel, to eat at great restaurants, to purchase a luxury home in a great neighborhood, that your kids will go to great schools and get a quality education.
Thanks to the electronic revolution, it is now possible for more and more people to gain access to the world of wealth. To be in the 10% bracket you must become wealth conscious.
Wealth can take the form of investing in stocks,
investing in real estate either your primary residence or investment property;
entrepreneurship through building products,
selling consumer goods,
Selling information products
publishing or on-line marketing.
Here are two mindset shifts from the Industrial Age to the Information Age
1. Your grandparents believed that you should study hard, get a degree and get a good paying, secure job.
In the Information Age, statistics show that most jobs today will be obsolete in 10 years so in addition to studying hard and getting a degree, you must also become financially literate. You must learn how to make money from passive income streams.
Unless a man enters upon the vocation intended for him by nature, and best suited to his peculiar genius, he cannot succeed.
2. In the Industrial Age your grandparents were told to save money in the bank for retirement or for a rainy day.
In the Information Age, to get in the 10% bucket you must create assets of your own.
The foundations for success does not change with times. Like the word of God, it is good yesterday, today and forever.
Here are some foundations for success that transcends the Industrial age and the Information age:
The foundation of success in life is good health: that is the substratum fortune; it is also the basis of happiness. A person cannot accumulate a fortune very well when he is sick. He has no ambition; no incentive; no force. Of course, there are those who have bad health and cannot help it: you cannot expect that such persons can accumulate wealth, but there are a great many in poor health who need not be so.
To make money, requires a clear brain. A man has got to see that two and two make four; he must lay all his plans with reflection and forethought, and closely examine all the details and the ins and outs of business. As no man can succeed in business unless he has a brain to enable him to lay his plans, and reason to guide him in their execution, so, no matter how bountifully a man may be blessed with intelligence, if the brain is muddled, and his judgment warped by intoxicating drinks, it is impossible for him to carry on business successfully.
Choose the right Vocation
Unless a man enters upon the vocation intended for him by nature, and best suited to his peculiar genius, he cannot succeed. I believe that the majority of persons do not find their right vocation. They enter into a vocation determined by an annual salary or other factors and not passion and purpose.
SELECT THE RIGHT LOCATION
After securing the right vocation, you must be careful to select the proper location. You may have been cut out for a job in silicone valley, they say you are a genius, but you work in Detroit” You might be able to run a hotel like Ivana Trump; but you live and work a city with 2000 people. Your location would be your ruin. It is equally important that you do not commence business where there are already enough to meet all demands in the same occupation.
AVOID CONSUMER DEBT
Young men/women starting out in life should avoid running into bad debt. There is scarcely anything that drags a person down like bad debt. Credit card for clothes and shoes and designer purses. if he/she succeeds in paying off the credit cards and gets more credit again, he/she is adopting a habit which will keep him in poverty through life. Working 12 hours days to pay for bad debt, he has nothing to show for his money. This is properly termed “working for a dead horse.
When a man is in the right path, he must persevere. I speak of this because there are some persons who are “born tired;” naturally lazy and possessing no self-reliance and no perseverance.
So many have almost reached the goal of their ambition or dreams, but, losing faith in themselves because of disappointment and failure, have given up and the golden prize has been lost forever.
If you hesitate, some bolder hand will stretch out before you and get the prize.
Perseverance is sometimes but another word for self-reliance. I have heard stories of men who have met with major losses and rejection, and have bridged them over by simple perseverance, aided by a firm belief that they have favor with God, and that Providence would “overcome evil with good.” You will see this illustrated in any sphere of life.
WHATEVER YOU DO, DO IT WITH ALL YOUR MIGHT
Work at it, if necessary, early and late, in season and out of season, not leaving a stone unturned, and never deferring for a single hour that which can be done just as well now. The old proverb is full of truth and meaning, “Whatever is worth doing at all, is worth doing well.” Many acquires a fortune by doing his business in excellence, while his neighbor remains poor for life, because he only half does a half ass job.
Ambition, energy, industry, perseverance, are indispensable pre-requisites for success in business.
GET ABOVE WAITING FOR SOMEONE TO DIE
How many times have I heard this “I will tell you confidentially; I have a wealthy old aunt, and she will die pretty soon; but if she does not, I expect to find some rich old man who will lend me a few thousands to give me a start. If I only get the money to start with I will do well.”
There is no greater mistake than when a young man believes he will only succeed with borrowed money. Money is good for nothing unless you know the value of it by experience. Give a boy twenty thousand dollars to start a business, and the chances are that he will lose every dollar of it before he is a year older. Like buying a ticket in the lottery; and drawing a prize, it is “easy come, easy go.” He does not know the value of it; nothing is worth anything, unless it costs effort. Without self-denial and economy; patience and perseverance, money has no value to you. Nine out of ten of the rich men of our country to-day, started out in life as poor boys, with determined wills, industry, perseverance, economy and good habits.
DO NOT SCATTER YOUR SKILLS
Engage in one kind of business only, and stick to it faithfully until you succeed, or until your experience shows that you should abandon it. A constant hammering on one nail will generally drive it home at last, so that it can be clinched. When a man’s undivided attention is centered on one object, his mind will constantly be suggesting improvements of value, which would escape him if his brain was occupied by a dozen different subjects at once. Many a fortune has slipped through a man’s fingers because he was engaged in too many occupations at a time. There is good sense in the old caution against having too many irons in the fire at once.
Men should be systematic in their business. i.e create a duplicatable system. By introducing a system into all your transactions, doing one thing at a time, always meeting appointments with punctuality, you find leisure for pastime and recreation; whereas the man who only half does one thing, and then turns to something else, and half does that, will have his business at loose ends, and will never know when his day’s work is done, for it never will be done. Of course, there is a limit to all these rules. We must try to preserve the happy medium, for there is such a thing as being too systematic. There are men and women, for instance, who put away things so carefully that they can never find them again.
The 90/10 rule can be applied to all areas of life.
The Simple Principle of 90/10 that Affects Your Whole Life
As we close as a Life and success Coach, I would like to offer my services to help you in your accumulation of wealth goals.
I can help with 3 of the wealth indicators mentioned earlier.
1. Investing in real estate
2. Selling informational products
3. Publishing or on-line marketing
As a Realtor Investor, I can help you find your first home or help you build wealth by finding discount properties to invest for your real estate investment business. Be it rehab properties to purchase and flip or generating passive income with buy and hold properties. Contact me on the web for my list of off market and MLS listed properties at www.myrnayounghelps.com
As a Life Coach, I can help you design information products around your specialty or Niche.
Think Tony Robbins. Tony Robbins made millions off his Personal Power information products.
Robert Kiyosaki made millions of his “Choose to be Rich” information products.
Mike Vu made millions off his “How to buy properties with no money down” products.
As an author of 3 books, a podcaster, a blogger, a YouTuber, I can help you write the book that God placed inside you, market it on Amazon, social media, YouTube and get interviews to promote.
Also, please subscribe to the iTunes podcast and leave a review. I would be so grateful.