I stumbled across The Millionaire Maker on the "new books" shelf of my library. While it is actually a "get rich quick" instead of a "get rich slow" book (the things the author recommends doing with your home equity and your IRA are truly frightening, and her example investments and returns are ridiculous), it did have a couple of ideas that I found useful.
I really liked her version of a net worth statement:
One-Year Freedom Day Goals:
• List goals for where you want to be in 1 year, for example:
• Establish a business
• Shift from draining assets to performing assets
• $ of invested assets
• $ /month in passive income
• Create $ / month of cash flow from new business
• Eliminate $ of debt
• One less employee in family (replace salary with passive income)
Shift $ of Assets as follows:
• For instance:
• buy $ of rental property
• invest $ in a business
• loan $ in a promissory note
• List type of business, cash flow goal, and ramp-up time
Passive Income: $ /mo
• For instance:
• $ /mo in rent
• $ /mo from note
• $ /mo from dividends
• Projected appreciation on rental property
Income: $ /mo (pre-tax)
Expenses: $ /mo (average)
• List assets
• List liabilities
• List skills
The author doesn't believe in saving your way to wealth -- in her view it takes too long. Instead, she advocates finding ways to generate extra income, through starting small side-businesses and passive income from owning rental property. She wants you to think up a business you can start within the next 24 hours based on skills and resources you already have (simple things like dog walking, computer tutoring, etc.) You use this first business to learn about how to run a business, and to provide a source of income for real estate investing. Eventually your goal is to reach the point where you have enough income from your side businesses and rentals that you can quit your job if you choose.
Our goal is to take those skills and gifts you have and put you in immediate action so that you can learn a whole new skill set, that of running your own business….Here’s the sequence:
1. Use a known skill set.
2. Create a viable Cash Machine.
3. Learn business skills.
4. Take those business skills into any arena you desire.
Whatever you decide to do, your first business:
1. Should have a low barrier to entry. That is, you should be able to have it up and running and possibly generating real money within 24 hours.
2. Shouldn’t take more time than you can allot, though perhaps you can get up an hour earlier every day.
3. Shouldn’t take more of your capacity than you can allot, tough it will be a stretch.
4. Should diversify your income.
5. Should give you a nice return on your investment.
Again, I want to emphasize that I think the book promises the moon, and I’m definitely not following her investment advice. However, a few worthwhile ideas gave me that lightbulb feeling: 1) the idea of starting a side business to learn business skills, 2) focusing on passive income in addition to salary vs. expenses, 3) setting long term and one-year goals.