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Booknotes: The Millionaire Maker

February 8th, 2007 at 07:03 pm

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)

Asset plan

Shift $ of Assets as follows:
• For instance:
• buy $ of rental property
• invest $ in a business
• loan $ in a promissory note


Cash Machine
• 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

Financial Baseline:

Income: $ /mo (pre-tax)
Expenses: $ /mo (average)
Assets: $
• List assets
Liabilities: $
• List liabilities

Skill Set:
• 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.

6 Responses to “Booknotes: The Millionaire Maker”

  1. tinapbeana Says:

    i think the goals are such an important thing. but not just the goals (i want to retire comfortably), but the small milestones along the way (i want to come up with an extra 200 per month, either saving or earning income or both). small, concrete, actionable items...

  2. kimiko Says:

    Unfortunately, all the get rich quick books involve starting your own business. But it's hard and extremely time consuming to do that on the side to generate much income. Most of the businesses, with the owners devoting their full time to it, fail and yet these authors keep expecting everyone to have a highly marketable skill that can easily bring in tons of income. Please!! how unrealistic could that be? If everyone could do that, they won't have to go to school and get a job in the first place.

  3. Ima saver Says:

    I tried the rental idea and it cost me a small fortune. Then we opened a business with 2 other couples and it was the worst 2 years of my life. Sorry, but we will keep working 60 hours a week and save our money!

  4. zetta Says:

    Yes, I agree both rentals and starting your own business can be very risky propositions! But I have to think there must be a conservative or at least moderate-risk way to invest in real estate, and my father-in-law runs a successful business in the building industry that he started from scratch so I know it can be done. Whether these are better paths to wealth than investing in the stock market is a matter of great debate! DH and I have become very disenchanted with our engineering careers, so I'm using this time as a SAHM to investigate alternatives and really think about what to do next.

  5. katwoman Says:

    The grass always looks greener on the other side, doesn't it?

    The above commentors got it right; landlording is definately NOT a passive endeavor (I can attest to this personally) and business ownership is just more blood, sweat and tears. My bro is a business owner and yes a millionaire who is saddled with a money hungry partner that is never satisfied. What good is all that wealth when you have to worry about a heart attack?

  6. DivaJen Says:

    flash (former member here at SA) reviewed this book http://www.divatribe.com/content/view/425/118/, with quite a different perspective.

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