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Lesson No. 8 – Identifying, attracting and
using external resources – Other People’s Time, Other People’s
Money, Mentors and many other absolutely necessary things.
I told you about my first investment, the one with the room I
let with 120 $/month, after I invested 9 000 $. That is I achieved
a profit rate of 16%/year and an investment pay back of 6.25 years.
At first sight, it seems OK, doesn’t it? but look what I did as
the next step in the financial evolution:
I went to the bank and I requested a credit for a two-room apartment.
And I received the credit under the following terms: They gave
me 10 000 EUR, for 15 years, with an interest rate of 9% per annum.
Therefore I had to reimburse 100 EUR/month. I spent another 4
000 EUR as prepayment for the purchase and another 2 500 EUR for
refurbishment and furniture. Thus the total of my investment amounted
to 16 500 EUR. I let that apartment with 210 EUR/month. Therefore
I received the difference of 110 EUR/month. That is a profit rate
of 110/6 500 = 20%/year. Do you see the difference between 16
and 20, it is about 25% more. An ordinary man would see this,
but an Investor would see more ... let me show you ... If we think
about the fact this amount of 100 EUR/month is not paid by us,
but by the tenant, and with every passed month the balance to
be repaid to the bank is reduced with the technical rate paid
(less the interest), it’s like somebody gave you the 10 000 EUR,
but for a period of 15 years, that is 55 EUR/month. Therefore,
the right calculation for the profit rate would be the following
: (110 + 55)/6 500 = 30 %. Thus, by attracting resources (capital)
from « other people » by means of the bank, I achieved an almost
double profit rate, compared to the variant according to which
I did not use the bank. You can take into consideration the increase
of that apartment’s value and calculate the investment profit
rate...
You could see above just an example about the way you can use
Other People’s Money to your advantage. You can also use Other
People’s Time and Efforts in MLM businesses, or to create businesses
and pay salaries to the employees who wish to spend their Time
and Effort for your prosperity ...
Mentor – another very important thing. Leonardo da Vinci, Raphael,
Socrates ... all of them had mentors and were, in their turn,
mentors. I wasted a lot of time trying to discover things that
had already been discovered by other people a long time ago. I
made exactly the same mistakes as them, losing money, but most
of all time. Find yourself this Mentor and follow him, «steal»
all that he knows and help him climb even higher and pull you
along ...
Have you ever seen the image of iron atoms? They are chaotic
... each one goes to a different direction ... it’s crazy ...
And look at the atoms of a magnet. All of them are oriented to
a certain direction, very organized ... If you put the magnet
close to that piece of iron, things change. The iron atoms start
orientate themselves to the direction of magnet atoms, and that
piece of iron is practically transformed into a magnet, which,
in its turn, will start attracting metals. The same thing happens
when you start to change your way of thinking, at first sight
you changed only a little, but the world around you has another
colour and expenditures become investments ...
- An overall view
on the Incomes and Expenditures Budget and the classical methods
of taxation for a natural person.
- Analysis of the
Incomes and Expenditures Budget, of the prospect and of the
methods used to increase the incomes and to decrease the expenditures.
- Where does money
come from, why and how it is taxed, depending on its source.
Test of evaluating the financial skills and the incomes. Basic
notions of Financial Education. The 45-year plan.
- The world of the
rich is a world that lives according to other rules. We begin
with the beginning, and the beginning is changing your way of
thinking.
- Preparing a Plan
to obtain the financial independence.
- Basic rules and
techniques for increasing the incomes and decreasing the personal
expenditures (that is for getting rich).
- Types of Investments
and types of Investors. Active Investments. How we can generate
an Active Investment.
- Identifying, attracting
and using external resources - Other People's Time, Other People's
Money, Mentors and many other absolutely necessary things.
- DREEEAMS ! I understand
that if I invest I earn money without working... but where from
can I get money to invest? Financial leverages. Pirghiile financiare.
- The Past and
Visions on the World Financial Future. Why is it good to be
Rich? Ways of protecting the Investments.
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