Monday, December 31, 2012

NOTES FROM EIGHT STEPS TO SEVEN FIGURES BY CHARLES B. CARLSON


NOTES FROM EIGHT STEPS TO SEVEN FIGURES

BY CHARLES B. CARLSON

Carlson took 170 individuals into account who invested their way to $1 million.  He surveyed ordinary people who saved their earnings.

Buffett – Washington Post, American Express, Coca-cola, Well Fargo, Gillette

Example:       A.J. Wright – started at age 25 and had $1 million by age 55

                        Philosophy:  “Save 10%”

                                                “Give 10%”

                                                “Spend the rest after taxes”

Example:       Saul is age 76 with $2 million.  He didn’t start investing until he was in                        his sixties.

                        Philosophy:  “Buy blue chip stocks with no intention of selling”

Most don’t reach seven figures because they want to consume today and still have seven figures later.

To participate in the survey the person needed $1 million in investable funds excluding their homes.

Survey participants:

o   80% were male

o   Average age was 60 years old

o   Average was married 32 years

o   Average income was $151,500 annually

o   Median income was $115,000 (1/2 below ½ above)

o   Most are retired and receive income from investments

o   1 in 5 are divorced (national average is 1 in 2)

o   Average number of kids is just under 2 per household

o   80% have undergraduate degrees

o   50% have advanced degrees

o   Average number of jobs held is 3 (national average number of jobs held is 13)

o   Average years at current job is 19

o   Less than 30% maintain a monthly budget

o   40% do their own taxes

o   They’ve investing on average for 30 years

o   Average portfolio size is $2.7 million

o   More than 85% had no investment experience prior to starting

o   On average they hold 44 stocks

o   Only 3% have ever declared bankruptcy

o   60% said their parents were important or very important influences on their investing

o   More than 80% classified their parents as frugal

o   Only 18% classified their financial records as average or below average

o   Only 19% have ever bought options

o   Only 6% have ever bought futures

o   Less than 30% own gold

o   Only 15% have ever sold a stock short

o   48% use the advice of brokers and 15% use the advice of investment newsletters

o   Of those that use brokers, more than 40% use a traditional broker (full service)

o   1 in 5 belonged to an investment club and have done so for an average of 8 years

o   60% admitted to acting on a hot tip

o   These tips panned out about 20% of the time

o   Two-thirds track their investments with a personal computer

o   One-third inherited money but in most cases it had little effect on their finances

o   Most used money saved from their paychecks

o   70% spend $500 or less on investment research

o   More than 35% spend $250 or less on investment research

o   Only 9% spend more than $1,000 per year on investment research

o   Most spend on average 12 hours per week tracking their investments or about 2 hours per day which is ½ of what most Americans spend watching television each day

o   More than 50% call themselves growth investors

o   Around 25% call themselves value investors

o   Around 16% call themselves growth and value investors

o   Well over 50% invest at least monthly another 28% invest at least quarterly

o   A slight majority consider themselves to be conservative, 26% aggressive, 14% both

o   Most fear a prolonged bear market and taxes most

o   75% hold their investments for at least 5 years

o   40% hold their investments for 10 years or longer

o   Only 8% hold their investments for 1 year or less

o   48% have an average tolerance for risk

o   38% have an above average tolerance for risk

o   13% have an below average tolerance for risk

o   1 in 4 attempt market timing

o   70% consider taxes important or very important

o   ¾ invest in what they know

o   1 out of 2 does believe individual investors can beat the market consistently

o   Most participate in a 401(k) and invest the maximum

 

Common Success Factors across All

1.     Start now

2.     Establish a Goal

3.     Buy only stocks and stock mutual funds

4.     Swing for singles

5.     Invest every month no matter how small the amount

6.     Buy and hold and hold and hold

7.     Take what Uncle Sam gives you (401(k), IRA, Roth IRA)

8.     Limit shocks to your finances    

 

Example:       Robert Cole age 56           

                        Started at age 28

                        Currently has $1.2 million portfolio

                        90% in 401(k)

                        Took 12 years to reach $50,000

                        Took 15 years more to reach $1 million

Fear drives most to invest.

Example:       Peter H. started investing at age 47

                        At 58 years he now has 7 figures

                        His advice is “Just right that first check.”

Step 1:           Start Now

Popular Excuses:

I don’t have the money to invest.

Most millionaires started small.

They stretched their paychecks.

They paid themselves first, even if it’s only $5 or $10.  Get in the habit and then it grows.

They are frugal.  They look at their spending habits.  They don’t eat out.  They pay cash.  They drive cars until they stop.

They want a better financial future more than things.

Some worked second jobs.

They use “found money”.  Gifts, tax refunds, home or property sales, inheritances

I don’t have enough money to invest.

You just have to find the vehicles.

DRIPs       (minimums rarely above $100)

401(k) (as little as 1% pre-tax)

Mutual funds (monthly ACH purchase)

I don’t know enough.

You must seek out information.

Books, newsletters, magazines, investment clubs, T.V., radio, internet

Internet and library are the best



Continuing education classes at community colleges

I don’t have the time.

The average adult spends roughly 28 hours per week watching T.V.

You must look at your priorities.

Most millionaire investors spend an average of 12 hours per week.

I’m too young.

If time is the most important part of this process, then how can you be too young?

Use stocks to teach a child.

Registration of child’s account:

In your name – you control

Unified Gift to Minor (UGMA)

Dividends at child’s rate

At age of majority – control of account goes to the minor

Offer kids matching funds

Use DRIPs (Coca-Cola, Walt Disney, Hasbro, Mattel)

Mutual Funds

I’m too old.

Many millionaires didn’t start investing until their 50’s, 60’s and 70’s.

Average millionaire portfolio was nearly $2.2 million and took an average of 30 years to accumulate.

The first million takes much longer than the second or third million.

If it takes 22 years for the first million, it will take only 7 years to accumulate $2 million with no further investment at 10%.

Beginning at 35 years of age you need to invest $650 per      month to reach $1 million by 60 years of age.

Beginning at 40 years of age you need to invest $1,200 per month to reach $1 million by 60 years of age.

Beginning at 45 years of age you need to invest $2,200 per month at 11% to reach $1 million by 60 years of age.

I don’t have a broker.

You don’t need a broker.

Dividend Reinvestment Plans (DRIPs)

Mutual Funds

The market is too high.

There is never a bad time to invest and get started.

            Step 2:           Establish a goal.

Any goal, it really doesn’t matter what it is as long as it matters to you.

                        Example:      

Retire early

                                                Pay for college

 

            Maintain purchasing power

            Leave good estate to children and grandchildren


Having Our Say: The Delany Sisters’ First 100 Years


Having Our Say: The Delany Sisters’ First 100 Years

          Page 50

             Sadie lived to be 109 years old.

          Bessie lived to be 104 years old.

Sadie made getting old a project.  She began doing yoga at around 60 years of age.  Bessie started at about 80 when she decided that Sadie looked better than her.

They eat a whole clove of garlic chopped every morning.  They swallow the pieces whole to prevent odor.

They take a teaspoon of cod liver oil daily.

Eat as many as seven different vegetables a day.  Plus lots of fresh fruits.

Take vitamins and minerals.

Bessie takes tyrosine when she’s a little blue.

They eat their big meal of the day at noon.  In the evening they usually have a milk shake for dinner.


Goals by Zig Ziglar


Goals by Zig Ziglar



Write down a dream sheet.


Everything in detail: travel, vacation, education, family, health, religion, reading, house, car and all the options, everything, promotions, etc.


When finished, set aside 24 – 48 hours, come back to it later and beside each item write down why you want to have or do it.  If you can’t do this in one sentence, remove the item from the list.


Fear is the reason 97% of all people never set goals.  Fear is:  False Evidence Appears Real.


The Steps.


          Write down the goal.

          Put a Date on it.

          List the obstacles you have to overcome.

          Identify the people, organizations and groups you need to work with.

          Spell out a plan of action.

          Set a time limit.

          Identify all the benefits of achieving your goal.


Yale 1953 study of the graduating class:


          3% took all seven steps to goal setting

          10% took part of the steps

          87% took none or very few of the steps


In 1973, in a follow up study of their career and finances, the 3% who took all seven goal setting steps accomplished more than the 97% combined.


Quote:         J.C. Penney  “Give me a stock clerk with a goal and I’ll give you a man who will make history.  But give me a man without a goal and I'll give you a stock clerk.”


The Seven Steps to Goal Setting:


Identify the goal.

Set a deadline for achievement.

List the obstacles to overcome.

Identify the people and groups to work with.

List the skills and knowledge required for reaching the goal.

Develop a plan of action.

List the benefits.  What’s in it for me.



 In addition to the seven steps of goal setting, there are seven types of goals.


          Social

          Mental

          Physical

          Family

          Career

          Spiritual

          Financial


Evaluate yourself from 1 to 5 in each of these seven types of goals (with 5 being excellent).




ALL YOU CAN DO IS ALL YOU CAN DO by AL Williams


ALL YOU CAN DO IS ALL YOU CAN DO

A.L. WILLIAMS

 

A.L. WILLIAMS POWER PRINCIPLES

 

  1. You Demand for Yourself Happiness and Success.
  2. Start to Dream Again. (2/3 of the battle is in your mind.)
  3. You’ve got to Compete.
  4. You Can Change!

 

DESIRE is the secret to winning.  You must also have a specific goal and a plan.

 

6 Steps to Success (by Napoleon Hill from Think and Grow.

 

  1. You Must Have a Specific Goal
  2. You Must Have a Specific Time to Achieve Your Goal
  3. You Must Write Down Your Goal
  4. You Must Develop a Plan to Achieve Your Goal
  5. You Must Decide the Price that You are Willing to Pay
  6. You Must Think About Reaching Your Goal Everyday

 

PRINCIPLE 1

 

            Desire has strength when it has concrete form.

 

PRINCIPLE 2

 

            Desire becomes an Obsession.

 

PRINCIPLE 3

 

            Desire becomes a Commitment.

 

            3 Stages to Commitment

 

                                                              i.      Lying (you really don’t believe it) but tell no one you can’t really do it.

                                                            ii.      Quitting

                                                          iii.      Commitment

 
PRINCIPLE 4

 

            Desire becomes endurance

 

            It takes 3 to 5 years to get a business off the ground.

 

You will beat 90% of the people in this country by showing up, working hard, having integrity and doing what’s right.  But the last 10% is a dog fight.

 

MAGIC FORMULA – Beat 50% by working hard.  Beat another 40% by having honesty and integrity.  Most people are fence sitters and mealy mouths.

 

  1. BECOME A DREAMER AGAIN
  2. HAVE A CRUSADE
  3. DREAM BIG BUT KEEP IT SIMPLE
  4. ALWAYS BE POSITIVE
  5. TREAT PEOPLE GOOD
  6. NEVER GIVE UP

 

Do not compare yourself to anyone else, especially those who have already made it.

 

Go inch by inch.

 

Work with what you have.

 

Dreams are the fuels that fire desire.

 

STEPS FOR A SUCCESSFUL BUSINESS

 

  1. Manage Activity – take action
  2. Create Little Successes
  3. Don’t get bogged down in paperwork
  4. Have a positive winning attitude

 

4 FUNDAMENTALS FOR A POSITIVE WINNING ATTITUDE

 

  1. Always be excited
  2. Stop making excuses.  Life is 10% what you make it and 90% how you take it.
  3. Always be up
  4. Make a total commitment.  Burn all your bridges.

 

3 RULES FOR SUCCESSFUL LIFE

 

  1. Always be positive
  2. Always be positive
  3. Always be positive

 

HOW TO MOTIVATE PEOPLE WITH PRAISE

 

1.      Praise people for everything.  (Attitudes, ideas, successes. Nothing is too little to praise.

2.      Know individuals first name and use it.

3.      Make sure everyone hears your praise.

4.      Have fun with praise.  Be creative with your recognition.

5.      Use praise not criticism to get results.

6.      Praise people when they are down and hurting.

7.      Praise must be sincere.

8.      Praise at home.  Start with spouse and children.

9.      Don’t ever stop praising.

 

BUSINESS GUIDELINES

 

  1. Others don’t care how much you know until they know how much you care.
  2. Live with your people through their good times and bad times.
  3. Don’t be afraid to show emotion.
  4. Make an unconditional commitment to your people.

 

           

 WHEN YOU FEEL LIKE QUITTING

 

  1. Use the magic of 30 days.  Set a stiff goal and achieve it in 30 days or do it regularly for 30 days.

 

  1. Give your efforts time to compound.

 

TOUGH FACTS

 

  1. You never get used to rejection.
  2. Things are never as good as they seem or as bad as they seem.
  3. Before you can be good, you can be bad.

 

 

 

Don’t compare yourself to others.

Don’t get discouraged.

Don’t almost do enough.

Talk is cheap, act!

 
KEEP IN MIND ON YOUR JOURNEY

 

  1. Do the “little bit more principle.”
    1. Winners work hard and a little bit more
    2. Winners pay the price and a little bit more
    3. Winners are committed and a little bit more
    4. Winners are good people and a little bit more
  2. Do pick ONE thing to go for.  You can’t do everything.
  3. Do learn to be flexible
  4. Do find yourself a hero
  5. Always play scared.  Work like it’s your last chance.
  6. Don’t sit around waiting.

 

WARNINGS

 

  1. Don’t compromise your integrity.
  2. Handle your money wisely.  Be a good steward.
  3. You can’t be selfish or self centered.
  4. Have the right priorities.  Live a balanced life.

 

 

 

LIFE GIVES YOU WHAT YOU ACCEPT.