“ANDY, I WANNA BE A MILLIONAIRE SO FREAK’N BAD”

One of my coaching clients and GOLD COURSE students told me this last Friday on one of our monthly private training sessions.

I asked him if he knew Bruno Mars – Bruno has loftier ambitions.

So in today’s lesson, I am going to review with you what I learned from studying under a true (real-life) self made Billionaire.

BILLIONAIRE.

Remember, in yesterday’s lesson (Johnny Depp) I basically told you want NOT to do.

#1. You net worth calculation is SIMPLE.

Take the net income from you GROUP HOME BUSINESS and Multiply it by 4. That is it. EXAMPLE:

If you have 5 GROUP HOMES and each one makes you $2,000/ month then you are making $120,000 per year. Now add back personal misc. items such as Phone, Internet, Cable, Insurance, Automobile Expenses and even your personal rent or mortgage (if you run that through the business) this could easily be another $45,000 / year. Now take THAT # and multiply by 4.

$165,000 X 4 = $660,000. YOU ARE WORTH $660,000

DO THAT 1 more time and you are a MILLIONAIRE. IT IS THAT SIMPLE. WHY?…..

#2. INTEREST RATES.

Yes, rates are going up. But savers are still losers. They make about 2% on their CASH at best. Millionaires, Deca-Millionaires and Billionaires don’t sit on cash (by and large). They play with productive (semi-illiquid) assets. In the above example, the buyer of those group homes would make a 25% return on his / her money. This is how the game gets played

#3. CASH IS TRASH.

The Self-Made Billionaire that I studied under buys and sells companies. BIG COMPANIES. He started small and then built out his team. Back in 2011 when I was studying under him, he was worth about 2.8 Billion. Guess how much cash he had? About $50 Million. Do your homework and run that as a %.

Obviously every guy / gal and industry will be a bit different, but this is something to consider.

#4. AIM HIGH. PICK YOUR NICHE AT FIRST.

I teach people (LIKE YOU) how to get financially independent and successful using one of the oldest methods (and 2nd oldest profession) in the world.

LANDLORDING.

THE GROUP HOME AND GOLD COURSE niche is a bit different in that we take a small, 1,500 sq ft home and rather than renting it out to families, we rent BEDS out by the room.

Rather than grossing $1,200 per month – I teach you how to make $4,000 – $6,000 PER MONTH.

It is a SUB-NICHE within the real estate sector.

And it works. It makes COLD HARD CASH. SPENDABLE INCOME.

(NOT EQUITY – have you ever gone out to dinner or tried to purchase a house using your home equity? No. It doesn’t work).

I TEACH YOU HOW TO MAKE MONEY USING A TARGETED NICHE.

MY LESSON TO YOU

Although I did not learn this from any of my mentors, one thing that I must emphasize is the fact that $1,000,000 is not enough. Think back to lesson #2. Interest rates. Now think about real costs in a Sand State like New York, CA, FL (heck, even Texas now)…..Here are some simple calculations:

– A nice house is at least $1,000,000. With property taxes, insurance and maintenance you will drop at least $9,000 per month assuming you have some debt on it.

– Want to eat at whole foods? Tri-Tip Steak and a Nice Malbec on the weekends? Free Range Chicken? Organic Veggies? With a small family you will spend at least $1,500 / month.

– Want a nice car? You insurance alone will be $2,000 per year. Chances are you need two cars

– Vacation? Umm, yes. Get ready for $10,000 – $15,000 per year or roughly $1,000 per month. Want to fly private? One 3 hour leg to Cabo from DFW will run you $12,000. Thats $24,000 round trip. You get the point

– Schools, Nannies, Babysitters etc. In most instances, the public school systems are HORRIFIC. ABSOLUTELY HORRIBLE. Get reaady for $1,000 per month BARE MIN per child. 2 Kids? That’s $24,000 / year. The reality is that it will be closer to $50,000 for two kids.

Just like a business, your personal P&L is VITAL. It is an expense. And it is never what you think it is. It is ALWAYS more. I strongly encourage my GOLD COURSE students to get a book-keeper or begin keeping books on their personal expenses. In the above example it is probably damn near $16,000 PER MONTH and we haven’t even talked about clothing, utilities, telephone, internet etc.

$1,000,000 of Cash in the bank wouldn’t even cover 1 month of expenses. Hell, $1,000,000 of STOCK with an annual dividend of 3% (rough S&P dividend yield) would only cover about 3 months of expenses.