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He
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Eugene
Schwartz possessed the world's most financially
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WEALTH
How
Much Money Is That Job Offer Really Worth?
You've
been looking for a better job and, finally, it looks like you've
got an offer you can't refuse. Or can you? If the job change
also means a change in the city or state where you'll be living,
an increase in your expenses could eat up that tempting salary
increase. To compare the cost of living in various major cities
around the country, use the calculator at www.homefair.com/homefair/calc/salcalc.html
(a site that's associated with the National Association of Realtors).
-
Charlie Byrne
HEALTH
More Proof That the Right Diet Can Help Prevent Cancer
A
research team at the University of Pittsburgh, led by Sanjay
Srivastava, recently studied the contribution of diet and nutrition
to the development of two hard-to-treat, low-survival-rate cancers:
pancreatic and ovarian. What they discovered is that red chili
pepper and broccoli are both effective inhibitors of these diseases.
When the researchers added capsaicin (cap-SAY-shin), the compound
that makes peppers hot, to a lab dish containing pancreatic
cancer cells, it caused the cancer cells to undergo "apoptosis."
In other words, they self-destructed. Normal pancreatic cells
were not affected.
And
in another study, when they added phenethyl isothiocyanate (PEITC),
which is found in cruciferous vegetables such as broccoli, to
a lab dish with ovarian cancer cells, it interfered with a key
protein necessary for the growth of the cancer.
These
results may help explain why people who eat large amounts of
fruits and vegetables have a lower risk of cancer.
(Reference:
Reuters)
-
Jon Herring
WISDOM
7
Questions to Ask Yourself the Next Time You Make a Mistake
Show
me a man who claims to be mistake free and I'll show you:
- an
egomaniac
- somebody
with a great PR machine
- a
cult leader
Mistakes
are part of life ... personal and corporate life. Building wealth,
for example, is all about taking the extra step, getting out
of your comfort zone, trying new things. If you think you can
do any of that without making mistakes, you're ... well, mistaken.
One
definition of courage is being able to face and overcome your
fears. Just as good a definition is being able to face your
own mistakes and move on. In both cases, you learn something
about yourself and become a better person for it. In other words,
mistakes can be extremely helpful if you take something positive
away from the experience.
-
Andrew Gordon
TODAY'S
ACTION PLAN
The
next time you make a mistake, in order to make sure you learn
something positive from the experience, ask yourself these seven
questions (from Rob Woollard of StartupNation.com):
1.
What can I learn from this mistake without beating myself
up?
2.
How can I handle this situation next time to ensure
a more positive outcome?
3.
Does dwelling on this mistake any longer help my business,
family, mental or physical health?
4.
Can I reframe this setback as an opportunity and move toward
a positive change?
5.
In retrospect, can I see that past mistakes actually
were blessings?
6.
Is this mistake part of my learning curve moving me toward
greater success?
7.
Are there people I admire who have made major mistakes
but still achieved great success?
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TODAY'S
MESSAGE
"Erfahrung"
Knowledge - Where I Got My Ideas About "Automatic Wealth"
by
Michael Masterson
"I
found this book slightly disappointing," ML, a Sand Diego
reader, said of "Automatic Wealth." "To me, the
book was more of a 'how I succeeded' book than I was expecting."
I
have read very few of the reviews for "Automatic Wealth."
Generally, what I do is glance at the stars. If it gets four
stars on Amazon.com (the maximum allowed), for example, I read
no further. And the great majority of the reviews have been
three or four stars.
I
do read the negative reviews. I can't resist the urge to find
out what someone didn't like about a book I put so much into.
Happily,
the negative reviews have been few and far between - maybe four
or five altogether. Of those, two were downright stupid - lunatic
comments that seemed to have nothing to do with the book. Another
two were clearly written by financial planners and/or stockbrokers
who didn't like my very guarded attitude toward the place they
earn their money - the stock market.
But
I could not dismiss a two-star review by this California reader,
because he seemed like a bright, fair-minded guy who thought
"Automatic Wealth" had some serious flaws.
His
first criticism - that "Automatic Wealth" is fundamentally
a "how I succeeded" book - is accurate. But that's
something he should be happy about.
There
are two kinds of books about success: those written by analysts
(i.e. people who study the success of others) and those written
by achievers (i.e. people who have been successful). ML seems
to think that my ideas about building wealth have less value
than, say, Thomas Stanley's in "The Millionaire Next Door."
Why? Because my ideas spring from my experience, whereas Mr.
Stanley's ideas come from his research, which covers a much
wider base.
Two
points that I want to make on that.
First,
"Automatic Wealth" is based not just on my success
but also on the success of about two dozen people who I've mentored.
Not only have my ideas worked for me, they have worked for other
people too. They worked for FJ, who went from bankruptcy to
earning $450,000 in less than 6 years ... for SB, who went from
a dead-end job making $35,000 to being able to buy a $1.6 million
home with cash ... and for SP, whose income rose from $16,000
when I met him to more than a million today. And they worked
for more than a dozen other friends, colleagues, and family
members. (At the next ETR
Wealth Building Conference, we are going to
show a video in which each of these people tells their story.)
So it's not just a sample of one.
Second,
it's good that "Automatic Wealth" is based on personal
experience, rather than research. Research is second- and third-hand
information. Nietzsche called that "wissen" knowledge
and contrasted it to experience-based knowledge, which he called
"erfahrung."
Wissen
is the kind of knowledge you get by reading books and analyzing
data. Erfahrung is the kind of knowledge you get from going
out into the world and actually accomplishing something.
The
problem with wissen knowledge, Nietzsche said, is that it can
be easily manipulated. In the hands of a clever arguer, statistical
and other secondary information can be shaped to prove almost
any point. Anyone who has ever spent any time in politics or
inside a courtroom can understand the truth in that.
Nietzsche
warned that in the future, wissen knowledge would be preferred.
Rather than relying on what they have actually experienced ...
what they have actually seen with their own eyes, smelled with
their own nostrils, touched with their own hands, and heard
with their own ears ... he predicted that future citizens of
the world would doubt themselves and rely, instead, on what
they were told by experts.
Nietzsche
was right. That's exactly what happened during the course of
the 20th century. And now that we are squarely into the 21st
century, the idea of making important life decisions based on
erfahrung, your own experience, seems - at least to nice, perfectly
smart and well educated people like ML - naive ... even foolish.
Needless
to say, I don't feel that way. I think we are all better off
directing our lives based on what we know from experience to
be true, rather than on what we've been told (by the government,
by big business, by vested interests, etc.) to be true.
In
my humble opinion, some of the most commonly held, "common-sense"
ideas about making money and accumulating wealth are downright
falsehoods. But I'll get back to that in a moment. Let's take
another look at what ML has to say about "Automatic Wealth."
"He
[me] is very specific in recommending those things that have
done well for him. He offers many strategies for making more
money doing specific types of [high paying] jobs, investing
in real estate, and starting or financing small businesses.
There is good advice in there, and I think it is worth reading
for that, since Mr. Masterson is very successful.
"But
the book's pitfalls center around specific investing advice.
"For
instance, he recommends not investing much in the stock market
because of its volatility (see "Word to the Wise,"
below), and talks about how much he likes investing in bonds,
since if you hold them to completion you know what you are getting.
This is true, but does not consider the effects of inflation,
which makes that steady income worth less (whereas stock valuations
and dividends tend to keep up with inflation). This is a perfect
example where you have to realize he is telling you what has
worked for him, but may not be the best advice for many (although
I agree with him that the stock market is currently overvalued)."
I
disagree on the small point ML makes - about bonds and inflation.
The truth is that the return you get on bonds does indeed take
into account the effects of inflation. When computing yields,
bond dealers include projection inflation rates into their calculations.
If they didn't, the bond market would have collapsed long ago.
But
on the larger point, ML's implied criticism that I am negative
toward stocks, I must plead guilty. I don't mean to be. But
I've spent almost 30 years in the investment advisory business.
During that time, I've seen lots of people get rich. But those
who got rich and stayed rich were the brokers, promoters, and
gurus of stocks. Seldom were they the investors.
Even
the greatest stock picker of all time, Warren Buffett, didn't
get rich by trading stocks. He got rich by being a businessman
and then parlaying his wealth into Berkshire Hathaway, the company
that he's kept in good shape through a combination of smart
stock selection and great business promotion.
Let's
get back to ML:
"He
[me] also seems to contradict himself when he uses the stock
market's historical average of 10% returns to claim you need
a net worth of 10 times your living expense to retire. In one
breath, he is poo-pooing the stock market, then using its average
returns in his retirement calculations."
Again,
I can't accept this as a criticism. My point about the stock
market - a point I've been making over and over again in ETR
and that I make in "Automatic Wealth" as well - is
that it is nearly impossible to beat the stock market. There
is a ton of wissen-type information out there that validates
the truth of this. Most professional stock traders can't beat
the market, and individual, non-professional investors usually
take a serious beating.
The
data tells us that. But so does my experience - my own experience
of trading stocks as well as what I've personally witnessed.
But
this is all beside the point. I am not against stocks. I'm against
the idea that the average guy can expect to earn, on the average,
25% a year (or more) on his stock portfolio. My advice about
stocks - "Automatic Wealth" and elsewhere - is to
put a reasonable amount of money at play (for me, a guy who
thinks the market is highly overvalued, a small amount feels
comfortable) and to invest it in either a no-load index fund
(in which case you should hope to get no more than 10% over
the long haul) or with an individual manager or advisor who
has a proven, long-term track record of 12% or 15%.
I
have recommended several such advisors in the past. For example:
- Steve
Sjuggerud, president of Investment U and editor of True
Wealth, on stock investing
- Porter
Stansberry, founder of Stansberry
Research, on breakthrough profit-taking
- Alex
Green, director of the Oxford
Club, on investment planning
And
for the past several months, I've been working with Andrew Gordon,
ETR's financial editor, on developing a new trading program
that we're calling "The Skeptical Advisor."
"The
Skeptical Advisor" combines what I know about evaluating
a business with what both Andrew and I have discovered about
successfully investing in stocks. What Andrew has come up with
is a sensible, business-oriented, time-tested system. I have
read his writings, discussed ideas with him, sought him out
for advice on my own portfolio - and I can vouch for his intelligence
and integrity.
In
short, if you are a conservative investor looking for above-market
returns in the stock market, I trust him to serve you well.
And "The Skeptical Advisor" should be right up your
alley. To
find out more about it, click here.
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INTERNET
MARKETING
Free
Reports Increase Online Leads
Offering
free reports or articles via e-mail can be a lucrative way to
generate leads and promote your product on the Web. The information
you provide should, of course, be useful to the consumer you
are targeting and relevant to the product or service you're
selling. If done right, this will position you as an expert
in your field - someone your prospects will want to do business
with. Just make sure you include an easy-to-follow link to your
website that allows them to make a purchase.
If
you're interested in learning more about proven Internet marketing
strategies, look into ETR's
Agora Model Internet Marketing Conference
(being held July 22-24 in Baltimore).
WORD
TO THE WISE
Something
that is "volatile" (VOL-uh-tl) is
inconsistent, tending to vary widely or often. It comes from
the Latin "volare" ("to fly").
Example
(as used by ML in the review of "Automatic Wealth"
that I quoted in today's main article): "For instance,
he recommends not investing much in the stock market because
of its volatility, and talks about how much he likes investing
in bonds, since if you hold them to completion you know what
you are getting."
