Get the edge - day 6 (Financial freedom)

1. The best way to get beyond scarcity is to start beyond it
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Take the invisible and make it visible
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2. The secret of financial abundance is sociology
3. One of the sociological barriers for being wealthy is the limiting belief that “I have nothing to start with ….”
4. One principle that we understand but don’t have it emotionally is the power of compounding
5. When you invest money and you don’t spend it, money that were continuously reinvested compounds on top of itself and in the beginning goes really slow but eventually has explosive growth
6. You must put aside the money now and invest it
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If you are not willing to take the dime out of a dollar, you are not going to take 100 000 out of a million
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7. When you do start – start with 10% of what you earn, invest it and not touch it, reinvest with compounding
8. Everyone (no matter whether starts from zero or not) who invest 10%, achieve his goal in 10 to 15 years
9. Start: decide today the percentage you are going to save
10. How: don’t see the money
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Pay yourself first
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11. Where I put the money? Answer it if you want to be a millionaire!
12. Stock – flexible and give you possibility to grow
13. How much money people lose in 1997 stock market crash in USA? Nothing unless they sold
14. Whatever you are invested you’ve got to understand it
15. There are always adjustments
16. Take advantage of whatever the economy offers you, don’t operate in a fear that you can do well only in a great economy
17. Great economy is one you are prepared for
18. Become investor = become wealthy
19. No matter how good you are, you are going to screw up
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Anything that eats while you sleep it is not a good investment
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20. Philosophy towards investments = Most important decision: asset allocation
21. The secret in investments = do it
I. Security bucket – the heist bucket, take percentage of your income and put it here always and first. Don’t touch it at all. These are investments that are secure and don’t give large return (fixed income investments – TB, money market accounts, corporate bonds)

II. Growth bucket – put percentage of your income investing in things that have potential to grow and give you much greater rate of return (mutual funds, real estate, collectables, securities stocks). There will be corrections – take your profit off the table.

Take 1/3 of this profit in the SB and put it the security bucket, 1/3 reinvest it in the GR and 1/3 put in the third bucket

III. Dream bucket
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The greater the risk, the greater the potential return, also greater the potential loss
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22. Stick to t5he percentage you chose to put in each bucket, don’t let the moment have you

- They don’t define what wealth means to them, can’t say when they will feel financial secure
- They make a moving target