BOOK REVIEW: "The Secrets of a Millionaire Mind" (2005)

For a long time, I have been planning to read financial books and share my favorite takeaways, like I had a couple months ago for "Everyday Millionaires." Unfortunately, a plan without action is just a want, so I was determined to make it move beyond a want. In order for more books to review, I visited Goodwill last December and purchased two books. The well-known "Rich Dad; Poor Dad" (Robert Kiyosaki) and the relative unknown "The Secret's to a Millionaire Mind" by the relatively unknown T. Harv Eker.

There are lots of deterrents to this book, primarily its resemblance to a high-pressure sales pitch for upsells, but at face value and just beyond, there was a wealth of knowledge beyond the standard "Think & Grow Rich" fare. It focused more on why we think the way we do than why we do what we do, and truly that distinction is a critical difference in all-around wealth than appreciated. It is one reason why so many lottery winners can win big but still outspend their gains.

The first part of the book introduces a "Wealth Principle" (or "Money Blueprint") formula that reads as "T --> F --> A = R" and it means "Thoughts lead to feelings; Feelings lead to actions; Actions equal Results." Ultimately, we do what we feel more than what we think.

This lesson is not only reinforced by repetition, but also by actions. Readers must accept it to get anything out of the book. So much of the book was written to drive cynics insane, intentionally or not. If you let your thoughts stop you from getting anything out of the book, it is to your own detriment in the long run.

I had mixed feelings throughout, especially the pro-MLM rhetoric, but I found the book to be an excellent thought experiment (plus, the target audience is for entrepreneurs, many of whom have the potential to become billionaires, which is not me).

Here are 39 of his Wealth Principles discussed in the book:

1. "When the subconscious mind must choose between deeply rooted emotions and logic, emotions will almost always win" (p. 22)

2. "If your motivation for acquiring money or success comes from a non-supportive root such as fear, rage or the need to 'prove' yourself, your money will never bring you happiness." (p. 31)

3. "The only way to permanently change the temperature in the room is to reset the thermostat. In the same way, the only way to change your level of financial success 'permanently' is to reset your financial thermostat." (p. 44)

4. "Consciousness is observing your thoughts and actions so that you can live from true choice in the present moment rather than being run by programming from the past." (p. 45)

5. "You can choose to think in ways that will support you in your happiness and success, instead of ways that don't." (p. 51)

6. "Money is extremely important in the areas in which it works, and extremely unimportant in the areas in which it does not." (p. 57)

7. "When you are complaining, you become a living, breathing 'crap magnet'." (pg.58)

8. "There is no such thing as a really rich victim!" (pg. 60)

9. "If your goal is t o be comfortable, chances are you will never get rich. But if your goal is to be rich, chances are you'll end up mighty comfortable." (p. 64)

10. "The number one reason most people don't get what they want is that they do not now wat they want." (p. 68)

11. "If you are not fully, totally, and truly committed to creating wealth, chances are you won't." (pg. 70)

12. "The Law of Income: You will be paid in direct proportion to the value you deliver according to the marketplace." (pg. 73)

13. "Bless that which you want." (Huna philosophy) (pg. 94)

14. "Leaders earn a heck of a lot more money than followers!" (pg. 104)

15. "The secret to success is not to try to avoid or get rid of or shrink from your problems; the secret is to grow yourself so that you are bigger than any problem." (pg. 107)

16. "If you have a big problem in your life, all that means is that you are being a small person!" (pg. 108)

17. "If you say you are worth, you are. If you say you are not worthy, you are not. Either way you will live into your story." (pg. 113)

18. "If a hundred-foot oak tree had the mind of a human, it would only grow to be 10-feet tall!" (pg. 114)

19. "For every giver, there must be a receiver, and for every receiver, there must be a giver." (pg. 116)

20. "Money will only make you more of what you already are." (pg. 119)

21. "How you do anything is how you do everything." (pg. 121)

22. "There is nothing wrong with getting a steady paycheck, unless it interferes with your ability to earn what you are worth. There's the rub, it usually does." (pg. 123)

23. "Never place a ceiling on your income." (pg. 125)

24. "Rich people believe 'you can have your cake and eat it too.' Middle-class people believe 'cake is too rich, so I'll only have a little piece.' Poor people don't believe they deserve cake, so they order a doughnut, focus on the hole and wonder why they have 'nothing'." (pg. 134)

25. "The true measure of wealth is net worth, not working income." (pg. 138)

26. "Where attention goes, energy flows and results show." (pg. 143)

27. "Until you show you can handle what you've got, you won't get any more!" (pg. 147)

28. "The habit of managing your money is more important than the amount." (pg. 147)

29. "Either you control money, or it will control you." (pg. 153)

30. "Rich people see every dollar as a seed that can be planted and earn a hundred more dollars, which can then be replanted to earn a thousand more dollars." (pg. 165)

31. "Action is the 'bridge' between the inner world and the outer world." (pg. 167)

32. "A true warrior can tame the cobra of fear." (pg. 167)

33. "It is not necessary to try and get rid of fear in order to succeed." (pg. 168)

34. "If you are only willing to do what is easy, life will be hard. But when you are willing to do what is hard, life will be easy." (pg. 169)

35. "The only time you are actually growing is when you are uncomfortable." (pg. 171)

36. "Training and managing your own mind is the most important skill you could ever own, in terms of happiness and success." (pg. 174)

37. "You can be right or you can be rich, but you cannot be both." (pg. 180)

38. "Every master was once a disaster." (pg. 182)

39. "To get paid the best, you must be the best." (pg. 185)

Thankfully, the book is not just soundbites, even if his writing (and speaking) often comes off that way. There were far more perils of wisdom splattered throughout the book, and I share a few of those below (but, admittedly, if I re-read his book, then I would likely have a significantly different set of takeaways):

"Wanting alone is useless. Have you noticed that wanting doesn't necessarily lead to having? Notice also that wanting without having leads to more wanting. Wanting becomes habitual and leads only to itself, creating a perfect circle that goes exactly nowhere." (pg. 65)

"Research shows that the happiest people are those who use their natural talents to the utmost. Part of your mission in life then must be to share your gifts and value with as many people as possible. That means being willing to play big." (pg. 75)

"Poor people expect to fail. They lack confidence in themselves and in their abilities. Poor people believe that should things not work out, it would be catastrophic. And because they constantly see obstacles, they are usually unwilling to take a risk. No risk, no reward (...) Although poor people claim to be preparing for an opportunity, what they're usually doing is stalling." (pg. 79)

"One of the reasons rich people are bigger than their problems (is) they don't focus on the problem; they focus on their goal (...) Either you are whining about the problem or you are working on the solution." (pg. 109) --> End goal: complaining?

"Don't wait to (invest), (invest) and then wait." (pg. 163)

"The more comfortable you 'have to be,' the fewer risks you will be willing to take, the fewer opportunities you will be willing to take, the fewer people you will meet, and the fewer new strategies you will learn." (pg. 171)

--> I note herein that the interesting caveat is that money is power, so quite often you will find that, once you have a lot of money, you can make yourself right -- but then, you might stop growing.

-"Becoming rich isn't as much about getting rich financially, as about whom you have to become, in character and mind, to get rich. I want to share a secret with you that few people know: the fastest way to get rich and stay rich is to work on developing yourself." (pg. 183)

-"The goal of creating wealth is not primarily to have a lot of money, the goal of creating wealth is to help you grow yourself into the best person you can possibly be." (pg. 184)

The Full Motley -- 1Q, 2022

For 13 years now, I have been sharing my thoughts on personal finance, growing accordingly. Rebalancing my old 401(k) quarterly has kept me actively. I have seen many trends come and go, relying most heavily on indexing to increase my wealth. And it has. At my next quarterly update, I will have been with my current employer for as long as I was with this previous employer. I look forward to sharing the differences between those accounts at that time.

For now, we have seen another early retreat in the first quarter of a year. These declines have not been rare in recent years. Has it become a trend? I would be wary to insist that is the case, largely because of how many times I have seen trends reverse as soon as they are identified, not to mention the disruption to conventional wisdoms. Regardless, the two biggest moves in my account this quarter saw me pull money from Total International Stock Index Fund and direct most of it into the Total Bond Market Index Fund. The other movement from the actively managed equity fund to the passively managed equity index fund and international bond index fund was significantly less than those major moves.

Thankfully, I was fully prepared to make moves in the market during this quarter having seen it happen enough times in the recent past. These moves will continue to pay dividends in the coming years. As an old saying (that I recently heard) goes, "do not wait to invest; invest and then wait."

Worst Financial Advice

There is an old saying, which is not applicable to finance, "The road to Hell is paved with good intentions." The adage warns that having good intentions will not automatically synch up with the execution or results. Accordingly, there several piece of financial advice that make me laugh because when applied incorrectly or timed poorly, these nuggets of advice are better left unheard.

1. "Buy low; sell high"

Not all advice is equal

At best, this phrase is a simple answer for “how do you make money in the market?” As advice, it is virtually useless since it gives no meaningful instruction. At worst, the end result is constantly selling your winners to buy perennial losers.

2. "Never invest in something you don't understand"

If you learn by doing (as everyone does), then this advice leaves you nowhere to begin. You cannot understand the market or investments without being in them, which leaves nowhere to start. Even the most successful investors in the world understand how little sense the movement of the stock markets make.

3. "Time is money"

Neither is a renewable nor unlimited resource. There are certainly situations by which “time is money” is a reasonably adequate adage, but it is neither universally true nor good advice. Out of context and in the wrong minds, this phrase creates more confusion than clarity.

4. "Hope is not a strategy"

This can be a snarky response to hearing someone say “Here’s hoping.” Except, hope comes after putting a strategy in place, so this phrase can turn a wannabe soothsayer from a smartass into a dumbass quickly when used abundantly.

5. "If you do what you love, you'll never work a day in your life"

There is a small but important difference between this phrase and "If you love what you do, you'll never work a day in your life." The latter can be great advice for the right people. But the former advice could ensure financial ruin. If you grow up following this advice with poor execution, then it might as well be a cautionary tale, "if you only do what you love, then you'll never work a day in your life," because you are unproductive, selfish &/or immature. As Dave Ramsey (a man who seemingly loves what he does) loves to say, “Adults devise a plan and follow it; children do what feels good.”

The Full Motley -- 4Q, 2021

Welcome to the final stretch of 2021, and the stock markets have been holding strong! In fact, we could break out pinstripe suits and flapper clothes since it almost feels like the start of a new Roaring '20s. Aside from a drop in late-September into early-October, the markets have continued to rise. The dollar amount moving from my Total Stock Market Index Fund into my Total International Stock Market Index Fund this quarter was less than the amount moved in the third quarter.

Any lessons that the market has taught us lately are nothing unique, and they probably could apply generally to life as well. The first one that came to mind compared market returns to happiness. It's funny how we (society) talk of happiness as a destination when it is really just an emotion, the same as our other emotions. It passes, it returns, and we cycle through them all repeatedly. In the market, we say "buy low; sell high," but there is no instruction for what comes next. Selling with nowhere to go is truly poor advice. It is a lot like whatever road to happiness, and learning that the road keeps going through happiness.

I was listening to talk radio this morning, and the broadcasters discussed bubbles. Heavily implying that the market is in another bubble (or is it that they are still saying it?), they said that bubbles emerge out of reasonable and rational thoughts, but they keep growing beyond the reasons and rationale. Many examples exist from AAA-rated mortgage bonds never defaulting (as described in The Big Short) to ESG investing today. The hosts stated how illogical it was that the value of Tesla, Inc. ($TSLA) has exceeded the energy sector combined, considering ZEVs' reliance upon energy.

Lessons from a Kick-Six

Scoring on an unlikely play
will not win the game 

On Sunday, September 26, 2021, Arizona Cardinals (2-0) attempted an ill-fated field goal, which resulted in a rare "Kick Six," where Jacksonville Jaguars (0-2) returned the kick from one endzone to the other. As a result, the game went from 10-10 to 16-10 at the half. 

Another result was that the halftime show aired the play no less than five times, questioning the decision repeatedly. Jaguars were gifted a great opportunity, and they capitalized on it fully. Instead of falling behind three points, they took a six-point lead into the locker room.

Then, there was another half of the game to play, and Arizona Cardinals had a stronger second half, winning 31-19. After all the advantages of that improbable touchdown gave them, Jaguars were only able to notch three more points, which was not nearly enough to win the game. The "Kick Six" still made highlight reels throughout the evening and it was shared across Twitter, but it was not a once-and-done solution to winning the game. In reality, any team expecting to win games with a "Kick Six" will not fare well throughout a full season.

Here is the loosely connected analogy to finance. That "Kick Six" touchdown reminded me of getting a big economic win, such as exposure to cryptocurrency, NFT, $GME or the like. Getting the big lead is only one part. Holding onto it is a different game altogether. Buying into Bitcoin 10 years ago has been spectacular, but NFTs may become nothing more than a beanie baby-esque fad and what happens to $GME remains to be seen early next year as those oversized increases then qualify for long-term capital gains.

More important than a single play, economically or athletically, is the strategy for the full game. Sticking to the strategy is quite often the singular skill that separates winners from losers, if not in sports, then at least for professional careers or in finance.

I warn people who are expecting a large inheritance (or hoping a big lottery win) can provide their financial stability that having money in and of itself does not equate to any money management skills. 

Herein lies the beauty of slowly building wealth. Your knowledge often expands as your wealth does, even if both are abstract concepts. There is an immeasurable benefit to that unity.

BOOK REVIEW: "Everyday Millionaires" (2019)

I have listened to more Ramsey Solutions programming this year than I have throughout the rest of my life combined. As such, I have heard their constant references to the 10,000 millionaire survey that they conducted recently, rattling off numerous statistics repeatedly each week. It made me wonder whether the book "Everyday Millionaires" had more information than the same statistics provided on the show.

Specifically, I was curious whether introverts had an advantage in becoming millionaires. If "being weird" or rejecting the habit of "buying things that you do not really want with money that you do not really have to impress people that you do not really like" were keys to becoming a millionaire, then it seemed as though a disproportionate percent of millionaires might be introverts. To my delight, this answer was in the book and the numbers were very close. Of the 10,000 millionaires that they surveyed, 53% identified as introverts and 47% identified as extroverts (p.90). Granted, I was unable to ascertain whether this distinction aligned with Meyers-Briggs definitions of the terms or if it was self-reported. Regardless, it was interesting to get my answer, and I was surprised that it was so close!

The rest of the book is a quick read, especially for loyal listeners since they have heard most of it already or know where the material is going. Chris Hogan is a natural salesman, so his energy was a bit dialed down by the written word, but his pitch remains the same. There were some questionable promises made, such as paying off the house equates to a life of no more bills and not owing anything to anyone anything ever again (monthly utilities would still be due in a paid-off house, not to mention taxes, which he somewhat preemptively addressed while dismissing the fantasy that "financial freedom" alleviates a person from paying attention to their finances. (p.213-214).

Regardless, here are 20 of the most interesting quotes or other tidbits that I took away from reading over the past week:

(1) "I'm okay missing out on potential gains that could bring probable pain" (in short, the focus of an investment should be on its probable reward, not potential reward) (p.47)

(2) "If there's one thing I've learned from the millionaires we studied, it is that shortcuts are for suckers. The long road may not get you there as quickly as you ant, but it will get you there" (in short, if you don't work hard for your money, your money won't work hard for you) (p.58)

(3) "I know from experience that more (money) does not equal better (money), if you are not ready for it" (p.79)

(4) "Psychologist Rollo May once said, 'The opposite of courage is not cowardice, it's conformity'." (p.88)

(5) "Some people need to imagine a villain working against them to excuse their own failings or lack of motivation." They cannot (or won't) say, 'it's my fault I'm not winning' so they parrot the same tired old phrases they might have heard from their parents. There's a problem with this fallback position though. You'll never make any progress as long as you're making excuses." (p.89)

(6) There's a difference between "someone saying, "It can't be done" (and) someone saying, "You can't do it." (p.105) 

(7) Don't hide your mistakes, or hide from your mistakes (p.107, paraphrased)

(8) "In fact, 98% of (millionaires) say they actively integrate feedback from other people. Despite their success, they know they always have more to learn, and they look to a supportive network to teach them new things and encourage them along the way." (p.111)  

(9) "Sometimes I didn't need marching orders; I just needed encouragement" (p.112)

(10) "When you plan for obstacles, they don't shake your confidence or interrupt your progress when they happen." (p.114)

(11) "Millionaire-minded people don't let the unknown scare them off. Instead, 94% of the millionaires we studied say they're willing to try difficult (tasks) to get new results." (p.116)

(12) "Understand that a goal is simply a promise you make to yourself." (p.161)

(13) "Work brings a profit, but mere talk leads only to poverty" (Proverbs 14:23) (p.170)

(14) "In total, the ability to work hard gives you an advantage, builds your confidence, allows you to experience gratitude, leads to self-improvement, and makes you intentional in all other areas." (p.175)

(15) "We found that 96% are always trying to learn new things. They want to find new ways to do their jobs better (because) as you get better at your job, you produce greater results." (p.177)

(16) "Millionaires don't find time; they make time." (p.179)

(17) "Consistency requires planning, preparation, patience and passion." (p.192)

(18) (Millionaires) "are simple, humble, happy people who you would never know were millionaires" (p.213)

(19) "It turns out that, once you can afford to buy whatever you want, you may not want to anymore." (p.224)

(20) "When you help someone else," Thomas said, "you forget about your own problems" (p.229)

The Full Motley -- 3Q, 2021

Another update came and went this month, and I forgot to post an update because the movement was quite minimal. The total percentage moved was below 1% of my current account value, but as this account values continues to increase, these small percentages (while relatively insignificant) grow higher and higher in dollar values.

The biggest moves came out of the equity index fund, going into the international equity index fund; the amounts were almost equal. The rest moved a little more from the actively managed equity fund into the bond index fund and international bond index fund.

The most notable takeaway from this move was how, this time, I thought about the fees being charged in my account. Like I had said, only 1% of the account value was moved, but the dollar amount moved was a meaningful amount. I thought back to the not-so-distant past when actively managed mutual funds often charged 2% or 3% as an expense ratio. John C. Bogle had always warned investors to minimize the fees because the variance in performance among managers never justified the dollar value. Over the past 40 years, he was proven right. The investment industry was amid a price war that he essentially started when he passed on, truly a fitting tribute to his life's work.