Week 15

WEEK FIFTEEN

Hello and welcome to Week Fifteen of the Jim Rohn One-Year Success Plan. We hope you are having an excellent week! As we take a step back and look at the first three Pillars we have covered: Personal Development, Goal-Setting and Health and now this month, Pillar Four - Finance/Money, we hope that you now have a sense of growth and life/skill enhancement. The interesting thing about progress is that often times it is preceded by feelings of failure, lack and overwhelm. With new knowledge also comes new awareness, and the new awareness can leave us seeing the mountain (problem) bigger than it really is. This can be true with our relationships (in particular as a spouse or a parent), our health (for example, a desire to lose weight) and our money (especially debt). But as we all know, the hardest and longest step on a 1,000 mile journey is the first step - and you have already far surpassed that. Years ago a friend of mine, Dr. Tom Hill, shared with me the principle of the J curve. He said that it usually takes about 18 months from the beginning of any significant change to see the full fruit or result of that change. I can't begin to tell you how true that has been for me. At the height of any successes or celebrations, I can usually pinpoint a significant change or decision that was made 18 months prior. And in some cases, it is one 18-month period on top of another and then another. The point is, remember that small degree changes become larger and larger over time, the same way the principle of compound interest works that Jim and Chris share regarding the laws of saving money in today's edition of Pillar Four - Part Two (see below). Think about your J curve - where you want to be 18 months from now and then start the consistent steps that will get you there. If we can apply this principle each and every month to the 12 Pillars of Success covered in the One-Year Plan, the harvest might not be immediate, and the challenges and problems might not just vanish, but the positive changes and future results are secure as we let the accumulation of positive thought and action take us toward our desired goals. Make it a Great Week! Kyle

“Those who start with too little money are more likely to succeed than those who start with too much. Energy and imagination are the springboards to wealth creation.” -– Brian Tracy

Copyright Jim Rohn International 2002, 2003

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Copyright Jim Rohn International 2002, 2003

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MONEY AND FINANCE Jim Rohn's Fourth Pillar of Success: Money and Finance, Part Two – Saving Hi there, Jim Rohn here. As we talked about last week, money is a tool and resource we can use. So as we go through this month I want to focus on some simple financial principles you can apply, as well as teach the underlying philosophies that govern what good people can do and what tremendous accomplishments can be made when we see money for what it is - a tool to improve our lives and the lives of others. The four pivotal topics in regard to finances are: 1. Getting Out of Debt - Debt is a killer. It is a killer of dreams and hopes. It is a killer of businesses. It is a killer of financial futures. And, according to statistics, debt plays a prominent role in many failed marriages. So what should we conclude from this? If we are to be successful, we must have a commitment to stay out of debt! You can make two million dollars a year but if you spend 2.5 million dollars, it doesn't matter how much money you made, does it? You will be saddled with debt. We addressed this issue last week. 2. Saving - One of the key components to long-term wealth building is the discipline of saving money on a regular basis. Today, we will go through the basics and show how a commitment to saving money can revolutionize your financial life and provide the kind of security you desire. One simple difference between the philosophy of the rich and the poor is: the rich save/invest their money and spend what is left; the poor spend their money and save/invest what is left. What a simple shift in our thinking for such a revolutionary result. We will talk about saving in today's edition. 3. Investing - Investing is much different than saving. Investing involves risk - calculated risk - and the possibility for much more reward. Saving and investing are done for different reasons and with different desired goals and outcomes. By taking a portion of our income and turning it into capital to be invested, we will be actively working toward our goal of financial independence. We will cover the importance of investing, along with some basics of investing in next week's edition. 4. Giving - Giving a portion of your resources away is one of the most powerful principles you will ever embrace. It seems counter-intuitive, but the truth is that giving will help you achieve the financial freedom you desire. Amazingly, giving makes you bigger than you are. The more you pour out, the more life will be able to pour back in. So giving a percentage of your resources away will help you not only have more money but enjoy it more as well, and that is the best benefit. We will cover giving in two weeks.

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This week we are covering the topic of saving money. Statistics consistently show that the vast majority of people live hand-to-mouth or month-to-month, that is with no savings to speak of. The average person would be hard pressed to live for more than just a couple of months if they were unable to draw an income. This means that they are not independent, but dependent upon insurance, government programs, friends, family and the like. The primary goal of savings is to provide a much higher level of personal independence and security. The discipline of saving directly determines how we will take care of ourselves and plan for not only the future, but also for the unforeseeable events that touch our lives at times. It is an act of self-determination where we decide that we will provide for ourselves and protect ourselves. Saving is not, as you will see further down, the pursuit of aggressive growth of our resources. Simply put it is our security, our safety net if you will, that remains in place to provide a solid base on which to build the rest of our financial independence. So, with these things in mind, let's take a deeper look at saving our money. Saving is an act of discipline. No matter how you slice it, saving money on a regular basis is a discipline. It is not “dependent” on income. If you were to ask five people, all at varying income levels, if it is hard to save, chances are they would all say "yes." This is because the tendency for us is to spend whatever we earn. When we start out and make $25,000 a year, we think it is hard to save. If only we could make $40,000 a year! But when we make $40,000 a year we say the same thing. Our expenses go up, we buy a bigger house, fancier car, etc. Some people who make a million dollars a year save nothing. At the end of the year, they have spent it all and they are no better off than the person who makes $40,000 a year. Professional athletes and entertainers are renowned for this. Pick up any number of magazines and you can read about an athlete who made twenty million dollars over seven years and is now bankrupt. It isn't a matter of money. It is a matter discipline. On a regular basis, put a little away until it builds up. That is the savings game. Saving is much like the familiar story of the tortoise and the hare. Little by little we put a small amount away and slowly but surely we develop the kind of saving amounts we are looking for. Those who put away a lot and then spend it all on a big screen TV may end up with a TV but that is about it. In the end, the slow and sure saver ends up with real wealth and financial independence. Saving builds self-reliance. Our ultimate goal financially should be to become independent, without relying on anyone else. We should be able to pay our bills and longterm, live off of the interest of the savings and investments we have. So through our diligent saving, we rely on what we have accrued. Then we become more able to help those in need. We are now the lender and not the borrower. Saving allows us to rely on what we have stored up for ourselves if bad times come along. A good savings goal is to

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have at least six months of living expenses set aside. For example, if your expenses are $3,000 a month, then you should set the amount of $18,000 as a savings goal. This gives you the ability to be self-reliant for those times when you may need it, and the peace of mind knowing you would be able to handle challenging circumstances if necessary. Saving money not only helps bring security and peace of mind, it also begins to harness the power of compound interest. As we will see next week, investing is the maximizing of capital gain and the harnessing of compound interest. Saving money in a standard savings account or money market account will pay a nominal sum, say 2-4 percent, depending upon interest rates. As we will discuss further next week, there is something called the rule of 72, which says that whatever interest rate you average, divided into 72, will determine how many years it takes to double your money. So, even at 3 percent, your money will double in 24 years. That isn't extraordinary by any means, but it does happen. Your money is working for you. You get more money simply by letting it sit there and letting compound interest do its work. With saving, this is a seemingly small beginning, but it is the strong foundation of security that allows you to build the future of your dreams and goals, and provides the anchor to help you weather financial storms that can come your way. But here's what is exciting, the real power comes next week when we talk about investing. Basically, our understanding of the discipline of saving our money on a regular basis is for the safety and stability it creates. Investing is for advanced compounding of your resources. So here is what to focus on: Adopt the regular discipline of saving. Think like the tortoise and not the hare. Achieve self-reliance through saving. Harness the power of compound interest. In the next section, Chris is going to give you some more thoughts as well as some questions for reflection and actions points. Until next week, let's do something remarkable! Jim Rohn

“Do yourself a favor and master the art of money. Treat it as an honored guest in your life, one who will quickly flee if you do not treat her well, but one who will stay and enrich your life beyond measure if you treat her with care and respect.” -- Philip E. Humbert

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Hi there, Chris Widener here. As Jim wrote, saving money is simply a discipline, much like any other discipline. If you want to lose weight, you exercise a little each day. If you want to build wealth and independence, you save a little each month. As I wrote in a column recently, there is no magic formula, there is no Land of Oz, there are no silver bullets and there is no genie in a bottle. Saving will come the same way all good things do: a plan, hard work and discipline. With that understanding, here are five steps for savings success: 1. Do it regularly. Every week, every two weeks, every month - it doesn't matter. All that matters is that it is a consistent practice. I have a friend who saves only once per year - but it is nearly $75,000 when he does it! It works for him and he is diligent to do it. At the first of every year he writes a check from his business and socks it away, never to be seen again! The point is to do it regularly on a time schedule that works for you. 2. Pay yourself first. One key principle many people promote is to pay yourself first. That is sound advice. Personally, my habit is to pay God the first 10 percent (more on that in the giving section in two weeks), but as far as humans go, you should give yourself the first payment. The taxman doesn't get it; the credit card guy doesn't get it. You do. That is the way to do it. When you get your paycheck, write yourself a check or transfer it to savings and put it away. Many people suggest, and I think it is a good idea, to put ten percent away in savings. This should be our goal. 3. Set a goal of saving enough to cover six months' worth of expenses or better yet, six months' salary. As Jim mentioned above, this is a good standard no matter what salary you make. Unforeseen things can happen to even the best of us and we are smart to be prepared. 4. Don't touch it. Do not touch your savings. Set it aside and let it be. Consider it gone except in the case of extreme emergency or opportunity. 5. Once you have your savings set, then and only then move on to investing. Investing is the second act of financial independence. Saving comes first for security and safety, then you move on to investing and placing your capital at risk. There is obviously a lot to be said about basic financial soundness, but the above is a simple way to begin saving and developing financial independence.

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Q Qu ueessttiio on nss ffo orr R Reefflleeccttiio on n:: Q. Do you have a plan for saving? Have you ever? How much do you save?

Q. Have you been disciplined in your finances? How?

Q. Are you more like the tortoise or the hare? In what ways?

Q. Would you say your finances are under control or out of control? Why or why not?

Q. Do you have a good understanding of compound interest and the power it can bring to your financial life? Have you begun to harness that power?

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A Accttiio on n SStteep pss T Th hiiss W Weeeekk:: 1. Sit down and take a good look at where you are financially. Know firsthand how much you have, where it is, where it goes and what your potential is. Write comments here.

2. Develop a plan for saving. Commit to a regular amount at regular intervals. Write down the time interval and amount of which you will save.

3. If you haven’t already, go open a savings account. Write comments here.

4. Put some money away this week. If you can only put $10 away, that is fine. If you can put $1000 away, that is fine too. The key is to actually do it! Write comments here.

A A LLo oo okk FFo orrw waarrd d:: This week we will be listening to CD 11 of the New Millennium series. Preview of CD Eleven Jim is back for more great stuff! • • •

Developing influence Investing life into life Goal-setting

And More! As always, have a Great Week! Chris Widener Copyright Jim Rohn International 2002, 2003

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N No otteess ffo orr C CD D EElleevveen n ffrro om m tth hee JJiim mR Ro oh hn nN Neew w M Miilllleen nn niiu um m sseerriieess:: ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Copyright Jim Rohn International 2002, 2003

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