got some good news and I’ve got some bad news.
First, the good news.
If you’re like the average person,
earning at least $25,000 a year, then, in your lifetime over a
million dollars will flow through your fingers. That’s a lot of
money. In other words, you’re a lifetime millionaire.
Now, for the bad news. If you’re like
most people, you’ll spend it all, and, after a lifetime of earning, will
end up with almost nothing.
How can that be?
Frankly, nobody teaches us about money.
We receive no formal education in the most critical of all life
skills–how to become financially successful. Did you ever attend a
class in all of your public education entitled, "Money 101?"
Why isn’t there such a mandatory class in every elementary school?
How have you learned what you know about
money? You picked it up, a piece here…a tip there. You absorbed
attitudes from your parents, from the media. You observed the examples
of friends. You proceeded through trial and error…the school of hard
knocks. What you learned was haphazard, mostly wrong, certainly out of
context. Most of the books you read about the subject probably
overwhelmed you with details or bored you with useless facts. If you’re
like most, you’re confused and frustrated.
Yet, money is one of the most important
subjects of your entire life. Some of life’s greatest enjoyments and
most of life’s greatest disappointments stem from your decisions about
money. Whether you experience great peace of mind or constant anxiety
will depend on getting your finances under control. Your relationships
will be greatly affected. 90% of all divorces in our society result from
disagreements about money. Understanding money–how to make it and keep
it– is absolutely essential to your life, to your relationships, to
your happiness, to your future.
Still, there are some people who seem to
be naturally good at managing money. The same million dollars flows
through their fingers, and, they seem to know how to keep some it and
even make it grow. In some cases, a hundred fold more than the average
Do these people work 100 times harder?
Are they 100 times smarter? Of course not. They just know how to play
the game. You see, money is a game. A very important game. If you
know the rules, you win. If you don’t know the rules, you lose. As
"Wealth is when small
efforts produce big results.
Poverty is when big efforts
produce small results."
In this book, you will finally learn how
to play the money game…and win. If you follow these simple strategies,
you can retire a multi-millionaire…while enjoying a banquet of
prosperity throughout your life. You will learn a simple system for
controlling your finances. You will learn how to invest your surplus
funds without losing sleep at night. You will learn how to create
multiple streams of lifetime income. You will learn how to oversee your
growing financial empire on as little as ten minutes a day. You will
learn how to leave a financially secure future to your family and loved
You may wonder how I qualify to be your
I started myself in the seventies,
perhaps just like you, with a dream of becoming financially independent.
After graduating with a Masters Degree in Business Administration (MBA)
from Brigham Young University in 1974, I began investing in small real
estate investments and parlayed a tiny nest egg into a large
multi-million dollar net worth in a few short years. Along the way, I
also suffered my share of setbacks. I’ve not only made millions but lost
millions…and made them back again. I know from the school of hard
knocks what works and what doesn’t.
I shared my powerful systems in the #1
New York Times bestseller, Nothing Down: How to buy Real Estate with
little or no money down. This book became the all time real estate
investment classic used by beginning investors ever since.
I also wrote two other major bestsellers,
the #1 New York Times Bestseller, Creating Wealth, and The
Challenge. In promoting this last book I made the bold statement:
"Send me to any unemployment
line. Let me select someone who is out of work and discouraged. In two
days time, I’ll teach them the secrets of success and in 90 days they’ll
be back on their feet with $5,000 cash in the bank, never to set foot in
an unemployment line again!"
is the true story of how I selected 3 people from the unemployment lines
of St. Louis, Missouri and taught them the secrets of financial
success…and, yes, they were able to achieve incredible success in
90 days. One of the couples went on to earn over $100,000 in the next 12
months. To celebrate, I took them on Good Morning America with me.
What I am about to share with you is the
result of having worked with thousands of successful people over two
full decades. I have seen people go from living on the streets to living
in mansions…from driving a taxi to being driven in limousines.
Although my most famous book is about
real estate investing, this book will show you how to create wealth in
many different ways…from multiple sources. Actually, there are three
great wealth creation mountains. I call them Money Mountains. Each
mountain is distinct from the others, and yet, each share similar
characteristics. The mountains are: the Investment Mountain, the Real
Estate Mountain and the Marketing Mountain.
From this mountain range of Money
Mountains, there are at least 9 separate and distinct streams of income
flowing into your growing reservoir of wealth. Each stream was carefully
chosen using a formula I use call the Money Tree Formula. In this book,
I will teach you the 9 characteristics of the ideal stream of income.
Then, I will teach you exactly how to profit from each of these streams.
The goal is for you to add at least one new stream of income to your
life each year. Eventually, these streams will overflow your life with
prosperity and freedom.
The first question people usually ask at
this point is, "Why Multiple Streams?"
The Wisdom of Multiple
Streams of income.
How many streams of income did it take in
the 1950’s for a family to survive? One. Today, very few families can
survive on less than two streams of income. And that won’t be enough
in the future. It’s a volatile future. You’d be wise to have
multiple streams of income flowing into your life.
Prosperous people have always known this.
If one stream dries up, they have many more to support them. Ordinary
people are much more vulnerable. If they lose one of their streams, it
wipes them out. And it takes them years to recover.
In the future, people will need a portfolio
of income streams — not one or two — but many streams from
completely different and diversified sources. So that if one streams
goes, you barely feel the bump. You’re stable. You have time to
adjust. You’re safe.
Do you have multiple streams of income
flowing into your life at this time? Maybe it’s time to add another
The Power of Residual Streams of
So let’s assume that you’ve decided
to add another stream of income to your life. You could always get
another part time job, but that’s not the kind of income I’m talking
about. You certainly don’t want to get stuck on somebody else’s
treadmill. You want the kind of streams that you can own.
I’m talking about residual income.
That’s a fancy term for a "recurring" stream of income that
continues to flow whether you’re there or not. I’ve heard too many
small business owners say, "I haven’t taken a vacation in 5
years." There’s something wrong with that picture. I don’t have
anything against hard work. But after a few short years of hard work,
you should be free to have your streams of income forwarded to your
mailbox in Tahiti. Get the picture?
Two Types of Streams: Linear and Residual
Not all streams of income are created
equal. Some streams are linear, and some are residual. Here’s the
question that tells you whether your income streams are linear or
"How many times to you get paid for
every hour you work?"
If you answered, "only once,"
then your income is linear. Income streams from a salary are linear. You
only get paid once for your effort. And when you don’t show up for
work, neither does your paycheck.
With residual income you work hard once,
and it unleashes a steady flow of income for months or even years. You
get paid over and over again for the same effort. Wouldn’t it be nice
to be compensated hundreds of times for every hour you work?
For example, as I mentioned earlier, I
published a book in 1980 called Nothing Down: How to Buy Real Estate
with Little or No Money Down . I put in over 1,000 hours of hard work
writing Nothing Down before I earned a single penny. Teenagers working
at McDonald’s earned more than me. But, I wasn’t looking for a
salary. I wanted a royalty. So I was willing to sacrifice. It took over
two years before the money started to flow. But it was worth the wait.
I’ve now earned millions of dollars in royalties. And every six months
I still get nice royalty checks. That’s the power of residual
income…it keeps flowing and flowing and flowing.
Here’s another example. Have you seen
that tiny battery tester on the Duracell battery? I’m told that the
inventor presented his idea to the big battery companies. Most turned
him down, but Duracell saw the genius of it and agreed to pay just a few
pennies per battery pack for his idea. And now he makes millions,
because those residual pennies add up. In essence, he invested many
hours of his time to create the concept, to package it and then to sell
it. And now it generates a raging river of residual riches to him and
his family. And the best part about it – HE DOESN’T HAVE TO BE
THERE! It flows without him.
Linear vs. Residual. Do you see the
The secret of the wealthy is not that
they have more money but that they have more TIME freedom. Because many
of their streams are residual, they have time to spend on anything they
When you view people’s lives through
the filter of residual income, many groups of people aren’t as
wealthy as they appear. Doctors and dentists don’t earn residual
income from their labors. Their income potential is capped. They can
only see a fixed number of patients in a day. And they have to be there
for every single one of them. That’s linear.
The same holds true for top sales people,
chiropractors and attorneys. Most of them don’t enjoy the power of
residual income either. They may appear to be rich but they’re on a
treadmill just like the rest of us.
What percentage of your income is
residual? If you’re smart you’ll start shifting your income streams
from linear to residual. This will give you the time freedom to do what
you want when you want. And that starts with turning on at least one new
residual stream this year.
There are many, exciting new ways of
creating residual income
Do you know who Warren Buffet is? He’s
the smartest stock picker in history and the wealthiest investor in the
world with a net worth in the tens of billions. What if Warren Buffet
himself were to call you on the phone and give you a hot stock tip. He
tells you to sink every penny into a certain stock. He says that he’s
invested a couple of hundred million of his own money and he feels the
stock is a sure bet to double or triple in value. What would you say to
him? "Sorry Warren but I like to pick my own stocks by throwing
darts at the Wall Street Journal!" Would you listen to the master
or continue to do things your own way?
Well, I’m no Warren Buffet, but through
my books and seminars I’ve probably helped to create more millionaires
than he has. If I were to guess, it’s probably in the thousands of
millionaires. And this book contains all of my "hot streams"
for the new millennium.
It’s where I’ve sunk a huge amount of
my own time and effort. What I am about to share with you are the best
opportunities I’ve seen in 20 years. They are certain to create many
residual millionaires in the next 10 years. You could be one of them.
The Money Tree Formula
The first step to picking the right
income streams is to pass them through the filter of the Money Tree
Formula — the 9 essential characteristics of the ideal income stream
Having a money trees assumes that you
have an exhaustible, effortlessly generating, stream of cash flow which
doesn’t require your presence. In order to do this, you must be in a
position to create, control and own that stream of income. Another way
of saying the same thing, is you must become an entrepreneur…a
business person. You may still retain your employee position, but on the
side, as a way of protecting your long term financial future, you need
to create additional streams of income. ASAP
I remember watching TV recently as a
couple was being interviewed about being laid off from a long term job
position. The wife looked into the screen and said, with tears in her
eyes, "For 17 years we worked hard for our security, and now
we’re out in the cold. It’s not fair." I wanted to reach
through the television set and tell her, that for 17 years she had the
illusion of security. She wasn’t secure, she just thought she was.
Working for someone else, unless you own a piece of the profits, is not
security. It’s just the illusion of security.
The Money Tree formula
If you’re going to become a home based
entrepreneur, you’d better learn which businesses have the potential
for creating lifetime streams of income and which ones are just a dead
end way to make a few extra bucks before they peter out and die. I’d
like to teach you a formula for the perfect business in the next
century. I call it the Money Tree formula and it will be very easy for
you to remember because it spells the word MONEY TREE…
M in the Money Tree
formula stands for Multiple Streams of Income
Multiple Streams of
The first goal in starting your own home
based business is to add another stream of income to your life as a
safety net for when other of your streams of income dry up. But the home
based business you select should be a source of more than just one
stream of income. It should eventually be a source of multiple streams
of income all by itself.
For example, suppose you’re considering
buying an existing restaurant. What possibility will you have to grow?
Can you add more shops? Is your idea franchisable? Can one of your food
entree’s be sold nationwide as a frozen item? Can you license your
special cooking secrets to other restaurants. Is there a cookbook in
there somewhere? What about bottling and selling your special sauces?
Get the drift? Don’t even consider a business that doesn’t have
expansion potential for additional streams of income. That’s why the
first M in the formula reminds you of Multiple Streams of Income.
The O in the Money Tree
formula stands for outstanding.
If your product, service or information
isn’t distinguishably excellent it will eventually become a casualty
of competition. The goal of creating a money tree is to do the work once
and to have the money flow for the rest of your life. What good does it
do to create a business and eventually have it succumb to competition.
In order for your source of income to survive through the next ten
recessions…as there will be many more recessions in your
lifetime…you must select a product, service or source of information
that has the possibility to be permanently and perpetually profitable.
When times get tough, people gravitate either to price or to quality.
Don’t get stuck in the middle. That’s a sure formula for disaster.
And don’t compete with the rest of the world on price. Make sure the
quality of your produce is outstanding…the best in the world at a
fair price. And you have a good chance of succeeding long term.
The N in the Money tree
formula stands for Nothing Down.
Why nothing down? Well, it doesn’t have
to be completely zero down…but as little of your own money as
possible. If you’re like most people, you probably don’t have a
couple of hundred grand lying around to invest in your business. But
what if you do have a nice chunk of cash. Should you run out and find a
business to match your money and launch in? I think that one of the
greatest curses is to have a lot of money to put into a new business.
Suppose you want to buy a hot franchise.
It might cost you $100,000 and that’s just for the franchise rights.
Then, you need to purchase inventory, leasehold improvements, special
equipment. And what do you get? For most franchises, you get the right
to be tied to a business 12 hours a day, to manage a lot of
undereducated, under motivated employees, and make a steady paycheck for
yourself. In a sense, you are just buying yourself a job. Why spend tens
of thousands of dollars of your own money just to buy yourself a
job…with a lot of risk?
I’m going to show you businesses that
you can launch with little risk, little or no money down and the
possibility of creating what I call "walk away" cash flow
–money that flows to you whether or not you show up.
The E in the Money tree
formula stands for "Employee-resistant."
That’s right…you don’t want
employees. Employees are dangerous! They begin to feel they are entitled
to their jobs. ("You can’t fire me. I own this job."
) The rapid increase in employee/employer litigation should be enough to
convince you that you want to find a home based business that can be
done by yourself, with a very low employee to income ratio.
I used to be the president of a seminar
company with over two hundred employees. I made the decision to downsize
when one of the employees sued me for age discrimination. He was in his
late sixties when he came to work for us and when we layed him off
during an economic downturn, he slapped us with a $500,000 lawsuit. We
settled out of court for $2,000 but that was the last straw. I decided
to never again put myself in a position where one disgruntled employee
and his smart attorney could take it all away.
Today, I have zero employees. I make as
much today as I used to make with 200 times less hassle. I like it that
way. All of my streams of income can be monitored from a telephone
anywhere in the world on only a few hours a day.
A friend of mine, Dan Kennedy puts it
this way, "When it comes to employees, hire slow and fire
fast." Most business people do just the opposite. They hire fast
and fire slow. I say, try to find money tree businesses that don’t
require any employees and then you don’t have to worry about either
hiring or firing.
The Y in the Money tree
formula stands for the world "Yield"
The streams you choose should be high
yielding, high profit cash cows. Five years ago a friend of mine,
Collette, started such a home based business. In less than a year she
was making about $10,000 per month. What’s more, this business was a
money tree business. It generates cash flow even if she stops working!
But why stop when she is having so much fun? Today, after five years,
she has grown her business till she now earns over $500,000 a year net,
What’s the yield on that kind of
income? It’s the equivalent of having TEN MILLION DOLLARS in the bank
earning only 5% interest! That’s my idea of yield. In this book I’ll
be sharing exactly how Collette did this…as well as other business
that meet the same kinds of money tree characteristics.
The T in the Money Tree
formula stands for the words Trend and Timing.
Trend and Timing
Starting a business against the trend is
like swimming up stream against the current. . Running a business is
hard enough without trying to swim upstream. But when you choose a
business that is with the trend it’s like floating downstream with the
current. How do you select a business that’s on trend?
The first time I started a business was
just after college. I started buying real estate…and as luck would
have it…it was the exact right time. The baby boomers wanted real
estate and the demand drove prices upward. Anyone who owned property
made a killing. You could almost do no wrong.
Then, I started teaching people how to
buy real estate with little or no money down. My little classified ads
brought hoards of calls. It was a feeding frenzy. I was on trend. My
seminar businesses took in more than a hundred million dollars in
the next decade.
The secret is to get in front of a trend
and ride the wave. The biggest wave of our century is the Baby Boom –
76 million people. This generation is four times the size of the
previous generation. As this mass of humanity rolls forward through time
it creates a huge demand wave. Picking businesses which are at the
leading edge of this age wave has created thousands of fortunes. You
need to make sure that your new business is leading this trend and not
following it. It can make a huge difference in your lifestyle.
The R in the Money Tree
formula stands for Residual
We’ve already talked about the
importance of this part of the Money Tree formula.
But to emphasize this concept even
further, let’s compare it to an escalator. Have you ever walked up a
down escalator…the wrong way? When you walk up the down escalator,
you have to walk fast just to stay in the same place. And to get to the
top, you have to walk at double speed. People on the Up escalator
don’t have to work hard at all. They just stand there holding the hand
rail and the escalator takes them to the top.
These two escalators represent the two
kinds of income that you can earn…linear income and residual income.
Our economy is a down escalator. You work hard for your money but with
inflation you have earn 3-5% more next year just to stay in the same
place. But this puts you in higher tax brackets. The more you make the
more they take. It seems you work harder and harder without making any
progress. Your bank account balance earns 2% and your credit card
balance costs you 20%. You’re going in the hole 24 hours a day. You
wonder why you can never catch up. And if you stop…the escalator just
takes you right back down to the bottom.
That’s what it’s like to earn linear
income. When I think of this kind of income I think of how they catch
monkeys in Africa. A native takes a coconut and cuts off one end to make
a small hole just the size to allow a monkeys fist to enter. To the
other end of the coconut they attach a long cord. They place a few
peanuts inside the coconut, place the coconut in the middle of a
clearing and hide behind a tree to wait for the monkeys to come. The
monkeys come and smell the peanuts inside the coconut shell. One monkey
reaches inside the shell to grab the peanuts, but with the peanuts
inside, his fist is too large to escape the hole in the coconut. And
then the native yanks on the cord and hauls that silly monkey to
captivity because the monkey will not let go of those peanuts to save
Are you working for peanuts?
If you’re walking up the down
escalator, you are caught in a Monkey Trap. What you want is Up
Escalator Income. Which escalator are you on?
Here’s a list of the many types of
residual income that you want to be exploring:
Savers earn interest
Song writers earn royalties on their
Authors, like myself earn royalties from
their books and tapes.
Insurance agents get residual business
Securities agents get residual sales.
Network marketers get residual
Actors get a piece of the action
Entrepreneurs get business profits.
Franchisors get franchising fees
Investors get dividends, interest and
Visual artists get royalties from their
Software creators get royalties.
Game designers get royalties.
Inventors get royalties.
Partners can get profits.
Mailing list owners get rental fees
Real estate owners can get cash flow
Retired persons can get pensions
Celebrity endorsers get gross percentage
Marketing consultants get % of profit or
When you go to bed tonight, ask yourself
this question, "What percentage of my day did I spend creating
residual income?" If the answer is zero, you’re in trouble.
You’d better wake up tomorrow and get busy. More on residual income
later. I hope now you see why it’s such a vital part of our money tree
The E in the Money Tree
formula means Essential to Everybody Everyday.
Whatever you sell, try to pick something
that’s essential or is perceived as essential by a large and very
motivated segment of society. Let me give you the real reason that real
estate has always been a great wealth creation vehicle and a prime
source of residual income for hundreds of thousands. It fits the Money
Tree formula. Check it out for yourself and you’ll see why..
Whatever product you choose to market
just make sure it’s essential. The more people need it and the more
often they need it, the more successful your business can become.
The final E in the
Money Tree formula stands for Enthusiasm.
You’ve got to love what you do. If you
hate what you sell, you’ll never be any good at it. The prime
admonition from Gary Halbert one of the all time great marketing gurus
is this; SELL WHAT YOU LOVE. Truth is, you’ll never be truly great
unless you do.
Well, there you have the 9 major
characteristics of the Money Tree formula. These 9 characteristics are
essential to the kind of hands off, hassle free businesses that create
lifelong streams of cash flow.
In this book, we’ll be exploring in
depth the 9 practical business which fit this formula perfectly.
As a final note.
In the book, Multiple Streams of Income,
I start with the basics, and help the reader build a strong foundation
for wealth. Then, I expand into the nitty gritty strategies and
techniques for developing 9 separate streams of income. Finally, I
finish with strategies and techniques for protecting these burgeoning
streams of income.
Like Nothing Down and Creating Wealth, I
believe that Multiple Streams of Income will become a long term,
perennial bestseller. I’m anxious to bring it to the large and growing
audience which is desperate for these solutions.