# Planning to be Wealthy

## Intro:  This is a blog from 2014 so a bit dated but may be of interest

This self-help part is the most philosophical part of 12Faces.  Because philosophy, like religion, is a pretty personal thing, you might not find some of the material and the other references given too interesting.  On the other hand, you might find it a bit inspirational!

I think my job is to introduce you to the arena and let you make up your own mind.

### How Wealthy do you want to be

This a ‘how long is a piece of string’ question!

Someone once wrote that ‘wealth is a businessperson’s applause’ and I guess we all like a bit of applause.

One way to answer is to approach it mathematically.

If we decide how much money we want to have after tax for the rest of our life after we retire, we can estimate the capital we will need to have invested in order to make sure our money doesn’t run out before we die.

There are plenty of websites available that will give you a prediction of the nest egg you need to live comfortably taking into account your country, age and life expectancy.  Because this will vary as investment markets and other factors change, I won’t give you a formula here but refer you to such websites as http://www.superguide.com.au to get current estimates.

However, writing in 2012, this Australian site gave the following nest eggs necessary to allow you to have \$200,000 per annum to spend.  This was at a time when a major Australian bank said you could live comfortably in retirement with \$55,000 per annum (assuming you own your home) so you can see that we are talking a pretty comfortable lifestyle.

• If life expectancy is 87 and you want 200,000 pa, nest egg required is \$3.03 million for a couple
• If life expectancy is 100 and you want \$200,000 pa, nest egg required is \$3.88 million for a couple

The figure of \$3-4 million in your nest egg may seem like a lot.  But if you sell your business at some point for a multiplier of 5 times the EBITDA (earnings before interest, tax, dividends and amortisation of goodwill – a measure of profit after adjusting for those expenses), you will get this if your annual EBITDA is \$600,000.  This is not too great a target to aim for.  Of course, you will also be collecting the annual profits until you sell your business so that will also contribute to your nest egg.  We discuss the sale of your business more in the ‘Exit Sale” Chapter later in the book.

In the earlier Section on Wellbeing we discuss setting up a Life Plan.  In this Plan, you set up goals or targets and this is your opportunity to set your Life Plan goal for a retirement nest egg.

One thing I would like to suggest is that you word the goal for a minimum value of (say) \$3 million rather than an actual value of \$3 million.  This leaves the value open ended.  Later in this Chapter you will see that many self-help writers say that you can hit pretty much any goal you wish.  So, if you set it too low, you can hit that but maybe go no further.  If you make it a minimum and open ended, there is no limit to the amount you allow yourself to accumulate.

### Is it OK to want to be Wealthy?

Most of us in the Western world grow up being feed a steady diet of how evil financial wealth is.  The quote ‘it is easier for a camel to go through the eye of a needle than for a rich man to enter the Kingdom of God” (Matthew, Mark and Luke in the Holy Bible) pretty well sums it up.

You might have grown up in a family that scorned the wealthy ‘tall poppies’ and delighted in their downfall.

Perhaps consequently, most of us probably have a nagging feeling that wealth – both getting it and having it – is not something good people talk about.

Your upbringing may also unconsciously limit the amount of wealth you accumulate.

In business, I regularly see staff saying something like “we can’t possibly charge that much for that good or service”.  Unconsciously they may be thinking, “I wouldn’t pay that much for that good or service so others won’t either”.  Time after time, I have seen prices rise after a discussion of this sort and the consumer is quite content to pay the extra amount.  If we had let the “I wouldn’t pay that much” argument govern business pricing decisions, the business would be much worse off.  You need to be careful you are not doing this in your own life.  For example, if it would cause family discord if you earned more than your partner, might you suppress your earning capability rather than get into a domestic about it?

There are plenty of authors who present arguments for the benefits of wealth and argue that it is available to all for the taking.

I don’t know who is right in this debate and don’t presume to be able to argue all the pros and cons of the discussion.

What I do believe is that, if you deep down think that wealth is bad, you won’t achieve any considerable amount of it.  That limiting mindset will govern your whole life; just as other limiting mindsets might convince you that you are worthless, that you can’t possibly speak in public, you can’t remember people’s names or that you deserve to have a bad marriage.

You have heard the saying ‘you are what you eat”.  Well there seems to be plenty of argument to say ‘you are what you think you are’ as well.

### Self help Literature

There is a whole body of self-help or motivational literature that is intended to make you more confident that you can achieve your goals.

Usually these authors will be found on the ‘self help’ and ‘motivation’ bookshelves at your local bookshop or online store.

As you might expect, it ranges from the fairly cosmic to work that has some scientific or at least research basis to its teachings.

I have read a fair bit of this literature over the years so I plan to spend a bit of time introducing some of these authors so that you can make up your own mind.

I very much doubt I can do justice to the writings of these people so I strongly encourage you to read or listen (most are available as audio books from iTunes and Amazon) to the ones that sound interesting to you.

I should say that I have often found that books I have recommended to others, or that others have recommended to me, haven’t rung any bells with the new reader.  I am inclined to think that this is due to the reader not being in a ready mental state to read that particular type of book and therefore its message does not resonate with them.

Conversely, how many times have you thought about getting a book or finding something on the internet and suddenly there seems to be all sorts of materials on the subject that has always been there but you have not noticed it before because your mind was not looking for it.

The upshot of this is that some of the material that follows may not seem to be of any use at all.  If that is the case, you should just move on.  At some point in the future, your mindset may alter and if you revisit these readings they may begin to resonate more with you.

#### Wallace D Wattles

Wallace was one of the early motivational writers.  His best known book is The Science of Getting Rich (Wattles, 1910).   Many of those following later build on his groundwork.

His opening paragraph sets the tone for the rest of the book (remember he was writing in 1910 when the masculine gender was normally used);

Whatever may be said in praise of poverty, the fact remains that it is not possible to live a really complete or successful life unless one is rich. No one can rise to his greatest possible height in talent or soul development unless he has plenty of money, for to unfold the soul and to develop talent he must have many things to use, and he cannot have these things unless he has the money to buy them with.  A person develops in mind, soul and body by making use of things, and society is so organized that man must have money in order to become the possessor of things.  Therefore, the basis of all advancement must be the science of getting rich.  The object of all life is development, and everything that lives has an inalienable right to all the development it is capable of obtaining

#### Napoleon Hill

Napoleon Hill (1883 –1970) was one of the early motivational writers and his books have been very popular with estimated sales of 20 million copies of his main book “Think and Grow Rich”.

His books focus on the power of personal beliefs and how they in turn impact on personal success.  A well known quote of his is “What the mind of man can conceive and believe, it can achieve”.

This book was the outcome of a commission by Andrew Carnegie, beginning in 1908, for Hill to interview over 500 of the main business and political leaders of the day.

Carnegie was one of the richest and most powerful men in the world at that time.  He believed that there was a simple formula to success that could be written down and used by anyone.

Because of the era in which it was written, the book focuses on the careers of men but most would argue his findings can equally apply to women.

#### Other Motivational Books

Over time, I might add other reviews here.

Some that are mentioned elsewhere is this book and which I recommend as ‘5 star reads’ include;