Hugh Culver

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How I got rich (and 6 ways you can as well)

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Before you get the wrong impression, this post isn’t about being rich – it’s about creating wealth so you can have a great life and do great work. Maybe you want to build a school in Nepal (like I did with my youngest daughter), go back to school, travel more, or simply get out of debt. That’s what I’m talking about.

If you’re okay with my argument, read on – you might be surprised by my advice.

Rich is good

I remember years ago hearing Mark Victor Hansen, co-author of the mega-successful Chicken Soup for the Soul series, somewhat sarcastically saying, “The best way to help the poor is to not be one of them.” There’s some truth to that.

For nine years, I led a small not-for-profit that gave teenagers a wilderness/leadership training experience. I am one of about 1,100 companies, along with singer Jack Johnson, outdoor apparel company Patagonia, and retail outlet Mountain Equipment Co-op, that donate 1% of our gross earnings (see 1% for the planet), to environment causes. I also lend money to about three dozen entrepreneurs in third world countries through KIVA. I need money to do that.

Having wealth also means you can travel, invest in education, enjoy better health, even spend more time with your kids.

Sound good? Here are six ways I continue to create wealth and you can as well.

#1 Get your head in the game

In a weird twist of psyche, a large percent of good folks have a deep-seated resistance to wealth. Maybe they equate wealth with Kardashian-like distress and unhappiness, or their parents mentored them to live frugally, scraping out a modest living. “When we recognize the wealth archetype in our own attitudes and behaviour,” says Charles Richards, author, The Psychology of Wealth, “we can use this understanding to consciously steer our course rather than allow it to unconsciously drive or sabotage us.”

“What’s in your head determines what’s in your wallet.” Darren Hardy, Publisher, SUCCESS magazine

If you are committed to – once and for all – resolving money issues, you need to get your head in the game. You need to want it. And I don’t mean, “Gosh, that would be nice.” – I mean, “Damn it, I deserve that!”

Here’s a valuable exercise that might make your head spin. Once a day, for a week, imagine enjoying more money. That’s it – simply imagine enjoying having more money and what you would do with it. Would you treat yourself to new clothes, take your kids on a mini-vacation, fix the furnace, or enjoy a dinner out? Whatever the treat, enjoy it.

This is a law of nature: train your sub-conscious to want and accept money and you will attract more money.

#2 Get a goal

Goals work. They work for athletes, sales people, playing tiddlywinks, and they work for creating wealth. But, (surprise) more income is the wrong goal.

I know professional speakers, like me, who earn $8,000 a talk (that’s $133/minute, thank you very much) and are broke. Chasing more income is a fools game.

When I turned 56 I made a series of goals (you can read about my 1460 goals here) for my marriage, children, travel, adventures (Everest anyone?), work, and net wealth.

Net wealth is simply all your disposable assets, less debt. That’s what you can take to the bank and that’s what you have to live off. Of course you might have a pension or government security (like CPP, in Canada), but net wealth should trump all of those.

I use a simple spreadsheet to track that number. On one side are disposable assets (homes, real estate investments, financial investments, vehicles, and cash). On the other side: mortgages, lines of credit, current credit card debt, etc. I update this chart every three months. It keeps me honest.

→GET A COPY OF MY NET WORTH SPREADSHEET

#3 Spend less

A dollar saved is the same as $1.42 in the bank. What!?!? (read more about crazy math in my post “Why $100,000 a year won’t make you rich”) When you spend money, it’s after-tax money. In other words, you have already paid tax on that money. So, to enjoy your $3.50 Caffè Americano you had to earn $5.00, before taxes. Ouch!

The crazy math is: $cost / (1-marginal tax rate). Let’s assume you have a 30% marginal tax rate (the amount of tax you pay on any additional income you earn). For my muffin example, the math is: $3.50 / (1 – 0.30) = $3.50/0.7 = $5.00. That means, skipping the muffin effectively puts $5.00 in your bank account (and a lot less gluten in your arteries).

Next time you pull out your wallet for dry cleaning, a $34 bottle of Crown Royal, or tub of Haagen Dazs Pralines and Cream, ask yourself what you had to earn for that little pleasure. I’m all for enjoying life – I like building wealth even better.

#4 Ask for what you deserve

I’ve always found when I ask for what I deserve, I get…(wait for it)…sometimes nothing. But, I DO get more than if I never asked at all. Need a raise? Want your consulting client to pay for travel? Three years since you increased your fees?

Time to ask.

When I’m on the phone with an event planner I know they have gone to some trouble to search me out. That’s not the time to chicken out and offer a deal. Unless I know they can’t afford my fees, I state my fee and wait.

Sometimes I have to bend a bit, but the net result is I’m always ahead. Ask for what you want – more often then not you’ll get it.

#5 Think little wins, not lottery wins

The statistics are horrible. Just eight months after the balloons and streamers the average lottery winner is no happier. Worse still, lottery winners go bankrupt at twice the national average every year.

Real wealth growth is boringly slow.

“Someone is sitting in the shade today because someone planted a tree a long time ago.” Warren Buffett

Last month I cancelled extra channels on our TV package. It’s been a heated debate in our house. I don’t watch TV, my wife enjoys sports and shows like The Voice and, truth be told, Bachelor. In pre-tax dollars those shows were costing us $857 annually. I could fly her to L.A., including hotel and meals, for that. Now, I just dress up and sing for her (she wants her channels back).

Month by month, $50 extra on your bill is no big deal – it’s a huge over time. A little purge now and again pays big dividends.

#6 Leverage dollars

The math is simple, use other people’s money and you get rich faster. It works like this:

You find a 1950’s special on a great street. The house need a bit of TLC, but the neighbourhood is good and it’s close to a bus route. The cost is $275,000, you scrape together the $68,750 (25% deposit) from savings and love money and buy it. You place some ads, screen tenants, and rent it for $900. Your mortgage cost $694, so you net a bit every month for insurance and maintenance.

“…while much maligned…debt, when used wisely, has been, and can be, a good thing.” Charles Richards, author, The Psychology of Wealth

Over 10 years, you have a few repairs, go though a few tenants, and the property is up in value by $100,000. Sure, you had to fix the washing machine, and cut the lawn, but you just earned an annual return of 9.4%, plus you can write off expenses against your other income and borrow against equity. That’s the power of leverage.

Want more money? It’s there waiting for you.

The question is: what are you willing to do to get it?

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About Hugh Culver

Speaker, author, athlete and founder of BlogWorks. I speak and write about getting stuff done and the art of growing younger.

Categories: Blog, Wealth Tagged: business, Charles Richards, Darren Hardy, get out of debt, get rich, have more money, income, KIVA, Mountain Equipment Co-op, Patagonia, real estate investing, savings, success, SUCCESS magazine

Comments

  1. Mitja Koren says

    March 6, 2015 at 8:18 am

    Nice roundup Hugh. I enjoyed reading it very much! I must admit that I have the same debates over (unnecessary) TV fees with my wife over and over, so I feel you 🙂 Not watching TV and using it productive by spending it actively with loved ones or striving towards your goals would be my advice. Greetings to your wife and girls from Slovenia!

    Reply
    • Hugh Culver says

      March 6, 2015 at 8:24 am

      Thanks Mitja. It’s it funny how universal these debates can be! The funny thing is my wife mentioned the lack of channels once and I haven’t heard anything since (well, she does still talk to me).

      Reply
      • Derek says

        March 9, 2015 at 10:51 am

        Quid pro quo: I am curious, what did you offer to give up in return for her giving up her channels?

        Reply
        • Hugh Culver says

          March 9, 2015 at 1:19 pm

          Oh, good lord – she gets me to vacuum 🙂

          Reply
          • Gert Engelbrecht says

            August 18, 2015 at 9:26 am

            I dont like this savings stories at all. I like my expensive car that can go 250km per hour. I also like my big screen Tv with 200 channels. Get yourself a business amd make lots of money. This poverty savings stories will just keep you poor.

          • Hugh Culver says

            August 19, 2015 at 12:02 pm

            Gert that is too funny and so true. Poverty mentality will keep the best of us back. I’m all for enjoying the riches of life, just not sure I want to dump my lowly VW yet.

  2. Steven Threndyle says

    March 9, 2015 at 10:31 am

    Those are awesome, Hugh.

    Reply
    • Hugh Culver says

      March 9, 2015 at 1:21 pm

      Thanks Steve – high praise coming from you!

      Reply
  3. David Rossi says

    March 9, 2015 at 1:05 pm

    That is one of your best insights ever! Thanks for the great content

    Reply
    • Hugh Culver says

      March 9, 2015 at 1:19 pm

      Thanks David! Really appreciate that.

      Reply
  4. Rowena List says

    March 9, 2015 at 9:10 pm

    Love talking about money and how to save it.I do not even have a TV for that very reason…cost and I never watch it and guess what? I do not miss it.
    Want to make more money? Spend less. Thanks for the share. Now I am going to go look at where else I can save.

    Reply
    • Hugh Culver says

      March 10, 2015 at 12:02 pm

      Thanks Rowena! I like that: why make more money? Spend less!

      Reply
  5. Pat Katz says

    March 10, 2015 at 12:54 pm

    HI Hugh

    Good article. I like the TV channel canceling idea.

    Dave’s the tube fan in our house, and I wouldn’t miss the extra channels. But, I would miss him.

    Negotiating saving opps can be tricky. It’s always easier to chop an expense for something that’s not near the top of your own list.

    When I read this bit below in an Art Newsletter I subscribe to, I thought of you and your message:

    Esoterica: Salvador Dali, while putting on a convincing display of craziness, was an artist who amassed a private fortune by hard work, careful management and shrewd investment. He once admitted, “I am a manufacturer of wealth.”

    Happy Tuesday to ya
    Pat

    Reply
  6. Shankar Pradhananga says

    March 12, 2015 at 12:56 pm

    Thank you very much for your article about being rich. It is very inspiring and a simple pragmatic approach to create the real wealth of happiness, prosperity and satisfaction.

    Reply
  7. Peter Freeman says

    March 13, 2015 at 8:19 am

    There’s some great advice here, Hugh. It all comes back to mindset and operating with your goals as “musts”, not “maybes”.

    Having moved to opposite sides of the globe twice in 10 years (the second time with my wife and 4 children), all while earning a single modest income, I can vouch for the importance of prioritising saving over spending!

    Reply
    • Hugh Culver says

      March 23, 2015 at 8:23 am

      Thanks Peter – well said!

      Reply
  8. Tim Johnson says

    November 29, 2015 at 3:33 am

    The misuse of the term ‘Not-For-Profit’. If you ran a not-for-profit for nine years and lived off it, you made profit!

    Reply

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