Week 15.pdf

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

ÐThose 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.Ñ -Î Brian Tracy

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MONEY AND F I INANCE

Jim Rohn's Fourth Pillar of Success: Money and Finance,

Part Two Ï 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 ÐdependentÑ 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 long-

term, 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

ÐDo 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.Ñ

-- Philip E. Humbert

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