Three Reasons Why Foreclosure Rates Keep Climbing‏

Hi Everyone,

I'm actually writing to you from Minnesota. Heather and I are going to a family summer camp with her family. It's like stepping back in time!

This morning before we left I read in the paper how the Fed lowered its short term rate for banks to borrow from it by half a percent (to 5.75 percent). The housing market has been on my mind of late. In fact, yesterday I recorded a special online class on it for members of Maui Mastermind Online (see below).

In this eLetter I thought I would share with you an article I wrote for you about a year ago on the rise in foreclosure rates and the three factors that were driving it. It's interesting to see how much of what I observed has come to pass and then some!

Then at the end of this eLetter I'll share some new observations I have about the mortgage meltdown and housing market in general.

I hope you enjoy!

*******************

Three Reasons Why Foreclosure Rates Keep Climbing

REASON ONE: Changing mortgage underwriting guidelines.

There was a time four decades ago that in order to get a loan to buy a home the borrower needed a 20 percent down payment, strong credit, and stable income that was at least three times as high as the mortgage payments. But the world has changed, and so has the lending market.

Today home buyers can get zero down loans with adjustable rate mortgages that cause their loan balance to actually increase every month (called "negative amortizing loans"). In fact, lenders today have loosened up their requirements on credit standards (witness the explosion of "sub prime" loans) and income levels (with many lenders requiring only twice the income of the total home monthly payment).

As you can imagine, this loosening of the financial requirements means more borrowers will default on their loans. They have less equity. They have a smaller cushion to make the monthly payments. And in many instances they have lower credit scores.

Just to be clear on this, I personally think many of the mortgage industry changes are good ones. I love the idea that more people than ever are able to get access to financing to purchase their home. To me this gives ordinary people the chance to build wealth and enjoy the freedom of owning their own home.

But there is a downside to this too, when you add in the societal push to buy the "most expensive home you can qualify for a loan for". This influence I think causes many homeowners to get in way over their heads. Hence the need for investors like you and I to be there to bail out many of them for a fair profit.

In many cases the lenders themselves make this profit possible by accepting less than what's owed (aka: "short sale"). Now don't go feeling to bad for the lenders since most loans are bundled up and sold on the secondary market (i.e. wall street) in such a way that the risks are spread and investors make a high enough rate of return to cover the cost of the defaulting loans. In fact, this financial flexibility and growth of the mortgage industry to source off the loans in collective bundles is what has allowed the lending world to offer so many more potential loans for would be borrowers. Again, in and of itself I think this is a very good thing--for borrowers, for lenders, for investors, and for the country as a whole. It's just when you add in the other element I just talked about along with poor financial fluency that so many borrowers get into trouble.

REASON TWO: Toxic Mortgages

A recent Business Week cover asked, "How Toxic Is Your Mortgage?" (September 6, 2006). In the 14-page feature article the Business Week reported on the alarming rise in "option ARM loans". These are adjustable rate mortgages that offer several payment options to the borrow, including one option, called the "minimum payment" that is less than the cost of the interest so that the loan grows bigger every month. According to the article, up to 80 percent of all option ARM borrowers make only the minimum payment!

In 2005, Countrywide Home Mortgage (the nation's number one mortgage lender) had a 500 percent increase in "option ARM" loans! According to the article more than 20 percent of all option ARM loans in 2004 and 2005 were worth less than the outstanding loan balance! And if the real estate market fell by just 10 percent that number would double to 40 percent!

Are you getting a sense of why in earlier wealth tips I suggested that prudent real estate investors would be ready to buy with cash? There will be a lot of properties that are in need of saving. Shortsales, as a technique to buy properties in foreclosure where the lender accepts less than what is owed just to get the defaulting loan off its books and make the best of a negative situation, will be one of the most important buying strategies for investors to master.

And if that wasn't enough, in 2005 lenders gave 43 percent of first time buyers loans for 100 percent of the purchase price (National Association of Realtors) leaving these homeowners vulnerable to the slightest economic quiver.

REASON THREE: A Shift in the Real Estate Market

The headlines are everywhere. The cover of The Economist read, "Has America's Housing Bubble Burst?" (August 26, 2006). USA Today reports about the declining real estate market.

What's happening?

The answer is that another market cycle is playing out in the real estate market. The huge growth of real estate (from 2000-2005 the total value of American homes skyrocketed from $9 trillion to $22 trillion) was drastically slowed and in many parts of the country, especially the Midwest, is declining in value.

When you add this decline in the real estate market to the loose lending trends of the past decade what you get is a recipe for a massive increase in opportunities for foreclosure investors.

*************

Well, reading through that past article you'll see how much has happened. Countrywide announced a few days ago that it has totally tapped out its line of credit. This is basically the biggest mortgage lender in the country saying that it is in bad financial shape!

The subprime default rate is 15 percent! And there are currently over 1 million home owners behind on their payments in the U.S.!

I see this as a time of great emotional extreme, and any time you have a big swing in emotional perception in a market there are opportunities for those people who have the experience and skill to intelligently invest in the market. I see this same opportunity happening over the next 12-24 months in the foreclosure market.

In fact, I just recorded a special Online Workshop on this very subject called, The Sub-Prime Meltdown and Foreclosure Opportunities. In it I'll share with you what I see to be the best opportunities for savvy investors in the residential real estate market. In it I cover the 3 factors that have combined to make now a time of huge opportunity to invest in foreclosures. Plus you'll learn bottom-line suggestions for taking best advantage of this window. Members click here to access it.

Not a member yet? No problem, click here for a free 30-day trial membership. After that your membership is just $9.97 per month auto-billed to your credit card. Each week we add cutting edge updates to the site just for members. You can cancel at any time (but why would you want to?)

Well that's it for this eLetter. I hope you enjoyed the ideas on the foreclosure and housing market. Take care and wish me luck at camp with my family!

My best to you,

David

P.S. For those of you who signed up for your free trial membership to Maui MastermindTM Online last time, thank you. What are the rest of you waiting for! Go ahead and take me up on this free 30-day trial offer. If you don't like it you can cancel and you'll never pay a dime. Plus you'll get to keep the $495 downloadable wealth course that new members like you get as a free gift just for trying it out! Start your free 30-day trial membership right now!

P.P.S. If you enjoyed this eLetter why not forward it on to a friend? You have my permission to post it on the web or email it out or add it to your company's eLetter. All I ask is that you don't edit it down and that you keep the links active.

I'm Back from Maui Event

Hi Everyone,

Heather and I just got back from the Maui MastermindTM event late last Saturday and most of the jet lag has worn off, but the excitement hasn't.

This summer's Maui MastermindTM was incredible. What made it so special?

Well part of it was that Heather chose to be a participant in the event and that thrilled me. And part of it was hearing back from returning graduates how they had applied earlier strategies, ideas, techniques, and insights from Maui to their business lives to create amazing results.

For example, one participant shared how he applied the key lessons from last year's Maui to upgrade his medical practice in a way that made him a million dollars of extra income.

Another returning grad told me how the ideas on how exactly to strategically invest her entire net worth in a comprehensive way (our proprietary Wealth MapTM process) was exactly what she needed as she moves into the next phase of her financial life.

But really the best part was the informal time I got to spend sitting down and just talking, hour after hour, with the participants about their lives, dreams, and plans. This is how mastermind groups get formed and real power comes from this type of deep networking and relationship building.

We also spent a good bit of time talking about combining philanthropy with business and how we as a Maui community are committed to touching the world.

To my mind it was the way we came together as a group and stepped up to a HUGE charity challenge. This includes raising time, talent, and money for diverse causes like women's shelters, housing for families who are homeless, children in orphanages around the world, financial fluency education for teens, and much more.

And this is why I am so excited let you know about a special offer I'm making you to entice you to join us at our "Mini-Maui"workshop on September 14th and 15th in Atlanta that we are hosting to raise money for these and dozens of other charitable causes.

But I don't want you to come just because you'll be helping out great causes, consider that a side
benefit. I want you to join me because when you do, you'll learn the strategies and concepts you need to break free of the rat race once and for all, and step to the next level in your financial life.
That's it. Plain and simple. Come join us because it will help free you from the stress and struggle that financially traps so many good people. You deserve more and you can have it. And I want to show you exactly how you can get it.

And just how do I plan to make this offer so irresistible? Well I guess you'll just have to read this letter to find out. (Hint: It may have something to do with the very BIG discount off of a newly updated wealth workshop I am teaching at the same hotel right after the Mini-Maui event that I'm offering to give you.)

Have you ever wondered what really happens in Maui that sparks people to willingly pay $30,000 to attend?

And then pay to come back a second, and a third time?

Have you wondered what Maui MastermindTM is actually like?

I mean, this summer over 90 percent of the participants signed up for next year's Maui MastermindTM event on the spot.

How could any "workshop" really be worth that kind of money?

Well come to the Mini-Maui event and you'll find out for yourself, and for a fraction of the normal $30,000 price.

But first let me tell you about that totally revamped workshop that I have just created that we're holding on September 16th and 17th (the Mini Maui event is on the Friday and Saturday and this new workshop is on Sunday and Monday at the same hotel.)

Because if you register for the Mini-Maui workshop at the same time you register for this brand new workshop (appropriately enough we call it, "Financially Fluent!", you'll save $1,700!

Exactly What You'll Learn at Financially Fluent

Before I give you a detailed overview of exactly what you'll learn when you attend Financially Fluent, let me share with you what two participants said about the last time we offered this workshop:

"Great workshop for charting your course towards wealth and financial freedom." Derrick P.

"It's like an MBA on steroids for like a ridiculous fraction of the cost." Olly F.

And I've totally redesigned the course and have added several brand new modules that I've never taught like this before. So here's exactly what you'll learn.

The workshop will be broken into three parts, one for each of the three levels of wealth.


Part One: Level One Wealth

• How to Know Exactly Which Stage of Wealth Building You Are Currently At!
• 10 Ten Essential Level One Wealth Concepts You Must Master to Become Financially Free!
• The 5 Action Steps to Move From Level One Wealth to Level Two In 6 Months or Less!
  

Part Two: Level Two Wealth

• How to Cultivate a Network to Help You Accelerate Your Wealth Building!
• The 15 Essential Level Two Wealth Concepts You Must Master to Build Your Asset Base!
• The 2 Wealth Tracks and How to Know Which Path Is Best for You!
• A Simple, 5-Step Action Plan to Blow Past Level Two Wealth Building in as Fast as 24 Months!
  

Part Three: Level Three Wealth (all day two)

• The 6 Ways to Leverage Your Wealth Building to Become Free FASTER!
• The 21 Essential Level Two Wealth Concepts to Transition to a Level Three Lifestyle!
• A Proprietary 6-Step Plan to Create a Personalized Wealth MapTM!
• How to Build Your Wealth Systems so that You Have BOTH the Money and the Lifestyle!
• The step-by-step Action Plan to Transition Into Level Three Wealth
  

The Three Types of People This Workshop is Right For

• One: People who know that for them to succeed financially that they must become financially fluent, and they are open to learning these skills in an accelerated fashion at this concentrated, information rich event.
• Two: People who are already well along the path to financial freedom who recognize the value they get by leveraging outside experts and perspectives to refine their financial education and wealth plans.
• Three: People, tired of being financially powerless, and who are willing to take action to take control of their own financial destiny.
  

So if you fall into one or more of the above categories then I urge you to join me for this powerful wealth-creation event.

Now here's my very special, limited time offer for you:

Special Offer!

TWO Seminars for Less Than the Price of ONE!

The next Mini Maui event will be held this September 14th and 15th in Atlanta. Originally Diane and I designed Mini Maui as a way for people to get a taste of while at the same time we raised a lot of money for charity. We were astounded at the end of the first event to add up the tally and find that we had raised over $320,000 for charities! (So far in 2007 we've raised over $600,000 from these events for charity.)

Now imagine how we felt when so many emails and letters flooded our office just like these two:

"It was fantastic spending a couple days with other investors and business owners. I met some wonderful people. Now I am focused on immediately implementing much of what I learned during the two days. I already have a new Mastermind group I have been invited to join. I am also looking to some fellow attendees for opportunities to partner up on some investment opportunities. I am also considering hiring an assistant to free myself from many of the daily tasks that take much of my time that could be spent on more important/wealth producing activities. This event has changed the way I do business."
- Michael P.

"I had been following the typical MBA path of working up the corporate ladder, only to find myself worn out, uninspired, and at risk of the next lay-off. The Maui Millionaires Wealth Weekend did for me in two days what two years of business school did not: face my limiting beliefs about money, and point me towards a new direction of wealth building. I now have an expanded context that goes beyond relying on corporate America. Instead I am developing key leverage points to build wealth in ways that will get me closer to the fulfilled, independent life I want."
- Clarissa D.

By itself Mini Maui is $500, with the money going to charity (less the hard costs of the event, we not only won't make a dime from the event, but we'll publish the financials of the event up on the web within 90 days of the event to keep all of the financial part totally transparent.)

The Financially Fluent workshop is a "for profit" event and normally is priced at $1,997.

Now here is that very special offer I have for you: Register for BOTH workshops right now for just $797! That's $1,700 OFF the normal tuition!

Think about it, that's just $200 per day for the four days of information packed, wealth producing workshops!

Why so inexpensive?

I'm doing it to make it a total no-brainer for you to attend so that together we can raise more money for charity. ($500 of your ticket will go to the "charity" part--the Mini Maui--and $297 will be for the Financially Fluent workshop. That way we raise $500 per ticket sold for charity.)

Together, Financially Free and Mini Maui are normally $2,497. But, if you act now, you can get both events for $1,700 off, for a total price of just $797! It's like getting two back-to-back wealth workshops for the price of one!

And rest assured that we've designed both these workshops to fit together in one incredible four-day experience. Some come join me in Atlanta and learn the inside rules of money and wealth.

This special price of $797 to attend BOTH the Financially Free and Mini Maui workshops is available for a limited time, so please register now!

I'd hate for you to miss out on your chance to learn what it really takes to build wealth and financial freedom. What better way could there be to start the new year?

Join us and register now!

My best to you,

David

P.S. It's not enough to be just financially literate in today's world – you have to be financially fluent! Get the skills you need to take your wealth-building to another level PLUS sample the magic of Maui with the Mini Maui for just $797. Register now!

P.P.S. Seats are selling out fast! Please don't wait to sign up for the Financially Fluent workshop plus the Mini Maui at $1,700 off! Register now while there is still room!

Getting More Accomplished in Less Time

Hi Everybody,

Imagine you were able to transform your relationship to time, balance, organized, and focus so that you were able to work less and accomplish more.

How would that impact your life?

Over the last 20 years I've had a passion for learning how to structure my time for maximum results.

It started off back in the days I used to be training to play in the Olympics (for about 8 years I played on the United States National Field Hockey Team). I had to figure out how to balance a rigorous training schedule with being a self-supporting college student.

But my biggest breakthroughs have come in the last five years as I've learned that hours worked have no bearing on results accomplished or dollars earned.

Once upon a time I thought that the way to become wealthy and successful was to work hard. But that is a Level One or Level Two reaction, NOT a Level Three solution.

In today's letter I want to share with you several key insights to help you get double or triple your results in half the time. Ready? Let's begin!

Leverage--Getting Twice the Results in Half the Time

People always seem amazed when they hear that I run five companies, sit on the board of two others, author an average of one book and 5 new workshops per year, and manage my family's investment portfolio. And I do this working an average of 32-35 hours per week.

Not only that but I also read over 100 books each year, exercise an average of four times each week, and take a minimum of 2+ months of vacation every year.

I'm not trying to impress you with this, far from it. I have no illusions about myself. But there are certain things that I am world class at, and my use of time is one of them.

Hence, I am merely using myself as an example of how much you can accomplish if you leverage your time using some simple yet profoundly powerful strategies.

It's exactly these strategies and techniques that I want to lay out and discuss with you in this letter. You see, I know you.

You're overworked, stressed out, feeling at times like you're having to run just to stay even, let alone get ahead.

You're drowning in information and struggling to find an effective way to structure and organize that information.

Most of all you're frustrated. Frustrated that you have too many "small" things that get in your way of focusing on the big stuff that really matters.

You crave a sense of control and balance in your life, and you'll do just about anything to enjoy them.

You just don't know how t get that control and balance back.

In the past you've chased after results and balance by working harder. You've tried working longer hours. You've tried working harder for the hours you do work. You've brought work home with you, worked while on your "vacation", multi-tasked while driving, eating, and probably even while sleeping!

And yet it hasn't helped. The more you do the more you find that is left to be done. It's a vicious cycle.

A Simple Secret that Holds the Key

I want to let you in on a little secret. Working harder is not the answer. It wasn't yesterday nor will it be tomorrow.

Working harder is a Level One or Level Two reaction to the fear you feel that you have so much to do. It will NOT get you the results you crave.

In fact, the harder you work, chances are the less you'll accomplish that really matters. I know this sounds easy for me to say, but hang in there with me as I walk through a key concept with you.

Many of you have heard of "Pareto's Principle" which states that 80 percent of your efforts produce 20 percent of your results, and that 20 percent of your effort produces 80 percent of your results. Well if this is true (and my experience shows me that it is) then let's apply this concept more rigorously.

If you take that 20 percent of your actions that generate 80 percent of your results and apply the same distinction, then 20 percent of that 20 percent produces 80 percent of 80 percent of your results. That means that 4 percent of your effort (the 20 percent of 20 percent) generates 64 percent of your results.

And if you can bear with me for another math moment, apply this distinction one more time...

This means that 1 percent (20 percent of 20 percent of 20 percent) generates 50 percent of your results! Think about it--1 percent of your highest leverage work produces 50 percent of all your results!

I used this idea to create something called the Time Mastery Pyramid™, which is an actual formula I developed about 12 months ago for you to quickly and accurately quantify the per hour value of four distinct types of time: A Time, B Time, C Time, and D Time.

D time is the 80 percent of unleveraged, wasteful time that only produces 20 percent of your total return. I call this time the "80 Percent Mass".

C time is the leveraged 20 percent that produces 80 percent of your results. I call this time "Leveraged Time".

For most people this is the only distinction they have ever made about time. And while it's better than most people have, if this is your only distinction on time, you are never going to earn what you are capable of earning, both in terms of income or net worth.

Next there is B time. This is the highly focused 4 percent that generates 64 percent of your results. I call this time the "4 percent Sweet Spot".

And finally, there is the top of the pyramid--A time--the "Magic 1 Percent". Fully 50 percent of your results comes from these activities.

Did you know that most people not only have no idea what activities of theirs fall into the above four categories, but they don't even know they exist? How in the world can you create more A and B time if you don't know what activities constitute A and B time for you?

Here is the real question for you: What activities do you do that fit into each of the four time categories above? What are your D activities? What are your C activities? What are your B activities? What are you're A activities?

When you really get this distinction and shift your focus from "putting in hours" to upgrading the type of work you do (more A and B time, and less D time) in the hours you do work, the results are amazing.

Let me share an example with you. Imagine you are an attorney who charges $300 an hour. What would your D time activities be? Things like fixing a computer glitch, or making copies, or sorting out mail, or any of the things you do that you cannot bill a client for! What should you do with these activities? Delay them, delegate them, or dump them. You simply cannot afford to do them yourself.

What would your "C time" activities be? Anything that is a billable time for you. This could include working on a legal brief, or reviewing a contract, or updating a client. Understand this: C time can provide you with a great income, but you will always have to work exceptionally hard to earn it. This is the trap that catches most high income professionals. They seek to increase their earnings by cranking out more hours. MISTAKE! More hours will only take you so far.
Plus when you get there you'll be exhausted from all that work, and you'll be a stranger to your family!

The answer lies in A and B time. B time for this attorney might include building relationships with other professionals who refer over business. Or putting systems in place in their law firm so that their staff can get better results without needing so much of our fictional attorney's time. It might also include creating an accounts receivable system that increases the collection on all the firms billings by 10 percent. You get the idea.

What would A time look like? This could be speaking at a large conference where this attorney is able to generate new client relationships for his or her firm that are worth hundreds of thousands of dollars of billable services. Or it could be writing a book that can be used to generate new business for the firm.

See the difference yet? D time is by definition something that you should get off your plate. C time is time that you do your work more effectively. A and B time, however, are when you step out of the "doingness" of the work and do something that improves your capacity to create results, or significantly pushes back your limiting factor (e.g. generating new clients, improving a critical system, etc.)

In fact, by focusing on upgrading your USE of time instead of focusing on increasing your hours worked, you can often double or triple your income, while at the same time lowering your working hours.

It's worked for me. Seven years ago I worked 65-75 hour weeks. I now earn more than double what I earned back then and work less than half the hours.

Trading time for dollars is a Level One or Two reaction. Upgrading your use of time to create more with less is the Level Three solution!

So now here comes the big question: How can you have more A and B time?

You won't get it by "trying harder". And you won't get it by sitting down and saying, "Okay, let's have A time right now."

Sorry, it just doesn't work that way. That would be like a parent saying to their three year old, "Right, let's have an hour of quality time right now Junior." How well do you think that would work?

What I've discovered is that to get more A and B time you have to fundamentally alter the way you structure your day and your week.

In fact, when you learn and master the ways to structure your time you will automatically enjoy more A and B time.

Focus Days and Push Days

Let me share with you a powerful concept to help you get more A and B time, and to minimize the D time that gets in the way.

I call this technique "Focus Days" and "Push Days."

Let me share with you the way I use it in my own life.

Mondays and Wednesdays and Fridays are my Push Days. These are the days that I "push" key projects and the "work" I do forward--step-by-step. These are the days I am accessible by phone and email. These are the days I hold many of my phone meetings.

On these days I "get stuff done".

I have set aside my Tuesdays and Thursdays as my Focus Days. These days I turn off the phones and email for the majority of the day, and focus on doing the highest value activities I can for my businesses. For me that usually means I am writing on these days. I'm writing new books; I'm writing sales copy; I'm writing business plans for my teams to implement.

In fact, I often leave the office and work remotely these days. I go to a library and write there. Or I go to a café and work there. (I find that removes the temptation to do C and D work that seems to live in every corner of my office.)

Here's the most amazing part--I can accomplish HUGE results in 3 to 4 hours on my Focus Days that I never would have accomplished if I stayed in the office "doing" the work all day long.
(In case you're wondering, I often will check in at the end of the day for 30-45 minutes to answer the most important phone messages or email.)

Now maybe you can't set aside two full days a week as Focus Days, but you can find one day a week, or at the very least HALF a day a week as your Focus Day.

There are so many other ideas I want to share with you about how to master your use of time. Ideas like creating "Prime Time" blocks to get more B and C things done on your Push Days. Or, how to leverage a personal assistant so that you accomplish more with much less effort. Or, how to handle the infoload of email, project notes, to do's, etc that threatens to drown most people.

But I am running out of space and time.

For those of you who are committed to get the very best results in half the time, I strongly recommend a brand new course that I recorded last May called, "Time Mastery: How to Ten-fold Your Results In 12 Months or Less".

The course walks you through the complete and comprehensive time mastery system that I created for own personal and business life. It covers how to manage and organize information and handle email; how to structure your time to create more with less; how to live the life you've always dreamed of living.

And it's the exact same system that I use that allows me to earn more than 99.99 percent of other people in the world working what for many people is just part- time hours.

In fact, the system is unlike any other time "management" system you've ever seen.

But don't take my word for it, prove it for yourself. Try out the program and see the results.

Because I wanted to make you this better than risk-free offer to test out the program.

Order the Time Mastery program today, and if after going through the course and applying the ideas and strategies to your own personal situation you haven't seen dramatic and fairly immediate results, simply contact my office for a full, prompt and courteous refund. PLUS we'll give you a $250 credit good off any of our other courses priced over $500. And you can take up to a full year to test out the course. I know you'll love it and I'm stepping up to guarantee that you do.

In a sense I'm guaranteeing you'll love the program, or I'll pay you $250 for your time trying it out. Either you love the program, in which case you'll use the ideas to pay back the investment a hundred times, or you don't, in which case you'll get a full refund and get that $250 credit.

Either way you win.

This special "better than your money back" guarantee is valid for the next 5 days so please, if you are truly committed to getting the results that you are capable of and want this generous guarantee, get the course now. Orders after this five day period will still get our normal full one year money-back guarantee, but they won't qualify for the $250 "thanks for trying it out" credit. Click here to order.

Thank you for listening to the ideas I shared today on getting more accomplished with less time and effort.

I will talk with you later.

My very best to you,

David

P.S. Try out the Time Mastery course today and if you aren't absolutely thrilled with the value you can return it for a full refund and get a $250 credit off any of our other courses priced at $500 or more. This extra guarantee offer is valid for the next 5 days. Order now!

What Would I Do If I Were Starting From Scratch Building Wealth

Hi Everyone,

Things here in Hawaii are going great. The event is amazing so far. We've got one more day to go. It's been even more special this time because my wife Heather was one of our participants this year. I'll give you a recap of the event in a few weeks when I get back to the mainland.

But in this letter I wanted to share with you about a different topic--lessons I've learned along the way as I've built my wealth.

I imagined we were sitting together by the side of the pool here in Hawaii and you asked me, "David, if you were starting out all over again from scratch, knowing what you know now from having done it before, what would you do to build your wealth the second time around?"

It's an interesting and critically important question. And to the best of my ability, here is my answer.

First, I would know how doable it really is. The first time around I thought I could do it. I hoped I could do it. I dreamed I could do it. But if I were starting over again from scratch, this time I would know I could do it.

In fact, I would know I could do it not just because I had done it before, that's too obvious. I would know I could do it because of all the other people I've seen start with fewer advantages, fewer resources, who went on to create amazing fortunes for themselves. I didn't have all these powerful and positive references the first time around.

I've literally seen school teachers go on to build multi-million dollar portfolios; mechanics go from fixing machinery at less than $10 per hour to owning Level Three businesses that made them multi-millionaires; and highly paid but totally overworked professionals who quit the rat race and went on to create the Maui MillionaireTM lifestyle.

Knowing that it's possible would mean that I would not be so scared the second time around. Believe it or not, I slowed myself down immensely the first few years because I was just too scared to really play full out.

For example, when I started investing in real estate in 1997, that first year I could have easily picked up 20 more investment properties than I did. People were willing to almost give me their houses because the market had been so bad in San Diego for so long. Considering those 20 properties would have doubled in value over the next 4 years, that fear cost me several million dollars.

The same thing happened with my early businesses. I was too scared to call on the big clients or sell at the major conferences. I stayed in my comfort zone far too long. And that was simply a matter of fear. Fear of failure, fear of success, fear of the unknown. Don't ever think that I don't have to battle the same demons of fear and uncertainty you do. It's part of being human. But the second time around I'd realize that I didn't have to be so afraid of feeling afraid. I'd recognize, like I do now, that it's how I act in the presence of my fears that determines my results, not the absence or presence of those fears.

What has your fear cost you this time around?

Next, I would have stepped up my thinking and playing to do larger business and investment deals earlier. I stayed too long in my small niche of investing in residential real estate and being satisfied with small businesses.

Third, I would have made sure I more effectively and strategically planned, monitored, and directed my financial progress. I wouldn't have done things "investment by investment" but rather I would have created an integrated plan right from the start. Plus I would have made sure that I didn't fall in love with the active income my businesses generated, but that I also invested for passive and passive, residual income along the way.

Speaking of which, if I were doing it all over again today, I would be much more aware of controlling my spending, especially on taxes and lifestyle expenses, so that I got myself financially free as quickly as possible. Then from that place of financial freedom I would have grown my lifestyle out of my passive and passive, residual income.

Another painful lesson that I learned the hard way, that I would definitely do it differently the next time around, was that at a certain point when I had accumulated a significant net worth, I needed to shift my investing focus from creating passive income (think one time paydays like a capital gain you get when you sell an asset that you own for a healthy profit) to passive, residual income (think recurring money that flows to you each month or quarter without you having to work more than 10 hours per month to secure it.)

It's really only been in the last few years that I finally "got" that last lesson. For me, it was sparked when I sold one of my businesses. I got a BIG wire transfer for the business, but I lost the six-figure monthly income that went with the business. So there I was, on the other side of the "cashing out", only to discover that building wealth and transforming net worth into passive, residual income were two distinct skills.

I could go on and on with "lessons" I've learned this time around, but I want to end with one more key lesson. This lesson is a "given" for me know, but it most certainly was NOT when I started out in business 12 years ago.

So what is this final lesson? Simply this: It can happen faster than you could ever imagine, but will probably take longer than you dream.

What a strange thing to say, but in my experience it's totally accurate. You will be amazed with how you can literally go from zero to millions in as little as 36 months, but you've got to hold true to your dreams when you find that it takes longer than you dream it might take.

The average person dreams of wealth this year (in the next 30 days would be even better). Well, that's probably not going to happen. So most of them get started, don't see immediate results, and give up. They quit. They throw in the towel. And they settle.

If only you can get yourself to get started, but hold on longer than you think you can, learning as you go, it's amazing what you can accomplish financially.

My first year in business I made something like $35,000. Not a lot of money is it.

But within 7 years I was earning well over a million per year. My net worth had grown at the same pace (faster actually). What if I had done what the average person had done after such a dismal first year?

I would have quit after the first year saying that it just wasn't working. In fact, I could have made more money (income and net worth) working for someone else in year one... and in year two... and maybe even in year three... But by year four there was no way I could earn the kind of income and wealth I had created for myself by working for someone else.

These same lessons can and will work for you.

I hope these insights are useful for you. In fact, I have recently put up a new Maui MastermindTM Online audio workshop titled, The 10 Most Important Wealth Lessons I've Ever Learned. In it I go into much greater depth about the kinds of insights that I've shared with you in this letter so far. Maui MastermindTM Online members click here to access the class.

If you're not a member yet, click here for a free 30-day trial membership if you want to access the class (and dozens of other classes on investing, financial fluency, tax strategy, and building businesses).

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Join me at Mini-Maui September 14th and 15th in Atlanta (and extend your stay and attend "Financially Fluent" workshop at the same hotel on September 16th and 17th!)
Click here for details and to register.

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That's it for this week. I hope you enjoyed the ideas on "starting over" I shared with you. I know that if you apply them they have the power to make a big difference in your financial life.

My best to you,

David

P.S. Maui Mastermind Online members, click here to access the new updated audio workshop called, The 10 Most Important Wealth Lessons I've Ever Learned. Not a member yet? Click here to sign up now and get instant access!

P.P.S. If this article struck a chord with you, you have my permission to forward it to your friends or post it to your website or blog. All I ask is that you leave the links in and don't edit what I shared. Fair enough?