Book Review 007: Millionaire Booklet - Grant Cardone
/One of the first books I read by Grant Cardone, was the Millionaire Booklet - a short guide on how to become super rich. In this book, Grant attempts to simplify the process of becoming a Millionaire and super rich. He is a 100% certain that there are actionable steps that an individual can take to make this happen, regardless of the current economic condition, where we live, or what we do.
Below is a summary of Grant's story and tips for becoming a Millionaire:
Ever since he was young, Grant made a commitment to creating wealth for himself and family for generations. Although he made this commitment at sixteen, he was broke at the age of twenty-five. In order to pursue his goal of becoming a Millionaire, he began to study the principles of wealth creation and applied what worked for him and did not. Through trial and error, he increased his savings to $10,000 and then to $100,000. He became a Millionaire in his early thirties and built over five companies that produce over $100 million in sales in each year.
Where do you get your financial advice?
Grant first debunks the myth that becoming a Millionaire is not a pie in the sky dream, and that the wealthy come from all walks of life, and that the reason most people never get rich is that they never even consider it a possibility. As these people are convinced by those close to them to simply be satisfied with whatever their financial situation is.
In addition, people fundamentally do not know how to get money, fewer understand how to keep it, and almost no one knows how to multiply it. He goes on to say that, even in one of the richest countries in the world, America, 76 percent of people live paycheck to paycheck, some 50 percent of Americans have no money for retirement, and 47 percent of Americans don’t have $400 for an emergency. He disagrees with the thought of saving your way to wealth like “don’t drink Starbucks coffee, and you will save $700 a year.” Per Grant, “you can save $700 a year for the next fifty years and you won’t be rich, you’ll just be old.”
The issue that many people face is where we get our financial advice. Most of the advice we get about money is from people close to us who either don’t have money or have given up on it. Some of the people we get advice from have never even thought financial freedom possible. Grant tells us to look beyond the noise and confusion about money and look at people who have created enormous amounts of wealth. These are the people we need to study and model our financial journey
Be on offense
Getting rich is mostly a game of offense, not defense like other people may have taught. You get wealthy by creating income producing assets and increasing cash flow not by cutting coupons and saving. Taking risks today is the way to eliminate risk, but you have to take risks at the right time. The middle-class is for those who settle for just enough rather than striving for prosperity. The middle-class life is a compromise. Grant goes onto say that when we compromise our finances, we become unable to help others, as we are struggling to simply take care of ourselves.
In his book, Grant shares that the first step to becoming a millionaire is to make a decision and that requires us to lose our middle-class mind and then get our millionaire mindset. It has never been easier to get rich, but it is still impossible if we don’t change our mind. For example, most people will produce or be in contact with a million dollars in their lifetime. Meaning, if we earn $50,000 a year for twenty years, we earn one million dollars. The purpose of doing this math is to simplify the objective. “Do the math to create possibility, then create strategy.”
Below are a few ways to a million dollars:
Salary $50k x 20 years
Salary $100k x 10 years
Salary $250k x 4 years
5,000 people buy a $200 product
10,000 people buy a $100 product
1,000 people buy a $1000 product
Stay Broke
When you start increasing your income, Grant tells us to stay broke. He has a policy to never, ever have money sitting around. Once he starts increasing income, he immediately moves the surpluses to sacred accounts that are out of his reach and marked for future investments. The real benefit of this strategy was it forced him to continue to produce and out-work his earlier results. There were months when he was making more money than he has ever made and he would push the entire surplus into his sacred accounts. When he did this, Grant couldn’t pay his rent even though he was making more money than he's ever made. He was forced to negotiate with his landlord for an extension on his rent.
This state of staying broke forced him to continue producing new revenue. As Grant saw first hand so many people have financial success, then quit doing what created their success and then go backward financially. Staying broke forced him to keep reinforcing the actions that had already proven successful. Grant's formula for success is as follows: Idea + Hard Work x Time + Discipline = Success
Save to Invest, Don’t Save to Save
Investing money is how you will get super rich. He shares how he believes the only reason to save money is to one day invest money. Most people aren’t equipped to take advantage of opportunities because they don’t have the money, they don’t have the knowledge or the courage. People don’t create wealth because they never invest enough in a deal to get a big payoff. To do this, one must have a surplus of cash and confidence. When you know it’s the right thing, he advises that we go all in, as speed is power.
We must have complete confidence in the investment and in our previous income flows so that, if the investment takes longer to work or even fails, we still can rely on our earlier flows of income. Grant is willing to go broke and exhaust all his cash knowing he is not putting his family or those who depend on him at risk because the earlier income flows can support him.
The poor and middle class try to replace flows of money while the rich try to supplement (add) more flows. Grant explains that creating multiple flows of income is the holy grail of creating financial freedom and true wealth. The most common mistake he sees people make when creating multiple flows of income is walking away from the current flow. The next most common mistake is moving to secondary flows that are not similar to the first and then being unable to give both proper attention.
When creating your second flow of income, Grant advises us to monitor our current flow and never abandon the first flow. For instance, if you work at a company and earn a salary, keep improving on what you do for that company and look for ways to create a second flow parallel to what you are currently doing. Do it within the company you work for during the time you are at work. To create multiple streams of income requires commitment and especially discipline in how you use your time and money.
Repeat, Reinforce and Hyperfocus
Maintain a commitment to self-improvement even though it may mean that you need to change your environment (e.g. friends and family). This doesn’t mean we need to get rid of people, but it means you need to add new people. The old friends will just fall off as they will lose interest. If you want to make it into the club of wealth, you must add new connections and that means you need to reach up, not sideways and not down. Remember that you are the average of the five people you spend the most time with.
To add new people to your circle, make a list of people in your network that are super successful, on the move, who are interested in personal growth, active in charities, who invest time to improve the quality of their lives, and are not just complaining all the time. These are the people you should surround yourself with.
Favorite Quote: “Money seems to flow to those who give it the most attention and take the most responsibility for it.”
Good Luck!
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