FINANCIAL - Millionaire School · the lottery! That’s easy money. Hey – many people have won the lottery. You could too, right? That’s what everyone who buys a ticket believes,

BY DANIEL KERTCHER

FINANCIALABUNDANCEFOR LIFE

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CHAPTER ONE: WHAT IS A FINANCIALLY ABUNDANT MENTALITY?

FINANCIAL ABUNDANCE FOR LIFE

What are your beliefs about money? Do you believe money is hard to make?

Most people do.

Do you believe that if you want to grow your wealth that it will take years of hard work and dedication?

Most people believe this one too.

Here’s another popular belief, “Money is not worth anything unless you’ve worked hard to make it.”

The reality is most people believe money is hard to make, that you have to work hard to make money, and that money is not worth anything unless you’ve worked hard to make it. Unfortunately, all of these beliefs are often subconscious, held at a very deep level and are challenging to reprogram.

The reality is these beliefs are what we call limiting beliefs.

Now I know all of us are used to working hard for our money. We all like to look around our lives and see our house, our cars, our children going to good schools. We say to ourselves, “Hey, we have achieved all this.” We have worked hard, we have made money and we have achieved all these life goals. And there is absolutely nothing wrong with that. But, these achievements are not equivalent to attaining the mental state of having a Financially Abundant Mentality. A Financially Abundant Mentality is in many ways a far greater achievement.

WHAT IS A FINANCIALLY ABUNDANT MENTALITY? A Financially Abundant Mentality is a State of Mind you can achieve where you know how to make more money than you will ever need for the rest of your life without having to physically work for it.

In other words, it is a state of knowing how to make your money make money for you, so you do not have to go out and make it by your own physical effort.

Would you agree with me that this would be a very powerful mindset?

A Financially Abundant Mentality is when you believe, beyond a doubt, that:

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1. Money is easy to make, and it can come easily to you without the need for hard physical work.

2. You can make your money work for you rather than having to work hard for your money.

3. It’s OK to spend, to be abundant and be generous, especially because you know that more money is easy to make.

4. You deserve all the money you make, and this is true even if you didn’t work hard to get it.

5. The inflow will exceed the outflow. If money flows out of your life occasionally you don’t panic, because you know that soon even more money and abundance will flow back in.

A Financially Abundant Mentality is one of the most powerful wealth creation tools you can acquire. Knowledge and education regarding wealth creation are important, and you will naturally develop a passion and enthusiasm for learning and betterment in these areas when you have a Financially Abundant Mentality. The mindset itself will fire you up about the endless possibilities and potential for growth in all areas of your life, not only financially.

However, you will never develop a Financially Abundant Mentality if you continue to believe that money is hard to make, that you have to work hard to make money, and that money is not worth anything unless you work hard to make it. All the knowledge and education in the world will not help you if your fundamental belief system is working against you and against the achievement of your financial goals.

For a Financially Abundant Mentality to develop within you, you must absolutely believe that money is easy to make, that you can make as much money as you want, whenever you want, however often you want, for the rest of your life without having to physically work for it. You have to absolutely hold that belief in every fibre of your body.

And how do you get to the point of believing that? Well, you can stand in front of a mirror and you can say to yourself, “Money is easy to make.

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Money is easy to make. Money is easy to make. Money is easy to make.” You can say it over and over and over a thousand times and still you won’t believe it. That is, until the very moment you experience it.

You have to experience making money over and over and over and over and over again without your physical involvement. Not just once or twice, but so many times that eventually it becomes second nature; so many times that you gain a total belief that money is easy to make and that you do not have to work hard to make money.

So, knowledge and education (which form the basis of your financial strategy) are important, but even more important is applying that strategy in real life so you can demonstrate to yourself that having a Financially Abundant Mentality is actually a reasonable and rational belief set.

Ah... But the psychological battle is not over yet. Because, when you have money, and it has come easily, how will you feel about that? And, perhaps even more important to some people is the question of how you will be judged by others about it.

Many people have a lot of guilt about having money. They have usually come from an upbringing where money is somehow seen as evil. That it is somehow bad to want to have lots of money. There is a perception that if you did not work hard to get it, then you must have done something dastardly or illegal or unethical to get that money... because people are not supposed to have money unless they work hard for it.

Remember: that is the belief that many people hold – people who, right now, you might consider to be your friends. People who may not be pleased to find out that you have made money without working hard for it. Be prepared for those kinds of reactions: disbelief, criticism, suspicion; and try not to let them affect you or your Financially Abundant Mentality.

If you are a person who wants to be financially free, you need to recognise that a Financially Abundant Mentality is a psychological mindset; a paradigm shift. And while the shift is an enormously rewarding one to make, you will find that 90 percent of your success will be based on your psychology. Only 10 percent of your success will be based on the strategy.

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There are lots of different strategies you can use to develop a Financially Abundant Mentality. We will talk about a few in this book. But we could have a hundred different strategies and we could get a hundred different results, because everybody has a different attitude towards money. Everybody has a different attitude towards risk, different beliefs about money, and different beliefs about themselves and money (e.g. beliefs about whether or not they really deserve to have money).

Having a Financially Abundant Mentality means that no matter what happens to you in your life; even if you somehow lose all your money, no-one can ever take from you your knowledge and your experience of how to make your money make money for you.

This is why you quite often hear of people who are self-made millionaires who have made a lot of money, and then through some circumstance they lose most if not all of their money, but then they go on to make it all back again. And they often do it faster the second time than they made it in the first place. Because the second time around, they know exactly how to make themselves even more money! They have a Financially Abundant Mentality!

Donald Trump was a billionaire in the 1990s, and then his finances went into a downward spiral to the point where he was about $900 million in debt! And yet 10 years later, by the late 2000s, he was worth over $7 billion. So how did he go from great wealth to staggering debt and back up to mind-blowing wealth again, all within a 10 to 15 year time span? Simple! Donald Trump is a master of having a Financially Abundant Mentality. He knows how to make money work for him, and no one can take that away from him.

MAKING MONEY Apart from health and relationships, making money is by far the most popular topic in the world today. But what do we mean by making money?

Most people have found a way to make at least some money. They work for someone as an employee or they own a business. Perhaps they inherited some money, or won the lottery. There are all kinds of different ways of making money. Most of us, however, simply work hard to make a living.

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But is working hard to make a living ultimately what we want to do with our lives? Do we want to spend our precious time making money? Do we live to work? Or do we work to live? Or, even better, do we want to enjoy a great lifestyle without having to spend much time or effort on making money we need to fund that lifestyle?

Now, I am not suggesting for a moment that making money is the whole point of life. There are far better and more important things to focus on, such as your health, relationships, spirituality, environment, community, etc. However, all of these ‘things’ become far easier to deal with when you are not spending your time working.

We want our money to make money for us so that we do not have to physically work hard to make money for ourselves. Because, if we can achieve that, then we can spend our time doing the things we really want and love to do... which may include travel, adventure, creative pursuits, spending time with our families or giving back to society in some way.

Wouldn’t that be great? Unfortunately, in most cases, people do not know how to make their money work for them, so their only solution to making money is to physically go out and work hard for it. And that can often mean that they can’t spend as much time as they’d like on the things that enrich their lives the most.

So, the question is, how can we make our money make money for us?

Well, making lots of money can be pretty simple. I mean, you could win the lottery! That’s easy money. Hey – many people have won the lottery. You could too, right? That’s what everyone who buys a ticket believes, anyway, even if the chances are pretty slim.

So, let’s assume you won $100 million dollars in the lottery. Would you automatically have a Financially Abundant Mentality? Would you know how to make that money make more money for you?

Let’s assume you went to Las Vegas and you lost all the money you won at the casinos. Would you know how to get that money back? Probably not. You would think you’d have to win it all back again, wouldn’t you?

The trap of limiting beliefs is one that many lottery winners fall into.

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Subconsciously, they believe the old adage of “easy come, easy go” and they become flippant with their money and spend it unwisely. They blow it, basically. They end up years later bankrupt and in a worse financial position than they were in when they first won the lottery. Because now they have had the experience of having money but they no longer have it, and they do not know how to get it back without, say, winning the lottery again.

Therefore, having money does not necessarily mean you have a Financially Abundant Mentality. Knowing how to make your money make you more money, that is a Financially Abundant Mentality.

But to develop a Financially Abundant Mentality, it is critical to work on the core money beliefs and to believe that:

• money is easy to make;

• it’s easy to make your money make more money for you;

• it’s OK to spend, share and be abundant with your money because you know how to get more of it (you don’t have to hoard it);

• you do not have to work hard to make money;

• money has value even if you have not worked hard for it;

• and (most importantly!) you deserve to have plenty of money in your life.

I believe one of the most powerful gifts you can give another person is the gift of a Financially Abundant Mentality. I have personally experienced the joy of sharing strategies to achieving this mindset with over 100,000 people around the world. It is what drives me. It’s what makes me passionate about life. And it’s why I have written this book.

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CHAPTER TWO: WHY DEVELOP A FINANCIALLY ABUNDANT MENTALITY?


First of all, for stress relief.

When you have to work hard for your money life can be pretty stressful. Many people in the world focus on making money and yet they always seem to struggle financially. They spend the bulk of their life energy working from pay cheque to pay cheque. They spend thirty, forty or even fifty years of their adult lives working just to finally reach a point where they might have saved up enough money to have a couple of years of comfort just before they pass away.

Obviously we all want a better lifestyle. We want an abundance of money to do the things we want to do, and we want to achieve this while we still have enough youth and vitality to be able to enjoy it. We want to lead a fulfilled life.

Imagine how you would feel if you had a constant stream of income, a solid base amount of money, and more importantly, the knowledge of how you could make your money make you more money, for the rest of your life? Then all the other challenges in your life would become a lot easier to deal with, wouldn’t they?

If we were to take a look out our windows right now what would we see? A world full of struggle, stress and pain? A world full of crushing responsibilities? A world full of poverty, war and famine? Or, would we see a world full of possibilities, of endless opportunity? A world in which we can achieve a mindset of financial abundance and do the things we love? A world in which we can make a difference – to ourselves, our families, our communities and even society?

The reality is that most of us are spending our time having to make money just to exist. We work just so we can have a car, so we can drive to work. We work just so we can have a house, so we can have shelter and a place to rest, so we can go back to work. We work just so our children can go to good schools, so they can learn how to work.

It’s a truly ridiculous situation when you think about it.

For most people when they retire, they retire because they can no longer physically keep working. But that is not why we want to retire. None of us

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wants to retire because we have to. We want to retire because we choose to, and we want to retire on our terms. That is, we want to retire when we have the money to do the things we want to do in our lifetime.

What this book is really about is how to develop what we call a Financially Abundant Mentality, that is, the mindset and understanding when you know how to make your money make money for you, safely, reliably, and as often as you want. And one of the reasons for developing a Financially Abundant Mentality is so you can put yourself in a position to expand your circle of influence in a positive way.

CIRCLE OF INFLUENCE Are you of the mindset that we all have a purpose on this planet? That there is something we all have to do? It is different for all of us, but do you agree that we are on this planet for a reason? Even if we don’t always know what that reason is...

So many of us have dreams, aspirations and goals we want to achieve, and yet we get so overwhelmed with the day-to-day time consuming effort of just existing, of making a living, of having some fun, going on holidays, buying a house, having a car, eating, surviving, raising a family. All this effort can drain us of the time and energy we need to commit to our goals, our dreams and our purpose in life.

I believe that developing a Financially Abundant Mentality is one of the most important tasks we can accomplish, so that we can get on the path to achieving our true goals and purpose.

Stephen Covey wrote the bestselling book, The Seven Habits of Highly Effective People. One of the key points I took from his book, which has resonated with me for years, is the understanding of a circle of influence. We all have a circle of influence. We may simply have influence over ourselves. As parents, we have more responsibility and have influence over our family.

Perhaps you have even more responsibility and you have a circle of influence over your friends and workmates. Perhaps you own a company with employees and you have influence over them and their lives. Perhaps you

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do community work and you have influence over tens or even hundreds of people in your local community. Perhaps you have a bigger profile and have influence over thousands of people.

We all have a circle of influence that we can use in either a positive or negative way. We all need to learn to harness and understand the level of influence we all posses and to use that influence for good.

There is so much good that each of us can achieve and attain in this world, but the sad truth is the majority of us never spend time focusing on it because we are so focused on working to make money.

One of the key reasons for developing a Financially Abundant Mentality is to be able to use and expand our influence for good. Money can be used for so much good when it’s in the hands of the right people.

Let me give you an example. Some people chain themselves to a tree to stop the forest from being chopped down. Now, while it sounds good in principle, and I applaud the people for their efforts, it is simply not effective. And it’s highly combative in that it is not a peaceful solution to the problem. Why not buy the forest? That would stop the destruction, would it not? It would stop it immediately and forever. No arguments. And there are people who do that. All they need is money.

One of my personal great heroes is the Late Steve Irwin from Australia. Steve Irwin was the world famous Crocodile Hunter. Steve was famous for his crazy antics of wrestling crocodiles, which he recorded for his television show. Steve had a phenomenally huge, global circle of influence. Tragically, he was killed suddenly while filming an underwater sequence for his show. However, his influence still exists today.

While most people knew of his skills with animals and reptiles, few people realised that he used those skills to amass a financial fortune. Even fewer people realise that he used that fortune to acquire massive acres of forest, which he turned into huge animal reserves, protecting the forests and wildlife forever.

Isn’t that fantastic? And isn’t it wonderful to know that we live in a world where a crazy larrikin like Steve Irwin could expand his circle of influence

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to the point where he has the ability to do something so selfless and beneficial for all of us?

We are all at a point in our lives where we can expand our circle of influence and grow as individuals, as people and as a society. And it pains me to see so much potential, so much talent and so much ability in so many people, and yet that talent, ability and flame of hope is extinguished because those people have to spend too much time making money just to exist, just to survive.

If only those people had a Financially Abundant Mentality. If only they did not concern themselves with having to make money to exist and instead had that money come to them, not as a handout, not as charity, but instead because they had mastered the ability to make money come to them. Better still, they knew that money would come to them for the rest of their lives.

Then they could focus on the bigger, much more important things in their life.

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CHAPTER THREE: HOW YOU CAN DEVELOP A FINANCIALLY ABUNDANT MENTALITY


As I’ve said earlier, my passion is for everyone to have a Financially Abundant state of mind. Just knowing that I can help you achieve all the wealth you’ll ever need to live the life of your dreams, on your own terms is what drives me. It is the sheer desire to share all my knowledge with you. I have discovered that the more I teach others, the more I learn myself and the better I become at what I do, because quite frankly, if I am going to set myself out there where people can criticise me, ask me questions, push my buttons and test my knowledge, I’d better know what I am talking about.

I pride myself on the fact that I spend an enormous amount of time researching the market, learning myself, but at the same time, I have well over fifteen years experience in trading, and in making some fantastic profits, as well as making some spectacular losses, but most importantly learning important lessons from all of that.

I have personally conducted hundreds of seminars through the education company I founded, Trading Pursuits. I have presented our introductory seminars to over 100,000 people since I started the company in 2001. Over 10,000 people have attended my live multi-day seminars in 25 different countries around the world. I have had people as young as 10 years old right up to 84 years old attend my training courses. Most of them come to my training programs with no knowledge of the stock market, or trading. And just like them, it would be my pleasure and privilege to also teach you as much as I can, so you too can truly turn a day-to-day existence into an extraordinary, fulfilled life.

I strongly believe that it is only when you develop a Financially Abundant Mentality that you are really in control of your wealth and leading a fulfilled life. And the greatest thing of all, once you have achieved a Financially Abundant Mentality nobody can take that knowledge away from you.

KEY POINTS FOR DEVELOPING A FINANCIALLY ABUNDANT MENTALITY There are many different tools and strategies available, such as real estate, stocks, options, foreign exchange, starting your own business, and many more. Each of these tools can be used in different ways, with completely different results, depending on how and when they are used. And just

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CHAPTER THREE: HOW YOU CAN DEVELOP A FINANCIALLY ABUNDANT MENTALITY


because you may use some or even all of these tools doesn’t necessarily ensure that you will develop a Financially Abundant Mentality.

HOW WILL I KNOW WHEN I HAVE ACHIEVED A FINANCIALLY ABUNDANT MENTALITY? When you have experienced it numerous times by following these three key objectives:

1. Youknowhowtomakemoneywithoutexertingphysicaleffort. Spending more than 30 minutes a day on a financial exercise suggests

to me that the exercise should be called a JOB. When you spend more than 30 minutes a day you are trading your time for money. Now, there is nothing wrong with having a job and contributing your time to support our society. However, it’s important we don’t confuse a job (where you are working for your money) to a Financially Abundant Mentality strategy, where our money is working for us.

When used correctly the Financially Abundant Mentality strategy should require no more than 30 minutes a day of your time, simply to monitor and guide your money. Remember, our money has to work for us, not us for our money.

2.Youcanmakemoneyoverandoveragain,asoftenasyoulike,wheneveryouwant.

Winning the lottery can provide you with a massive cash windfall, but can you win the lottery over and over again? It’s almost impossible to do it the first time! In order to have a Financially Abundant Mentality you must be able to reproduce a result again and again, not just once or twice.

3.Youseeallmarketandeconomicconditionsasopportunities. Recessions, recoveries, booming markets, falling markets: they have

occurred for centuries, and will continue occurring well into the future.They are simply words and names describing the shifting of wealth from some groups of people to other groups of people. Once you have a Financially Abundant Mentality you will know how to guide money to you in all market conditions.

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CHAPTER FOUR: MY STORY


HOW I DEVELOPED A FINANCIALLY ABUNDANT MENTALITY One of the first financial tools I used that lead me on the path to developing a Financially Abundant Mentality was real estate.

Let me share with you part of my story. My mother is an inspirational woman. My parents divorced when I was 6 years old, and although I’m still very close with my father today, my younger brother, sister and I grew up with our mother.

Mum was a seamstress by trade, and she worked her fingers to the bone (just an expression, but she did work hard for her money) making custom women’s clothes for wealthy clients out of the basement of our house in Canada. I remember thinking even at the young age of 10 there had to be a much better way of making a living. What I didn’t realise at the time, but grew to admire, was my mother’s understanding of real estate.

In addition to her dress making business and raising three young kids, she bought and sold houses. That is, she would move us into a house and then set about renovating it. She’d do minor renovations, wallpaper, painting, maybe a new kitchen, and then she would typically sell the house. She usually made a tidy profit and would in the meantime buy another house that we would move into and do it all over again. As a child, I didn’t understand what she was doing. I just became used to moving house all the time.

We moved house sometimes 2 to 3 times a year, and I went to 11 different schools as a child. We even moved countries from Canada to New Zealand and back again when I was 9 years old. I remember the year I was 15 we moved house 4 times! We then moved to Australia when I was 16.

And she did all this back in the 70’s and 80’s, well before there were property seminars or teachers around to teach her what to do. She just worked it out for herself!

As a parent of 1 child today, I am absolutely amazed at how she pulled it off. Looking at her financial success at buying real estate, and then working hard to do the renovations and selling it again, I couldn’t really say she had achieved a Financially Abundant Mentality. She was spending her time working hard making her money make more money yes, but she was working hard. Hard physical labour. Fortunately she did it during a time

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when Canada was experiencing a long, but steady real estate boom and rising house prices. If she’d stopped buying and renovating houses, her income and profit probably would have stopped.

The wonderful gift for me though, was that I learned all about real estate. As I grew older, she taught me about buying and renovating houses for profit.

When I was 13 years old my mother became a full-time real estate agent. I was so interested in what she was doing that I started reading some of the text books she had to study to achieve her real estate licence. Being the eldest child in my family and, if you like, the young “man of the house”, she confided a lot in me and explained to me what she was doing. Thanks to my mother I learned so much about real estate that when I finished high school I started working in the very real estate office she managed.

Selling real estate became my summer job. I was a junior in the office and I worked really hard in finding my clients, talking to them and explaining the virtues and benefits of investing in real estate. Once I found an interested client, I would call my mother in to help close the deal. It was a really fun time!

I made enough money each summer to put myself through university. I also saved up enough money for a deposit on my first property. I remember the incredible feeling of buying that first modest three bedroom house and renting it out. I was then able to purchase my second property by the time I was 20.

After completing my Bachelor of Science degree, I wanted to take a break from studying. I had spent 3 years looking down microscopes, and as fascinating as it was, I didn’t see my future as a Scientist. I decided to work full time in real estate with my mother.

We formed our own real estate business together. We worked hard selling property to make money and I channelled as much of that money as I could into property investments. I bought a few more properties. Some of the properties were on the Gold Coast in Australia. Two particular properties were in a suburb called Main Beach.

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MAIN BEACH, GOLD COAST, AUSTRALIA Main Beach is an interesting area. It sits right next to the ocean and the beautiful Broadwater of the Gold Coast in Australia. It is truly world-class. The property prices had soared in the late 80’s and due to the recession, had more than halved by 1993.

We recognised a huge amount of potential due to discovering a lot of development growth about to go into Main Beach. So Mum and I scrimped and saved and we purchased these two properties in Main Beach. We mortgaged ourselves up to the hilt and then we worked like crazy to make enough money to cover the shortfalls on our mortgages.

For the first 6 or 7 years the property prices did not really move. But typical of real estate, all of a sudden there was a huge burst of activity for a couple of years. One of the houses we purchased for $350,000 became worth more than $2 million! Another rose in value more than 400%. Now, this is where things got interesting. These 2 properties in Main Beach happened to be within 100 metres of the beach, and also happened to sit on high-rise zoned land.

So the value of these properties went through the roof, as did my personal wealth, and I didn’t do anything to physically work for it. We hardly even did any renovation at all. It was then, for the first time in my life that I experienced making money without having to physically work for it. I had just experienced my first taste of a Financially Abundant Mentality.

I thought of myself like Elvis – that is I could die, but I would keep on making money! My death would not stop those properties from continuing to rise in value. I realised that making money was not dependent on me doing anything.

So, just like Elvis, who made far more money after he was dead than he ever made alive, I could keep making money with these properties, even though I passed away.

And that was when this special mentality dawned on me, this state of mind where I realised I could make more money than I would ever need for the rest of my life, without having to work for it. So long as I kept channelling my money into certain investments and allowing those investments an amount of time to grow.

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The challenge with real estate as an investment tool is that it often takes many, many years to grow substantially in value. Furthermore, for the last 40 years in America, Australia, Canada, and Europe, the western world has experienced strong property growth mainly due to the strong flow of reasonably low interest rate loans from banks, and a strong investment market driven by Baby Boomers.

Please don’t get me wrong, I am not trying to criticise real estate as an investment tool. But my point is that real estate is generally a long term investment. There are no guarantees that real estate is going to perform the same way in the next 20 years as it has in the past. There are a lot of different issues in the world today which can heavily influence the future values of real estate.

One other big challenge with real estate is that for all the strategies I have ever seen promoted, they all revolve around the price of real estate rising. I have yet to discover how anyone can repeatedly make money with falling real estate values. Sure, you can buy a bargain when the market is depressed, but then you still need to sell it for more to make your profit.

Remember, in order to develop a Financially Abundant Mentality you need to experience making money work for you, and not just once or twice. I mean anybody can be lucky and invest in a property that happens to be in a booming area. But how often can you do that?

So from real estate I started to become interested in the stock market, and soon I began investing in stocks. Now stocks rise and fall in value faster than real estate. You can see the value of the stocks at any given time because they are published in real time, unlike real estate which we don’t know the value until we sell it. In any case the house price is virtually somebody’s opinion as to what it’s worth. The actual value could be substantially different. The true value of the real estate is based on what somebody is willing to pay for it, and hopefully the person who pays the most just happens to be in your region at the time you want to sell. There are so many factors that can influence the value of real estate, whereas with stocks, we can see immediately what the value of the share is at any time the market is open.

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So, in saying this I came to realise there was a lot more to a Financially Abundant Mentality than just investing in real estate. I would now like to share with you some of the more effective investment instruments I used to develop a Financially Abundant Mentality.

THE STOCK MARKET I first got interested in the stock market because I could see there were a lot of analytical benefits for trading in the stock market. Share prices move faster. You can see an actual historical chart of what they are worth. People can see highs and lows and certain chart patterns which can influence them into thinking as to which way they think the price is going to go, and therefore that dictates their reaction.

One of the disadvantages with the stock market is when you just buy stocks, it usually means that you can only make money in a rising market. If the market price falls, the share price falls then you lose money. Most people understand that, but most people do not understand that it is possible to make money in a falling stock market. What is more, when you just buy stocks you do not have any leverage. If the share price goes up 10 percent, you make 10 percent. No big deal. And if the share price falls, you do not have the protection in place, so you lose money.

So to develop a Financially Abundant Mentality, it is critical that we make a lot of money quickly. When I learned about the ability to use leverage in the stock market, and the ability to make a profit in both a rising, falling and even sideways market, that was when my Financially Abundant Mentality took a huge leap forward into a whole new realm.

LEVERAGE I continued developing my Financially Abundant Mentality through expanding my knowledge of how to safely and profitably use a variety of trading instruments which I continue to use to this very day. I use instruments that are known as CFDs or contracts for difference, options, futures, e-minis and foreign exchange (or Forex). These instruments provide the key ingredients required in developing a Financially Abundant Mentality. One of the key ingredients is called leverage. Leverage is the ability to make a lot of money, or in other words a lot of profit, from a relatively small investment.

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I will give you an example using real estate. If you were to invest in real estate, most property investors, if they are going to buy a residential property, do not usually pay cash for the property. That is, they do not pay for the entire property outright. They typically buy the property with a small deposit (10 percent or 20 percent) and they borrow the balance of the funds required from the bank.

They have a mortgage and they then rent the property out. Ideally the rent from the property covers the mortgage. If it does not quite pay the entire mortgage and there’s a shortfall, then they have to make it up themselves and quite often they get a tax break from their income tax. That is known as a negatively geared property. If the tax break and the rent pays the mortgage completely, and their outgoings on the property, we call that balance geared. And if they are actually left with a small profit at the end of paying the mortgage and getting the tax breaks etc., we call that being positively geared in real estate.

But let’s say we now own a property. Let’s say the value of the property is $100,000 and we have put down 10 percent, we have a 1:10 leverage ratio. Let’s say the value of the property goes up by 10 percent. If the value of the property rose by 10 percent it would now be worth $110,000. If we were to sell the property now we would get $110,000. Of course, not counting expenses and fees we would have made a profit of $10,000 on that property. Based on our original investment of $10,000, that is a 100 percent return.

There are government taxes, agents’ fees which can amount to 10 percent or more in the buying and selling of the property. So property typically is a longer term investment. We need the price of the property to go up much more than 10 percent in order to make a substantial profit to justify our investment in time and money.

Now let’s compare that to the stock market. If you just buy stocks, you have no leverage. If the share price goes up 10 percent, you’ll make a 10 percent profit. No big deal. But there are instruments available to us in the stock market that does enable us to access leverage, namely CFDs (contracts for difference) and options.

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CFDs CFDs allow us to control 10 times more stocks than we normally would control than by buying stocks alone. We need to put in a 10 percent initial ‘margin’. So, just like the real estate example, we have a 1:10 leverage ratio. If the value of the stocks goes up by 10 percent, we’ll make 100 percent profit, because we have only invested 10 percent ourselves.

What are the benefits of applying leverage to the stock market? Well, stock market prices move much, much faster than real estate. The values of stocks often move 10 percent in a day or a couple of days, or a couple of weeks compared to real estate, which can often take a year or more to move by 10 percent in value.

What is more, we do not have the high selling and buying fees like real estate. So when a share price moves 10 percent and we make 100 percent profit then the fees themselves are minuscule in comparison.

One of the keys to developing a Financially Abundant Mentality is that we have to be able to make a lot of money quickly. Another is to be able to make money in both rising and falling markets.

With CFDs we are able to do both; make money in a rising and falling market, and make it quickly, unlike real estate. There are risks, of course, and you have to learn how to manage the risks and protect yourself from big losses. But, the speed with which leveraged trading moves, means you can do it again and again and again and again and again very quickly, over and over and over and over and over. You can refine your trading strategy and gain confidence in your trading abilities quickly. This is an important key to developing a Financially Abundant Mentality.

Like I said earlier, you can win the lottery. That is easy money. You have not worked hard to make money when you win the lottery, but how many times can you do it? It’s virtually impossible to do it over and over and over again. In order to develop a Financially Abundant Mentality, you need to be able to make a lot of money and do it over and over and over and over again, and you need to know that the strategy is reproducible.

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OPTIONS Another instrument you can use in the stock market is what is known as options. Options are very similar to CFDs. They provide you with a lot of leverage. 10 times leverage, or even more depending on how you use the option. You can gain 20, 30 even 50 times leverage. In the case of a 50 times leverage ratio, if the share price moves 1 percent, you can make a 50 percent profit. If the share price moves 10 percent, you can make 500 percent profit, and more specifically with options, you can make money in both a rising and falling market.

There are two different types of options: Call Options and Put Options. A Call Option gives you the right to buy stocks and a Put Option gives you the right to sell stocks. Now, how do you know which option to use and when? Well very simple. We use a saying, Call Up, Put Down. It means if we think the share price is going to go up, we buy Call Options, and if we think the share price is going to go down, we buy Put Options.

In fact, trading options can be very effective. If you think the stock price is going to rise, you buy Call Options, or you buy CFDs, and if you think the stock price is going to fall, you buy Put Options, or you short sell using CFDs.

Simple! Just remember, “Call Up Put Down.”

The big difference between options and CFDs is that options expire. That is, if you buy an option, at some date in the future, (usually a few weeks or months) the option will cease to exist. Therefore, as an options trader, you must buy and then sell your option before it expires. If you don’t sell the option, you run the risk of it expiring, and you can lose all the money you invested in it.

CURRENCY TRADING Outside of the stock market there are many other trading instruments we can use to gain access to the power of leverage in our investments. One of these is known as Forex, or foreign exchange, currency trading. That is, we identify the movement of currencies against each other. So, for example, we might believe that the Australian dollar is going to fall against the US dollar, or that the Canadian dollar is going to rise against the Japanese yen.

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Now it sounds quite complicated to people who have never experienced it before, but in fact it is actually quite simple once you have done the training to understand how foreign exchange works. And the benefits of using foreign exchange are the degree of leverage that goes on.

Foreign exchange is easily the most heavily traded instrument on the planet today, and will likely remain so because we are just trading money. And with foreign exchange we can have leverage ratios of 1:50, 1:100, even 1:400. A leverage ratio of 1:400 means that a 1 percent movement in the currency can translate into 400 percent profit on our investment capital.

One thing to note is, don’t be fooled by the power of leverage. The concept of leverage can be a double edged sword. Leverage, if the price goes up can make us a very high return – 10, 20, 50 even up to 400 times more profit. But if the price goes the opposite way than what we expect, then we can lose 10, 20, 50 or even 400 times more money. Quite frankly, leverage, on its own, is very risky.

But using leverage so that we make money faster is a key ingredient of creating a Financially Abundant Mentality, so we can’t shy away from leverage simply because we’re afraid of losing money. We have to learn how to protect our money. We need to have insurance in place, so that if the trade goes against us, we get most, if not all of our money back.

PROTECTING YOUR MONEY The next key ingredient to developing a Financially Abundant Mentality is, understanding how you can protect or insure your money in the markets. Let me explain with an analogy, using car insurance

I am sure you probably own a car. Let me ask you, do you pay car insurance on your car every year? You probably do. Now, how much do you pay for car insurance? Most people pay $500 to $1,000 per year for their car insurance; this usually works out to be around 5 percent of the value of the car.

Now, let me ask you, do you crash your car every year? Probably not!

So, if you don’t crash your car and no one else crashes into it, at the end of the year does the insurance company give you back your insurance premium? No way!

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In fact, you cough up another $500 or another 5 percent of the value of your car to insure it for the next year.

Would you ever dream of driving your car without car insurance? Of course not, because obviously if you crash the car or someone else crashes into it, you would want your car to be fixed. And also, if the accident is your fault and you hurt or killed somebody else, you do not want to be financially liable.

So it is critical, for the sake of spending around 5 percent of the value of the car per year, just so you have the peace of mind should anything happen.

Now, let me ask you this question. If you do not crash the car and the insurance company does not pay you back any money at the end of the year, do you consider that payment a loss? No, it’s not a loss, is it?

Let’s define loss. What is a loss? A loss is when you pay money and receive nothing in return. So in the example of car insurance, what are you receiving in return for your money? You are receiving protection and security. You are receiving peace of mind.

Now, what is an expense? An expense is where you pay money and you receive something in return. What are you receiving in return here for your money? Of course, you are receiving insurance – that is, protection, peace of mind and security.

Let’s now use that same concept of car insurance in the stock market. Let’s say we decide to trade CFDs where we have 10 times leverage. If the share price goes up 10 percent we will make 100 percent on our money or more. In addition to trading CFDs, let’s now combine that trade with protection, with insurance. So we take out insurance that will cost us around 5 percent of the value of the stocks – very similar to car insurance – where we can insure our trade so that if the share price goes in our favour, we will make a fantastic profit. But if the share price goes the opposite way, we get most, if not all of our money back.

This protection is what is known as CFD Hedging.

Hedging is simply another word for insurance. CFD Hedging simply refers to trading stocks with CFDs to maximise leverage and profits, and buying options to insure the stocks in case the prices move in the opposite direction than you expect.

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How would you feel trading in that situation? Would you feel more protected?

Now, would you feel more confident using leverage?

I teach CFD Hedging in my TradeAbility Income Plus course. As a strategy it combines the leverage power of CFDs with the protection of Put Options as a hedge. But, for years I have dreamed of combining the leverage of CFDs with options in another way: by Writing Covered Calls on CFDs.

Covered call writing is a strategy that has been used on stocks for years – I also teach this strategy in my TradeAbility Income course. It’s often referred to in the financial media as “share renting”. But, until now, it has not been possible to Write Covered Calls on CFDs.

In 2010 I worked together with a leading international CFD broker to finally make this extraordinary strategy possible and available exclusively for my clients. Now, because of the leverage involved, Writing Covered Calls on CFDs requires a different type of strategy to Writing Covered Calls on un- leveraged stocks. And, quite frankly, it’s the most powerful monthly income generation strategy that I have ever seen – and it is specifically designed to earn great, regular returns in volatile market conditions. The strategy takes only about 30 minutes a month to do. That’s right – 30 minutes per month, not per day! And the returns are amazing for a relatively low risk strategy.

CONFIDENCE The last (but not least) ultimate key to developing a Financially Abundant Mentality is confidence. The more confidence you have, the better you feel. The better you feel, the calmer you feel. The calmer you feel, the clearer your mind and the more opportunities you see to make money.

The moment you start to lose confidence you start to feel knotted in the stomach – you become upset, nervous and scared – and that is when your mind clouds over with negative thoughts. You don’t see money making opportunities in front of you. You don’t take advantage of them. You miss out.

Confidence is the single most important ingredient to developing a Financially Abundant Mentality, but what will give us that confidence? The knowledge that we have protected our money from downside risk, of course.

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When I am trading the markets, I am the first to say that I do not know which way the stock market is going to go. I have my opinion, of course, and it may be a well-informed opinion, but ultimately it is still an opinion. How can I possibly know which way the market is definitely going to go? I never have, and I never will.

I therefore set up my trades so that if they move the way I expect them to, I will make a fantastic profit, but if they move the opposite way I will receive most, if not all of my money back. That makes me feel pretty confident about what I’m doing.

Developing a Financially Abundant Mentality involves using a variety of investment tools or strategies. No one tool or strategy can be effective in all market environments, but learning how to use a variety of different tools allows you to diversify your portfolio and develop multiple streams of income and capital gain.

I am talking about learning how to make money over and over and over and over and over again, safely and simply without using physical energy, without taking up your time, and doing it by using the strategies that will be around forever.

Real estate, for example, will always be around for the rest of our lifetimes. The same thing goes with the stock market. The stock market might be volatile and stock prices might go up and down, and individual companies might come and go, but the stock market will always be there. It is the same with the options market, the same with the Forex market, and the same with the futures market. These instruments will be around for a very long time to come, and they are phenomenally powerful.

Once you have mastered how to successfully trade these instruments, you have essentially mastered the techniques which you can use to make money for the rest of your life.

Let’s take a moment now and discuss what would be the ideal business – the hypothetically perfect business – a business that could produce for you the amount of income you would like to earn, with the amount of time you want to spend, with the amount of protection that you want to have, with the amount of involvement you want to have.

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CHAPTER FIVE: THE PERFECT BUSINESS


This is an exercise I do at my live seminars from time to time, and it always fascinates me. I say to the audience, “Now let’s define the features of this business together. This is a hypothetical business. It could be involved in doing anything. What we want to talk about are some of the features that would make up a hypothetically perfect business.”

I ask audience members just to call out words and I write them down on a big white board or a big screen. I’ve listed the most popular features my students have come up with below.

TOTALLY PORTABLE One of the most popular things people typically call out is they want a business that is totally portable. They want a business they can take anywhere in the world. We’re not tied to going into an office. We are not tied to working from home or any area in particular. It is a business that can produce our income no matter where we are – say a ski field in the Swiss Alps, or we could be lying on a beach in Fiji, or having a family holiday in Italy.

No matter where we are anywhere on the planet, we can still manage our business and keep our income coming in. In addition to our business being portable, we want to monitor that business wherever we are on the planet, like on a mobile phone, an iPhone, or laptop. That way we know we’re able to keep an eye on it anytime we want.

NO STAFF Another very popular point people usually call out is they want a business with no staff. We do not want to have to manage other people. Anyone who has ever owned a business knows that having staff can be a challenge. We’ve got to manage them, we’ve got to manage their time, and manage their personalities. Who needs office politics? Unfortunately it is unavoidable when we’ve got staff, particularly when we start getting up into the tens and hundreds of staff members.

NO BOSS Another very popular point is to have no boss to answer to. We want a business where we are the boss. We have no staff to manage, and no one else to answer to.

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NO CUSTOMERS A lot of people say they would like to make money without having to deal with customers. Who wants to deal with customers if you don’t have to?

In fact, let’s not have any people at all!

As much as we like other people as friends, as soon as we have to rely on other people to make our business successful, human relations problems pop up. I suggest we keep people out of the business altogether.

Remember, this is a hypothetically perfect business, so these are just all the features we would want to put down on our business. So far we want the business to be portable, no staff, no boss, no customers, and no people – just us.

HIGH RETURNS We want to have a business that produces, of course, very high returns. We want to have lots of money coming in from the business on an ongoing, regular, consistent basis.

LOW RISK At the same time we want to have very, very low risk, in fact, no risk if possible. We need to have a business that makes us an enormous amount of profit but with little or no risk at all.

DOESN’T TAKE MUCH TIME TO OPERATE We want a business that doesn’t require much in terms of time, and is very flexible on when we spend that time. We can spend 5 minutes a day, 10 minutes a day, 20 minutes running the ideal business.



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LOW START UP COSTS We want to have a business that requires very little money to get started. So something that might take only a few hundred dollars or even a couple of thousand dollars just to get started and grow. That being said, however, there has to be no limit to how much money we want to invest into the business either.

EXTREMELY LOW OVERHEADS We want a business that has low overheads – that is, no rent, no office space, no advertising, no special training fees for staff, and no marketing expenses.

UNLIMITED GROWTH AND INCOME POTENTIAL We want a business that has no limit to our income possibilities. We do not want to be limited as to what we can earn from it. So, not only can we put in as little or as much money as we want to get started, there is no limit to how much money we can make or take out of the business.

NO COMPETITION We want a business that has no competition. We certainly don’t want to have to fight for market share or opportunities. But at the same time, it shouldn’t matter how many other people are doing the same business. That is, we want a business opportunity we can share with other people, but not have those people compete against us.

EASY TO LEARN We want a business that requires very little training to begin with, meaning a business that’s very easy to learn.

Think about a doctor. I have a friend who did medicine at university. 16 years later, she had finally completed her studies and became a fully qualified specialist dermatologist. She had also done years and years of extra study in her specialty, and since she completed her undergraduate degree, which took another 6 years, she has been working 80 to 100 hours a week! Now that she’s a qualified dermatologist she can reduce her hours, but she still has to work several hours a day to keep her practice viable and make money.

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EXCELLENT TRAINING We want a business that has an excellent standard of training available to us. We want to have really good teachers available if we have questions. It’s also important that we can do that training anywhere in the world, ideally at home, in our own time.

SUPPORT AND COMMUNITY We want a business that has a community feel. We want a business where we can relate to other people. They are not in competition with us, they don’t work for us, we don’t work for them, but we can bounce ideas off each other, take notes and discuss our successes and our challenges without ever having to fear competition. None of these people can gain advantage over us, and we can share freely.

AVAILABLE TO EVERYONE We want a business that is available to anybody regardless of physical ability, age, sex, race or religion. We want a business that virtually anyone can do.

I would say that the above list covers pretty much all the features of the ideal business that people normally call out to me at seminars.

If you had a business that could achieve all of these points, would you agree that it would be something worth looking at?

Does the perfect business opportunity even exist?

Believe it or not, it does! And people have been doing it for years!

We call it, trading on the financial markets, as opposed to just trading the stock market, as it involves more markets than just stocks.

DothestrategiesIuseinthemarketmeettherequirementsforahypotheticallyperfectbusinessmodel?Now let’s take our hypothetically perfect business – a business that would be totally portable so that we could take it anywhere in the world. We would have no staff, no customers – it would be a business that can produce for us extremely high returns with very little risk and at the same time require very little time from us to run.

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At the same time let’s consider, in this context, some of the different strategies we can use to develop a Financially Abundant Mentality.

We talked very early in the book about real estate and how it was one of the first strategies or instruments that I personally used to develop a Financially Abundant Mentality for myself. I learned that I did not have to physically do anything and still the value of that real estate had risen over time. I also realised, though, that it took a long time to happen and that real estate takes a lot of money for the initial deposit, to pay the legal fees, and on-going taxes, maintenance, renovations, let alone money to cover the risk of tenants who may not pay rent for a period of time. This all adds up to quite a substantial cash flow drain.

So straight away, real estate does not necessarily match the characteristics of the ideal business. We have customers – technically we have our tenants who are our customers and we are relying on them to pay us promptly and on time. We also, of course, are involved with a lot of government taxes and regulations. Now, we can make very high returns out of real estate but there is also a substantial amount of risk and it’s difficult to protect ourselves against that risk. How do you stop your property from falling in value if the market slumps? You can buy insurance to protect the property in case it gets damaged, but you can’t buy insurance to protect the market value of the property if it falls.

On the other hand, one of the key benefits of real estate as a business is that it can be totally portable. Obviously, the real estate does not move but once we have acquired our real estate and our tenants are in place then we, as individuals, can move around, still collect our rents, and we can acquire real estate in most parts of the world. Real estate represents a lot of wealth and no doubt many, many millionaires and billionaires around the world today have built their wealth through real estate. However, for the average person, real estate can be a challenging instrument to use requiring a lot of money, a lot of competence and experience to do it properly and a long time to generate substantial returns.

Another instrument is having your own business. Having your own business means straight away you are dealing with staff, you are dealing with customers, and you will no doubt have competition in your business.

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You have an unlimited income potential, but there is also a substantial amount of risk and usually a substantial amount of time required from you to oversee the business. So having a traditional business, be it any type of business at all, generally requires a substantial amount of time and therefore, does not meet our hypothetical perfect business model.

What about the stock market and other financial markets? I could say, trading stocks, options, CFDs or Forex matches our criteria of a perfect business model in that we have a totally portable business. We can trade anywhere in the world through our computer, even through our iPhone. We have no staff, it’s just us. We are not responsible to anybody and we have no customers. It is purely our choice as to where we want to place our money. It is totally legal and can provide extremely high returns with very little risk (when you know how to insure your trades). Best of all, it requires little time.

Better yet, we have no competition. There is nobody else out there who is competing against us making money. Everyone trading is out to make a profit, of course, but we could discuss our trades with our friends, they could get on the same trades and we could all make the same returns! It’s also quite easy to do. Placing a trade can be done in seconds either online or over the phone with a broker. You just ring the broker and place a trade. The brokers are there to help you by explaining exactly, step by step, how to place the trade.

Best of all, trading the financial markets is something that is available to everyone. You can start with as little as $500, and there is no limit to your potential profit. There are always opportunities to trade in rising, falling and even sideways markets, and with today’s technology, everyone has access to live data, news, charts and cheap brokerage rates.

However, to make the business of trading financial markets profitable, you have to know how to protect yourself from downside risks, and how to cope with market volatility. Regardless of the reasons, the world has entered a time of staggering financial volatility. Crashes follow booms and booms follow crashes. The financial markets have seen a period of higher volatility in the last 3 to 5 years than has been more in any time in history.

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Now, the good news is that volatility creates fantastic opportunities, but only for those people who know how to take advantage of it. Most people do not understand volatility or how to profit from it.

Most people are very naïve when it comes to the stock market. If they do have some stocks, it’s usually because they have been awarded them through an insurance program or from their work. Perhaps they invested in stocks by going through a managed fund, or even went to the effort of buying stocks directly themselves.

But for all these people, however they acquired their stocks, their problem is that the stock market must go up for them to make a profit. They believe that a rising stock market is good, and a falling stock market is bad.

That kind of thinking might have worked well throughout the 1990s and up to 2007, but we have just gone through the biggest period of stock market volatility in history, and many people have suffered terrible financial losses when the markets have turned against them.

And yet the truth is very simple: It is possible to make profits in both rising and falling markets. In fact, it’s often easier to make profits in falling markets. And, it is possible to make money in highly volatile market conditions. Unfortunately, the majority of people do not understand how to do these things. So, when the markets do fall, or go through big whipsaws, the majority of these people lose their money to a much smaller group of people who know how to seize the opportunities.

The important point, is that volatility creates fantastic opportunity.

I always chuckle when I read in the newspapers how, “A hundred billion dollars was wiped off the value of the stock market today”. Money is never lost in the markets. It simply changes hands. It moves from the people who used to have it over to the people who now have it.

Let’s consider now some of the instruments I use in trading the markets.

We have instruments available to us, such as CFDs, Forex and Options which allow us to gain 10 to 50 times leverage, meaning of course that we will make 10 to 50 times more profit if the share price goes in our favour, as opposed to just buying stocks alone.

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What’s more we can insure our leveraged trades by purchasing options to protect the value of our investment. That is, if the share price goes the opposite way than we expect we get most if not all our money back. All we would risk is the cost of the insurance, and we agreed that it is exactly the same as purchasing car insurance for peace of mind and security. We don’t view the cost of the insurance as a loss, we consider it an expense.

Most trades we make can take somewhere between a week to a couple of months to be completed. Once we have actually placed a trade, our money is doing our work for us. We are not physically doing anything apart from monitoring the trade. This should take no more than 30 minutes a day.

Wouldyouputallyourmoneyononetradeatonetime?Of course not! What we could do instead is place a variety of different trades at the same time. We might have 3 or 4 or 5, perhaps even more trades going at the same time.

So no matter what happens in the market, we have a strategy, we have a plan, and it still matches our perfect business model.

I have developed a set of strategies that matches our hypothetically perfect business model. Therefore, would it make sense to you to spend time learning more about these particular strategies?

It is an extremely exciting time. Markets are more volatile today than ever before, and that volatility is more likely going to increase in the future. Great shifts of wealth are occurring every day. Strategies now exist allowing us to make money in both a rising and falling market.

I have studied real estate, business, stock market investments and others. I have invested in ostriches, in forests, in start-up companies, in retail shops, in restaurants. I have tried a variety of different strategies. In all my experience of investing I have never come across anything that remotely compares to the possibilities that are offered by financial markets trading strategies.

I truly believe that these are the strategies that are the most appropriate and most powerful for anybody around the world to take advantage of.

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I encourage you to research these particular strategies, and I have many educational courses and products that I have developed to help you on your way. Ultimately, the goal is to become proficient and experienced in these strategies, to use the strategies over and over again to generate returns, to limit risk, to develop confidence, and ultimately to develop a Financially Abundant Mentality.

I would wish you luck, but I know it’s not about luck. It’s about having the right knowledge and the right mindset. So what I wish is that you will take the steps in expanding your knowledge, in shifting your mindset and in creating for yourself a Financially Abundant Mentality. And that you will use your Financially Abundant Mentality to expand your circle of influence in a positive way – to make life better for yourself, for your family, for your community, and even for society.

All the best!

From the desk of Daniel Kertcher

FOR MORE INFORMATION OR TO LEARN MORE, VISIT WWW.TRADINGSEMINARS.COM.AU

DANIEL KERTCHER USA & AUSTRALIAN STOCKMARKET, OPTIONS & CFD TRADING EDUCATION

TEL +61 2 9267 1421 FAX +61 2 8088 6236 WWW.TRADINGSEMINARS.COM.AU

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FINANCIAL - Millionaire School · the lottery! That’s easy money. Hey – many people have won the lottery. You could too, right? That’s what everyone who buys a ticket believes,