The other day, I heard some people talking about their dreams of winning the lottery. They decided they’d really need to win the big money, because if they only won $2 million or so as a lump sum after taxes, that wouldn’t be enough to retire.

Their reasoning was that if they got 5% interest on $2 million, that would be $100,000 a year of taxable income. But that’s like a normal salary, not enough for the lavish retirement they have in mind. So how can you retire on only $2 million?

Aside from the ridiculous odds of winning that much money in the lottery, their logic isn’t quite right. You can get more than a 5% rate of return, and also you’re not limited to spending only the returns (you can spend the initial $2 million too).

But the basic idea is right: what may sound like a lot of money isn’t so much when you need it to support your big spending plans for the rest of your life.

Whenever someone asks if $x is enough to retire, the answer is always no. Because if you were planning to live within your means and spend money at an indefinitely sustainable rate, you wouldn’t have to ask.

If you have to ask, what you’re really wondering is “Since my desires will expand completely out of control with my unrestrained greed and carelessness, is this so much money that I can’t possibly screw it up?” No, it never is.

I remember when Michael Vick got his 6 year, $62 million contract in 2001. Everyone wondered how he could possibly spend it all. Aside from the obvious fact that you don’t have to spend it all, I didn’t see any reason he couldn’t run out of money if he wasn’t careful. Oprah had recently spent $52 million on a single house.

Fast forward 7 years. He had lost his salary and endorsement deals because of the dogfighting scandal. And the bills continued to pile up: steep lawyer fees, 6 luxury homes, and living expenses and 10 cars for friends and family. With no other options, he filed for bankruptcy.

Your retirement could last longer than you think, and you probably won’t have close to $62 million to take you through it. So how can you prevent this from happening to you? It’s pretty simple, actually.

1. Be frugal. It might not be fun and sexy, but it’s by far the most important tip for becoming and remaining financially independent.

2. Don’t stop earning money in retirement. Earning money comes from creating value. Why do you need to stop creating value at a certain age? You might want to change the way you do it, but you don’t need to shut down completely.

Keep these tips in mind, and you can live indefinitely with no savings at all. Ignore them, and no amount of money will ever be enough.

Gordon Gekko has often been misquoted as saying “greed is good.” He did technically say “greed . . . is good,” but that snippet leaves a lot of the meaning out. Let’s look at what he really said:

“The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated…The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.”

Greed isn’t the right word because it’s an extreme version of what he’s really talking about. The opposite extreme is apathy, and both extremes are bad.

I’m not sure what a better word would be. Desire? Ambition? Drive? Mojo? Life force? Evolutionists call it selective advantage. Academics call it a thirst for knowledge. Economists call it rational self-interest.

Whatever you call it, it’s not bad. Surely there’s plenty of room between one extreme of preying on innocent people, and the other extreme of being a spineless jellyfish.

I’m bringing this up now because I just saw Michael Moore’s new movie, “Capitalism: A Love Story.” While I liked it, I thought it was far weaker than “Sicko” and “Fahrenheit 9/11.” I totally agree with him about all the corruption at the top, but I disagree with him about what’s happening at the bottom.

We see several people in the movie being evicted from their homes. Is it sad? Yes. Being poor is awful, no question about it.

But while I saw people who weren’t happy about their situation, I didn’t see anyone taking personal responsibility for it, or coming up with a plan for how they’re going to fix it. They just think they deserve to stay in their house whether they’re making the payments or not.

Their logic seems to be “I’m poor, therefore someone should give me a free house.” If it were me, I’d be thinking “I’m poor, therefore I better make more money so I can pay for this house.”

One family looked out the window as several police cars pulled up to their house to evict them. But they refused to open the door for them. Instead, one family member called the Sheriff and said they weren’t going to resist, but the cops were going to have to break the door down.

I actually found this guy more offensive than the “condo vulture.” He thinks he’s Gandhi in a noble fight of nonviolent resistance? No, he’s just a jerk who’s wasting the cops’ time and causing someone else’s property to be damaged.

To be fair, we didn’t get any information about how all these people ended up like that. There could have been tragedies that put them in that situation through no fault of their own. (Though minor economic fluctuations such as this recession are far from being tragedies.)

But there were hints that they became homeless only through absence of greed, for lack of a better word. Thinking that money is evil isn’t going to help. If you’re not making enough to pay the bills, then you have to either reduce your bills or make more money.

Are there no jobs where you live? You might have to move. Does your occupation no longer pay well? You might have to change fields. Do you not have any skills that employers want? You might have to develop some. This might not be fair or convenient or what you wanted, but it’s sometimes necessary.

When I got laid off in the dot com bust, I had to move to where the jobs were, learn new skills, and take a big pay cut. Did I want to do that? No, but it was a lot more constructive than sitting around in an area with no jobs, waiting for Michael Moore to put me in a movie.

And if I had stayed, I certainly wouldn’t have claimed the right to live there without paying for it. I would have sooner starved to death than default on my mortgage.

One person in the movie says there are only two kinds of people: the ones who have nothing, and the ones who have everything, with no one in between. Where is he getting that from?

I’d guess that almost everyone who’s reading this post is in between. The ones who have nothing sometimes truly lack the ability to move up, but usually they just refuse to evolve.

If someone doesn’t want to have moderate greed, I think that’s their right. But they have to accept the consequences of the path they’ve chosen.

Michael Moore says capitalism is the enemy of democracy. But the problem isn’t capitalism itself, just the kind we have.

Most people are outraged that the top 1% makes as much money as the bottom 95%, but that’s not the problem per se. If they create that much value, they should make that much money. Why should the people who don’t create any value make as much money as the ones who create a lot?

However, the problem is that the broken system allows some of the top 1% to make that much money without creating that much value. In fact, some of them destroy value.

And some of them have gone to jail for it, but many more are still out there and up to their old tricks. Why wouldn’t they keep doing it, if they have no sense of ethics and no one’s going to stop them?

Moore says the top 1% fear the bottom 95%, because they have 95% of the votes. But he says they won’t take back the country with their votes, because they believe that if they keep working hard, they’ll be in that 1% someday.

I don’t know where he’s getting that from. Why would anyone think they’ll magically jump up like that? No, the problem is that there’s no one to vote for. No one stands for eliminating corruption because being a politician requires being all caught up in it.

True capitalism doesn’t guarantee that everyone is equally good at the game, just that we all get to play by the same rules. And while there should be a safety net to help people stay in the game when they’re down on their luck, we don’t want a system that fixes everyone at the same level. Eliminate greed, and you eliminate progress.

Moore unwittingly gives us an example of the good kind of greed: Jonas Salk, inventor of the polio vaccine. He did a great thing and didn’t patent it for personal gain, because he didn’t need the money.

But while he wasn’t greedy for money, his greed for a cure is what made him work hard enough to find it. He wasn’t the kind of guy to sit back and wait for someone to hand him a cure, or buy him a house.

Evil people are often obsessed with money, but that doesn’t mean that money is evil. It’s just a resource, and it works for its owner.

When good people refuse to play the game, that just means that only the evil people will have it. Isn’t it better to see it in the hands of people who will use it well? That’s why we need a healthy dose of the good kind of greed.

Photo by Tina Keller

“I suppose I could collect my books and get on back to school
Or steal my Daddy’s cue and make a living out of playing pool
Or find myself a rock and roll band that needs a helping hand
Oh Maggie I wish I’d never seen your face”

- Rod Stewart, in a moment of career confusion

This is a follow-up to I Am Problogger, Hear Me Roar, where I announced that I was going on a mini-retirement to become a full time blogger.

I went back to work nearly two months ago (didn’t realize it had been that long), so my mini-retirement lasted nearly 5 months. I’ve been meaning to post an update about the full time blogging experiment: what worked, what didn’t, and where to go from here.

The overall outcome

Looking at the total effect on my quality of life, the mini-retirement was a fantastic success. Being in control of my life (you know, like an adult) was like breathing for the first time. Just ending my sleep deprivation alone made a world of difference. There’s nothing like being able to do what you want, when you want. I ate better, exercised more, had better health, more energy, a better social life, and more time for both work and fun. Not that everything was perfect all the time, but it was a day and night difference.

In the beginning, I was actually a little bit concerned that I might become bored. I didn’t really think so, but so many retirees have said they couldn’t figure out what to do with their newfound freedom, and they had to get a job just to have something to do. Now I can say I have no idea what’s wrong with those freaks. Equating freedom with boredom is the lie of the lie of the 4-hour workweek. If you get bored, something is seriously wrong with you. You might consider consulting with a neurosurgeon to see if you can get a chip implanted in your brain that would endow you with imagination, curiosity, and a sense of purpose.

I don’t know, maybe I was supposed to be European. I’ve never accepted work as a substitute for life. I don’t even think I’m lazy, just highly resistant to devoting my life to something that isn’t really my thing. But what is my thing?

Good question. I quickly found out that I don’t want to do something just to make money. Like if I was doing something that let me work from home on my own schedule, but it was something that I didn’t really care about, would that really be any better than having a job? No, it would probably just be far more work for far less money.

Knowing that allowed me to rule out a lot of options. A lot of the time, I’d consider something and think, “Well, I’d do it if it paid a lot from day one. But is it interesting enough to be worth putting in tons of effort, not knowing if it would ever pay a decent income?” And if the answer was no, I had to pass.

So far, the only thing for which the answer has been yes is blogging, and that’s why I’ve focused on it. (I use the term “blogging” in a very broad sense. Ebooks, affiliate marketing, even consulting or services that result from my blog–anything that turns my ideas into money–it’s all “blogging” to me. No need being picky about the delivery mechanism.)

So how did that work out?

The blogging results

Looking at my mini-retirement purely from a blogging perspective, it was an absolute disaster. In five months, my subscriber count increased by about 40%. In the five months prior to that, when I was blogging part time, my subscriber count increased by about 130%.

That’s right, I got more than triple the results when I was blogging part time!

And I’ve got to tell you, this was very disappointing. If I had maintained my previous growth rate, I’d have ended up with 1,400 subscribers. If I had doubled my growth rate, which would be reasonable since I was doing it full time, I’d have gotten to 2,200 subscribers. But why would my growth rate plummet?

I got this in an email from a new reader, who wanted to remain anonymous:

“From what I’ve seen, the quality of your posts truly stands out. How is it possible that you only have 800 subscribers? I mean, that’s a lot in its own right. But I think your stuff should demand a larger following.”

Why thank you reader, and I agree with you! But while my results were disappointing, they’re also encouraging in a way. I now have confirmation that blogging results have little to no correlation with how much time you put in. Which means you don’t have to work yourself to death. In fact, working too much can not only be unhelpful, but counterproductive (and when you consider the effect on your quality of life, it hurts you far more).

I don’t like things that appear random. Everything has a reason, and I want to know it. I know it’s not just a matter of “less work = better results.” I think the conclusion is that doing the right things is far more important than doing a lot of things. But what are the right things?

One thing I think I’m doing right is having a unique voice. There will always be people who don’t like it, but I don’t think I’ll ever be accused of being a copy of someone else. One reason I wanted to start a blog is because I was so frustrated that out of all the people I saw talking online, nobody was really saying anything. I eventually found people who would go beyond rehashing the same old stuff, but the really good blogs are a tiny percentage of the total. Even if your feed reader is full of blogs you love, remember how long it took to find those needles in a haystack.

Ron Hitson (no URL given) feels the same way. In a comment spliced together with an email he gave me permission to quote, he said:

“Hunter, your blog is the only blog I follow. You actually add value and a good perspective. IMO bloggers only offer opinions of things that have already occurred…I like your blog because you’re somewhat of a ‘thought leader’ (like Steve Pavlina). You guys bring fresh thinking to ‘the game.’ Most other bloggers have the same stuff, it’s just repackaged.”

OK, “thought leader” is totally going into my personal branding statement! But here’s the point: if there are even a handful of people saying things like this, I’m going to choose to listen to what they’re saying (keep going) instead of what the stats are saying (give up).

The new 3-step plan

Still, I was putting in too much effort for too little results, so something had to change. I’ve been trying a new strategy, and while it’s too soon to judge the results, it feels like a good idea. Here are the 3 parts.

1. Post less.

When I went full time, I increased my posting frequency from about twice a week to about four times a week. I didn’t want to increase it too much because it didn’t seem like it would help. A lot of people say you need to post every day to keep people coming back to your blog, but why? If someone’s subscribed, they’re subscribed. Why does it matter how often they visit?

In fact, I thought posting too much could hurt me. Giving tons of posts to people who are already subscribed won’t make them subscribe twice. But it might make them unsubscribe if they have too much to read. Actually, is that what happened? After all, I must have done something different that slashed my growth rate, and I don’t know what else it could have been.

I don’t want to overload my readers. I want to take care of them, but then spend as much time as possible going after new readers. That’s how you grow.

Writing posts like the 5,336 word Lightworkers, Darkworkers, And The Other Kind was taking a toll on me. (That one took 3 days to write; I don’t know how many hours.) And now I just don’t have the time.

I’m still going to be posting regularly, just not as much. And maybe with more short posts (which for me means less than 1,000 words). And maybe being a little less thorough (I actually rented the 2nd and 3rd Matrix movies as research for The Inductive Oracle, The Deductive Merovingian).

2. Stop reading blogs.

This was a really tough decision to make, but it had to be done. I was spending about 40 hours a week just reading and commenting on blogs. Then I’d think about how there were so many more blogs I wanted to read. I was living in reaction mode, with a never-ending to do list. At times I felt like I was going to snap. (I talked about this in detail in Why We’re Failing The 4-Hour Workweek.)

When I first started reading blogs, I soon learned that you could subscribe to a blog to make sure you didn’t miss any posts. And I remember thinking that no blog could possibly be good enough to subscribe to. While I’ve changed my thinking on that, I still don’t want to try to keep up with everything.

I’ve tried cutting back several times, but somehow I’d just get back in the habit every time. I had to quit cold turkey.

When I get home from work, I just have a few hours before I have to go to bed. With all the different ways I could spend my time, how many of those hours do I really want to spend reading blogs, as good as they might be?

(And in reality, I’m still reading blogs. Just fewer of them, with much more skimming and much less commenting. I don’t want to quit entirely. But if I tell myself that I’ve stopped reading blogs, my conscious mind will act accordingly. I think I can keep my blog reading to less than an hour a day.)

3. Use Twitter more.

But there’s a problem here. If I’m not commenting on many blogs, how will people find me? That’s where Twitter comes in.

I see Twitter as being very similar to commenting, only you don’t have to read a post first. I can send out tweets a lot faster than I can leave comments, and they can potentially be seen by far more people when I have enough followers.

This is an experiment for now, but hopefully it will prove to be effective.

Going forward

Some people took Blogger’s Paradise a bit more autobiographically than I had intended. I get frustrated sometimes, but I can’t imagine quitting blogging. I’m still getting warmed up.

As @stevepavlina tweeted, “The first million words of content are usually the hardest. ” I guess this can be considered the blogging version of the 10,000 hour rule. You have to pay your dues before you collect the rewards. I estimate that I’ve written a quarter of a million words on my blog. Make it a third of a million if you count my ebooks. Make it 335,333 if you count this post. It’s a start.

But I still continue to consider different options. Some people suggested that I get in on the iPhone app gold rush. And while that’s a reasonable idea, I’m already involved in one gold rush. If I’m going to do something else, it would have to be a better option than blogging.

But dare I say it, I actually seem to be connecting well with the new job. Who knows, maybe one day I’ll be able to write a non-sarcastic version of Top 10 Reasons To Have A Job.

BTW, it’s come to my attention that comments aren’t working, at least for some people. I’ll try to get that working as soon as I can.

What an awful book. I received this as a gift from someone who had some extra copies. I appreciate the gesture, and I would gladly link to them, if it didn’t reflect so poorly on their judgment. It’s that bad.

How Secrets of the Millionaire Mind by T. Harv Eker became a New York Times, Wall Street Journal, and USA Today bestseller, I have no idea. It’s like the guy started with Rich Dad, Poor Dad, threw out all the good parts, and padded the bad parts out to 200 pages.

I don’t even need to tell you what’s wrong with it. I’ll let the author do that for himself:

“This is a special ceremony, so I’m going to ask you to eliminate any distractions right now. Stop munching, stop talking on the phone, and stop whatever you’re doing. Men, if you like, you can change into a suit and tie, although a tuxedo would be best. Women, a formal evening gown and heels would be perfect. And if you don’t have anything that’s classy or new enough, this would be an occasion to go buy yourself a brand-new dress, designer label preferred.

If you’re all ready, let’s begin. Please kneel down on one knee and bow your head in respect. Ready, here goes. ‘BY THE POWER INVESTED IN ME, I HEREBY ANOINT YOU AS ‘WORTHY’ FROM NOW UNTIL FOREVER MORE!’

Okay, we’re done. You can stand up now and hold your head high because you are finally worthy.”

Feel better now?

“The play account rule is that it must be spent every month. That’s right! Each month you have to blow all the money in that account in a way that makes you feel rich. For example, imagine walking into a massage center, dumping all the money from your account on the counter, pointing to the massage therapists, and saying, ‘I want both of you on me. With the hot rocks and the frickin’ cucumbers. After that, bring me lunch!’”

After that, bring me humility!

“[At my workshop] I then pull out a wooden arrow with a steel-pointed tip and explain that as a practice for this discipline [going beyond your comfort zone], you’re going to break this arrow with your throat. I then demonstrate how the steel point goes into the soft part of your throat, while another person holds the other end of the arrow against their outstretched palm. The idea is to walk straight into the arrow and break it using only your throat before it pierces through your neck.”

And if you survive this, next you drink the Kool-Aid!

I really don’t have much to say. For an infinitely better financial motivation book, try Rich Dad, Poor Dad. It has its flaws, but anything negative you can say about it goes ten times for Secrets of the Millionaire Mind.

So why did I even bother writing a review? Because I had to say something. It greatly concerns me that a book like this can become a bestseller. We’re in an economic crisis because too many people checked their brain at the door when making financial decisions, and I don’t think books like this are going to help restore sanity to the American public.

Have any of you read it? Did you find it helpful? If so, tell me what I’m missing.

Photo by MENE TEKEL

I have a credit card that I haven’t used in a long time. I just got a letter from the company saying:

“We’re writing to you because we noticed that this credit card account hasn’t been used for at least 24 months. We believe this may indicate that the account no longer meets your financial needs. With this in mind, the account has been closed.”

Translation:

“We haven’t been making any money off of you, and because you haven’t used your card in 24 months, FINALLY we’re allowed by law to close your account without notice. Go away now.”

Today’s quiz: what will happen to my credit score?

A) It won’t change, because closing an account that hasn’t been used in 24 months doesn’t make any difference.

B) It will go up, because now I have less credit available, and therefore less ability to go into debt.

C) It will go down, because my balance on my other card is now a higher percentage of my total available credit.

D) It will go down, because I’ve lost the history of timely payments on that account.

I don’t know the answer. Do you?

So at last I get around to reviewing Napoleon Hill’s classic, Think and Grow Rich. It was first published in 1937. People had lost their money as well as their spirit in the Great Depression, and needed a reminder that financial success was still possible for people who would create their own opportunities. That’s not so different from today, is it?

“You have ABSOLUTE CONTROL over but one thing, and that is your thoughts. This is the most significant and inspiring of all facts known to man! It reflects man’s Divine nature. This divine prerogative is the sole means by which you may control your own destiny. If you fail to control your own mind, you may be sure you will control nothing else.

If you must be careless with your possessions, let it be in connection with material things. Your mind is your spiritual estate! Protect it and use it with the care to which Divine Royalty is entitled.

You were given a WILL-POWER for this purpose.

…

Doubting Thomases scoffed scornfully when Henry Ford tried out his first crudely built automobile on the streets of Detroit. Some said the thing never would become practical. Others said no one would pay money for such a contraption.

FORD SAID, “I’LL BELT THE EARTH WITH DEPENDABLE MOTOR CARS,” AND HE DID!

His decision to trust his own judgment has already piled up a fortune far greater than the next five generations of his descendants can squander. For the benefit of those seeking vast riches, let it be remembered that practically the sole difference between Henry Ford and a majority of the more than one hundred thousand men who work for him, is this-FORD HAS A MIND AND CONTROLS IT, THE OTHERS HAVE MINDS WHICH THEY DO NOT TRY TO CONTROL.”

This gives a taste of his writing, which is a bit old fashioned and peppered with glaring typos, creative punctuation, and RANDOM ALL CAPS. It also requires a good amount of patience to read it, because he’s very wordy, sometimes going on and on about things that are completely out of date.

But Think and Grow Rich is worthy of being a classic. While the wording is dated, the ideas are timeless. It’s also incredibly optimistic without being too cheesy.

And it’s practical. It’s about controlling your thoughts, but in a down to earth way instead of being all about “thought vibrations” (although there is some of that). If you find yourself making excuses instead of money, Napoleon Hill will whip you into shape.

Actually, it’s not really specific to money. At one point he says that “riches” means “financial, spiritual, mental, and material estates.” Think of it as a guide for keeping your mind from getting in the way of your success, whatever it is you’re working towards.

He alludes to Andrew Carnegie’s secret, which he says is the key to all great financial success. He doesn’t state it directly, but he hints at it in every chapter, and says the secret will appear to you when you’re ready. I’ll revisit the Carnegie Secret at a later time.

Meanwhile, Think and Grow Rich is freely available from this link.

Table of Contents:

Author’s Preface
Chapter 1 – Introduction
Chapter 2 – Desire: The Turning Point of All Achievement
Chapter 3 – Faith Visualization of, and Belief in Attainment of Desire
Chapter 4 – Auto-Suggestion: the Medium for Influencing the Subconscious Mind
Chapter 5 – Specialized Knowledge, Personal Experiences or Observations
Chapter 6 – Imagination: the Workshop of the Mind
Chapter 7 – Organized Planning, the Crystallization of Desire into Action
Chapter 8 – Decision: the Mastery of Procrastination
Chapter 9 – Persistence: the Sustained Effort Necessary to Induce Faith
Chapter 10 – Power of the Master Mind: the Driving Force
Chapter 11 – The Mystery of Sex Transmutation
Chapter 12 – The Subconscious Mind: The Connecting Link
Chapter 13 – The Brain: A Broadcasting and Receiving Station for Thought
Chapter 14 – The Sixth Sense: The Door to the Temple of Wisdom
Chapter 15 – How to Outwit the Six Ghosts of Fear

Today I came out from under my rock to see what was happening in the financial world, and found that today was one of the worst days of the financial meltdown. I found myself thinking about Martha Stewart, and wondering whether insider trading should have been included as the seventh income stream in Online Business School.

Seven years ago, Martha sold all of her ImClone stock on insider information the day before an 18% drop, avoiding a loss of $45,673. She denied it when questioned, saying “I just want to focus on my salad.” But sure enough, she was eventually convicted of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators. She was given a free five-month vacation in Camp Cupcake, and fined $30,000.

I didn’t follow this story closely, but am I missing something here? Did she actually profit from the deal, even after the conviction? I’m not an economist, but it seems that one good way to reduce the deficit is by raising the “insider trading tax.” I’m not a big fan of taxing the rich just because they’re rich, but if they’re guilty of illegal riches, can’t they share the wealth a little?

Below are the lyrics I remember from the parody song “Martha,” to the tune of Barry Manilow’s Mandy. I heard it on the radio years ago, but I can’t find it online. I wish they did a video, because it really loses a lot without the tune.

She got an inside Wall Street tip
Now she’s gonna pay for it
Her broker says she lied
She’ll soon be indicted
She’s facing lots of time
And we’re so excited

To see her walking out in cuffs
Twenty years won’t be enough
Dress her up in stripes
Send her to Sing Sing
Keep her there for life
It would be a good thing, oh Martha

Well they’ll get you for insider trading
Then they’ll send you away, oh Martha
When we’re laughing so hard that we’re shaking
What’s your stock worth today, oh Martha

You had everything and you spoiled it
Now they’ll lock you away, oh Martha
Pretty soon you’ll be sharing a toilet
With your cellmate

If you live in the U.S., no doubt you’re aware of being in the biggest financial crisis since the Great Depression. If you live outside the U.S., it will still spread to your part of the world if it hasn’t already. But is it really as bad as everyone says?

I think people are severely overreacting to the short term problem while severely underreacting to the long term problem.

The short term problem

The economy is obviously in trouble, but remember that for most people, nothing bad has actually happened yet.

Some people have lost their jobs, and I most likely will too. I’ve known for about 6 weeks that the company I work at is going to lose 80% of its revenue on October 3, and that date is finally here, so we’ll see what happens. But most people in this country haven’t lost their jobs.

Homes have dropped in value from their peak, but that doesn’t matter. You don’t feel it at all until you sell, and even then, you’re getting a better deal on the next place you buy. Some people have lost their homes, but that’s because they were counting on a miracle to be able to afford them. Failure of a miracle to materialize is not a crisis.

Stocks have dropped, a little. It amazes me how much people were freaking out about that tiny 4% dip in the Dow we recently had. 4% is nothing. It was back up more than 4% the next day. Now the 7% drop, yeah, that was big. They called it the biggest Dow plunge ever, but that’s only in terms of points. In terms of percentages, which is what matters, it was only the 17th biggest Dow plunge.

It dropped by a greater percentage as recently as September 17, 2001. 7% is really big, but not close to the record of 22.6% on October 19, 1987. Did anyone here survive 1987? Corrections happen once in a while, and we were about due for one.

Gas is up a little, they say. Actually, adjusted for inflation, gas prices have remained relatively flat in the U.S. since 1918.

What is this blood in the streets that everyone’s talking about? Maybe it’s not champagne, but it’s sure not blood. There will be some kind of bailout, and then everyone will forget all about this.

The long term problem

Don’t get me wrong, lots of bad things have happened lately. It’s just that we haven’t felt the effects yet. The tumors are growing, but we appear healthy on the outside.

Unfortunately, it’s possible to rack up an awful lot of financial problems before it all comes crashing down on you. But then, it’s too late. One good thing to come out of this mess is a wake up call.

This past Tuesday, the U.S. national debt passed $10 trillion. That’s 1 quadrillion pennies. How often do you get to measure things in quadrillions? When you include unfunded Social Security, Medicare, Medicaid, etc., the total debt is $59.1 trillion, or $516,348 per household.

We’ve been at a financial DEFCON 2 for a long time. For us to really see blood in the streets, all that has to happen is for the world to say, “You know what, America? We don’t want to lend you any more money.” Then we’ll see how helpless we are at paying our own bills.

Don’t think that the U.S. is invincible. The Holy Roman Empire had a nice run for 1,000 years. How are they doing today?

The day of reckoning is coming. I have no idea if it’s coming soon, or in 10, 20, or 50 years. But it doesn’t matter. The longer we wait, the harder it will be to avoid it. We need to start taking some drastic actions now.

So here are some basic ideas. You won’t like them, but you can’t get a shot without feeling a pinch. No sacrifices and the whole country goes under.

I’m going to take a risk and get slightly political here, but seeing as how I’m an independent, it’s probably relatively OK. (Interestingly, Breanne Potter posted some political statistics about the Myers-Briggs Type Indicator, which predict that I’d be an independent based on my type.)

Social Security

They say that Social Security can’t be saved. Really? Are you sure that cutting benefits by 90% and raising the retirement age to 100 wouldn’t do it?

Social Security was originally meant to provide some extra income in your golden years, not cover all your expenses. People would start collecting benefits at 65 (I assume), and maybe die at 68. They also probably had a pension. (Remember those?)

Now people are living much longer, there are fewer workers per retiree, and people expect Social Security to pay all their bills. And yet, we’ve made basically no changes to the system.

If you want to retire at 65 and live to 95, you need to save up a lot of money to pay for that. Social Security is just your ice cream money, but you’re responsible for the rest.

Let’s start raising the retirement age right now. We don’t even need to cut benefits for current retirees, but at least stop making cost of living adjustments. I know you think you’re entitled, but we’re in a crisis, and we need to do SOMETHING.

Wars

New rule: no more unnecessary wars. Even if a war would cost absolutely no lives and liberate these people and make us allies with those people, it doesn’t matter. We can’t afford it.

We used to be the country that thought Hitler was Europe’s problem. Now we’re the country that wants to send the military whenever someone looks at us wrong. Stop doing that. If there’s a problem, let the UN do something.

The bailout

The bailout might not end up being $700 billion, but there will probably be a bailout of some kind. Bail out who you absolutely must, but let some people go under. Don’t reward recklessness and encourage it to happen again. Go after the bad guys and make them pay. Let people lose their homes if they can’t afford them; it’s their own fault and we can’t afford to save them.

Personal debt

As for individual households, stop racking up so much debt. I recently got a letter saying my credit card limit had been increased to $20,000. If some disaster ever forced me to charge even a tenth of that, I’d cut my power and starve myself until I paid it off.

I know someone who makes considerably less money than me, who just bought a $27,000 car and financed most of it. Meanwhile, the car I paid about $14,000 cash for 6 years ago is holding up just fine. I know being cheap isn’t much fun, but neither is being in debt.

I have a friend of a friend who owes $25,000 on his credit cards, and he has no intention of ever paying it off. His plan is to just keep charging and making the minimum payments until he dies. A good plan, until he maxes out his credit and has to declare bankruptcy.

Stop thinking of debt as normal. The attitude that citizens and politicians can afford anything they can charge is killing this country.

An inspiring story

But I won’t end on such a grim note. Instead, I’ll share this story I heard years ago, which provides some much needed inspiration for these troubling times.

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A young man asked an old rich man how he made his money. The old guy fingered his worsted wool vest and said, “Well, son, it was 1932, the depth of the Great Depression. I was down to my last nickel.

I invested that nickel in an apple. I spent the entire day polishing the apple, and at the end of the day, I sold the apple for ten cents.

The next morning, I invested those ten cents in two apples. I spent the entire day polishing them and sold them at the end of the day for 20 cents.

I continued this system for a month, by the end of which I’d accumulated a fortune of $3.50.

Then my wife’s father died and left us ten million dollars.”

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My last post on how to slowly grow your subscriber count ironically brought in 20 new subscribers that day.

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Michael Martine at Remarkablogger is going to hold a blog traffic teleseminar in a couple of weeks. See that link for details. If you click, it increases my chances of winning something. Again, see that link for details.

I just read the international bestseller The Millionaire Mindset by Gerry Robert. It’s available for free when you sign up for Bob Proctor’s mailing list, but I didn’t actually sign up. You know how you get a confirmation email with a link you have to click on in order to sign up for a mailing list? They gave a link to the ebook in that email, so I didn’t actually have to opt in. That being the case, I guess it’s OK for me to link directly to the ebook and save you the hassle: The Millionaire Mindset.

This is yet another finance book with a picture of a guy pointing at you (page 6), but it’s good. And it’s also an actual book, selling on Amazon from $80.90 used and $122.88 new. Here, let me save you a hundred bucks or so.

Here’s the table of contents:

Chapter 1: MAGIC THINKING: The Key to Success

Chapter 2: HABIT MAGIC: Turning Yourself On to Self-Discipline

Chapter 3: GOALS MAGIC: The Ultimate Tool for Financial Success

Chapter 4: MONEY MAGIC: The Keys to Mastering Your Money

Chapter 5: M.S.I. MAGIC: Multiple Sources of Income-What the Rich Have Always Known About Wealth Creation

Chapter 6: MASTERMIND MAGIC: The Secret Weapon
of Wealth

Chapter 7: TIME MAGIC: Double Your Power and
Personal Effectiveness

Chapter 8: SALES MAGIC: Learn To Sell-The Key to Your Future

Chapter 9: SUCCESSIBILITY THINKING: The 30-Day Success Declaration Plan

Chapter 10: MULTIPLY YOUR BUSINESS: The Ten Realities

This is a full-fledged book at 321 pages, so don’t expect to finish it quickly. It’s filled with lots of good stories, tips, ideas, quotes, and so forth, and he really covers a lot of stuff. In fact, he covers too much; I would have split it up into a few separate books.

As with any finance book, I don’t agree with everything he says. Among his more stupid ideas is to call up the most successful person in your industry and say this:

“Hi, my name is ______. We’ve never met, but I really admire you. The reason I’m calling is I would like to meet briefly with you. I’m trying to hit new levels in my business life and I know I could learn from someone like you. I will only need 37 minutes of your time. When we meet, I will have a list of well-thought out questions. I will take notes and I will act on the advice you give me. Also, I will report back to you all my progress.”

I dare someone to do that!

I was a little thrown off by Chapter 10: Multiply Your Business. It really looks and feels like a completely separate book that was just randomly thrown in. It even comes after the epilogue, so I guess it’s supposed to be a bonus book. It’s about marketing, it’s not as good as the rest, and some of it is really dumb. He says he can teach you how to get a book published in order to differentiate yourself from your competitors. OK, but he says you can write it in 40 hours, or use their copyright-free material, or use ghostwriters. Huh?

Anyway, if you ignore the weird chapter 10, this is a good book, though personally I found it more entertaining than practical.

I really wish people on the covers of finance books would stop pointing at me.

Nevertheless, 4 Steps to Financial Freedom by Sean Toh is a good ebook. It sells for $18.90, but you can get it for free from Saiful’s blog. (Click that link, then click the picture of the ebook at the bottom of the post).

And this ebook really should have been free from the start. It’s good, but it’s not the kind of thing that you’d want to pay $18.90 for considering what’s already available on the internet for free.

Here are Sean’s 4 steps:

1. Get Healthy And Strive For Great Health

2. Adopt An Open Mindset To Learn

3. Invest Your Time In Financial And Health Education

4. Enjoy The Wealth That You Have Created

What I enjoyed most was Sean’s personal story of how he rose from humble beginnings to financial freedom. I love stuff like that.

One warning, though. This ebook is pretty long at 158 pages, and completely unfocused. It jumps all over the place, from bodybuilding to nutrition to mental health to putting together a financial plan to changing your mindset to the different types of income to how to trade stocks online in Singapore, etc. He has a lot of good stuff here, but I would have split it up into several more tightly focused ebooks.

I guess Sean’s breadth of knowledge comes from all the different experiences he’s had. For example, his jobs have included being a waiter, dishwasher, painter, construction worker, promoter, salesman, technician, flight attendant, lighting designer, engineer, personal trainer, educator, competitive bodybuilder, and model. Different experiences make life interesting, and I guess they also make for interesting ebooks, if you can handle the twists and turns.