Hello and Welcome!

My name’s Adrian John Cartwood, but my friends call me AJC.

I’m sorry to have to tell you that you’re a little late … you’ve missed the party!

But not to worry, there’s an even bigger party opening at a new location.

Let me explain …

In 2008 I opened this site as a free online coaching program where I mentored just 7 Millionaires … In Training! over two intensive years. During this time, I showed them how to become as rich as they need to be in order to live the kind of life that they always dreamed of.

I’m uniquely qualified to teach this, because I went from $30k in debt to over $7 million in the bank in just 7 years, and I created this site to prove that anybody can do this without resorting to scams, clever online or MLM marketing tricks, no money down real-estate, or any other shady way of making money.

Yes, anybody can learn how to make $7 million in 7 years. No scams, no schemes, just by following some good, old-fashioned financial advice …

To prove this point, Scott (a young doctor), Ryan, Josh, Debbie (who volunteered to leave the program to help me write a book about their experiences with this experiment), Jeff (the true life Top Gun navy pilot who replaced Debbie), Diane, Mark and Lee (a retired Police Chaplain!) all participated and you can read about their experiences on this site.

Now, I have hugely expanded the program into a new online Guided Learning Experience and finally opened it up to the world!

Well, what are you waiting for?!

Click Here!

]]> https://7m7y.wordpress.com/2009/06/18/were-moving/feed/ 0 Adrian Master of My Domain https://7m7y.wordpress.com/2009/06/11/number-wanted/ https://7m7y.wordpress.com/2009/06/11/number-wanted/#comments Thu, 11 Jun 2009 07:55:35 +0000 http://7m7y.com/?p=2042

Well, as I mentioned before, we actually lifted off before we reached the launch pad …. ooops

But, in personal finance – thus, this ‘grand experiment’ – we’ll actually be doing a lot of back-tracking even as we move forward at great (I hope!) speed …

… in fact, some horses have jumped right out of the gate so fast, we’ve had to gently coax them into slowing down, just a tad

Horses and rocket ships? Now there’s a broken analogy, but it’s all in a good cause, because:

As promised, we are now moving into MM201

For at least a few of the 7 Millionaires … In Training! the past few months has seen a confirmation that their MM101 strategies are sound (but, I don’t know any who shouldn’t have made at least a slight shift in their thinking?), but for others, change is required.

I’m retired at 49 [AJC: and, I intend to stay at this age for my ‘blogging persona’, much like a perpetually 10 y.o. Bart Simpson] … if I had this advice in front of me when I started out (probably in my mid- to late-20’s would have been the right-frame-of-mind time for me), I would be retired before 35 and be living my Life’s Purpose already …

…. it really is just a 7 year project IMHO, give or take a little

Some of the keys that we have learned already are to:

1. Set a solid base (bankroll management, respect for money, delayed gratification) without going over the top (it’s just not necessary to live totally ‘frugally’)

2. Have a very clear understanding of the ‘why’ (your Life’s Purpose), the ‘what’ (your Number), and the ‘when’ (your Date)

3. Select the right ‘how’ i.e the MM201 ‘tool/s’ that are most appropriate for YOU to get YOU there

… the ‘who’ is pretty straightforward: it’s only YOU who can make this happen!

I’m starting a new ‘occasional series’ where we put one of our 7 Millionaires … In Training! – or, any other reader – under the spotlight when there is an interesting or unusual aspect of their journey towards their Number / Date that needs to be discussed.

Josh is the lucky first participant, as a result of some discussion that we have had online (with this post) and via e-mail (that I will summarize below) …

… this is designed as a discussion – Josh and I are looking for YOUR thoughts!

___________________________

I told Josh (via e-mail):

Listen, you’re keeping me up at night … and, believe me, this project isn’t usually what does that! So, here’s my concern:

Professional poker players KNOW that they need to manage their bankroll carefully; this means:

– Not risking more than 15% of their bankroll in any one session
– Breaking up their ‘windfall’ winnings in a similar manner to the 1/3 x 3 method that I outlined for you in that post.

Note: if your income comes from external sources you can ‘fiddle’ this a bit e.g. to make it 50/50 passive v trading or even 1/3 passive and allocate fully 1/3 x 2 to trading. Also, I’m not here to tell you how much of your trading account to risk on one ‘bet’ …. if you want to follow your system for 100% of the trading account in one ‘hit’, go for it.

But, if you DON’T come up with a better bankroll mgt ‘system’ than Bet It All, you will have problems later; look, this is MM101 For Traders and if you don’t make the habits now when you DON’T need them, you definitely won’t have the habits when you DO need them!

So, I’ve got some ‘special homework’ for you, Josh:

1. Buy/Read that Jesse Livermore book (you’ll love it, anyway) … esp. for how high he ‘flew’ and how far he eventually crashed. You have to KNOW this will happen to you one day if you don’t do what’s necessary NOW: http://www.amazon.com/Jesse-Livermore-Worlds-Greatest-Trader/dp/0471023264

2. Come up with a ‘bankroll management system’ that will work for you under all circumstances (i.e. now when Josh = No Commitments and later when Josh = mortgage, school fees, family commitments, etc., etc.) … and, I don’t want to hear “bet it all now so that I have a LOT of money to split up more wisely later” One system for all circumstances!

3. Think about what/how you will deal with the ‘passive investment account’; read this series of posts CAREFULLY:

http://7million7years.com/2008/09/08/if-its-not-passive-its-active/

http://7million7years.com/2008/09/09/how-to-build-a-perpetual-money-machine/

http://7million7years.com/2008/09/12/the-perpetual-money-machine-begins-to-wind-itself-up/

http://7million7years.com/2008/11/06/your-perpetual-money-machine-wont-start/

I’m happy to bounce ideas around, but this is your ‘homework’ …  and, it will help me sleep better if you come up with a GREAT plan – one that you, hopefully, actually intend to keep to

Josh responded with:

[I] hear what your saying, basically discipline myself now, so when I have a lot of money, it won’t be an issue (is this what your saying?).

I agree in theory, and in 95% of practice, but right now it seems foolish to have cash sitting on the sidelines in a sub-par investment when it could be really working, because blue chip or good MLP dividend stocks aren’t going to help me GET to my number, but will help me maintain it. And right now I’m still not there.

This is my plan. Lets assume I have 500,000 now. The minimum I would like to start a hedge fund with is 500,000, but  I would also like to purchase an apartment soon which costs between 750,000-1.2mill, the purchase of the apartment is important because I would like to get married soon (six months). So I’m thinking….

Once I have the apartment = 1.2 mill (worst case) I can start the hedge fund = 500,000 Lets just round up to 2 million dollars.

Once I have the apartment + the 500,000, I can understand dividing the cash into separate investment strategies to minimize risk at that point because there’s nothing to rush for, since I’m basically retired at that point anyway.

Also I plan to break the 20% rule, and own my house free and clear. This stems back to basic biblical principles of the borrower being servant to the lender. Let me know your thoughts

BTW: Josh also says that his “closing value of assets under management for today is $477,000”, which is quite a sum for a young man …… to build from and protect

____________

Josh and I would love to hear your thoughts

Photo credit: Maggie’s World

This is the last of our transition posts!

IMHO – where H = humble as well as honest – it starts to get VERY exciting / challenging – interspersed with long periods of boredom – from here …

…. so, let’s make this a last-but-best post: Mark knows his path (i.e. real-estate and small businesses). How do we help him on his way? C’mon, be creative!

___________________

Onward! That reminds me of my former co-worker. He is a happy go lucky guy who is very smart and he is currently in his 3rd or 4th retirement now.  How that works? Work really hard a few years, save some and spend carefully, hit a jackpot with a start up and retire temporarily. I might adopt some hybrid approach in the near future, hopefully. Too much of either one; work or retirement, is not healthy.

We have just concluded a bunch of MM101 exercises. Most of them are really helpful; I’m particularly fond of the 20% Rule and the 25% Income Rule. Maybe because I like numbers and I got an elephant stamp out of that exercise with my old home. I do need to rework it for my new home. Nevertheless, the other MM101 exercises are equally important.  It is MM101 principles that got me here at this point.

Like a few of the 7 millionaires in training, I started some MM201 activities like converting my old home into a rental property and making attempts to launch a mall business. The rental is not cash flowing a whole lot and I’ve made some significant improvements on the property. The way I look it is the experience that I’ll gain from this activity. It will help me in my future real estate acquisitions too.

Let’s review my original number and date here. It is $5 million in 10 years and the required compound growth rate is about 40%.  I should be looking at:

Real-Estate together with Stocks and Small Businesses

So far, I’ve started on a small rental. I’ll be launching a small business soon investing in Tax Liens and that will bring in more real estate exposure. I did hire an accountant to help me draft out a business development plan and I’m happy with the outcome. The next steps are flawless execution according to the plan. How do I do so far? I must say, I’m not moving forward enough! My current obstacles are my home, assembling furniture and furnishing the new home;  and a very busy social calendar – trips, concerts, parties. It is time to make a choice. I can still do it all but there will be some sacrifices.

Isn’t there a song that goes: “you picked a fine time to tell us, Lee ….“?

But, it’s never too late, especially not for Lee … and, I’m sure that there are some great ideas out there … so, let’s get them ‘out there’ and help Lee!

________________

Now is a heck of a time to share this revelation but I’m afraid of heights, so much so that if there was a social network for ladders you would find me at the bottom.  This journey Making Money 101 so far has been a great learning and relearning experience causing me to admit some great failures in my past.  But I have learned that like in the Bible not all failures are “unto death” they just feel like it. So my learning has been that in order for me to make my number of $4,000,000 by 20019 I need to do some house cleaning, house building and house hunting.  My biggest failure and yes my greatest need at this point is to establish some savings so I will have something to work with when I launch out into Making Money 201.

Debt retirement is not really a problem for I have no debt except my home ,vehicles and student loans. The vehicles will be paid off in less than a year.  Sensible Savings for me would be any savings which is better than I have had in the past.  I have established an ING account and am having some automatic withdrawals placed in it, so that’s a start.

Cleaning up my spending style has been a real challenge and 10-1-1-1 exercise and recording my spending opened my eyes pretty quick.  So guess what I have a little bit more money now because I’ve adjusted my spending but I’m still a long way from where I want to be.

I calculated my required Annual Compound Growth Rate and it came up 131.88%. Oh great now I really concerned.  It’s kinda like being sized for a space suit only to find out you have to have oxygen also.

As I stand on the launch pad I am keenly aware that I need some active income, I would like to do some investing and am trying to figure out how to begin. Sensible Investment keeps coming to mind.

Small Business perhaps online type is where I would really like to go and something that my son and I could join together is my preference.  The issue is a product.

Bottom line,  what is holding me back? Two things (1). Lack of funds to invest in any effort and (2). Fear of heights.

On a personal note: Please forgive my tardiness with this post, that’s what happens when you stand at the bottom of a really tall ladder and refuse to look up.

When I actually begin to climb I just hope I don’t have to look down.

Jeff has made great progress, but he’s still at the stage where adding a single rental foreclosure can increase his Net Worth by 67%; over the next 18 months he will probably need to maintain that growth rate … another $400k in equity over the next 18 months should do it, then $800k after that. Easy, huh?!

If not, where to from here for Jeff? Any suggestions?

______________

MM101 is my comfort zone. I was pretty successful in the 101 zone before I made acquaintances with Adrian. With his ideas (I like to call them “the rules”) added to my current bag of tricks, I expect to have continued success in this realm with a better understanding of the mechanics of MM101.

When I started this experiment I concluded that my number was 10 million in 10 years (by Jan 2019).

At that point my net worth was $383K and I needed a 38% annual compound growth rate to make it to 10 big ones in 10 years. To achieve that growth I’ve been planning to make use of stocks, real estate and business ownership. That should cause me to overshoot my goal (hopefully).

Since determining my number, I have made some positive progression.

The foreclosure home I purchased in February has given my net worth a nice shot in the arm. As of May 2009, I’m sitting at $642K and have surpassed my minimum required growth for this year.

Comparing the $642K with the $383K tells me I’ve had a 67% increase since December. That amounts to 1.75 years of progress toward my number. Almost two years worth of work in six months is fine by me.

At that start of this experiment, I needed to see better than 3.16% growth each month to stay on track. I’ve been hitting monthly numbers in the 4, 5, and 6%’s for the last several. A reassessment of my required growth rate tells me (assuming I’m doing the math correctly) that from this point forward I need to continue to compound at approximately 29% annually (or 2.44% monthly).

Now all I need to do is hook up to Josh’s rocket and I’ll be done by next week.

A 29% growth rate probably means I need to reassess whether to start a business or not. If memory serves me correctly (I couldn’t find Adrian’s post on the topic to confirm), 29% now puts me in a category that can be achieved by stocks and real estate alone, without the need for a separate business. This could minimize some of my risk exposure and require less of my personal time to accomplish.

This bothers me a bit, because I have been pretty excited about “making it big” on my own in an aviation related business. But if you don’t have to, it begins to beg the question, “why should you?” And it makes me think that I really need to have my business ideas clear and my personal reasons for moving forward on this one clear. My military commitment means that I have a good three years or so to think this one through, because I don’t have the luxury of chucking my day job in order to pursue a wild business dream.

Since unbridled pursuit of a business is not possible (nor really necessary) for the time being I’ll be focusing mostly on stocks and real estate for my growth engine.

Speaking of real estate, I’ve got another room I need to paint….

Josh’s strategy has been clear from the start – and, with a slight ‘jump’ in Net Worth recently, due to a positive outcome on a trade (a.k.a. bet) and a stake in a pharmaceutical company, he should soon have the capital to do what he wants to do: start a hedge fund of his own. Anybody ready to throw their money in the ring, yet (7MITs aside, due to the 7 Golden Rules)? If so, why? If not, why not?

_______________________

At this point in our journey, it seems appropriate to graduate from the foundational principles of Money Making 101 and to immediately enroll in Money Making 201 activities. Similar to sequential classes in school, 201 principles are well rooted in 101 principles, so a strong foundation in Money Making 101 is imperative.

The most important principle I’ve taken away from Money Making 101 is to keep my finances as simple as possible. I’ve determined to use only one credit card, and only for purchases related to my automobile, such as gas, parts and service (I just can’t pass up the 5% cash rebate). All other purchases are to be made with cash or debit card. Another financial amendment starting in June will be automatic deductions from my checking to my brokerage account, this will be the second most important deduction after my tithe.

Speaking of tithing, I experienced a slight increase in my net worth this past month, it currently stands at approximately $450,000.  Obviously this has caused my required compounding growth rate to decrease, but after  exploring the housing options in Westchester County recently, I’ve increased my number to slightly under 9 Mil, leaving my required compounding growth rate around 53% (I guess this is an improvement from 170% not too long ago).  My date remains unchanged at 6 years, 6 months from now.

To achieve 50+% compounded annual growth, I plan to start a hedge fund, possibly within the next year. Once the fund is established, I will consider myself partially retired because trading doesn’t demand much of anything I wouldn’t or couldn’t do if I didn’t have to work at all. As long as I have a computer, internet connection and phone, I could trade from anywhere, and frankly, the strategy I use doesn’t demand much research time. The assets I’m invested in currently have very little risk while potential future increase is large. I expect the managing executives of the company Titan Pharmaceuticals (the company I own a small stake in) to do as they recently described as “maximize the value of our current assets… for our shareholders while minimizing expenses”. The only viable option I see is for the company to be sold to the highest bidder and when the avenue for egress has been offered, I will sell my shares and start the hedge fund.

If Scott achieves the same compound growth rate over just the next 12 months that he says that he has achieved over the past four years, he’ll reach his Number in less than a year and be almost twice as rich as Warren Buffett in just 4 more years! That’s the power of compounding …. of course, you need to fuel up the tanks with rocket fuel to reach those heights so the same tools that worked before (saving, saving, saving … with some high income thrown in for good measure) have a limit that is quickly reached … in other words, Scott’s annual compound growth rate will start to slow down (in fact, it’s already a ‘paltry’ 67%), unless he adds something with a lot more octane to the mix.

In fact, Scott is already building up his “‘war chest’ to use for business startups, purchasing stocks and real estate” … any suggestions?

____________________

Well, here’s another brief review of my journey to financial freedom so far.  I’ve gotten a lot out of Money Making 101, or more specifically, the exercises have driven home valuable lessons that I learned before becoming one of the 7 MIT from reading books by various famous finance authors, taking seminars on finance and wealth building, as well as the personal punishment that I usually put on myself to be financially responsible, lol.

I don’t think there’s anything that I need to change, everything is moving along as I had planned for it to. We have no consumer debt, no car payments, no personal loans. The biggest sin on our list financially is my student loan, which is fixed at 2.85%, so for obvious reasons, we are simply making the normal minimal payments on that loan, so we can maximize our required annual compound growth rate. We have actually been saving 50% of our take home, net income.

Our number is still pretty much the same, 4 million in 10 years(of which there are 9 years left!) and our required annual compound growth rate is 40% which can be met with a combination of small businesses, real estate and some stocks. I calculated that when we actually started 4 years ago, we had a net worth of NEGATIVE -$225,000.00 and today our networth should reach $200,000.00 by next month(or pretty darn close) which means that over the last 4 years, we have had a growth rate of over 2450%. Now of course it may not necessarily keep up that kind of pace (but who knows!).

Looking at the last 12 months, we have grown 66.67%, so it looks like we are moving in the right direction and with some of the Money Making 201 plans that I have, we will reach our number far sooner than our originally planned date in 2018, or overshoot our number by a good margin. The main goal this year for us is to stock pile as much cash in our ‘war chest’ as possible to use for business startups, purchasing stocks and real estate.

We have saved over 40k in cash so far this year so our current strategy is to fund an emergency fund of around 15k into the rental property savings account to be used as a buffer against any damages or any vacancies as Adrian stated to do. Then leave around 15k in our own personal ’emergency fund’ to be left alone for any damages or emergency on our own home front. This leaves 10k in our ‘war chest’ that will now be built upon month after month and used for Money Making 201 purposes. We should have between 60k-80k in that chest by the end of the year to use  for this purpose.

Right now i’m so torn on which move to make first with this investment money. Do I take advantage of some amazing and almost unheard of growth potential that the stock market can provide as it begins it’s upswing? Do I purchase the building that my practice resides in first, effectively cutting out paying rent and paying it to myself instead?!?(also enjoying the possibility of real estate growth that a COMMERCIAL property can provide under the right conditions) AND collecting rent from the business next door in the same building. Or do I use this money to open up another practice, spend the next year overseeing it develop, begin to make overhead and then cashflow sometime the following year, adding not only a large increase to our networth due to the value of the business once it’s developed, but this extra monthly cashflow which can be used to fuel other investments.

Or do I divide the efforts into all 3??(Sounds like the badword: DIVERSIFICATION, so perhaps I should focus instead   )

Any advice or help would be greatly appreciated!