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Advanced Money Skills

By Frederick Mann


(If you're wondering why there's a gap in the numbers between the last Basic Money Skills and the first Advanced Money Skill, it's to leave room to add more Basic Money Skills.)

In July 2000 I came up with the term "Financial Success Divide" and had discussions on various email lists with the idea of starting a course called "How to Cross the Financial Success Divide." I offered to pay people $25 in e-gold for useful suggestions. Some of the suggestions I received were so good that I paid more than $25 for them. In all, I paid out about $300 worth of e-gold. This report is based largely on edited versions of the responses I received.

First, a list of Advanced Money Skills. Then a description of each.

[More coming soon... ]

Money Skill #100: The Threshold Principle

Program X's Lesson #5 is about the THRESHOLD Principle. They tell the story of two frogs who need to escape from a basement by jumping up a series of steps. Each step is 12" high. The one frog easily jumps 12" so he escapes with his life.

The second frog can only jump 11". So he can't jump up the steps. He can't cross the 12" threshold. So he pays with his life.

The first point is that in some activities, in order to succeed, you need to cross a threshold. If you cross the threshold, you succeed. If you don't cross the threshold, you fail.

The second point is that the difference between failure and success is often very small. In the frog story it's "A little can be a lot!" can mean the difference between life and death!

It may require persistence and determination to cross the threshold to success -- see Money Skill #45: Persistence and determination.

Excerpt from WBM#52: Jumping Over Barriers and Thresholds:

About 20 years ago, I was living in London, England and "working" as a professional blackjack player. Several times my bankroll went up to about £2,000, I started losing. This happened several times. It was as if £2,000 was some kind of "invisible ceiling" I couldn't rise through. It took several months before I could "break through the £2,000 barrier.

Some years later in Las Vegas, Nevada, I experienced a similar threshold at $50,000.

It's almost as if psychologically you only allow yourself to win so much. You don't "deserve" any more than that. So you unconsciously sabotage yourself and your efforts so you can't rise beyond some threshold.

Maybe this phenomenon also applies to many people trying to make money on the internet.

The first barrier or threshold is of course to raise your earnings above zero. For some this is a tough nut to crack. Some people have psychological barriers to earning any money whatsoever on the internet. Whatever they attempt, fails. Or, if they earn a little money with one program, they lose more on the next.

Some people spend an enormous amount of time, trying to sell products and/or recruit downlines. If they operate inefficiently or ineffectively, their earnings per hour spent may be dismal. It's possible that some people have psychological thresholds along the lines, "I deserve only so much per hour and no more."

See also Money Skill #46: Overcoming Helplessness.

Money Skill #101: Apply superior money formulas

This is the single most important and most advanced money skill of all.

Please review Money Skill #23: Apply appropriate formulas.

Why is Bill Gates so wealthy? Discover some of the superior money formulas he applies by reading books by and/or about him: The Road Ahead, Business at the Speed of Thought: Using a Digital Nervous System, The Wealthy 100: From Benjamin Franklin to Bill Gates - A Ranking of the Richest Americans, Past and Present, Business the Bill Gates Way: 10 Secrets of the World's Richest Business Leader, How to Become As Rich As Bill Gates, etc.

How about Warren Buffet? And George Soros?

Gates, Buffet, and Soros are billionaires because they apply superior money formulas. Even if some of them started off with lots of money, they are where they now find themselves as a direct result of the superior money formulas they've been applying.

You and I may not be in the same league, and may not be interested in playing in that league. You may argue that Mahatma Gandhi moved mountains while maintaining his vow of poverty... but one of his fund raisers once remarked that it takes a lot of money to keep Gandhi in poverty! Personally, I'm also not particularly interested in operating in the "big league," but I wouldn't mind having 10 - 100 million to play with!

If you don't have all the money you need and want, it's because you've been applying inferior money formulas. Your parents didn't pass any or much money-expertise on to you. You learned little or no money-expertise in school.

In contrast, the chances are that Gates, Buffet, and Soros learned important money skills early in life and also know how to further improve their money skills.

It's very important to realize that in many kinds of businesses there are people with superior money formulas who can generate from substantial to huge returns for their investors. This certainly applies to Gates, Buffet, and Soros. It also applies to the area of High-Yield Investment Programs (HYIPs) -- and I'm not talking about any crude "double-your-money-in-a-week" scams. Buffet ("High-Yield Capital Gain Program" operator) and Soros (HYIP operator) are not alone in their ability to generate substantial or huge returns trading domestic and international markets. There are other highly-successful sophisticated traders. Some use advanced computer systems that apply superior trading formulas. Some have "inside knowledge" and "special contacts" they utilize to improve their performance.

Unfortunately, most people never learn any superior money formulas. The reasons for this are not mysterious. Among the most useful responses I received about "How to Cross the Financial Success Divide" were from Richard Sauder. He suggested several alternative names for my planned course, including "Twenty Short Steps to Great Riches." He wrote:

"When I was 19 years old my father died from cancer. Near the end he fell into a semi-comatose, delirious state and kept muttering and shouting, "Dollar! Dollar! DOLLAR! Dollar! Dollar!" He repeated this word, and only this one word, hundreds, perhaps thousands of times. Shortly before he died he regained his ability to converse and explained that he was trying to tell my brothers and me that if he could "make a living," then so could we. Within a day or two after that he died. He left no money to my brothers and me. He also left us little or no practical advice on how to "make a living," beyond the cultural expectation of going to work for a corporation every day. In fact, a couple of weeks before he died, he gathered my brothers and me to his bedside to tell us that it seemed to him as if he should provide us some advice on life, but that he found he had none to give us. Within weeks he was gone, with his words still ringing in my ears.

My father was not a bad man -- on the contrary, he was a good man in many ways. However, he left his sons no financial inheritance and precious little practical financial advice.

Here are some of the important lessons I draw from this episode:

(1) You can only teach what you know; you can only pass on what you have.

(2) Many of the wealthiest families pass their wealth from generation to generation. Jewish people are well known for their bar-mitzvahs and bat-mitzvahs, where they initiate their children into adulthood. My understanding is that these ceremonies begin a years-long process where the entire adult lore is passed on to the upcoming generation, including the practical knowledge of how to get, increase and retain wealth. Somehow, those of us with children must accumulate and master a body of knowledge and wealth to pass on to our children, in both word and deed. We need to teach them and show them what we have learned, and pass on to them what we can, or what is appropriate, depending on the child's character, of course. My father and mother failed to do this with me. To be fair to them, they didn't know how to do it themselves, because their parents never did it with them. This pattern of ignorance and dysfunctionality stretches back and back and back.

(3) I once took a psychology course where the professor made a point of saying that humans learn 90% of their behaviors by modeling what they see other people do. This underscores why it is crucial for parents to master and embody a solid core of financial success principles [formulas], so their children absorb their practical lessons simply by being around and observing what the parents do, and how they handle their affairs. In this way, they will be primed for financial success, almost instinctively, just by being part of a successful, wealth-oriented household. They will naturally take up a successful, profitable outlook on personal finance, because they will see it modeled in action, from childhood on through adolescence and early adulthood. Ordinary life will be an apprenticeship in personal success.

(4) The final point I draw from my father's example to his sons is his emphasis on "making a living," i.e., on "making" money. I begin by observing that I think money essentially has a neutral valence. It has potential energy to indirectly do work, to represent value in a commercial exchange, etc. From my individual viewpoint, therefore, I do not think money has to be "made," only exchanged. From my individual standpoint, vast amounts of money already exist, therefore it does not need to be made (by me). Since it is obtained in exchange for something else, such as time, or value, or effort, or knowledge, money needs to be, shall I say, "attracted" into my immediate sphere of influence, where I can readily access it and make use of it. The emphasis might more profitably be on "attracting" money, rather than on "making" money. It is a simple point, but one that has extensive ramifications, nonetheless."

Money Skill #102: Become a deep thinker

Please review Money Skill #2: Improve your thinking.

You can be pretty sure that Gates, Buffet, and Soros are deep thinkers, at least in the domains of their specialties. They are almost certainly capable of observing their own thought processes and improving them. This is called metathinking. See Metathinking Explained.

A very important deep-thinking skill is the ability to go to the root of things.

"There are a thousand hacking at the branches of evil to one who is striking at the root." -- Henry D. Thoreau

See How to Disagree and Question Everything.

See also Deep Thinker Network.

After I make a significant mistake, I examine and analyze my thought processes that led up to the mistake. From this I attempt to learn and improve. I also look for some deep behavior pattern or habit that may have caused or contributed to the mistake. I look for common denominators between this mistake and earlier similar mistakes I've made.

Similarly, after a significant success, I examine and analyze my thought processes that led up to the success. What did I do right and why? How can I build on this success?

These are characteristics of deep thinking.

Money Skill #103: Learn superior money formulas from others -- or develop them yourself

In my own case, my father once "played money" with me, showing me how to add and subtract money and exchange money for goods. It took about 15 minutes. Apart from that, I learned no money-expertise from my parents, or at school. Had I been more precocious, I would have carefully observed my parents' relationships with money, observed how they handled it... and learned to not make the same mistakes!

If you're not as wealthy as you'd like to be, then the first step is probably to suspect that you might have more to learn than you thought. Suppose we formulate a "unit of money-expertise" called the "gate" and to operate at the level of Bill Gates, you need to master 100 gates of money-expertise. So how many gates have you mastered?

Suppose you've learned how to pay for things you buy, count your change to see that it's correct, work at a job for a paycheck, bank the checks, withdraw money, write checks, pay bills, balance your checkbook, use a credit card, buy and sell stocks, file a tax return, etc. In other words, the things about money practically everyone knows. How many gates would you say your money-knowledge represents? Let me warn you that there's a common human illusion of thinking that you know more than you really do. I would estimate this basic money-knowledge at maybe one gate. But what if it's really a small fraction of a gate?

In any case, once you realize how little you really know, you can open the door to learning...

Personally, with all I've read, experienced, thought, and written about money, I've mastered maybe 3 - 4 gates! That should be enough to make millions!

The key to developing your own superior money formulas is study the successful money formulas of others, coupled with the realization that anything can be improved -- indefinitely!

Money Skill #104: Overcome two common illusions -- overestimating your knowledge and being overconfident

I've already indicated the common human illusion of thinking that you know more than you really do. A second common human illusion practically always accompanies it -- the less you know, the more confident you are likely to be about your "knowledge!" (See #TL04A: Unreality Imperative: The Most Basic Human Problem.)

Some time ago, I came across a money-making program called "Gold Capsule" (GC). It had by far the best website of any similar program that I'd ever come across. It was so sophisticated that you didn't even have to request a payment from the company; you could pay yourself via e-gold. They also had superb customer service. They had a sixty-day holding period on investments, but you could withdraw earned referral fees at any time with a few key strokes and clicks.

My reasoning went like this: The company invested about 5 - 10 times the effort into their website compared to similar programs. In addition, they must have set up a physical office to manage the business and provide excellent customer service. From the outset, I thought it might be a scam. My past experience has been that such programs, if scams, keep going for at least six months, and sometimes longer than a year. I figured that because of all they'd invested in the business, the principals would keep it going for at least six months. So even if it turned out to be a scam, I would be able to earn at least several thousand. And if it were not a scam, I would be able to earn a great deal more. (In an earlier similar program called Stockgeneration -- far less sophisticated than GC -- I earned over $90,000 before it became evident that it was a scam and it collapsed!)

Of course, I knew and understood far less about GC than I thought (illusion #1). I was also very confident about my "knowledge" and "understanding" (illusion #2). So I immediately put 4K into GC. Because I felt so confident about it, I also promoted it heavily.

Many people joined and I started earning referral fees. Every time they amounted to about 1K, I paid myself. About three weeks after I joined, they made a special offer of a 10% bonus on deposits. I saw this as a warning signal (see Money Skill #30: Signal detection), was somewhat disappointed, and downgraded GC according to my Rating System. Nevertheless, I was still so confident (illusion #2) that I deposited another 2.5K to take advantage of the 10% bonus. Meanwhile I continued paying myself whenever my referral fees amounted to 1K. Then GC came out with a bombshell -- a 30% "Christmas bonus" on deposits! My confidence disappeared and I downgraded GC further. Now I paid myself whenever my referral fees got up to $300. When GC disappeared I had taken out about 7.2K. So I made a "profit" of about $700. However, practically all those I promoted to lost all the money they put into GC -- nearly 50K. Because much of my earnings depend on those I promote to making profits, my loss in future earnings will be far greater than the measly $700.

Beware of overestimating your knowledge (illusion #1) combined with overconfidence in your "knowledge" (illusion #2). It can be an expensive combination! It can also be deadly. Heard of the Titanic? "Everybody" knew it was unsinkable... and they were very confident about that "knowledge."

In retrospect, it's obvious that GC was a sophisticated version of "The Big Store" classic sting described in the book 'The Big Con: The Story of the Confidence Man' by David W. Maurer and used in the movie 'The Sting' starring Robert Redford and Paul Newman. See Money Skill #107: Learn from the psychology of scamming for a review.

I must emphasize that not all HYIPs are scams*. Among those presented to the public, the vast majority are scams from the outset. Some start out honest, but somewhere down the line the principals become dishonest and their program becomes a scam. Some are honest but fail because of bad management and/or government interference. Some are honest and successful for a while, then run into problems and delay their payments, but eventually recover and continue for many years. Some remain honest and reliable for many years; at a certain point they close their doors to new members and their members are forbidden to even mention the program name to any non-member. I have the good fortune of earning good money from some of these. Secret Program #1 is an example.

In contrast to GC, it's interesting to examine Westside Holdings (WH) (yielding about 33% per month). They launched in September 2000. About 3 - 4 months after that I started receiving reports that they were making all payments as promised. When I originally looked at the WH website, I couldn't see it being anything other than a "scam that would soon collapse." After another 8 months of receiving reports of all payments being made as promised, I finally joined. After 3 months I took out my original capital. The earnings on my remaining balance is large enough to enable me to take out more than my original capital every month!

[* Note from DTF: I must emphasize that all "HYIPs" are scams! Of course WH was obviously a scam too - it just hadn't disappeared before FM published this article!]

Money Skill #105: Acquire a winning edge

Gates, Buffet, and Soros have knowledge, skills, and expertise, and they apply superior money formulas that give them a winning edge in the "money games" they play. Simply stated, they know and do things that make them win. See WBM#7: The Winning Edge.

When you buy a share on the stock market, buy a lottery ticket, place money in an HYIP, invest in a new business, etc., you are essentially making a bet with the hope or expectation that you're going to get back more money than you risk. In casino games the house has a built-in advantage. In blackjack you may be able to gain an advantage over the house by counting cards; in craps by exerting a degree of control over the dice. If you don't know something, do something, or learn some relevant skills, chances are that you'll lose.

With the stock market, it may appear that you have a winning edge because, in the long run, it keeps going up. But what happens if your investment happens to be in Enron or something similar? What happens if there's a huge collapse and it takes 10 - 20 years for the market to recover back to the point where you bought? What happens if the US$ collapses to zero? (See Inflation Report -- includes a chart showing declining purchasing power of the US$.)

"Money games" can be classified as "zero-sum" (a fixed "pot" everyone plays with), "positive-sum" (the overall "pot" is growing), and "negative-sum" (the "pot" is getting smaller). If you play poker in a casino, where the house takes a percentage (say, 2%) of each pot, you're essentially playing in a negative-sum game. Roughly speaking, in order to win, you need to be on average more than 2% better than your opponents.

Whatever money game you play, it's vital that you gain a winning edge. The more you understand the game itself, the better. On top of that, you need to do something "special" (like apply a superior money formula -- Money Skill #101: Apply superior money formulas) that gives you a winning edge.

Money Skill #106: Recognize the good and the bad

Almost certainly, Gates, Buffet, and Soros are all very good at recognizing both the good and the bad in situation. Most likely, it's part of their superior money formulas. I would be extremely surprised if Buffet invested in Enron!

For more on this skill, see #TL15A: The Good and the Bad.

In the case of Gold Capsule (GC), there were three subtle yet very important hints in their website pointing to the "bad":
(1) There was nothing in their rules preventing you from opening one account with a minimal amount and then to "sponsor yourself" with another account where you put the "real money," so you earn the referral fee yourself.
(2) They offered a free bonus of 10 "gold capsules" (worth $29 when I joined) just for opening an account. There was nothing in their rules preventing you from opening dozens of accounts, earning a free bonus of $29 for each.
(3) The rules were such that with two accounts (one sponsoring the other), once the 60-day holding period had expired, you could withdraw, say $1,000, paying yourself in e-gold. You could then deposit $1,000 in Evocash in the sponsored account, earning $150 referral fee for the sponsoring account, which you could immediately withdraw in the form of e-gold. In other words, the system and its rules would enable you to convert $1,000 Evocash into $1,150 in e-gold, costing GC $150. The "cost" to the member of doing this would be that the $1,000 is converted from withdrawable to subject to 60-days holding.

When I originally studied the website, I noticed these weaknesses. But I was so impressed with GC's "phenomenal good" that I denied to myself the importance of the "little bad." Given that GC had been so meticulous in developing by far the best website I've ever seen for such a program, why did they have such weaknesses in their system? Answer: They didn't care because they didn't intend to stick around long enough to have to pay for the weaknesses. (It was soon after GC disappeared that I started writing #TL15A: The Good and the Bad.)

Such signal detection (see Money Skill #30: Signal detection) is vital to improving your winning edge -- Money Skill #105: Acquire a winning edge.

Money Skill #107: Learn from the psychology of scamming

The term "con man" is short for "confidence man." One of the secrets of success of the scammer is that he persuades his victims to trust him and have confidence in him. He also appeals to their greed. He may have accomplices who help him set up and operate a "big store." They may stage some preliminary events to provide "proof" of the legitimacy of their operation.

The important question: Is it possible to apply the psychology of scamming to earn money in honest ways?

From the

The Big Con: A Lost and Found Criminal Classic
by Monica Drake

THE BIG CON by David Maurer should be required reading, at least for stubbornly naive people like me who believe they can spot a criminal, trust the average person, or through honest work afford an Armani suit. Written by an academic in the late 1930s, The Big Con covers psychology overlooked in most psychology courses, and the sociology left out of Sociology. It offers a model for looking at film and literature that raises essential questions about motivation, desire as weakness, and exactly how character becomes destiny.

The Big Con was published in 1940, reappeared in 1968 as the basis of the film The Sting, was recently reprinted in its original form, and remains entirely relevant by describing a slew of confidence games still in play today. As the author proves, the con doesn't need to change his methods, because there's always a new "mark" to take the bait.

Once I started reading Maurer's book, I couldn't pick up a newspaper without finding evidence of swindles. A recent New York Times headline asked "Was He Wiser Than the Wise Guys?" The story was about a young "financial entrepreneur," Mohammed Ali Khan, who raised over $3 million with a phony brokerage firm by convincing K-mart and Forbes -- as well as members of the Gambino family (infamous in their own right) -- to trust his investments while he gambled with penny stocks. Ironically, Thomas Gambino, currently imprisoned for racketeering, filed a lawsuit against Khan based on charges of "violation of trust."

The New York Times devoted two full pages to describing the alleged swindler's charming good looks, smooth tongue, falsified and inconsistent background, luxurious parties, and tailored clothes. If The Big Con were read widely, the reporter could've just said, "Standard routine, stock props."

All of this, including the con man's ambition of drawing in older and more experienced cons, is covered in the book. According to the newspaper article, the Gambinos were persuaded to participate in the brokerage by a friend of Khan's, "a lovely old Italian gentleman, a retired vaudeville performer who lived in Hoboken." It's hard to imagine a more 1940s character description, here employed to appeal to old-time mobsters.

Clearly -- judging by the tenets of The Big Con -- this lovely old gentleman would be a "roper," or an "outside man," receiving a percentage for posing as a disinterested party!

The Big Con was written by a linguist, and the author's love of language is apparent in passages that sink into long quotes of 1930s grifter-speak, with confidence men revealing their trade. One grifter known as the Postal Kid explains getting into the business: "You go out looking for a mark you can trim. You take the chances and the gamblers take the dough... they are very nice to you when you are flush, but when you are chick, boy they give you the chill. They think you might put the bite on, and gamesters don't like to associate with grifters who are chicane. So you go out for another mark...."

This is the language that's drawn readership and praise from James Ellroy, and I suspect influenced David Mamet, among others. Mamet's written several movies (such as House of Games) based directly on confidence games, employing a similarly stilted and theatrical language, with a lack of contractions.

Maurer has a fondness for con men, an admiration of their skill and nostalgia for the old days, before squad cars, when a foot chase through town could afford a small-time con a quick escape. In the final chapter, Maurer raises speculative questions about the future of the big-time confidence games, and bemoans the federal government's "booming campaign of propaganda designed to rob the criminal of the sympathetic public opinion he has for so long enjoyed." This "sympathetic opinion" stems from the idea that cons are non-violent, and that only those with "larceny in their veins" who are hoping to get the inside deal on a sure thing will fall prey to confidence games. The con man's motto is "you can't cheat an honest man."

Armed with one's own honesty and the information obtained from this book, readers can feel flush with inside knowledge and be certain not to become a mark themselves. Of course, the rub is -- as with the Gambinos -- that those who consider themselves the most informed can often fall the hardest in con games, those "carefully rehearsed plays in which every member of the cast except the mark knows his part perfectly."

(I wonder if Monica Drake is capable of recognizing that "government" (so-called) is a big con? See #TL07B: The Nature of Government.)

For another review of 'The Big Con,' see

See also NEOCHEATING the Rising Menace by Frank R. Wallace, Mark Hamilton and William S.

Money Skill #108: Attract money

If you have a significant winning edge in any "money game," some people are likely to notice. (Several people in Las Vegas have noticed me doing well at craps and asked me to teach them. I always decline politely with something like, "Sorry, just like everyone I have my good and bad streaks. This looks like a lucky streak. I hope it lasts.") If people think you have a winning edge at some "money game," it's easy for you to attract money -- as it is for Gates, Buffet, and Soros -- but not necessarily to the same extent! Very few enjoy the kinds of winning edges Gates, Buffet, and Soros have.

Above, Richard Sauder refers to "attracting money." (You may want to do a search for "how to attract money" or just "attract money.") Richard also wrote to me:

"(1) I have a friend who is comfortably retired. She has a playful attitude towards life. A few years ago, she had the idea to pass out $20 bills on the sidewalk to people -- for free! She just stood there and tried to hand them out. Amazingly, many people refused to accept a free $20 bill, with no strings attached. They just would not accept free money. Period. She was astonished and marveled at people's reactions.

This demonstrates an important point: for whatever reason, even when an absolutely free gift falls from the sky into their hands, many people will refuse it! I believe this emotional dynamic is deeply embedded in millions of people. Many people will have to overcome deep disbelief that something good can happen to them. Many of us need to learn to simply accept good fortune when it crosses our path -- and just put it in our pocket right away, thank you!

(2) In chemistry, there are two broad classes of reactions: endothermic and exothermic reactions. Chemical reactions either radiate heat (exothermic), or they absorb heat (endothermic). Many chemical reactions require an input of heat to initiate -- using a match to light a fire is a familiar example. The wood is there, the oxygen in the air is there, but without applying an external source of heat the chemical reaction (fire) does not start. It often happens that after a chemical reaction has begun it requires a smaller input of energy to continue than it did to initiate. In other words, there is a threshold effect -- once the threshold is crossed, the reaction becomes easier to sustain, in terms of its energy requirements. In the case of the fire, it is endothermic in the beginning (absorbing heat from the match), but becomes greatly exothermic once it catches and starts to blaze.

I believe there is a parallel here to the situation that many people who will read your course find themselves in. In a sense their lives are like the dry, unlit wood in a fire place (endothermic, a black hole for money). The financial prosperity and freedom technology resources you provide are analogous to oxygen (also endothermic, but that when combined with the dry wood of people's lives, can potentially stimulate a run away, exothermic "freedom" reaction that is contagious like a wild fire). Combine the two, and their interaction can result in a blazing fire, that is to say, a more highly energized, and prosperous financial condition with the potential to transform many aspects of their lives. Once begun, once a body of information and techniques have been mastered to a certain extent, the process will continue and deepen, with less of an ongoing expenditure of effort and time, than was necessary at the beginning, to get the process rolling.

But in order to reach this higher energy level, in order to cross the threshold to financial prosperity, there has to be a spark. There must be an energy source to initiate an ongoing, sustained reaction between the people and the prosperity techniques and freedom mentality that are espoused at Build Freedom. This spark has at least two dimensions that I can see, an inner and an outer one:
(a) On the inner dimension, it absolutely must comprise the individual's own volition, desire to succeed and will to progress and overcome. These are interior, spiritual qualities. If you have them, or can develop them, they will greatly contribute to the likelihood of success.
(b) On the outer dimension there must be some money from somewhere to jump start the process. There are myriad ways to get the money, some easy, some hard, some quick, some slow. But in order to really make the break from being a wage slave (or worse) to being financially prosperous most people will need at least a few thousand dollars of seed money, maybe more, to "prime the pump", to invest in places where within a few months or a few years, at most, they can begin to reap dividends that release them from wage slavery.

Acquiring this "seed" money is likely to be very, very hard for most people, for a host of reasons. It is the "energy of reaction" threshold that stands between many people and prosperity. It can require extreme effort and hard thought to overcome. But once hurdled, far, far greater financial returns are possible, with much, much less effort than was ever before possible.

On the front side of the threshold, a man might strive mightily to make $500. On the other side of the threshold, he might realize a $50,000 gain with 1% of the effort he formerly expended to obtain $500.

Helping people past this threshold stage is perhaps the most crucial part of the entire course. It is the sine qua non -- if people don't make it past the freedom technology "energy of reaction" threshold, anything else you write will have little meaning, and will be of precious little practical financial use to them. You may make their wage slavery a bit more comfortable, but if they don't make it over the threshold, at the end of the day they will still be wage slaves.

For that reason, I think that as many ways as possible to reliably make money for little or no investment must be found, so that people can make additional money that they can invest or use to multiply in other creative ways. On your business opportunities page some opportunities require hundreds of dollars or a thousand dollars to join. For a variety of reasons, many millions of people just do not have this kind of disposable money to play with, and cannot easily get it. A rising tide lifts all boats, true enough, except for those that are so mired in poverty they're stuck in the mud of the vast tidal flat of the global economy. Only "free," or nearly free means of gaining or increasing income will be of any use to those who are stuck in the mud.

That is why I think that your "zero risk" financial prosperity web page is terribly important, and I encourage you to continue putting creative thought and energy into it. I also want to thank you for devoting your life's work to thinking about and promoting freedom.

(3) Taking the first step is crucial. Deciding to succeed is essential. It is the sine qua non. Before you can succeed you must want to succeed. You have to consciously flip a switch in your mind from the "failure" position to the "success" position. It is actually as if there is a toggle switch in your brain, and you flip it over from one program to another, so that it starts running a success-oriented set of instructions, rather than a failure-, or victim-oriented set of instructions. This is literally what must happen. (See the "win-lose switch" in #TL03: How to Improve Your Information.)

(4) Progress is incremental. One step builds on another. There is great power in small, incremental first steps. (See Money Skill #13: Apply the small-step progression principle.)

(5) Direction is important. A step forward is a step forward and carries you closer to your goal. Do not discount the cumulative power of incremental, small steps forward. They add up into giant leaps over time.

(6) If you continue in the direction you are going (forward), you will certainly end up where you are headed. It's guaranteed. It's only a question of time.

(7) Time is a personal commodity and fungible. It can be transformed into other things - money, waste, progress, etc. You control your expenditure of time. How much time it takes to achieve your goals is in large measure in your own hands." (See Money Skill #43: Time is money; spend it well.

A crucial factor in attracting money is to develop a reputation of competence, reliability, and trustworthiness. It's difficult to attract money if people don't have confidence in you and don't trust you.

Money Skill #109: Correct your first impression of money

In my own case, I remember both my grandmother and my mother shouting at me that should never put money in my mouth because "it's dirty!" (filthy lucre). It's very important that you "dig out" your earliest memories about money, particularly when you put a coin in your mouth and someone shout at you, "Don't ever do that; it's dirty!" Such memories could be behind why so many people can't accept a $20 free gift. Such memories constitute early unconscious imprinting that may shape your life-long attitude toward money. One way of handling this is through Idenics. I've made a special arrangement for my contacts to receive a FREE Idenics telephone session. To schedule, call Mike Goldstein toll-free at 1-800-IDENICS (1-800-433-6427) and tell him Frederick Mann sent you. For those outside Mike's calling area who can't reach him on the toll-free number, you're welcome to call him at 1-303-695-4940.

Another approach is to do a search for "earliest memory of money" -- check out the stories to see if anything strikes a chord. Do some deep thinking about how your earliest memories of and impressions about money may have shaped your life.

This may be an important step in igniting the spark that lights your "money fire!"

You may have to ignite this spark before you can become skilled at attracting money.

Money Skill #110: Unleash your conquering force

Everyone has certain CORE DESIRES. Most people have no idea what their Core Desires are. If you work at some job (or any activity) that doesn't satisfy your Core Desires, YOUR HEART ISN'T IN WHAT YOU'RE DOING, and you are unlikely to achieve success.

Through REVEALING your Core Desires, you UNLEASH YOUR CONQUERING FORCE. Successful people are successful because they operate to satisfy their Core Desires, their HEART is in what they do, and they unleash their Conquering Force.

Discover Your Conquering Force.

This may be what you need to do to light your "money fire!"

Money Skill #111: Overcome psychological inertia

A correspondent wrote me:

"I am an 8-to-5 computer programmer watching my work earn other people's "financial independence." Granted, "they" came up with the idea for the software I'm currently working on, but it is now my coworkers and I making the product that ships. However, I have many ideas that are just now breaking on the software scene (Microsoft's .NET platform -- I anticipated the technology in their vision over two years ago). ".NET" has the potential to completely bury JAVA, but only time will tell... But to tell the truth, I have some sort of block that I need to work around. Maybe it's as simple as motivating myself after "giving at the office." Maybe I need to find something small enough that I can do myself, but yet has the potential to blossom into something big.

My family and I have been through three network-marketing businesses in the past 10 years, and we watched with wonder as all three grew and with horror as all three crumbled to dust. My final analysis on our experience with network marketing is that we just didn't know enough of the right kind of people. Do we now? Beats me. My family is really skeptical now about anything remotely "MLM."

Several things that would help me:
(1) Motivation! Finding what motivates each person. For us 8-to-5'ers, we need that second wind at the end of the day... But we need to be taught how to *find* what motivates us (and others if we're in a leadership position), not to simply be motivated from "outside ourselves."
(2) Ideas! How to settle (objectively) on one or two ideas we think will get us the most bang. Then following through with breaking the idea down so that we get a income stream as quickly as possible (without having to have the idea fully implemented).
(3) Community! During my family's MLM-building days, we found like-minded individuals necessary to business. Once those people stopped or left our "downline," the business crumbled quickly. This is where an extended community of people helping each other is important."

What do you say to someone who writes the above? He may be in a rut going nowhere. No, it could be worse! A rut is a ditch that goes somewhere. Maybe this person is stuck in a hole!

Read the following:

See #TL03B: Apathy, Psychological Inertia & Success.

Actually, the main problem in what my correspondent describes above about his MLM experiences may not be his main problem. One main problem is the general helplessness of people who join MLM programs -- see Money Skill #46: Overcoming Helplessness. A related main problem is that typically about 95% of MLMers fail -- see Assessment of MLM Madness.

But the main problem of being stuck in his "job situation," may very well be psychological inertia.

Money Skill #112: Learn from setbacks and failures

To learn from setbacks and failures there are basically six areas to examine:

  1. Your psychological make-up -- see Basic Money Skills and the rest of this report to see what may apply to you.
  2. Specific mistakes you may have made and the thought processes that led to the mistakes.
  3. The skills you need to acquire to prevent the same mistakes in future.
  4. The tools and/or systems you can use in future to avoid similar mistakes.
  5. Weaknesses in systems external to you. For example, trying to make money with a program that has fatal flaws.
  6. Upgrade your own brain software so you continuously become more effective -- see 'Software for your Brain.'

Money Skill #113: The Franchise Principle

About 90% of new businesses fail during their first year or so. In contrast, I've seen numbers claiming that 70% or more of franchises succeed.

"Success" is a subjective term. A September and October 1997 Gallup Organization study on franchise owner's and attitudes towards their franchise experience revealed that more than nine of ten franchise owners stated that they considered their franchise to be somewhat or very successful. Two of three respondents said that they would not have been successful if they tried to open the same business on their own. The franchising system is designed to provide a formula for operating a successful business. Unavoidable business mistakes have been worked out of the system through experience and the franchisor is available to assist when new challenges arise. The Small Business Administration says most businesses fail from lack of management skills. With a franchised business, your franchisor should be eager to help you overcome problems. Your hard work and the franchisor's expertise spell a strong partnership." -- ABCs of Franchising

The first part of the Franchise Principle is that workable formulas, systems, and procedures have been developed, tested, and proved successful. They are written up in Operating Manuals that spell out everything in precise detail. To succeed all you have to do is follow the instructions.

The second part of the Franchise Principle is that the necessity of special skills for success has been eliminated. The McDonald's employees don't have to learn the skills of a cordon blue chef. They only need to be able to press buttons, turn switches on or off when a bell rings, flip burgers, and so forth. No special skills are required to succeed. Similarly, everything the franchise owner, the manager, and the accountant need to do is written in Operating Manuals in the minutest details. No special skills are required for success.

For an excellent example of applying the Franchise Principle to make money on the internet, see Assessment of MLM Madness!

Money Skill #114: The Power of Systems


Definition of system:

  1. : a regularly interacting or interdependent group of items forming a unified whole
    // a number system
    : such as
      1. : a group of interacting bodies under the influence of related forces
        // a gravitational system
      2. : an assemblage of substances that is in or tends to equilibrium
        // a thermodynamic system
      1. : a group of body organs that together perform one or more vital functions
        // the digestive system
      2. : the body considered as a functional unit
    1. : a group of related natural objects or forces
      // a river system
    2. : a group of devices or artificial objects or an organization forming a network especially for distributing something or serving a common purpose
      // a telephone system
      // a heating system
      // a highway system
      // a computer system
    3. : a major division of rocks usually larger than a series and including all formed during a period or era
    4. : a form of social, economic, or political organization or practice
      // the capitalist system
  2. : an organized set of doctrines, ideas, or principles usually intended to explain the arrangement or working of a systematic whole
    // the Newtonian system of mechanics
    1. : an organized or established procedure
      // the touch system of typing
    2. : a manner of classifying, symbolizing, or schematizing
      // a taxonomic system
      // the decimal system
  3. : harmonious arrangement or pattern : ORDER
    // bring system out of confusion
    - Ellen Glasgow
  4. : an organized society or social situation regarded as stultifying or oppressive :
    ESTABLISHMENT sense 2 - usually used with the

If the President of the USA were to give an order to bomb some anti-aircraft facility in Iraq, the order would be conveyed down a hierarchy, eventually to one or more squadron commanders, pilots would take off with their planes, fly to their targets, take aim, and press the buttons that release the bombs that destroy the anti-aircraft facility.

This is awesome power. One person expresses an intention in his office. A process is set in motion, resulting in some devastating actions on the other side of the world.

All this is possible because of SYSTEMS. The military has communication systems. They also have a command structure, which is a system. The bomber plane is a complex, sophisticated system. The bomb is a system.

Corporations are powerful, depending on their systems. A job can be described as a system of procedures.

Your body is a system. So is your mind.

Language is a system.

People have systems of beliefs that are sometimes difficult to change.

Our solar system is a system.

Sometimes systems compete and more powerful systems eliminate the less powerful.

Your automobile is a system -- a kind of extension of your body -- that enables you to travel from point to point at great speed.

Your computer is a system. So is the internet.

Some systems are more workable than others. Some systems are plain bad and destructive.

In general, any system is more powerful than no system.

A system can be a lever that multiplies your power.

Some people fail in their attempts to make money on the internet because they don't use workable marketing systems. They blindly send out lousy emails and post futile messages without systematically testing and refining them. They don't have a follow-up system. They don't have a system for receiving support from their upline and giving support to their downline.

[More coming soon...]

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