The Butler Project

In my goal to consistently interview millionaires, I often have to pursue people for weeks before I can finally spend 15 or 20 minutes on the phone with them.

Mike was no exception. He owns an advertising company, with around 50 employees and millions of dollars in contracts ever year. That being the case, he’s a hard man to pin down. I first contacted his assistant in January, and it wasn’t until six weeks later that I finally got him on the phone.

When we finally did talk, the conversation lasted a little over eight minutes. He had this urgency in his voice - completely polite, happy to talk with me, but not wasting any time. It was a nice change of pace from other interviews I’ve done, where the person I was talking to didn’t have to be quite as succinct in his answers.

Mike got straight to the point. Here are two of his answers:

Mark: If you could only give me one piece of financial advice, what would that advice be?

Mike: Get rich slow. Eliminate debt first, don’t go for the home run. Don’t swing for the fences. [A] single at a time is what [will] win. Big risks and betting big on grand opportunities could possibly win big for you, but be careful how you bet, because you could lose it all. So, it’s get rich slow…eliminate debt, and get rich slow. Don’t borrow money. I’ve been able to build this business totally without debt.

[I asked him a question about what he would say to the sales reps I manage, and I've altered it only slightly to make it apply to all of us, whether we're thinking about our careers, our businesses, or our financial goals:]

Mike: You’re the master of your own destiny. If you’re not self motivated, and if you can’t come up with your own business plan, and see your way to move yourself forward, you’re going to lose. You’re going to die. Get in another job. If you’re not self motivated, and can’t make your own business plan, if you’re depending on your company, or somebody else to furnish you with what you need for success, you won’t succeed. You need to figure it out. You’re an entrepreneur. You have figure out how you’re going to do it. The answer isn’t in a book, it’s in your head.

So there you have it. Some might say that a lot of his advice is trite or cliche, but you have to remember that thirty years of business ownership is behind those words. For three decades, this man has managed employees and clients to the tune of millions and millions of dollars, and he’s had some serious setbacks along the way.

So before you pass this advice off as something you’ve heard a thousand times before, think about who is offering it, and think about how closely it mirrors the advice of the other millionaires I’ve interviewed.

Last Friday I talked about what it would mean to your financial situation if you could earn an extra $500 per month. Using that $500 wisely will make a huge difference to your financial goals if you’ll stick to it over a 15-30 year period.

Here’s the problem: most of us don’t have that kind of attention span, and it’s hard to stay enthusiastic about goals that won’t really pay off for a couple of decades.

So, today I wanted to take the idea of the extra $500 a few steps further. See, you always hear about how money compounds, and how a little money invested at a conservative interest rate over a long period of time will make you financially independent. It’s a sound philosophy, and I don’t challenge it. I hope everyone that reads this will save and invest as aggressively (and wisely) as they can.

But what about those of us that don’t want to spend the next 30 years becoming financially independent? Is there a faster way to do it, without falling into a ridiculous get rich quick mentality?

I believe there is. If you want to become wealthy in less than 15-30 years, you have to leverage more than your money and the financial markets. You have to leverage yourself. The Richest Man in Babylon says a key to becoming financially independent is to “Increase Thy Ability to Earn.”

There’s more to the wealth equation than spending less and saving more - you also need to consider what earning more would do for your situation, and how it would accelerate all your financial goals. And I’m talking about more than an extra $500 per month.

Let me see if I can stretch you mentally a little. Work through this mental exercise with me, and see what you come up with. I’ll warn you in advance that you’ll finish this exercise with more questions than answers. That’s the point.

I’m going to give you a Six Year Plan for earning an extra $100,000 per year. Write this down, because it’s bulletproof. There is only one prerequisite to making this plan work: you have to be willing to invest the time. How much time? 15 hours per week.

Year 1

In year one, you’re not required to earn any extra money at all. What you have to do is invest 15 hours per week into the discovery of how you could earn an extra $500 per month. Read, research, talk to people, investigate, figure it out. The only questions that really matter in year one are: 1)How could I make an extra $500 per month?, and 2) Am I willing to do the work associated with the opportunities I’m finding?

Are those easy questions to answer? Nope. Is becoming wealthy and independent easy? Nope. Deal with it. Do the work.

By the end of year one you need to have chosen a vehicle for earning your extra $500, and you need to have started doing the work associated with making the extra income happen. Your time requirement is still 15 hours per week.

Year 2

By the end of year two, the $500 should be rolling in every month. You’re not rich yet, but who couldn’t use an extra $500 per month? For anybody making less than $60,000 per year, that’s more than a 10% raise, and for anybody making less than $100,000 per year that’s at least a 5% raise. Not bad at all.

Year 3

You’ve entered year three now. Year three has only one purpose: figure out how to turn that $500 per month into $1,000 per month. How? Great question. Figure it out.

By the end of year three you will have found your answer and you’ll be making an extra $1,000 per month. I hope nobody disputes that $12,000 on top of whatever you’re household income is makes a big difference to your stress level and your belief in your financial goals. This is some real progress.

Year 4

Guess what you need to do in year four? That’s right. Figure out how to turn the $1,000 per month into $2,000 per month. Again, the question is How? And again, the answer is you tell me. But oh what a difference that $2,000 per month is going to make when you have it.

According the Census Bureau in 2006, median family household income is about $59,900 per year. An extra $24,000 per year would represent a 40% increase in income. And all you have to do is anwer that question: How?

Year 5

You’re making a great supplemental income at this point, but we’re not finished.

You’ve completed year four of the six year plan, and in year five you have just one task. Turn the $2,000 monthly income into a $4,000 monthly income. And remember - you’re only allowed 15 hours per week to work on this project. Seem impossible? I guess it probably does to many of you. But somebody is going to figure out How, why shouldn’t it be you?

By the end of year four, you’ve succeeded, and an extra $4,000 is flowing to you each month. At this point, you’ve probably seen some changes in your lifestyle. Your ability to pay off all debt and invest wisely has been multiplied ten times or more. If you stopped here, and managed your money wisely, you’d be virtually guaranteed financial freedom in a relatively short period of time.

Year 6

I wouldn’t stop though. If you can just get through year five and throw yourself into year six, there will be a big reward.

In year six, double your extra income one last time. Take it from $4,000 per month to $8,000. I know I said $100,000 per year, but hey - you got this far. I’m sure you can figure out a way to make the extra $4,000 that will get you to a nice round $100k.

A lot of the people who read this post will call it ridiculous. “It’s not that simple - you can’t just earn an extra $500 per month and expect to double it every year for five years.” Maybe they’re right. Let’s say you throw yourself into this and you only get half way to the $100,000 goal? Are you still a lot better off? What if you only get 25% of the way to the goal? I don’t think you’d turn down an extra $25,000 per year.

The only question is “How?” There are ten thousand different answers to that question, and they’re all right. To end, I’ll give you another one of my favorite quotes. This comes from Peter Drucker, management legend:

“We greatly overestimate what we can accomplish in one year. But we greatly underestimate what we can accomplish in five years.”