Banjo Smyth

I would like to share with you an interview that Kurek Ashley gave to Sean Rasmussen (One of my amazing mentors).  Kurek Ashley is a great life coach/motivator who has inspired me and millions of others to achieve our goals.  I hope you enjoy.

In Part 1 we will find out Who exactly Kurek Ashley is?

Last weekend I was lucky enough spend 4 days with Tony Robbins – what an amazing experience. I traveled up to Sydney to attend his Unleash the Power Within Seminar and it was well worth the trip. This was the first time I had seen Anthony and it was amazing to see one of the most influential educators of our time in person. There was more energy in the Sydney Entertainment Center than any rock concert I have been to. One of the best parts of the weekend was simply to be surrounded by thousands of people who have a similar mindset to me.

After coming home from Sydney I Was lucky enough to get a ticket to the AFL grand final and see my team (The Hawks) win their first premiership in nearly 20 years. 100,012 people crammed into the MCG even gave the Tony Robbins crowd a run for their money. As much as I love football I do find it kind of odd that thousands of people get more excited about 22 young men kicking a ball around the park than they do their own lives. Mmm slightly strange.

Less than two weeks to go to the marathon. Last week my knees were very sore so I have decided to keep my running to a minimum and do most of my training on the bike. The last few weeks are simply tapering so I should be fine for the big day. Sorry about the lack of Investment news but it will be coming soon I promise!

You are probably asking what does running a marathon have to do with Investment Strategies & Wealth Creation? For most people the answer would be NOTHING but for me the answer is EVERYTHING.

11 months ago I decided to fulfill a lifetime dream and complete a marathon. I have always been an active person and generally go for a couple of 4-6km jogs a week – a long way off the somewhat ridiculous figure of 42km that the marathon is. I see the marathon as the ultimate physical test, something that will push you into areas and feelings that you have never experienced before.

This is where I see the similarities to Investing and Wealth Creation. When you are beginning your journey towards financial freedom you are faced with ideas and concepts that are totally foreign to you. Dealing with the Stock Market, buying Real Estate to rent out and going into debt to create wealth are all concepts that are incredibly scary to someone that hasn’t experienced then before. Just like with the marathon these foreign ideas force you to choice one of two things. . . .

When your legs start hurting or you mind is getting confused you can either

Give up and stop running or stop learning about Investing

Or

You can keep going despite the fact that you feel completely spent, exhausted, confused and angry.

There is nothing better than going on a long run and getting to the point where you feel like you have to stop but you somehow manage to persuade yourself to keep going and finish. In that moment you have conquered the part of your brain that says “I can’t do it”. You have learnt that if you push through the pain barrier or that overwhelming feeling you get when learning about investing – you will succeed.

So after 11 months of training I am now only 4 weeks away from the Melbourne Marathon. 3 months ago I completed a half marathon (1:41:30) – 3 ½ minutes faster than my goal time. Since then I have slowly been building my long runs up and last weekend I completed a 35kn run in 3:15:00. My main goal for the marathon is to finish but I would love to do it in less than 4 hours. 4 weeks to go and I will let you know how I went.

When I tell people that I am doing a marathon they all tell me I’m completely crazy. To be honest I agree with them and that is the beauty of doing such a silly thing like running a marathon. It is such a long way to run that if I can finish it, surely I can do whatever I set my mind to?

So you want be rich but you don’t know how to get rich? Only a minor problem I’m sure you will agree – surely it can’t be that hard? First you will read Rich Dad Poor Dad then dream about getting rich quick and how you can become a millionaire whilst working from home. Next you might try some get rich quick schemes or get rich scams before you start to run out of ways to get rich. Unfortunately this will all happen before you become wealthy.

So can someone please tell me how to get rich because I’m impatient and running out of time!

Now before I bore you the secrets of how to get rich I want you to think about something. Do you ever catch yourself thinking about how everything is going to be ok when I’ve got this or everything is going to be ok when I’ve got that? Humans have a bad habit of always looking into the future rather than living in the moment.

The other day I was at the supermarket and I was making small talk with the guy at the check out. He told me how he was really happy because his shift had gone really fast and it was nearly time to go home. Nothing out of the usual but it got me thinking. We are only on this planet for such a short time that surely we should want every moment or minute or hour to last as long as possible. The idea of being glad that your day is over ‘quickly’ is a very weird concept. So what does this have to do with making easy money and becoming rich? Everything!

I am here to tell you that becoming rich is as much about your mindset as it is your wealth creation strategies. How many problems do you have today that you think would go away if you were to become rich? How many little annoyances each day would disappear if you knew how to get wealthy and were to become a millionaire? Well I have some good news and some bad news for you. . . .

The bad news is that those little annoyances will probably be there no matter how rich you are they just might take on a slightly different form. The good news is that you can get rid of those annoyances and problems before you get rich and you can start today.

The even better news is that in doing this you will learn the number one secret to getting rich. You might be saying “hold on this doesn’t make sense; I don’t want to get rid of my problems before I get rich – I want to get rich so that my problems will be deleted automatically”. Well I’m sorry but you’re wrong. Learning how to get rich is about earning money and about creating a great mind set. To be truly rich you need to be happy because I don’t know about you but I don’ think it would be fun being really rich but really unhappy and sad.

So the first thing that you need to do is realize that you already have everything within you that you will need to become rich. Your mind is a wonderful thing and you can use it to create whatever you want. The first step in becoming rich is to become happy in your self. How do you do that? Simply start appreciating what you DO have rather than what you DON”T have. I guarantee that if you can start to become happy within yourself then your financial goals will become so much easier to achieve.

So stop living in the future and start living in the present. The quicker you can do this the quicker you will be able to learn how to become rich. Who knows you might even find out that you are already rich?

Who decided that options are too risky for the everyday investor? More importantly can somebody please explain why options are too risky? After years of research I have finally come to understand that there are 3 types of people that can be held responsible for the Myth that options are too risky. Who?

1. Financial Planners
2. Stock Brokers
3. Taxi Drivers

Is it possible for the uneducated investor to lose lots of money if they trade options? Yes of course they can, first of all the uneducated investor can lose tons of money using any trading instrument and secondly options are highly leveraged so if used incorrectly then they will increase your losses. So if this is the case then why an I saying that trading stock options isn’t risky?

The first thing that you must realize about stock options is that they were actually invested to reduce or manage risk. The whole idea of buying a put option to hedge you stocks is basically another form of insurance. When looking at your portfolio risk management options buying puts to ‘insure’ your stocks is one of the most conservative investment strategies that you can implement.

On the other hand selling call options on stocks that you already own (covered calls) is another incredibly conservative stock market strategy. This strategy actually increases your downside protection, so when used correctly the myth that options are too risky is simply not true. Of course if you start writing naked calls or naked puts then your risk levels are going to seriously increase but when used correctly options are an amazing risk reduction tool.

Let’s have a look at why financial planners, Stock Brokers, and Taxi drivers are giving Options such a bad name.

Financial Planners: If you go to your financial planner and say that you would like to include options in your trading strategies then they will almost definitely tell you that it is a very bad and risky idea. Why? Simply because 99% of financial planners wouldn’t have a clue how to use them. I recently spoke to a financial advisor who admitted that her entire financial planning degree only had one chapter on options and it was completely theoretical information. In their entire course there was not one bit of practical information about how to use options. So considering that most financial planners don’t actually know what stock options are let alone how to use them is it any wonder that their typical response is negative. Remember human’s beings fear change and looking stupid.

Stock Brokers: Surely Stock brokers don’t think that options are too risky? Aren’t they meant to be professional stock market investors? Unfortunately most stock brokers are exactly that ‘STOCK’ brokers not ‘OPTION’ brokers. To become a legal options broker there are additional courses that you need to complete so most stock brokers aren’t actually allowed to give you ‘option’ advice. Put yourself in their shoes for a minute – if a client came to you and said “What do you think of buying Options” then you are faced with two choices

1. Tell them that is a great idea but unfortunately you will need to take all of your money out of our accounts and go to another broker who is legally allowed to trade options, Good Luck with your investing.
2. Or you could tell them that options are too risky and you really should just stick to managed funds and stocks.

So what answer would you choose?

Taxi Drivers: Obviously this is a little bit of a joke but the point I am trying to make is that everybody seems to think that trading stock options is too risky. It is extremely important to remember to make up your own mind about investment strategies, whatever you do don’t take advice from a taxi driver about wealth creation.

“the most expensive advice you will ever get is free from poor people”

Kurek Ashley

So are Options too risky? If used incorrectly yes but perhaps the question you should ask yourself first is ‘what are stock options’? Before you dismiss something as being too risky or scary make sure you try to understand what it actually is and how it works. There are plenty of free resources on the internet so do some research and make up your own mind about stock options. The last thing you want to do is ignore something just because that is what everybody else thinks. After all are these people achieving the results you are after or are they still driving taxis?

Does the idea of a high risk high reward investment strategy excite you or make you scared?  It is the general perception amongst most people that in order to make spectacular gains you must take spectacular risks.  This is definitely a myth as there are plenty of investment strategies that allow you to make massive profits with very little risk.  Today I would like to have a look at some of the emotional and decision making processes that take place when using high risk high reward investment strategies.

Am I saying that high risk investment strategies are bad?  No definitely not, high risk strategies have a time and place but they must be one of many strategies that you use – not your main investment strategy.  I would also like to mention that there are plenty of ways to make high rewards without necessarily taking high risks.

If your broker suggested that you have a look at a particular trade that required $1000 that would double to $2000 if it was successful or you would loose half ($500) if it was unsuccessful – what would you do?

In my experience most people are pretty happy to accept the challenge and take a small risk for the prospect of a very good profit.

Would your decision change if your broker offered you the same trade but instead of $1000 you had to put $100,000 o the line.  So if successful your profit would be $100,000 or your loss would be $50,000.

Suddenly most people aren’t too keen to take on the trade – Even thought the odds are EXACTLY the same.  Obviously the prospect of loosing $500 is much less frightening than losing $50,000 but I believe that it shouldn’t make any difference to your decision making process.  A high risk high reward investment strategy is exactly that – an investment strategy that that has the potential to loose or win you a lot of money.  I prefer to look at all investment strategies as a percentage rather than in dollar terms.

This has two main benefits that are vital to developing a strong mindset that is vital when trading (especially if you are using high risk high reward strategies).

1.  It makes you look at the trade in relation to the actual value of the trade.  The above example is the exact reason why this is beneficial.  Should you place a trade that has the ability gain a profit of $100,000 or a loss of $50,000?  There is no right or wrong answer but if you start looking at the percentages of the trade you will be able to make a much clearer decision.  Always make sure the numbers stack up no matter how big or small the trade is and especially when you are using high risk high reward investment strategies.

2.  The best thing about looking at your trades in terms of a percentage is that it stops you from getting to emotionally attached to the profits and losses that you will inevitable have.  For instance if you were to make a $5,000 profit on one particular trade it is very easy to start getting ahead of yourself and spending the money on flights around the world, cars, boats etc.  If you keep focused on the Percentages you can be extremely happy with your trade but not get to over the top.

Using percentages is even more important when you have a loss on the stock market.  When you lose money is very easy to start thinking about how many hours of ‘normal’ work you have just lost and very quickly you are so depressed that you never want to trade again.  It is quite common for new traders to want to quit after their first loss on the market – even if they have still made a profit over all!  Using percentages gets you away from this mindset and makes you analyze your profits and gains in a much less emotional state.

So does this mean that high risk high reward investment strategies are a thing of the past?  No, it just means that you should really think about the pro’s and con’s of every investment that you make.  One of the main reasons why people love using high risk high rewards investment strategies is because they love the feeling of taking risks.  You only need to go to the casino to see that many people are addicted to the rush of gambling with their money.  The question you need to ask yourself when you are placing a trade is – are you Gambling or are you Trading?

How many times have you heard someone say “I want to be rich”? Unfortunately 99% of people who I hear talking about how they want to be rich will NEVER achieve their goal. Why?

When most people say ‘I want to be rich’ they don’t actually believe that they can ever achieve this goal. Let’s face it, if they don’t believe in themselves then what hope do they have of ever achieving anything.

Another reason why ‘I want to be rich’ prayers are rarely answered is because most people don’t actually know what being rich is? This may sound like a weird concept but have you ever taken the time to clearly define what being rich is? Well if you are serious about becoming rich then it is time that you sat down and figured out what being rich actually means to you.

What are your reasons for wanting to be rich?

- Don’t have to work

- Get to spend your time exactly how you want to

- Travel the World

- Help others

- Spend more time with your family

- Not have to worry about money

- Never have to say “I can’t afford that” again

All of these answers are very typical for someone who has just proclaimed “I want to be rich” but how come most people never get close to achieving any of these goals?

The reason most people never actually become rich is the exact same reason why most people never achieve any of their big goals. First of all they don’t ever define what their goals actually are and second of all they don’t believe that they can achieve them. One of my all time favorite quotes sums this up perfectly

“Whether you think you can or can’t, either way you are right”

Henry Ford

Most people overestimate how much money you need to retire from your job You don’t actually need 10 million dollars to live your dreams, unless of course your dreams include a private Learjet. So next time you say ‘I want to be rich’ don’t leave it at that – instead follow these steps below and who knows one day you might even become rich.

Step One: Think about why you want to be rich

Step Two: Think about how much money/equity you would need to live these dreams

Step Three: Decide what is the best way to achieve this equity – Business, Shares, Property?

Step Four: Knowledge, Knowledge, Knowledge – Research your chosen field

Step Five: Create a plan – Saying I want to be rich is NOT a plan

Step Six: Follow the plan

Like most things that you do, becoming rich is 90% in your mind. Rather than looking for miracles I recommend that you start by following the above steps and working on your mind. Next time you hear someone say “I want to be rich” why don’t you ask them why? And what do they consider the definition of being rich? So before you start yelling ’show me the money’ I recommend that you start thinking about exactly why you want to be rich..

One of the questions I hear every single day is “Where should I invest my money”? When you are just beginning your investment journey this is a very important question as it is vital that you get off to a good start. Too many people have one bad experience with investing and then turn their back on it for the rest of their lives. When you are learning where to invest your money the most common problem is that you have too many options.

I like to call this problem - “Option Anxiety”

The definition of option anxiety is when you have so many options to choose from that you start getting anxious about which one you are going to choose. Pretty soon you are incredibly stressed about which option you are going to take. All of the options start to look pretty good but you just can’t make up your mind. In the end you decide that all these options are simple too stressful and its much easier to do nothing. Does this sound familiar? It really is quite a bizarre thing but I’m sure everybody has experienced it at some stage.

When I first began my investing career I used to always get option anxiety when deciding where to invest my money. Should I invest my money in the stock market, should I invest my money in real estate, should invest my money in the bank – quite simply WHERE should I invest my money.

If you too suffer from option anxiety then don’t worry, it is an easy problem to solve. There are two main reasons why most people get anxious when they are investing their money for the first time.

1. The most obvious reason is because they have worked extremely hard for their money and they don’t want to loose it. This is a very natural emotion as nobody likes loosing money. If you come from a family that didn’t encourage investing then deciding that you want to invest can be an incredibly big accomplishment in itself.

2. When we are doing things that we don’t really understand we get scared. This is totally normal and in fact a very sensible thing to feel. If humans didn’t get a little bit scared when we were doing foreign things then we might get ourselves into a lot of trouble very quickly. In saying this it is very important that we don’t let this natural fear hold us back form doing anything.

So how did I overcome these problems and decide where to invest my money. I picked an investment strategy that I was comfortable with and then I built up my knowledge and got some expert advice. Pretty soon after that I was addicted to investing. So you are probably asking “how can I learn where to invest my money”.

Well the first thing to do is to decide which kind of investment you think you are most suited to. The obvious two choices are Property & Shares. As a general rule you will need more money to get into the property market (although this is not always the case) so it is often a good idea to start with the stock market. Once you have decided what option you would like to take I recommend that you start building your knowledge in that area and then once you have a general idea of what you want to achieve you can start looking for an expert to help you even further.

Don’t feel like you need to do everything on your own. Deciding where to invest your money is a very big choice so there is no harm in asking other people for help. If you wanted to become a dentist I don’t think you would assume that you could learn how to do it without getting an education from somewhere, would you? So what are you waiting for? There are thousands of free investment resources on the internet all you need to do is to find them, use them and then in turn you will begin to break down your fear of investing. Remember to become successful you need to grow and develop and the best way to do this is to increase your knowledge.

The secret to becoming rich is really quite simple.

First of all you must spend less than you earn – Then you must invest the difference.

But don’t stop there – You then need to re-invest the profits that your initial investment created as well as the original investment. In time this will create a big enough resource that you will be able to comfortably live of the income that your investments create.

Does this sound a little bit scary or like too much hard work? Well don’t worry because all you need to do is to create some savings and investment strategies and the rest will fall into place.

The first step is to create a Savings plan that works for you. When it comes to saving money there are generally two different types of people.

The first type are people who are somehow able to save money without any great difficulty. They have good restraint when it comes to purchases and they always have a sock full of money somewhere. When they are ordered around and given strict rules to abide by they tend to want to rebel and do the opposite.

The second type of person needs strict rules and regulations to achieve most things. Left to their own devices they would happily spend all their spare money on a new pair of jeans or car. When these people are given clear rules they seem to be able to save money with much more success.

Which type of person are you? Do you need strict Savings and Investment Strategies to save money or are you at your best when you are given more freedom. To be completely honest I think that everybody could become a better at saving money if they applied a few simple ideas.

One of the best savings and investment strategies that I have come across is this.

Reward Based Savings System

The first step of this system is to actually create a savings plan. For instance you need to focus on some areas in your life where you think you could save some money eg.

Bring your lunch from home

Quit smoking

Less alcohol from expensive bars

Cook your own meals

Public transport

Cut down on snacks

Isn’t it fumy how most of the things that I have just mentioned would be beneficial to your life in more ways than just saving you money? The problem is that all of the above things are actions and pastimes that you really enjoy.

So is it realistic to try and cut these activities out of your life and expect to be happy just because you are saving some money?

No, I don’t think it is. What about if every time you saved money you simply rewarded yourself? Then you might actually enjoy saving money rather than growing to resent it.

For example if you were to give up smoking then I would suggest that you keep a tally of the money that you are saving and use a portion of it to reward yourself with something that you love but don’t usually get, for instance a massage or a night at the movies. This way you are creating a savings plan that will actually work. Why? Because you want it to work so that you can get your rewards. Too many people create Savings and Investment strategies that don’t have inbuilt reward systems. The best thing about a reward based saving system is that you really enjoy the feeling of saving money. Then if you are smart enough to invest the extra money that you are saving you will have begum your journey towards financial freedom.

Trying to find a good and ‘up to date’ property investment book can be quite a challenge. There is nothing worse than reading a property investing book that refers to property prices that are half what the current day values are. In my experience I have found that sometimes a good general investment book can be of just as much use as a specialist property investment book. Most real estate investors are actively investing in other areas so having a book that discusses real estate investing in relation to the stock market etc. can be very beneficial.

What to look for in a property investing book?

The best property investment books should be written in an easy to follow – step by step fashion. It is no good if the reader finishes the book but still doesn’t feel like they have the confidence to start building their property portfolio. At times the facts and figures involved with property can become quite tiresome so it is also vital that the writer can deliver the information in a fun and entertaining way. Let’s have a closer look at three of my favourite property investment books.

More Wealth from Residential Property – Jan Somers

A fantastic property investing book that covers all aspects of how to purchase residential property. It literally covers every stage and detail that you need to know when buying your first (or 10^th) investment property. Jan Somers writes in an honest and fun way and she doesn’t forget that most of the people reading her book probably haven’t ever bought an investment property before. There is a chapter that talks about renting vs. buying the house you live in and Jan mentions the fact that living in your own house can have great mental advantages that don’t come into consideration when you only look at the figures. This is a refreshing view point from a property investing professional as I often find that the writers of these property investing books can loose touch with reality but definitely not Jan Somers.

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What I Didn’t Learn at School but Wish I Had – Jamie McIntyre

This book is a more general investing book but it covers some great real estate strategies. The first half of Jamie McIntyre’s book concentrates on the mental aspects of becoming a successful investor. He calls it developing the mindset of a millionaire. It is easy to want to skip over this section of the book but I promise you that if you haven’t developed your mental investing muscles then no matter how many great strategies you have you will find it hard to succeed. Whilst Jan Somers book goes into the real ‘nuts and bolts’ of Real estate investing this book covers some more elaborate and interesting strategies.

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Go For Your Life – Chris Grey

This is a very underestimated book that didn’t receive anywhere near as many accolades as it deserved. It is basically a combination of the above two property investing books. It shows how Chris slowly bought the 6 investment properties that he currently owns. You might be saying “6 properties – that’s not enough to write a book!” But this is the exact reason why it is such a great book. He explains how you don’t need to own 100 houses to be a successful real estate investor and enjoy the luxuries of life. By owning a handful of properties he has been able to obtain his dream lifestyle.

So there you have it 3 great property investment books that you should definitely read before or after you start building your property empire. All of them are filled with great property investing tips and secrets that will help you achieve your goals.

The only thing missing from these books and form every property investing book ever written is the magic ingredient that makes you actually put the strategies into action. You will need to find that yourself! You can read as many books as you like but if you don’t ever take some action then you won’t ever achieve the success that you would like. So what are you waiting for? Start taking action today by reading one of these books and then when you are armed with the required knowledge take the next step and start your investing career.