If You Get Rich While You’re Young, You Can Have A Blast Growing Old!
“The Only Real Difference Between Wealth & Poverty Is Education. If You Don’t Understand How Money Works, How Can You Expect To Have Any?” — Lonnie Scruggs
Are you so busy trying to make a living that you aren’t making any real money? Most people spend their entire life working for money, only to wind up old and broke.
If you depend on a “job” for your income, then you need to learn what financially successful people do…make your money work for you. This book shows you how to work smart by doing a little work one time, and getting paid for a long time.
Taking The Mystery Out Of Money is loaded with case histories, examples and money-making ideas to help you understand money & financing so you can reach your financial goals. Making money is easy…if you know how.
Just Some Of The Topics Covered In This 253-page Book:
· How To Use A Financial Calculator
· Power Of Compounding Of Interest
· How Many Doubles Do You Have?
· How To Create Notes & Cash Flow
· How To Use Notes To Buy & Sell
· How To Improve Notes For Better Yield
· How To Buy Notes In Pieces
· How To Make Big Yields From Little Deals
· Making Hard Money Loans
· Profits From Prepayments
· Time Value Of Money
· Rule Of 72
· Understanding CAP Rates
· Simple Interest vs Compound Interest
· Difference Between Yield & Discount
· How Much Does That New Car Really Cost?
· New Car Or ROTH IRA?
· Money Is Not The Problem.
· Is Being Poor Heredity?
· Job Security Or Financial Security?
· Who’s Planning Your Retirement?
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Table Of Contents — Taking The Mystery Out Of Money
It Ain’t Funny Without Money 12
Cash Flow 12
Who’s Planning Your Retirement? 14
Making Money Is Easy 15
The Problem Isn’t Money 16
Is Being Poor Hereditary? 17
Be Careful Who Your Friends Are 18
What’s Your Choice? 19
Winners Choice 21
Losers Choice 22
What Road Will You Travel? 24
Difference In Rich People & Poor People 24
Life Is Short, Do What You Enjoy 25
Job Road 27
Dead End Road 27
Do Nothing Road 28
Financial Freedom Road 28
Job Security Or Financial Security? 30
Time To Get Real 31
Quit Living In A Fantasy World 31
What If You Could Turn The Clock Back? 34
It’s Not My Fault 36
How To Earn A Degree In Debt 38
It Was Such A Lovely Wedding 38
Average Credit Card Balance Is $8,000 40
Minimum Payments On $2,000 42
What The Credit Card People Don’t Tell You 43
$75 Payments On $2,000 Debt 44`
Who Do You Pay First? 46
The Typical Lifestyle 47
Money Is Not The Problem 49
Put 10% In A ROTH IRA 50
How Much Does That New Car Really Cost? 52
Gomer Gets The Fever 53
What Happened To Logic & Common Sense? 54
Depreciation Keeps You Broke 56
How To Become A 5 Year Employee 57
Why Not A Used Car? 58
New Car Or ROTH IRA? 59
Financial Freedom, Or Worn Out Car? 60
How To Use A Financial Calculator 62
Color Isn’t For Looks 64
The 5 Primary Financial Keys 66
Our Standard Table 67
Financial Memory Registers 67
Data Storage Registers 68
Constant Memory 68
CLX (Clear) Key 69
Decimal Places 69
Doing Simple Math 70
HP-12C Platinum Model 71
RPN Mode 71
Algebraic Mode 72
Begin & End Modes 73
CHS (Change Key) 74
Automatic Functions 74
Structuring A Loan 75
Let Your Calculator Do the Math 77
Use The Auto Functions 78
Charlie’s Loan 80
Our Calculator Has Fibbed 82
Make It Easy-Keep It Simple 85
Selling Charlie A $6,000 Mobile Home 87
Calculator Exercises 90
Figuring Monthly Payments 90
Figuring Balloon Payments 91
Balloon Payment Using PV Method 92
Balloon Payment Using FV Method 92
Figuring Quarterly Payments 92
Figuring Semi-Annual Payments 93
Figuring Annual Payments 94
Figuring Loan History 95
Payment With Auto Function 96
Payment Without Auto Function 96
Play It Again Lonnie 97
Figuring Interest rates 100
Figuring Number Of Days Between Dates 102
Date & Day Modes 102
Figuring Yield On A Daily Basis 104
What Would you Pay For This Note? 106
A Better Way 108
Types Of Interest 110
Simple Interest Method 110
10 Years–10%–Simple Interest 110
Simple Interest Table 111
Compound Interest Method 111
Annual Compound Table 112
Semi-Annual Compound Table 113
Time Value Of Money 116
Future Dollars vs Today’s Dollars 116
From $11,900 to $69,900 In 35 Years 117
Profit Or Illusion? 118
What Happened? 119
My Restaurant Seminar 120
Same Meal 40 Years Later 121
Same Meal 40 Years In Future 122
How Time Affects Our Money 122
Power Of Compounding 124
Rule Of 72 124
How Many Doubles Do You Have? 125
Starting At Age 24 126
The Cost Of Waiting 130
Starting At Age 30 131
The Number Of Doubles Make A Difference 132
How Do You Make 15%? 136
Notes & Paper 138
What Is A Note? 138
Unsecured Notes 139
Secured Notes 142
A Good Note Turns Bad 143
Here Comes Da Judge 144
Keep A Camera Available 145
Determining Seniority Of Notes 146
Personal Property Notes 147
UCC-1 & Chattel Mortgage 147
What Can you Do With Notes? 150
How To Get A Note 150
Using A Mobile Home To Create A Note 151
The Best Notes are Created 152
Where’s The Money? 153
Banks Won’t Even Buy You A Cup Of Coffee 153
Where To Find The Money 154
Sell Part Of The Note 155
Sell Part Of The Payment 157
Sell The Whole Note 157
Improving Notes 160
Sammy Didn’t Want A Note 162
Sammy Sells His Note 163
How To Increase Yield 165
Call Mom & Pop 165
From 37% To 266% 166
Everybody’s Happy 167
Seller Financing 168
82 Year Seller Takes 20 Year Note 169
Advantages Of A “Wrap” 170
Always Ask For A Discount 172
Buying Notes In Pieces 174
What Does The Seller Need? 174
How To Pay More Than Face Value 175
Substitution Of Collateral Clause 176
Early Payoff & $23,700 177
Time To Talk Discount 177
Yield vs Discount 180
Yield For 10% Discount 182
Yield For 20% Discount 183
20% Yield vs 20% Discount 183
Difference In Dollars 184
What If Lisa Won’t Sell For $6,838? 184
Paying $10,000 For $10,000 Note 184
You Buy 60, Lisa Keeps 60 186
Balance After 60 Payments 187
Option To Buy Last 60 Payments 190
Big Yields From Small Deals 192
Stop Thinking Like Average People 192
Real Deals 193
How To Make 15%-20% The Simple Way 194
$308 Monthly For Life 195
Attention Landlords 196
Profits From Prepayments 198
If You Don’t Ask, You Don’t Get 199
15% Discount Equals 31% Return 199
How Does The Note Holder Benefit? 200
10% Discount For 12 Payments 201
8% Discount For 6 Payments 201
State Usury Rates 190
Hard Money Loans 208
What Is A Hard Money Loan? 208
A Deal In The Making 211
Prepay Points Or Add To loan? 211
Yield If Note Goes 6 Months 212
Yield If Note Goes 3 Months 214
Figuring Number Of Days 215
Yield For 108 Days 216
More Deals Than Money 216
Typical Terms 217
Results Of 3 Month Loan 219
Hard Money Loan Tables 221
Do Your Due Diligence 223
The Paper Work 223
Disbursement Of Rehab Money 224
Loan Instructions 225
HML’s Provide Excellent Passive Income 227
Where To Find Investors & Lenders 228
Cap Rates 232
The 3 Components Of Cap Rates 233
Understanding CAP Rates 233
Cap Rate Formulas 234
Solving For Cap Rate 234
Solving For NOI 235
Solving For Value 235
What’s A Property Worth To You? 237
CAP Rates Are Only A Staring Point 239
It Just Didn’t Smell Right 241
Are CAP Rates Really That Important? 242
C-S-L-M Formula 242
Non-Assumable Loans 244
A Money Pump 245
A Little Gold Mine 248
12 Years Later 250
How To Increase Value Of Park 252
A Great Retirement Program 253
Mister, Can You Spare A Dime? 256
From Dimes to Dollars 256
Are You Working For Dimes? 257
What’s Your Comfort Zone?? 258
“That’s Where The Money Is” 260
About The Author 263
Sample Pages from “Taking The Mystery Out Of Money”
About The Author
Lonnie Scruggs was born and raised in Virginia. He has been in some type of business most of his adult life. For nearly 30 years he owned, rented, managed and maintained his own rental properties. After becoming a burned out landlord, he began selling off his properties and started buying discounted notes and mortgages. When it became more and more difficult to find good notes, he found a way to make his own. He discovered how to create his own “Mobile Home Money Machine” by buying, selling and financing used mobile homes.
His two books, Deals On Wheels and Making Money With Mobile Homes, explain in complete detail his simple, unique, and proven system of how you too can create your own money machine. Lonnie shows you how to put your money to work for you, instead of you working for your money. Lonnie says you should “Never Let The Mail Carrier Pass Your House Without Leaving A Check.”
Chapter 1 of “Taking The Mystery Out Of Money”
It Ain’t Funny Without Money
Did you ever stop and think just how many things in our lives are either directly, or indirectly, affected by money? Or how few things we can do that doesn’t require money? Take a minute and think about it. How many things did you do last week, and how many things will you do this week that won’t require money? Kind of scary, huh?
Yet, the majority of the people in this country will never make a serious effort to learn and understand how money works. Everybody wants to make money, but very few will make a real effort to learn even the basic concepts of money. If you don’t learn to understand money, respect money, and value money, how can you expect to ever have any?
Since we have to deal with money every day of our lives, wouldn’t you think the schools would make a more serious effort to teach their students something about how money works? They spend 12 years teaching you how to prepare for a job, and how to work for money, but nothing about how money can work for you. And that’s the real key to reaching financial security.
What does “cash flow” mean to you? Working a job for a paycheck? A check from a rental property? Dividends from a mutual fund? Earnings from a saving account? A check from some type of investment? A Social Security check? A retirement check from working 40 years on a job?
All of these produce cash flow, but what you should be concerned with is the type of cash flow each check represents. And, just how much of your time and labor is required to produce that cash flow. Does your cash flow come from using your time and labor, or from using your specialized skills and knowledge to obligate somebody else to use their time and their labor?
If you’re unable to get out of bed next week, would any checks show up in your mail box? If so, would they be enough to pay your bills? Or, would you have to put in 40-60 hours on a job? If you create enough Mail Box Money, you don’t have to work a job.
If you ever expect to be financially independent, and enjoy financial freedom, you must understand the different types of cash flow, and what’s involved in producing that cash flow. And the first thing you need to learn is how to create positive and passive cash flow that doesn’t require you to be there. You need to have something working for you, instead of you…something that will pay the rent and put groceries on your table if you’re unable to work.
Contrary to what the schools teach, getting a good education, and a good job, with good retirement benefits, just won’t cut it. What you learned in school is one thing, financial education is quite another. How many rich school teachers and professors do you know?
Most students will be just as financially illiterate when they graduate from school, as when they started. And the majority of them will become trapped in low paying jobs and never learn how to do any better. Even more frightening is the fact that the majority of the workers in this country will reach retirement age and still need to work a job, or receive financial help in order to live a decent life.
If you have doubts, just look around you. Do you really think that 60 year old waitress who’s working for tips, is working because she enjoys it? Do you think those “senior citizens” who greet you when you walk into Wal-Mart are there because they don’t have anything better to do? Or because they just like to meet people?
If you don’t want to be one of them, then let’s get real, because you have some serious choices to make. It’s time for you to decide whether you want to be like that waitress, or retire with financial security. If you’re tired of working for a paycheck that’s too small to keep up with your expenses, your needs, and your wants, then it’s time to make some changes.
Who’s Planning Your Retirement?
Let’s say you’re 30 years old and your goal is to retire at age 60 with enough income that you won’t need a part-time job, or any outside financial help. You have 30 years to reach your goals. What’s your retirement plan? Do you even have one? If so, who’s in charge? Is it you, or some “financial planner”? Maybe you expect Social Security to do it? (If it’s still around). Or maybe you’re counting on one of those “Government Gimmee” programs.
That’s enough of those silly ideas, so let’s get down to some serious planning. If you expect to retire with financial security, then it’s up to you to design and implement a sensible and solid retirement plan that will fit your particular situation. And don’t be misled by those financial consultants and financial advisors who try to convince you that they can do a better job of managing your money than you can. (Wouldn’t it be interesting to see their financial statement?).
You need to realize that nobody is going to look out for your financial well being like you will. So it’s up to you to design your own plan that will ensure that you reach your financial goals. Otherwise, you might very well be taking orders for Big Macs or pushing carts in Wal-Mart when you’re 60 years old.
Making Money Is Easy
In my seminars and workshops, I often make the statement that “making money is easy and simple”. Then, after giving the class time to give me that “what kind of a nut do we have here”? look, I add, “if you will learn and understand how money works. If you don’t, then you will spend your life working for people who do understand that principal.”
If you’re still earning your money the old fashion way, (working a job), then Taking The Mystery Out Of Money was written especially for you. And it’s my hope that after reading and learning the lessons I’ve shared with you in this book, that you too will be able to become gainfully “unemployed.”
Power Of Compounding
This chapter may very well be the most important chapter in this book. So I urge you to spend whatever amount of time necessary to
fully understand the lessons outlined in this chapter. If you will learn, understand, and implement the awesome power of compounding of interest, you can become rich beyond your wildest dreams.
Suppose you had the chance to double your money in 10 years, would you consider that a good return? Hold on, don’t be too quick with your answer. Before you can give a qualified answer, you would need to first know what rate of interest you would be earning. Do you know?
If not, don’t feel bad. Unless you’ve studied money and compounding of interest, you probably wouldn’t know. But you will from now on. You’re about to learn a very simple little rule that will enable you to answer such questions in seconds. And you won’t need a calculator to do it.
Rule Of 72
It’s called the “Rule Of 72”. This simple technique makes it very easy to figure out how long it will take to double your money at a particular interest rate. Here’s how it works…
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