Secrets of Self-Made Millionaires

Secrets of Self-Made Millionaires

They’re just like you. But with lots of money

When you think "millionaire", what image comes to mind? For many of us, it’s a flashy 1980s entrepreneur who flies a private jet, and lives the kind of decadent lifestyle that most of us can only dream about.

But many modern millionaires live in middle-class neighbourhoods, go to work and shop in discount stores like the rest of us. What motivates them isn’t material possessions but the choices that money can bring.

"For the rich, it’s not about getting more stuff. It’s about having the freedom to make almost any decision you want," says T. Harv Eker, author of Secrets of the Millionaire Mind. Wealth means you can send your child to any school or leave a job you don’t like.

According to the Australian Bureau of Statistics, more people are living the good life than ever before: more than a million households boast a net value of more than $1 million. Most of our millionaires are self-made.

And the very rich are getting richer. According to the BRW rich list, our top 200 wealthiest people are worth on average $698 million apiece – up more than $10 million on the previous year. If more people are getting richer than ever, why shouldn’t you be one of them? Here, four people who have at least a million dollars in liquid assets share the secrets that helped them get there.

1. Educate yourself

Tracy Harvey grew up on welfare and the cycle was repeating itself. A single mother of two children, one of whom was autistic, in 1996 she fled an abusive relationship in Adelaide, relocating to Brisbane, where she hit rock bottom.

She was living on a mattress on the floor of a rented property in a bad suburb. She couldn’t afford to get her abscessed tooth fixed and her car was not roadworthy, so she couldn’t take her little girl, Hayley, to school.

"I had taken a handful of pills and I wasn’t thinking properly," says Harvey. "Hayley put her arms around me and gave me a hug and said ‘Mummy, I love you.’ It really was my turning point." Realising that she was the only person who could fix her predicament, Harvey enrolled in a university course to study social work. She also started a small business making theatrical costumes to supplement her pension.

"I saved every penny and put it into a fixed managed fund and started to look for a place to buy," she says. The banks knocked her back, but she found a finance firm prepared to loan her the money to buy her first unit, a run-down dump that had been on the market for a few years. Even though it had no kitchen and holes in the walls, moving in was the best day of her life. She paid as much on the mortgage as she could every week.

Gradually the unit was done up; its value doubled. As soon as she saw the market start to move, she knew it was time to buy again. Because she had made extra repayments and her first home had risen in value, Harvey managed to borrow the money for a second and, almost immediately, a third property.

"I was carrying a huge debt," she says. She took out a line of credit and used that to fix up the properties, and rented them out for more than the mortgage repayments. Then she studied for a real-estate licence so that she could manage all of the properties herself.

Today, Harvey is up to her 14th property and is worth around $4 million. She lives in a beautiful house with a pool, but she’s still ultra-careful with her money: "We live within our means," she says. "I drive an average car. My only goal is to get my daughter through uni and give both my children the skills and know-how to ensure a comfortable financial future.

"So many of us go through a divorce or lose a job – one minute we can have an income and the next minute we don’t. We have to know how to take care of our money."

2. Passion pays off

For 38-year-old Justin Herald, the journey to wealth began one Sunday morning at a church in Sydney’s northwest, when he had an altercation with a member of the congregation.

"You have an attitude problem," she told him.

The accusation sparked something in him, and the cheeky then-25-­year-old borrowed $50 from his brother to have four T-shirts printed with the slogans: "I don’t have an attitude problem, you have a perception problem" and "When I want your opinion, I’ll give it to you". "It was the best $50 I ever spent," laughs Herald.

By the end of the morning he’d sold three of the four T-shirts. With the money he made he had another six printed, then 12, then 24. "That first year the turnover was $980,000," he says. His business, Attitude Inc, is now a multi- million dollar concern with a wide range of products selling in 3500 stores across Australia.

His success was due to clever marketing – the public loved the slogans – but also, he admits, luck. In those days there was very little competition in his sector of the clothing industry, and he was in the right place at the right time. The media spotlight also helped, with people picking up on Herald’s likeable personality and infectious passion for his business: the night of one TV appearance, 187 stores rang to get his products into their shops.

"The consumer liked the bloke behind the product. They really did support me as an individual as well as the brand," he says. Herald sold the business three years ago, by which time it was turning over $30 million a year, and now spends his time as a motivational speaker.

His message: anyone can be financially successful if they set their mind to it. "You have to have a lot of stickability – not everything is going to work the way you plan it." Still living in Castle Hill with his wife and two children, Herald believes too many successful people become caught up on the trappings of wealth. "I have lived here since I left school at 16," he says. "In this area, you don’t forget where you came from."

Money has meant he has been able to indulge his other passion – fast cars – but essentially he says he’s the same person he’s always been. "Time and freedom and choice are more valuable than having a lot of money in the bank," he says.

3. No guts, no glory

Many of us harbour a dream of becoming our own boss, but rarely spot an opportunity to do so – and this desire is what prompted Annah Stretton, 48, to take a risk.

Twenty years ago, Stretton was working as a product sourcer for a clothing company. She flew around the world, spotted fashion trends, brought samples back to New Zealand and sold redesigned replicas in bulk to department stores. "I was really good at it," she says. "I knew how to pick styles and wheel and deal."

Then when the opportunity arose, Stretton decided to set up her own wholesale clothing business. She converted buildings on her family’s farm in Tatuanui, on New Zealand’s North Island, and her father guaranteed an overdraft of $24,500. Stretton then got busy contacting business connections and before long, she started getting orders – her first being for 20,000 dresses. "It was a hell of a task for one woman sitting on a farm," says Stretton. "But I never doubted I could do it."

There were times when Stretton couldn’t make monthly payments, but she communicated with her creditors, telling them why, and when she’d have the money. "I was very upfront with them," explains Stretton.

By the end of its first year of trading, Stretton Clothing Company had turned over $817,000. However, Stretton was too consumed with the business to enjoy her new-found success. She worked hard, driving around in her Mitsubishi L300, sourcing fabrics and visiting customers. But as the Asian import market started to grow, many of the big retailers began buying through their parent companies rather than independently for the New Zealand market. "I wasn’t prepared to follow the same path," says Stretton.

To strengthen her business, she broadened her product line and launched a boutique collection line of clothing, Sam & Libby. Stores were paying a wholesale price of about $33 a garment and selling them for about $150. Eventually, she decided to open her own boutique. "I planned to go into rural areas that were fairly affluent, and offer them services that they would expect from a city store, such as a quality tailor and exciting visuals."

Within two years, she had seven stores. Today, there are 32 Annah S. and Annah Stretton stores in New Zealand, her company exports to around 150 boutiques throughout the world and generates over $8.17 million in revenue a year. As her business grew, so did Stretton’s public profile and she started writing a monthly column in Her Business magazine. One day the editor of the magazine e-mailed her saying the future of the magazine was uncertain, cheekily adding, "You don’t want to buy it, do you?"

Stretton made the snap decision to do precisely that. "I didn’t know much about publishing, but I quickly became passionate about it," says Stretton. Her publishing company now produces three magazines.

Today, the mother of two runs both companies, is heavily involved in charity fundraising and mentors women on how to succeed in business. Stretton’s top tip: "If you don’t love what you are doing – get out and find something you do!"

4. Set your sights on where you’re going

At the age of 40, Paul Counsel from Leederville in Western Australia hardly seemed on the road to wealth. A potter and ceramics artist, he was used to scraping by on whatever work was on offer. Then in 1994 he was invited to a major art exhibition in Perth, where he exhibited 40 beautiful pieces. The show was a success, but still he only sold seven, coming out with just $1500 – not including the cost of the materials.

"I thought, Hang on, I want be wealthy," Counsel recalls.

Thinking like a millionaire is a crucial first step to becoming one. "Most people retire financial underachievers," he says. "You have to see the world differently from the way other people see the world." Counsel borrowed enough money for a deposit on a house, fixed it up and invested the money he made in the share market. In just three years and eight months he’d made his first million.

What counts most, he says, is mindset: freeing yourself from society’s conditioning and becoming economi­cally and personally free.

"As soon as we earn an income, we’re encouraged to buy things we can’t afford," says Counsel. "Credit and buy-now-pay-later schemes lull us into a life of debt servicing rather than experiencing the freedom that income should provide." Today he has more money than he’d like to mention, but still lives in the same Californian bungalow in the suburbs and shuns the trappings of luxury that so many of us aspire to. "My neighbours don’t have a clue how much money I have," he says. "Everybody teases me about my Hyundai car… but it’s bloody comfortable."
From Reader's Digest Magazine - October 2008

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All Fished Out

Human greed may spell the end for the magnificent Mediterranean tuna-

by fen montaigne

No more magnificent fish swims the oceans than the giant bluefin tuna, which can grow up to 4m in length, weigh more than 250kg and live for 30 years. It can streak through water at 50kmh and dive to over a kilometre in depth. Warm-blooded, it roams from the Arctic to the tropics. Another extraordinary attribute may prove to be its undoing: its buttery belly meat is considered to make the world’s finest sushi. Over the past decade, a high-tech armada, often guided by spotter planes, has pursued bluefin from one end of the Mediterranean to the other, annually netting tens of thousands of the fish, many of them illegally. The fish are fattened offshore in sea cages before being shot and butchered for the sushi and steak markets in Japan, America and Europe.

Once, giant bluefin migrated by the millions throughout the Atlantic Basin and the Mediterranean Sea. So many have been hauled out of the Mediterranean that the population is in danger of collapse. Meanwhile, European and North African officials have done little to stop the slaughter.

“My big fear is that it may be too late,” said Sergi Tudela, a Spanish ­marine biologist with the World Wildlife Fund. “We are witnessing the same phenomenon happening to giant bluefin tuna that we saw happen with America’s ­ buffalo.”

The decimation of giant bluefin is emblematic of everything that is wrong with global fisheries today: the vastly increased killing power of new fishing technology, the shadowy network of international companies making huge profits from the trade, negligent fisheries management and enforcement, and the in­difference of consumers to the fate of the fish species they buy.

The very act of procreation now puts the giant bluefin at the mercy of the fleets. In the spring and summer, as the water warms, schools of bluefin rise to the surface to spawn. Planing on their sides and exposing their massive silver-coloured flanks, the large females each expel tens of millions of eggs, and the males emit clouds of milt (sperm). From the air, this turmoil of reproduction can be seen from many kilometres away by spotter planes, which call in the fleet.

13 Green Questions and Answers

In public toilets, is it better to use a paper towel or an electric hand dryer?

Go for the hot air. The energy needed to heat and blow air at your hands is far less than the energy needed to make and transport paper towels and haul waste away. One US study found that nine fully grown trees are cut down to supply an average fast-food restaurant with paper towels over a year; the tossed towels then create over 450kg of landfill waste. The hand dryer is also more hygienic. Doctors at the University of Ottawa claim the hot air gets into more crevices in the skin, killing off germs quicker.

Should I do the dirty dishes by hand or use a dishwasher?

This one’s not so crystal clear, since it all depends on how you hand wash and on the model of dishwasher. According to Tanya Ha, the author of Greeniology, old-style washing, using one sink for washing and one for rinsing, consumes 15-20 litres of water. “However, the amount increases considerably if you rinse dishes under running tap water instead of using a filled sink or bucket.” Research by the British government’s Market Transformation Programme last year found that dishwashers get items cleaner and use about 75% less water. The key is having a modern model. Dishwashers built today use around 95% less energy than those built 30 years ago, says Ha. Older models can use up to 90 litres of water a load; modern two-drawer dishwashers use as little as nine litres. To be even greener, stick to full loads and use the no-heat or air-dry option.

Should I do my laundry in a front-loader or top-loading washing machine?

Front-loaders win, hands down. Top-loaders have faster cycles but they use much more water, energy and detergent. When you are buying a new machine, look for the labels listing its energy and water ratings. Also choose a machine size that suits your household. Even if you’re not planning on buying a new machine, you can still make your current washer more eco-friendly. Clean the filter, use the minimum amount of detergent, stick to cold water and stick with full loads.

What should I eat for dinner tonight?

Out of everything you do, what you choose to eat has the biggest impact on the environment, says Rebecca Blackburn, author of Green is Good: Smart Ways to Live Well and Help the Planet. “Farming uses more resources than any other industry: two-thirds of Australia’s land and more than two-thirds of our water. It also produces one fifth of our greenhouse gas emissions.” In fact, one third of the average person’s carbon footprint is due to their intake of animal-based food, which is far more than the impact of driving a car or the energy used in our homes.So should we turn vegetarian? Blackburn says you’ll be surprised at how much you can help the environment simply by reducing your red-meat intake even slightly. In fact, eating 3kg less red meat each year is equivalent to reducing household water use by half! Blackburn’s handy tip: go for Meatless Monday.

Is it correct that flicking fluoro lights on and off uses more energy?

Actually no. New data suggests frequent switching doesn’t shorten the life span of bulbs or waste energy. Compact fluorescent bulbs are basically energy-efficient versions of the strip lighting we used to put in laundries and bathrooms. Manufacturer Osram is now selling a bulb that it claims can be switched 500,000 times – equivalent to 91 times per day over its 15-year life.

When it comes to grocery shopping, should I do a big shop each month or fortnight, or should I shop every few days?

Australians admit to throwing out a whopping $5.3 billion worth of food a year. Not surprisingly, the majority of the wasted food is fresh: $2.9 billion worth. “It’s not just money that’s being wasted, it’s the resources that went into making the food,” says Blackburn. “Do an audit of the fridge before you go shopping and figure out what’s left behind, what went off and why you didn’t eat the food.” So by all means do a big monthly shop of durables and non-perishables, but buy your fresh fruit and vegetables every couple of days so they don’t sit in the crisper unused.

Are the new hybrid cars that much better than small, fuel-efficient, conventional cars?

Hybrid cars are not the be-all and end-all. “Choose the smallest car that you can manage and choose the most fuel-efficient car in that range,” says Blackburn. New vehicles are rated by website http://www.greenvehicleguide.gov.au/based on greenhouse and air pollution emissions. “You can make a big difference without buying a hybrid,” says Blackburn. “If money’s an issue, you’d be far better off spending the extra money on a rainwater tank, solar hot water, insulation and energy-efficient appliances.

”What’s best: curtains or venetian blinds?

When it comes to keeping your house insulated, curtains win hands down. Venetian blinds don’t reduce heat transfer at all; a close-fitting, lined, floor-length curtain with a pelmet will reduce heat loss in winter by one third. To keep the radiant heat out in summer, install outdoor shutters, awnings or miniature louvres. Window films provide some protection from summer sun but are less effective than external blinds, and they also don’t protect against heat loss in winter.

When it comes to baby, what’s best: disposable nappies or cloth nappies?

Let’s call this a draw. Several independent studies – taking into account all the environmental factors such as raw material and energy usage, emissions of air and water pollution, and even waste management – conclude that both have roughly the same environmental effect. But the dollar cost is another equation.

I’m thirsty. Bottled water or tap?

Australians drink 150 million litres of bottled water each year. And Clean Up Australia reckons just 35% of all plastic bottles are recycled – the rest end up as landfill.When it comes to tap water, there are no transportation costs or carbon emissions. Buy your own water bottle. Instead of spending $2 per bottle, factor in just 2c and decide now if the taste is OK.

Solar hot water and solar panels: what’s the difference?

A lot of people get confused about this. One is taking the sun’s energy and heating up hot water. The other is taking the sun’s energy and producing electricity.If you can imagine going camping with a big black barrel filled with water sitting in the sun, when you had a shower from the barrel, the water would be warm, says Blackburn. That’s essentially the same as the process in a solar hot water system. Solar electricity is more complicated. It’s still quite expensive so the federal government has introduced a rebate of up to $8000 if you install solar panels, which practically halves the cost. Says Blackburn, “It’s not cost effective to install solar panels as a way to reduce your greenhouse gas emissions. For much less money, you can install energy-efficient appliances, lights and insulation and reduce your emissions by about half.

”Rechargeable versus disposable batteries?

Rechargeables. No question. They work out better on the hip pocket, too. “You buy them once for about $4, versus a normal alkaline battery for $1, but get to use them about 1000 times.” And for those who think rechargeable batteries are too fiddly to use and take too long to charge: remember, you’re already using them in your mobile phone and laptop. “If you were using throwaway batteries in your mobile, it would cost more than your phone bill.

”Scraps. Should I compost them or throw them straight in the bin?

Up to 50% of domestic waste is food scraps and garden waste that could be composted. Make it easy for yourself: keep a little plastic bin on the kitchen bench, or use a stainless-steel cooking pot and line it with newspaper so it cleans more easily.You can compost the strangest things: vegetable oil, tea bags, coffee grounds, vacuum dust, eggshells, hair clippings or hair removed from a brush, ash from wood fires, shredded paper and cardboard, even dried flower arrangements. If you live in an apartment, consider a Bokashi bin. It sits under your sink and the fermentation process doesn’t produce smells. When full, visit the communal garden or enrich a friend’s garden

Driving Towards a Greener and Cleaner Future

Converting water into fuel is one solution, but making sure we get from A to B as efficiently as possible is the true future of transport

Widespread concern for the environment and record fuel prices add up to one thing – healthy profits for companies that can make cars which are less polluting and cheaper to run. Manufacturers are acutely aware of the opportunities. "Oil consumption is not sustainable right now, plus, we’re compounding the problem with growth," says J. Gary Smyth, director of powertrain research at US carmaking giant General Motors. "We [the car industry] are the major contributor, we are the problem, we have to solve this problem." The likely solution would not please Henry Ford, who famously wanted all his cars to be black, to suit mass production. Instead, variety will be spice of life on the road this century. The number of different fuels, engines, body shapes and materials is set to multiply.
"It is likely that vehicle types will diversify, broadening our concepts of the recent past," says Professor John Heywood of the Massachusetts Institute of Technology. "Size and weight may well change too." Some of the innovations are already on the road, and others will be in a showroom near you very soon, displaying imaginative ways to reduce petrol consumption. Lighter cars burn less fuel so alloy frames and plastic bodies are on the cards – and cutting four wheels down to three is a growing trend on urban run-abouts like the Clever (Compact Low Emission Vehicle for Urban Transport) two-seater designed by a European engineering consortium, which includes German industry titan BMW. Eliminating internal combustion engines altogether is another approach. Take electric vehicles: They emit no pollution where they are used and are very quiet, which is precisely why the historic French port of La Rochelle has a fleet of electric cars for hire and why most of its municipal vehicles run on amps not octanes. Nissan plans to start selling battery-powered cars in Japan and the United States within two years and the Port of Los Angeles has already introduced a heavy-duty electric truck to haul cargo containers. The prototype cost US$527,000, but plans for an assembly plant to build a fleet of the electric trucks are at an advanced stage. All being well, the truck will be sold worldwide. Paradigm shifts like this always allow smart players to enter the game and there’s a host of eager innovators keen to plug in and switch on. Venturi, from the Mediterranean principality of Monaco, aims to start selling its $40,000 Eclectic threeseater next year. It has solar panels on the roof to turn sunbeams into electric power and a crowd-stopping optional extra – a wind turbine to top up the batteries

Earth-friendly eating

Food that’s good for your body also turns out to be good for the environment

Substitute chicken, fish or vegetables for red meat and dairy just one day a week, and your family of four will eliminate greenhouse gases similar to the amount produced by a 1200km car trip, say researchers from Carnegie Mellon University in Pittsburgh, who studied the impact of dozens of foods. Other ways to do your part:

Buy local and fresh Local isn’t better if the food is stored for long periods, using up more energy. Fresh-picked fare not only avoids long trips in fume-spewing trucks, planes and boats, but it also packs more nutrients and requires no preservatives.

Choose sun-ripened fruits and vegetables They generate fewer emissions than produce raised in heated greenhouses.

Cut back on processed foods A lot of truck kilometres go into foods with artificial sweeteners, additives, and preservatives because these ingredients are often shipped to the manufacturer from other locations.

Tiger Woods is Back

Tiger Woods needed just three tournaments to prove he’s still the hottest property in world sport – and worth every cent of the $3m it usually takes to persuade him to play events which don’t figure on the US PGA Tour schedule.
The hard-pressed governors of Victoria must have chuckled into their cornflakes as Woods sealed an astonishing fightback with a 16-foot putt for birdie and victory on the final hole at Bay Hill.
Their decision to underwrite Tiger’s invite to next November’s Australian Masters raised howls of anger and derision Down Under – but it doesn’t look so dim now.
Meanwhile, Tiger’s rivals face a sobering question in the run-up to next week’s US Masters. What if Woods brings his ‘A’ game to Augusta National?
Get the calculators out. Should Tiger marry the ball-striking and shot-making we saw from him at Doral to his unworldly chipping and putting at Bay Hill, his record 12-stroke winning margin at the 1997 US Masters could come under threat.

No question, Woods, on his ‘Second Coming’ is stronger mentally and physically at age 33 than the toothy youngster who took the sporting world by storm 12 years back.
It’s a big ask. No normal human could be expected to win a Major on only his fourth outing after eight months on the injury list.

And at Augusta National next week, Woods won’t get away with the errant shots which frustrated him at Arnie Palmer’s place. Yet with venues like Bethpage, Pebble Beach and St Andrews on the roster over the next 16 months, don’t bet
against Tiger achieving his lifetime ambition and equalling Jack Nicklaus’s record of 18 professional Majors.
Of course, the weekend’s sixth win at Bay Hill is an enormous boost to Tiger’s morale as he heads home to prepare for his first Major since June’s staggering US Open success.
Standing on Bay Hill’s first tee on Sunday, Woods, the defending champion, was five strokes behind Sean O’Hair, yet he posted a final-round 67 to clinch his 66th win on the PGA Tour and 90th worldwide.
Though his 26-year-old opponent held out stubbornly to the last, the self-assurance which had underpinned O’Hair’s performance over his first three days at Bay Hill had evaporated.
In truth, Tiger wasn’t playing well enough to obliterate his opponent with one of those famous final-day charges – but he’d still close to within one stroke by the par-three seventh, where the jittery O’Hair three-putted for a telling second bogey in four holes.
Of course, it cannot have helped when several spectators, as keen as the rabble at the Roman Colosseum for the Tiger to spill blood, cackled audibly at O’Hair’s misfortune there.
Sunday would be the fourth time O’Hair failed to seal the deal after leading into the final round on the PGA Tour, including last year’s Arnold Palmer Invitational when he also played in the final group with a rampant Tiger.
Yet Woods had to scramble hard on occasions, most notably on 14 when he sank a phenomenal 14-footer for par after his approach shot had plugged under the lip of a greenside bunker. His magical putter then helped Tiger draw level for the first time at 15, where he holed from 25 feet for an unlikely birdie and the bell tolled ever louder for his opponent at the next when O’Hair’s approach fell short into the water. O’Hair’s bogey put Woods ahead but Tiger dropped a shot out of yet another plugged lie tight to the lip of a greenside bunker at 17.
So they were all-square, until Woods rolled home that clutch putt for birdie and victory on the final green. For the second year on the trot, Bay Hill witness an explosion of elation from Tiger, only this one had been eight months in the making.