14 Rules for Achieving Financial Literacy

The Success Margin

Thursday, March 31, 2005


Virtually everyone reading these words is
interested in increasing their wealth.

However, to achieve financial success and
independence, including a comfortable
retirement, you are absolutely required to be
financially literate.

And there's the rub. The lack of financial
literacy of all but an elite group of very rich


The little guy just hasn't been exposed to the
real facts.

In the U.S., the richest country the world has
ever known, here is what life is like for the
average person. They spend their entire life
helping someone else get rich working for a
pittance. Upon retirement their total assets are
less than $7,000. They have no savings
whatsoever. Instead, they are deeply in debt.
On average they owe over $18,000 on their
credit cards, with few prospects of ever paying
them off.

Most Americans spend more than they earn.
Unfortunately the spendthrift lifestyle of
Americans is rapidly spreading to Europe and

It's no wonder personal bankruptcies in America
are at an all-time high, with projections of over
2,000,000 this year.

Not even one person in a thousand is financially
literate. It's not taught in schools or
universities. Parents tend not to teach their
children virtually anything meaningful on this
important topic.

Since I haven't seen anything that makes sense
written on becoming financially literate, I
decided to share my views and experience.

This issue is dedicated to all the people I love
and care about. These include my family, friends
and readers.

What you are about to read is responsible for
earning my first million dollars by age 24. And
my assets have continued to grow ever since.

The principles I will share were not taught to me
by anyone. I've developed them through the
hardest but most effective taskmaster. Trial
and error.

Much of what I say will contradict what you've
been taught and exposed to. You may not agree
with some of my views. Several are surely going
to make you uncomfortable.

But, breaking out of your comfort zone may be
exactly what is necessary for you to acquire real-
world financial literacy that works.

* 14 little-known rules for achieving great wealth *

Nicholas Rule #1:

Recognize the difference between active and
passive in^come.

Active in^come is that which is earned in a job.
Poor people stay poor, living paycheck to
paycheck. The employees' mentality is to trade
time for money. Clearly, this is not a wealth

Passive in^come is completely different. It is
the only route to great wealth. It exists in
several forms. These include:

-- Royalties - Such as that earned by authors,
copywriters, and inventors
-- Rents - From real estate or equipment
-- Dividends - From shares in companies
-- Interest - From bank notes and other
interest-bearing investments
-- Residual in^come - From network
marketing organizations

Rich people earn the biggest portion of their
in^come by having their money work for them.
Or they earn money on work done once upon
which they get paid over and over again.

Twenty-four hours a day, every day of my life,
regardless of what the economy is doing or world
events, my wealth grows from each of the above
categories. You can do the same. In fact, you
only need one of them to achieve enough wealth
to become financially independent.

Nicholas Rule #2:

Learn how to sell.

The jobs and professions with the highest
rewards are those which generate in^come and

There are only two basic ways to earn money as
an employee or professional in the business world.
In a job that brings in money. Or that costs

To earn the highest in^come, bonuses and raises,
learn the skills that make money. Avoid the
technical and administrative positions. They
cost money. They also have the lowest level
of in^come growth.

The highest paid jobs and professions include
salespeople, copywriters, marketers, product
developers, and those who manage such people.

Of course, the highest paid career by far is that
of a successful entrepreneur. Over two-thirds
of the world's wealthiest people are

Nicholas Rule #3:

Discover how to manufacture money.

The only legal way to create unlimited quantities
of money on the basis of nothing more tangible
than an idea is in a business you own.

Tip: Start a small business on a part-time basis
as soon as you can. And the best time ever to be
in your own business is right now.

Nicholas Rule #4:

Spend less than you earn.

Unlike the majority of people who spend more
than they earn, live on 75% of your in^come.
Invest 15% of your in^come in things which
provide you passive in^come. Give 10% away
to charities you wish to support.

You must delay gratification to ultimately
achieve financial independence. You will be
wealthy at the point when your passive in^come
equals or exceeds your expenses.

Nicholas Rule #5:

Trust only yourself.

Do not follow the advice of third parties. These
include friends, family, bankers, investment
advisors, stockbrokers, economists and
politicians. Especially politicians.

The ridiculous advice of Alan Greenspan and
President Bush and other bureaucrats to "spend,
spend, spend-buy cars, bigger houses, etc." only
encourages the downward spiral of debt that many
people, especially Americans, pursue.

You can't spend your way to wealth. No one ever
has or ever will. On the contrary, to become rich
one day you must simplify, save and invest. This
is the only real route to a golden future.

Nicholas Rule #6:

Avoid debt like the plague.

The financial cancer that keeps people poor and
is sinking so many individuals and their families
is debt. Especially credit card debt, automobiles
and houses.

It's far better to:

-- Pay cash for your car. A car is absolutely
the worst investment you'll ever make,
depreciating 50% or more the first year. Car
payments will tend to keep you broke.

Tip: A great car buy can be a 5 to 7 year-old
Mercedes, Volvo, or Saab. Often you can find
them for $3,000 to $7,000. These cars tend to
be well maintained by conservative owners.

Christian Boucke attended my seminar in
Germany awhile back. He recently picked us
up on the way to the Dusseldorf airport in a
gorgeous white Mercedes that rode like a dream.
You simply couldn't tell it from a brand new
automobile. It cost him just $3,000!

-- Get rid of your credit cards as soon as
possible. These will keep you broke since you
must pay 18%-21% interest. That's why most
people never pay them off.

-- Most people's wealth is tied to their homes
and depends on rising prices. This is a huge
mistake. Nothing goes up forever. It's only
a matter of time before the worldwide property
bubble bursts!

Avoid single-family homes until you can pay
cash. Instead, sell your home. Invest in a
duplex or multiple-family house. Live in one
unit. Rent the rest of the building. Often you
can earn enough in rental in^come to cover your
mortgage expenses. There are lots of variations
on this strategy.

For example, starting my very first business, a
candy shop, I had no money. I bought a three-
story building with no money down for $50,000.
The mortgage was $308.74 per month
and was carried by the former owner. I
inexpensively converted the upper two floors
into three apartments that paid me $575.00 in
rental in^come. So, I was in the building not
only rent free but generating positive in^come.

Nicholas Rule #7:

Avoid buying most stocks, including mutual funds.
The stock market is a loser's game. Ninety-nine
percent of small investors lose their shirts. And
it's no wonder.

Insiders and big institutions are privy to
information the little guy never sees. Do you
really think you can get access to the same inside
information as Warren Buffett, George Soros, Bill
Gates and other big investors? Do you think with
limited information you can outsmart them? I've
never seen anyone do it.

Quick note: I'm not suggesting companies are
deliberately withholding information. One of my
previous companies traded publicly. However,
even though we wanted to we could not give
shareholders the real facts about our future
potential as it was against SEC regulations!
The only people who know about the real future
of any company are the insiders. I've never
seen this very real fact discussed anywhere.

Plus, most securities in the U.S. are overpriced
at 22 times earnings on average. And most pay
no interest.

The only type securities you should ever buy are
those in solid blue-chip companies with a long
history of dividends and/or interest payments.
Remember, always look for those which generate
passive in^come. Otherwise, don't make the

Nicholas Rule #8:

Learn about how to employ corporations in
your financial plans.

Discover the difference between Limited
Liability Companies (LLC's), S and C
Corporations and Not for Profits. Learn about
how to protect your personal assets, which
should be kept separate from what you invest
in the business.

Tip: Talk with a good accountant well-versed in
business. Review your personal situation. Take
their feedback into account before you make your
financial decisions.

Nicholas Rule #9:

Do not keep all your assets in any single country.

Spread your assets among several countries,
including Switzerland.

One-third of the world's wealth resides in
Switzerland. It's not an accident.

Other countries which are relatively strong and
stable include Austria, Australia, New Zealand,
Germany, Luxembourg, Liechtenstein, the United
Kingdom, and Monaco.

Perhaps the safest as well as perfectly legal way
to invest and get approximately 8% return on
your money and have a guaranteed retirement
income for life is via a Swiss annuity. The
income can be in Swiss francs or in U.S.

Tip: For better protection and safety, diversify
your assets among several currencies, including
those of Switzerland, Austria, New Zealand,
Australia, Norway, Germany, United Kingdom
and the Euro. Bill Gates, Warren Buffett, and
George Soros for example are currently betting
against the U.S. dollar by putting much of their
cash into non U.S. currencies.

Nicholas Rule #10:

Keep your taxes to the legal minimum. Most
entrepreneurs overpay their taxes unnecessarily.

With the help of a really good and aggressive
Small business tax accountant, often you can
legally re^duce your tax pay^ments to little or
nothing. If you prefer to fund any government
schemes, you can always contribute whatever
you like.

Tip: Explore the use of such concepts as
employee-benefit plans, where you are the
biggest beneficiary. Business deductions for
rent for your home office, as well as much of
your business-related travel and entertainment
are deductible. And, as mentioned, use
corporations in your home country to personal

Nicholas Rule #11:

Learn to benefit from setting up bank accounts,
companies and foundations in off^shore centers.

There are many ways to do business off^shore.

As an independent entrepreneur, you can do the
same sorts of things major corporations around
the world have been doing for years to reduce
taxes and achieve other important benefits.
These include great asset protection and increased
privacy. Places such as Bermuda, Liechtenstein,
the Cayman Islands, Cook Islands, British Virgin
Islands and Channel Islands can often provide
excellent benefits for you .

Selecting a good lawyer well versed in off^shore
financial planning is an absolute must.

Nicholas Rule #12:

Invest in yourself.

There are only two investments that are forever
and can never be taken away from you.

The first is your knowledge.

You can suffer losses and if you are not careful
even lose all your money. But what's retained
in your mind is always yours to keep.
Continuously invest in well-chosen seminars.
At least 4 and up to 12 per year. Also, read a
minimum of one book a month. Plus listen to
CD's and tapes. You can turn your car into a
"University on Wheels."

The other unsurpassed investment is
your health.

Nicholas Rule #13:

Invest in your health.

You cannot get all the nutrients you require from
food alone.

Budget each month to invest a minimum of $175
in natural supplements and herbs. (My budget is
$275 monthly.)

You must exercise. Join a fitness center or pool
if that's your style. Or simply walk an hour a
day. Make sure you acquire good walking or
running shoes, goggles, and other sports
equipment to help support your daily exercise

The number one asset all of us have is our health.
No other investment will pay off for you as well.

Nicholas Rule #14:

Study direct marketing and copywriting.

In this age of mass communication in all the
major media including the Internet, the very best
way to take advantage is by using direct

By learning to write sales copy that gets your
message to your markets, you can build a
fabulous business fast. No other skill will pay
you more. Study this topic and watch your wealth
multiply faster than any way I know.

Tip: You may recall the "8th Wonder of the
World" ad I ran for several years. The 8th wonder
is compound interest. It is the most powerful
force man has ever created. When you put this
force to work for you, your wealth will continue to
compound for your benefit as well as your loved

Study and apply these 14 rules. I promise you
that your wealth will compound faster than you
may now even imagine.

Quick note: Anyone who wants the inside secrets
of how to write successful sales copy, you can
now get the knowledge you need really fast from
was recently recorded live and comes on CD's
along with workbook and complete transcript.
For all the details, including a very special
price, call 1-877-232-4002.

Your correspondent,

Ted Nicholas


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