Chapter 10 / Part 2 / The Formula for Riches / The Difference Between Rich and Poor / by Dr. Hannes Dreyer.

The First Pillar – Wealth Creator Laws.

The Laws of the Wealth Creator? are about educating and improving yourself. Unless you know and apply these laws your chances of becoming successful in life are very slim.

Before you can become a Wealth Creator you must want to be one. Unless you want to change, these laws will have no impact on you.?

Once you have made up your mind the journey can begin. And it always begins with you, with your mindset, your attitude, your emotions. It is about how you manage TEM$? (time, effort, mindset, and money).

The problem with not having a system is that your money, time, and attitudes will be managing you. The moment that something or someone else is managing you – you will never be able to live a life of abundance and happiness. You will never reach your destiny because you are not in control and you cannot manage the process.

People, in general, are uninformed when it comes to making money; they are ignorant mainly because they were trained to think that it is very difficult. Making money is easy if you do it the right way, and incomprehensible if you do it the “expert” way.

The reason the experts keep it as difficult as possible is that it’s the only way they can keep financial control over us. We then have no control over our financial destiny.

Experts learn everything there is to know about money – but they never learn how to make it. You will not learn how to make money in any school or college or through any financial institution. That’s the bottom line – look around and you will see that it is true.

On the other hand, The Formula For Riches is about how to make money. It is about how to learn to create money and then about learning how to invest it and make it work for you instead of you working for your money through your job or profession.

The moment you work for your money you become the slave to money. If you know how to let your money work for your money becomes your slave.

So how can we practice what we know?

The First Law states that we must first invest in ourselves before we invest a cent in any investment.

Ignorance is the only risk.

Most people do not grasp this basic law. They think they can use an expert to help them.

The problem with this is the fact that when it comes to your money there is no one more qualified to look after it than you are. It is your money and you need to take full responsibility.

The moment you hand your money over to an expert what are you doing? You are breaking The Formula For Riches. According to the formula, you must take the responsibility to manage both the risk and the growth of your surplus.

By taking all the risk – without the ability to manage it - you are breaking The Formula For Riches.?

And that is how it goes when you rely on experts and financial institutions. That peace of mind they talk so much about is an illusion that will be shattered when you try to retire.

The Formula For Riches says that if you have a surplus you must be able to calculate the risk and the growth on your investment in order to manage both these variables. But, if you hand over your investment (surplus) you immediately keep all the risk.

Add to that the fact that you can do nothing to decrease the risk or increase the growth, and you will understand why most people stay poor.

Let me take it one step further. Most people are confused when they hear the word ‘investment’. They think that if they invest money with a financial institution they become investors.

This is simply not true. What you are doing is you are saving your investment through the financial institution.?

Saving is not investing.

To become an investor you must actively manage and control your investment. The only way to do that is to minimize the risk and at the same time increase the growth. This is the complete reverse of what we were taught by the educational system and in our professions.

My Application of the First Law.

The only reason I could accept the Wealth Creation Challenge was that I know The Formula For Riches. I have seriously invested in myself and my “financial education” during the last twenty-five years.

In this specific investment, I had two risks.

The first was the risk of losing my investment which was 11 cents. In the worst-case scenario, the risk was $14.28. In other words, the maximum I could have lost if it didn’t work out was $14.28.

But here is another interesting fact. The moment I can calculate the risk and know how to manage it, the risk disappears.

There are only two risks when it comes to money. If you eliminate them you will have no risks.?

They are:

Financial Ignorance - This is the First and Biggest Risk

The Second Risk is to Lose Capital because of Ignorance

In other words because of the first law “invest in yourself,” I can eliminate the major risks which life throws at me. If however, I do not know how to manage risk, the risk will manage me. This is a very important reason why people stay poor.

The most difficult thing to do in The Formula For Riches is to invest in yourself. It takes TEM$? (time, effort, mindset, and money – although as you will see very little money is needed to start an investment, and the less money you use the smaller the risk will be).

There are no shortcuts.

It gets more complicated because by now, you know that investment, as taught by the financial institution, does not work. Ignorance will keep you poor. If you do not want to invest in yourself and learn how to do it, you will ask for advice from an “expert”. Who teaches the experts??

Can it be the financial institutions? What do they teach the experts??

How to sell their products??? Is this not a recipe for disaster?

Let us take a quick look at the training system. The world’s economy is based on an outdated and false system that is based on a scarcity mentality, yet this is what most people believe.?

What am I talking about?

Remember Thomas Malthus’ scarcity theory in Chapter Three? Today most of the world still accepts this concept as the truth even though, in my opinion, it is an outdated module.

Can you see where all of these sayings and belief systems have their origins?

Now, why do people not query this limited resources belief? One reason is that we have been trained to believe the “experts” - the professors and doctors and chartered accountants and financial planners who advise us, and are considered by most people as “experts”.

We were trained never to question them, and so we just accept what they say as the truth. That is how the educational system works too – so we have been trained from a young age in this way of behaving!

Please do not get me wrong. I am not saying you should not use experts to implement your strategies because that is why they are there and this is what they have been trained to do, but when it comes to giving you advice on how to get your money to work for you, you should be careful.

We do not know how to ask the Right Questions.

Add to this the fact that we do not know how to ask the right questions and you will quickly understand why we have to invest so much time and effort in educating ourselves.

We must break this limited belief system first before we can begin to really learn about the economy, money, and finances.

Unless we take action nothing will happen. Why then do the majority of people not take action?

I think one of the main reasons is that they do not know how to ask the right questions. They have never been taught how to ask the right questions.

Another reason is the limited beliefs people have. We all know where these ridiculous ideas originate: “There is not enough” or “Money does not grow on trees” or “It is difficult to make money”.

At the same time our belief systems flourish on inaccurate information like: “If you really love me – you would do ……” or “No one cares about my needs” and so forth.?

Thinking like this is sloppy, immature, and most of all distorted, leading to a lot of unnecessary problems in our relationships and other important areas in life.

People are sometimes so afraid to make mistakes or to be rejected. They are afraid that they will look stupid.?

They will never admit that they do not know something and therefore they do not ask questions.

I have seen in my workshops that professionals often keep a low profile and do not ask questions in front of the class because they are afraid to appear ignorant.?

But unless we ask the right questions how can we learn?

Another reason why people don’t ask questions is a result of low self-esteem. “Who am I to stick my neck out and ask,” they think. Or “I’m sure my question is too stupid to ask.”

The last reason why we don’t pose questions is pride. We don’t want anybody to think we don’t have all the answers. The truth is that we do not have all the answers.?

Nobody does. We never stop learning and we cannot learn unless we ask questions. Or perhaps I should say, we should never stop learning because it leads to growth and to a better life.

So we need to get into the habit of asking questions and not worrying about how we come across.

In other words, we need to put some serious effort into “re-educating” ourselves, to expand and overcome our limited belief systems and achieve our full potential.

In order to help you, I want to reveal a couple of traits of successful people.

• They invest in themselves diligently.
• They are persistent.
• They believe in themselves.
• They are willing to start small.
• They are willing to do something.

Be careful of wanting to know and plan for everything in the smallest detail before you start. I have a surprise for you - you will never begin if this is your attitude. In fact, this approach can become a kind of unconscious way of putting it off, a way to procrastinate.

In real life, we learn as we do. Mistakes are part of the process. When I started the financial challenge I had no idea what I would do or how I would do it.

I just did it. And as my students have also found, it is liberating, exciting, rewarding, surprising. It puts the zest back into life!

Another False Doctrine – or is it?

The educational system teaches us much that is just plain wrong and amongst these lessons is the doctrine that people are the most valuable assets and investments of any organization. Well - perhaps that is true for the corporate world but from an entrepreneur's point of view, I am not so sure about this statement.?

Why do I say this?

As an entrepreneur, I have spent many hours and much effort training people to become extraordinary. But as soon as they have learned the necessary skills what do they do?

They become demanding – and this can cost money, time, and resources.?

Many times someone else (like head hunters) will offer them a better “deal” and your investment is gone. In other words, people are not always an asset.

I have also experienced from a professional point of view that you can train people, share trade secrets and as soon as they start to become successful, they go out on their own. Again your investment is down the drain.

So in this challenge, I decided to concentrate my time and efforts on building systems that are based on The Formula For Riches rather than concentrate on building businesses around people. It also means that you can do it too – and avoid the pitfalls of conventional business.

Responsibility.

Unless you take full responsibility for your personal, real education, unless you take the time and put in the effort required to absorb this new information, you will not be able to do what I am doing.

As a Wealth Creator, you are a person who has the ability to make your money work for you, instead of working for your money.

What about the Future – Can I Predict it?

I cannot predict the future. I believe no one can - but I also believe that God has given us a wonderful gift – the ability to make decisions. We are free moral agents.?

We can choose.

If we choose the right actions and have the right system to guide us, we can make life a lot easier. If we want to become rich the same truth applies. We must make the decision and then start the process of becoming Wealth Creators ourselves.

I want to tell you what I am planning to do next in the Wealth Creation Challenge as I follow my proven system.

Last year my passive income from this challenge (before tax – and only two years after I started the challenge) was $285,000. Yet I did not spend on average more than five hours per week on generating this income.

(Note: due to space constraints, this has been an abbreviated introduction to my Wealth Creator Laws – not a comprehensive study of them.)

For more information on the Formula for Riches book;