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How Arnold Schwarzenegger Totally Recalls making $20 million-dollar paychecks

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Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength. – Arnold Schwarzenegger

Arnold Schwarzenegger is one of the biggest movies stars in the world. His iconic roles in The Terminator, Predator, Total Recall, and True Lies are just some of his hit Hollywood blockbuster movies. During the 80’s and 90’s he raked in big bucks at the box office and cashed in big paychecks at the bank as a result.

In my quest to study the self-made, I decided to read up on the “Governator” himself, Arnold Schwarzenegger.

I actually mentioned Arnold in a couple posts I wrote, Forget casinos, bet on yourself and Money Lessons I learned from Jay Leno.  Now, I am going to talk about how he became self-made.

Arnold wrote his autobiography, written in 2012, entitled, “Total Recall: My Unbelievably True Life Story.” Clocking in at 656 pages long, it is a massive read. I actually completed this undertaking last December 2017. It took me 3 weeks to finish reading from cover to cover. In the book, Mr. Schwarzenegger actually lists his paychecks for his hit films. At one point, he was making $20 million per film.

How did he do it? There is only one word to describe it: unbelievably.

Here is his story.

ALL GREAT STORIES HAVE GREAT BEGINNINGS

The mind is the limit. As long as the mind can envision the fact that you can do something, you can do it, as long as you really believe 100 percent. – Arnold Schwarzenegger

Arnold Alois Schwarzenegger was born on July 30, 1947, in Thal, Styria, Austria. His father, Gustav Schwarzenegger, served in World War II. Arnold’s mother, Aurelia, was working at a local shop when she spotted his father in uniform. That was all it took for her to fall for him as she loved a man in uniform. I must admit, so did I.

His parents married on October 20, 1945. His mother was 15 years younger than his father as she was 23. They were strict disciplinarians. Arnold said in Austria the rod was not spared if a child was disobedient. In the book, he said his father would make him and his brother earn their breakfast by doing pushups or sit-ups.  His father believed that the way to fix any problem was through discipline.

YOUNG EXUBERANCE

Arnold was an average student but, was popular and well-liked for his boundless energy, humor, and cheerfulness. He started playing sports and picked up his first barbell at age 14. He decided that bodybuilding would be his career. His deep interest in the sport took up almost all his spare time. At one point, he even broke into the local gym when it was closed and began to lift weights for a couple hours just to get in his workout.

Money was tight growing up. There was no inside plumbing or bathroom. They fetched water to bathe from a local well and one of the highlights of his youth was getting a refrigerator, where he said they would marvel at the opening and closing of the fridge door. When going shopping his mother only used cash and never bought anything other than the essentials.

Austrians believed in conformity and were not allowed to be individuals. However, Arnold had different plans. He was considered a rebel because he wanted to move to America and be rich. He stated he wanted to be somebody. Due to his rebellious tendencies and other issues, Arnold was never close to his father as his favorite was Arnold’s brother. However, he had a close relationship with his mother until her death.

A chance meeting at his bodybuilding coaches house would change his life. Arnold, in 1966, met bodybuilder and movie star Reg Park, his idol, and he went on to become his mentor. Schwarzenegger decided he would not only be a body builder, but also a movie star, just like Reg Park.

BARBELLS AND COMPETITIONS

Training gives us an outlet for suppressed energies created by stress and thus tones the spirit just as exercise conditions the body. – Arnold Schwarzenegger 

Arnold would work out almost every day. Lifting weights became an obsession. He would break into the gym on weekends when it was closed and work out.

He couldn’t stand to miss a workout. Arnold has said he couldn’t even look himself in the mirror, if he missed a workout. That is dedication. This was 1961. By 1965, all Austrian males, at the age of 18, are required to fulfill one year of military service, but Arnold had other plans.

AWOL BODYBUILDER

While in basic training, Arnold learned he was able to eat meat every day. Growing up, his mother had a garden where she would grow vegetables so she could feed her family on a tight budget. They rarely ate meat. Once he was able to get protein on the daily, he was constantly growing out of his uniforms. He went up a size every month and required a new uniform several times.

During his service, he learned basic tank mechanics, almost wreaked one by not putting it in park, and learned to ride a motorcycle. He said those skills would later serve him well while doing the Terminator and other films. Arnold learned to become pretty fearless. He was scared, but he would push ahead anyway.

During his time in the military, a Junior Mr. Europe Contest came up. He went AWOL and served a week in military prison because he chose to attend. But Arnold won that title.

He later received a job offer to work and train in a gym as a bodybuilder. He used this information and his past transgressions to convince the military to release him and he received an honorable discharge. That competition in Europe made him famous and the Mr. Universe title was his ticket to America-the land of opportunity, where he felt he could become rich.

CALIFORNIA BOUND AND HOLLYWOOD DREAMS

Arnold was happy to leave Austria as he had been telling people for many years as a kid he was going to America, but no one believed in his dreams. But the day came in October of 1968, when he was headed to California to train at the infamous Gold’s Gym in Venice, Los Angeles. He could barely speak English, but at the age of 21, was going to America to live and work.

Arnold was able to get a role in a film in 1969, “”Hercules in New York”, which paid him $12,000. He continued to train from 1970-1974 non-stop. In 1970, he won his first of seven, Mr. Olympia titles.

EDUCATION IS JUST AS IMPORTANT AS PHYSICAL FITNESS

In the 1970s, Arnold is enrolled in college throughout the decade. He bounced around to several taking math, English, science, and eventually earned his bachelor’s degree from the University of Wisconsin-Superior in 1979. It took about 10 years, but finally he had his college degree.

He also stated in the book he would write down his goals on an index card at the start of every new year.

At one time in his life, he met Pope John Paul II in 1983, they talked about workouts. The pope rose daily at 5 a.m. in order to stick to his regimen. It was something like 300 push-ups. If he could do it, this book says, you can do it, too. This is where I got the idea to start my daily fitness routine. I, personally, like boxing.

ALL ROADS LEAD TO HOLLYWOOD

All roads not only lead to Rome, but in Arnold’s case also to Hollywood, California.

OLYMPIC CHAMPION

Arnold also competed in the Olympics and won the title of Mr. Olympia 3 times. After the 1971-74 competitions, in 1975, filmmakers convinced him to do the bodybuilding film Pumping Iron.

SAVING MONEY AND INVESTING

The worst thing I can be is the same as everybody else. I hate that. – Arnold Schwarzenegger 

Arnold is big into frugality. He saved every dime he could from any winnings he made while competing. When he first got to America, he had $27,000. That is the equivalent of $173,000 (adjusted for inflation) in 2017. His motto was turn every dollar into two.

Arnold invested his money in real estate. He researched for 3 years and worked with an agent before finally setting his sights on putting a down payment on his four-unit apartment building at the cost of $214,000. Then he sold the building the next year for $360,000. Then immediately put his profits into a new 12 unit building. He did this to avoid the huge tax bills of his profits.

The Los Angeles real estate market was booming. You could make $100k profit in just a year or two.

Arnold then bought a 36 unit building, followed by a 100 unit building. Within about 10 years, Arnold Schwarzenegger was a real estate tycoon and millionaire.

This was close to 7-8 years before he would become a bankable Hollywood action star. He was able to be pickier and choose plum movie roles because he did not have to take any role that came his way. He always believed in going to the top. Go where its empty and you can chart your own path. He aimed to be the leading man.

CONAN

“The idea is not to live forever, it is to create something that will.” ― Andy Warhol.

After small roles in various film and television, he was offered the lead in his breakthrough film role of Conan the Barbarian in 1982. The movie was a hit.

Love the painted look.

Then he starred in the sequel, Conan the Destroyer, in 1984.

For me life is continuously being hungry. The meaning of life is not simply to exist, to survive, but to move ahead, to go up, to achieve, to conquer. – Arnold Schwarzenegger 

Arnold got to meet and work with lots of people. He feels that building relationships is key to having a successful, happy, and fulfilled life. Some of those people include, Linda Hamilton, Sharon Stone, Michael Ironside, Vanessa Williams, and the late Andy Warhol.

THE TERMINATOR

I’ll be back. – Arnold’s famous line as The Terminator

Arnold was offered a role in a film where there is a futuristic war between man and machines. At the meeting, with Gale Anne Hurd (The Walking Dead) and James Cameron (Avatar), he was convinced that the role of the T1 was pivotal, if the film was to be a success.

He was right. Listen to Ah-nuld! I just watched the film a few weeks ago. It still holds up.

Here’s one of my favorite scenes from the film; it’s Kyle Reese, played by actor Michael Biehn. He did an incredible job as he also did in the film Aliens.

Arnold Money Lesson: When Arnold met his future wife, Maria Shriver, he accidentally left his wallet at home. She had to write him a check for $70, to pay his train ticket home. He paid her back and wrote her a thank you note. In addition, he learned a valuable lesson. Always have cash. From that moment on, he would carry $1000 cash and a high or no limit credit card. He learned the motto of this blog, that cash is king.

He then decided to do a film by new first time director, Jim Cameron, called The Terminator.  It went on to gross $80 million and Arnold was officially a bonafide movie star.

Fun Fact: Arnold likes to tell jokes. He decided early on that his films should include quips that are memorable one-liners and catchphrases.  Like this, “Hasta la vista, baby” — Terminator 2: Judgment Day.

I actually heard that same phrase in a Jody Whatley song Looking For A New Love from her self-titled 1987 album. That was 4 years before T2.

HOLLYWOOD MAKING IT RAIN DOWN ON ARNOLD

“Money doesn’t make you happy. I now have $50 million, but I was just as happy when I had $48 million.” – Arnold Schwarzenegger

From there it just keeps getting better. He’s a hit factory and the paychecks got bigger and bigger. Arnold made $250,000 for Conan and $360,000 for Conan 2. Then took a pay cut for The Terminator, at $75,000.  Arnold earned $1.5 million for 1985’s Commando, $3 million for 1987’s Predator and $8 million for 1988’s Red Heat. Bang, bang, bang! That’s all money in the bank.

He hit the deca-million ($10 million USD) paycheck mark with Total Recall in 1990. Then made $15 million for Terminator 2 and True Lies. Arnold eventually hit a $20 million-dollar payday in 1996 with Eraser. Yes, that’s US Dollars!

Source: themovietimes.com

He is estimated to have a net worth around $400 million dollars.

And there you have it.

At the end of the book, he also listed Arnold’s Rules for Success.

Here is Arnold talking Life’s 6 Rules during the Governor’s 2009 USC Commencement Address. He said be unique, be a maverick. Maybe even an outlier?

How being an outlier can make you rich

So let’s recap…

  • Start with a dream
  • Write it down
  • Say out loud what you want to do or be
  • Work hard
  • Break the rules, not the law
  • Don’t be afraid to fail
  • Exercise
  • Weight lifting builds muscles and confidence
  • Trust yourself
  • Ignore the naysayers
  • Save and invest
  • Real estate can make you a fortune
  • Financial independence equals freedom
  • Give something back
  • Turn every dollar into two
Budgeting, Celebrities and Money, Credit Cards, Retirement, Saving, Self-Made Millionaires, Wealth

Money Lessons I learned from Jay Leno

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Photo: Forbes.com

Everyday and in every way, invest in yourself. Invest in your health and education to help build your wealth. With money comes power and protection. The wealthy are protected. Build up your knowledge and money coffers. A war money war chest is your way to ditch the 9 to 5 and get out of the rat race.

Jay Leno gives advice on how to do just that.

MONEY LESSONS FROM JAY

Jay on starting out

“I wasn’t a millionaire when I started.”

“I would alternate between the two, so it was cars and hamburgers, which are actually still two of my passions.”

He started his career working for minimum wage at McDonald’s in Massachusetts. Jay also worked at a Ford dealership. He discovered the key or secret sauce (pun intended) to getting rich: Developing multiple streams of income.

Jay on working more than one job

“I always had two incomes.”

“I’d bank one, and I’d spend one.”

“I had two jobs because I realized that was the quickest way to become a millionaire.”

“When I got ‘The Tonight Show,’ I always made sure I did 150 [comedy show] gigs a year so I never had to touch the principal.”

He has worked two jobs simultaneously since he was 16.

And there you have it. Basically, if you want riches, then you have to put in the work. If you work 40 hours a week, then find a way to work 50 or 60. Gotta make that paper.

Jay on saving money

“When I was younger, I would always save the money I made working at the car dealership, and I would spend the money I made as a comedian.”

“When I started to get a bit famous, the money I was making as a comedian was way more than the money I was making at the car dealership, so I would bank that and spend the car dealership money.”

“Then I got to the point where the comedy money was, like, five times the other money, so I decided to flip it around and save the comedy money.”

“I would always spend the lesser amount of what the two were.”

Therefore, if you are working 2 jobs or more, then you bank the bigger paycheck and spend the smaller checks. Bank the bigger of the two checks and live off the other.

Forget the pundits that tell you not to save. There is value in saving. You need an emergency to help in case of job loss or illness. Life is full of hiccups. Once you have saved reasonable amount, then you start investing your surplus income.

The key is not to only save, but to also invest. Savings help you live your life to the fullest. In addition, savings can help you fund your dreams. Not having to go to the bank for a loan is an incredible feeling.

Jay on living on one salary

“I pretended as if I didn’t even have the ‘Tonight Show’ job.”

“You know, when you start making money, you get lazy. I wanted to make sure I always had that hunger, so I never looked.”

“It would go directly into a bank.”

Simply put, bank it and forget it.

Jay on patience

It took 22 years to accumulate, “a nice little nest egg.”

You heard it here folks. Building wealth takes time. In many cases, it takes a couple decades. There are no get rich quick schemes. There’s is no free lunch. There are no shortcuts. You do the work, get paid, invest the surplus incomes, and wait to earn interest.

Jay on retiring

“If you do something and it works, then keep doing it.”

You do not have to retire early unless you want to. If you are passionate about something, and can make a living doing it, then do it.

Jay on Buy-And-Hold

“The McLaren F1, I paid $800,000 for it in 1998. The last offer I got was $12 million. … The nice thing is, if you buy what you like, and it doesn’t go up in value, you still like it.”

Warren Buffet likes to buy-and-hold forever. Therefore, don’t even part with your cash, if you don’t want to keep an item to infinity and beyond. Just don’t even open your wallet.

Jay on avoiding credit cards

“I barely use credit cards.”

Words to live by. Either use credit sparingly for a purpose and get it paid off ASAP or don’t even bother using it at all.

Jay on house buying

“I didn’t buy my house until I had cash. When you own something and you don’t have to write checks every month, you’re just better off.”

I learned from James Brown, Dick Clark, Jay-Z, Oprah, JK Rowling and Michael Jackson to own what you do. You can control your earning potential and life, if you own. You can continue to make money off the things you own and control for many years to come.

Regardless, of whether or not you’re still working. You can still earn royalties from work you have done in the past. That is how the rich get richer. Earnings on top of earnings.

Jay on debt

“I don’t carry any debt. I don’t write checks at the end of the month for anything.”

“I didn’t buy anything I couldn’t afford to pay for in cash.”

“Here is the money, give me the thing, transaction over.'”

Jay hates installments, as do I. His cash only solution is what the world needs to adhere by.

I have literally saved for two years or more to purchase items or services I wanted or needed.

When I wanted Lasik, I used my flexible spending and waited about 3 years before I did the procedure. It cost between $4,000 to $5,000. And was worth every penny. Paid cash, not credit.

When I needed dental work done, I saved for 2 years. Paid cash, no installments.

Don’t buy on credit, build a fortune.

Jay on Retooling

“Since high school, I’ve always had two jobs. I worked at a McDonald’s and I worked at a car dealership. … When I was doing the Tonight Show, I’d be on the road at least two to three days a week because I thought, ‘We’ll see how long this lasts.’ ”

Do not ever get too comfortable. Things can change. Always have more than one way to earn a living.

Jay on owning

“I own everything. I own my buildings. I own my cars. That way, if it ends tomorrow, I know what I’ve got.”

His conservative money philosophy gives him peace of mind. When you are out of debt you just feel better. Take control of your finances and this too will help give you some peace of mind.

Jay on old-fashioned values

“I’m not a big splurge guy, partly because I had Depression-era parents: “They just frightened me to death, saying, ‘You gotta save every penny!'”

“It’s a little old fashioned, I suppose, but it seems to work pretty well for me.”

No impulse buying. This is the debt trap. Plan your expenses. Budget just means you plan where your money goes and it gives you permission to spend. Use it.

Jay on Taxes

“I just pay. Fine, I’ll get another job, I’ll work harder. That’s probably not very good tax advice. I don’t have money in the Cayman Islands or any of that nonsense.”

Always pay your taxes. Period!

Jay on being frugal

“McDonald’s sent me these Happy Meal coupons, so one day I’m in the McLaren and I’m going to McDonald’s. I say, ‘Give me two Happy Meals.’ And I give them the [coupons].”

“Now I look like the cheapest guy in the world driving this multimillion-dollar McLaren and I’m trying to get a free hamburger.”

“I’ve never touched a dime of my ‘Tonight Show’ money. Ever.”

He hates spending on clothes and has not touched one dime of his Tonight Show money. At one point, he was earning around $30M a year! It pays to be frugal.

So, you just avoid the mall, invest the money you would spend on clothes and start earning your way to a fortune with compound interest. Delay your gratification. Discipline is the key to wealth. Once you have it, no one can take it from you. Then you can save money to invest. Easy as pie.

Jay on Shifting Gears

“So many friends of mine, all they ever did was the TV show. When the TV show ends, suddenly their life ends, because that was their whole life. I was never that guy.”

It’s great to have hobbies and interests outside of work. See if you can turn a hobby or side gig, into an income. At the very least, have something to do after one thing ends. Remember, no idle hands.

Jay on shopping

“I’m not a big shopping guy. I’m just not interested in clothes outside of the essentials.”

“To me, it seems like a complete waste of money. I just want to have enough clothes to cover legally what parts I have to cover.”

Hear, hear! I used to like shopping. Until I didn’t. That happened once I learned I was losing a small fortune for that new purse or shoes.  Read my post How Millennial Money inspired me to start saving $13,333.06 a year for more on that topic and see how I quit shopping for good.

Jay on Fixing Things

“When you’re in a business like show business, everything is subjective. Some people think you’re funny, some people think you suck. …When something’s broken and you fix it, no one can deny it’s running.”

Very true. Always be tweaking or working toward expanding and doing better. People notice you the harder you work.

Jay on setting high standards

He, like Coco Chanel, believe in setting high standards for yourself. Chanel said, “keep your head, heels, and standards high.”

Jay learned this attitude while working at McDonald’s. A key pillar of success: You can never go too far to ensure you’re producing a great product.

He would go home every night after work and write jokes. Jay would go through hundreds with his staff and get it down to the top 20. He would record himself and then re-listen for timing. Tedious? Yes, I know. But effective. The hard work paid off.

Jay on idle hands

“I meet with the writers at about midnight or so and work until about 4:00 a.m.”

“I sleep four hours, maybe five.”

The way he saw it was, “if you have time to complain, you don’t have enough work to do.”

I am notorious for going to bed thinking of work and getting up to work. Sometimes I get up in the middle of the night to write down ideas about work. I work so much I barely have time to breathe.

I learned that from Pat Benatar who was a workaholic in the 80’s.  But guess what? She wrote hits songs for like a decade. When there are times I need a break or pick me up while working, I’ll listen to her songs Invincible, Shadows of the Night or Love is a Battlefield.

For those who may not know or remember those songs, check out the links below. Good stuff.

Jay on failure

“You learn a tremendous amount from the mistakes.”

I have learned to fail better. It makes you stronger. It also humbles you and makes you more empathetic to others.

Jay on money to blow

“So many people get to be the age I’m at now and they’ve got nothing because they just blew it all.”

“I put my money in a hammock and say, ‘You relax. I’m going to go work.’ And when I come back, I put some more money in the pile.”

It’s your money. Don’t blow it.

Jay on Life

“Life is not that complicated … if you’re kind and decent, and try to be honest, it’ll probably work out. Yeah, you’ll get screwed once in a while. I certainly have, but that’s okay … don’t dwell on it.”

Pick yourself up, dust your wallet off, and get back into the grind. Don’t rest on your laurels. Put your head down and work. Stay humble and stay hungry. Generate multiple streams of income, diversify your earnings, increase your savings, and build your wealth. Get that net worth pumping in that interest faster than Arnold Schwarzenegger did lifting weights in Pumping Iron and you will start rolling in the dough!

Just FYI: Jay is worth over $300 million dollars. Has no debt. Is a self-made millionaire. And still works at the age of 68.

Celebrities and Money, Entrepreneurship, Financial Freedom, Financial Independence, Self-Made Millionaires, Wealth

How being an outlier can make you rich

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“Ten thousand hours is the magic number of greatness.” – Malcolm Gladwell

“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” – Bruce Lee

No one can arrive from being talented alone, work transforms talent into genius. – Anna Pavlova

If you’re a fan of Enter the Dragon, like me, then you know that talent and practiced skill are the difference between winning and defeat.

Bruce Lee also said Knowledge will give you power, but character respect. 

That reminds me of this saying from The Rock.

I also notice that mavericks tend to get rich.

Those willing to do more than the bare minimum. We are talking captains or titans of industry and business mavericks, that buck the trend, throw caution to the wind, and are all in.

Steve Jobs, Bill Gates, LeBron James, Phil Knight, and Walt Disney, to name a few, embody the characteristics of what it takes to dominate in one’s field.  They are outliers. If you dare to dream and be an outlier yourself, then you are in great company.

WHAT IS AN OUTLIER?

A person or thing that is atypical within a particular group, class, or category. – Merriam Webster Dictionary

Simply put, you are different than the rest. You stand out. An outlier is the proverbial diamond in the rough or needle in the haystack. The 1 out of a million.

We all know how it worked out for Aladdin in the end.

When everyone else goes right, you go left and turn down the street.

You have tunnel vision. All energy is focused on a single task until it is completed or you are an expert. The rejection of noise and naysayers are a must.

A great definition of focus is this: To follow, without halt, one aim: There’s the secret of success. – Anna Pavlova (Prima Ballerina)

WHO ARE OUTLIERS?

The more you like yourself, the less you are like anyone else, which makes you unique. – Walt Disney

We will take the examples above and expand on those individuals that have either been born great, achieved greatness, or had greatness thrust upon them. (To revise Humphrey Bogart’s famous words: Here’s looking at you, William. Shakespeare that is.)

So, who are these mavericks you say? Just keep reading.

Steve Jobs

Photo: Forbes.com

Steve Jobs was the CEO and co-founder of the most valuable brand in the world: Apple. The first ever trillion-dollar company in the entire world.  He pioneered revolutionary technologies. Thanks to his genius and willingness to dare to be different, we now have a computer in our pockets.

He decided to buck the trend and paid no dividends for Apple shareholders (this changed in 2012), as he thought that money could be better spent to expand the company.

Forbes, in 2011, estimated Jobs’ net worth to be around $6 billion to $ 7 billion dollars prior to his passing.

Bill Gates

Photo: Forbes.com

Bill Gates is a business magnate who is the founder of Microsoft. He took the road less traveled by famously dropping out of one of the most elite and prestigious universities in the world: Harvard.

Mr. Gates devoted every minute of his time to computer technology. He would read trade magazines and stay informed on the latest in tech. Becoming an expert in the field and later launching Windows in 1985. It became the top operating system for PC’s.

Forbes lists Gates’ net worth at $96B.

LeBron James

Photo: Forbes.com

LeBron James started playing basketball at a very young age. He loved the game so much that he played and practiced non-stop. By the time LeBron was 14, he had ESPN covering his high school basketball games because he was just that good.

He was drafted in 2003, to play professional basketball with the NBA. It is estimated that he spends $1.5 million dollars a year just on his health care and personal training to keep his body in the best athletic shape possible. He would go on to win the first ever championship for Cleveland. Ever. He recently built a school and is offering college scholarships to those students.

Forbes estimates James’ net worth at $440 million. That’s a lot of M’s just for going hard in the paint. It pays well to be the best.

Phil Knight

Photo: Forbes.com

Phil Knight is a business magnate and the co-founder of Nike. He ran track for the University of Oregon under the infamous track coach Bill Bowerman, with whom he co-founded Nike.  Bowerman is famous for coaching 31 Olympic athletes including the legendary Steve Prefontaine.

After attending Stanford Graduate School of Business, Knight decided to become an entrepreneur. His business plan paper became the catalyst for his company. He traveled to Japan to see about good running shoes, which would go on to become Nike.

Forbes estimates Knight’s net worth at $31B.

Walt Disney

Photo: Forbes.com

Walt Disney was a pioneer in the American animation industry. He always loved to draw. He had a paper route with a grueling and exhausting schedule as a kid, which contributed to his poor grades at school.

None the less, he continued to draw. He had $40 dollars in his pocket when he moved to CA to start his career. After, getting fired from a job in animation at one company, he decided to start his own.

People laughed at him for wanting to draw a talking mouse. An old legend states he was rejected 302 times to get financing to start Disney World. He ended getting the last laugh as Disney is the biggest and most diversified mass media and entertainment conglomerate in the world.

At the time of his death in 1966, he was estimated to have a net worth equal to $1 billion in today’s dollars (adjusting for inflation).

HOW CAN BEING AN OUTLIER MAKE YOU RICH?

Go confidently in the direction of your dreams. Live the life you have imagined. – Henry David Thoreau

People are willing to pay for unique. Something that is one of a kind. The rarer the better.

Do something so good that people can’t wait to see you.

“Make sure it’s mean so them fiends keep on coming back” –  Who Dat (Song by J. Cole)

Keep them wanting for more.

They say the riches are in niches.

Mae West wrote on taboo subjects in the 1920’s. She made a mint in real estate and oil. This is what she thought of all that hoopla she made way back when.

I believe in censorship. I made a fortune out of it. – Mae West

Figure out what you are good at and make it happen.

When you start out you have to take what you can get, but when you blow up, you can name your price.

Remember that song Back Then by Mike Jones. Yeah, it can be something like that.

GO AHEAD AND TAKE THE ROAD LESS TRAVELED

Two roads diverged in a wood, and I — I took the one less traveled by, and that has made all the difference. – Robert Frost

Many people have made a fortune off being different.

Success depends in a very large measure upon individual initiative and exertion, and cannot be achieved except by a dint of hard work.  – Anna Pavlova

Let’s see some numbers for clarity and perspective.

Only the best can become NFL players. Here is what the best can make.

Rookie Salaries in the NFL

Source: FootballNextLevel.com

Highest Paid Players in NFL

Source: Spotrac.com

These are just salaries for one profession. There are many others.

CEOs are making bank. In addition, so can authors, producers, actors, musicians, professors, doctors, and more can as you can garner success in many other fields.

How hard are you willing to work to make success happen?

Dwayne “The Rock” Johnson says success takes no less than everything you’ve got. You don’t need directions on the road to success, just point to the top and go! Here are a few more of his words of wisdom for motivation.

Celebrities and Money, College, Credit Cards, Financial Independence, Retirement, Saving

Meet an orthodontist with $1 million in student loan debt

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Unless you have not been reading headline making news lately, then you have heard of the man who ran up a tab of over a million dollars to become an orthodontist. It was featured in the Wall Street Journal and has attracted a lot of attention. His name is Dr. Mike Meru. He owes approximately $1,060,945.42 as of the reporting of the article in May 2018. There are only 101 people with $1 million in student loan debt. He is one of those people. Here is how this went down.

HOW TO GO FROM DEBT FREE TO OWING $1M IN 13 YEARS

Mr. Meru grew up in California. He has two brothers and is the eldest of the three. His parents said they would help pay for college. He got through undergrad with the help of his parents and by working through school. He graduated in 2005 from Brigham Young debt-free.

From there he decided to go to dental school.

Before we go any further in this story, I want you readers to know that becoming a doctor is incredibly expensive. It is not uncommon to have medical students be in debt for hundreds of thousands of dollars. Anywhere from $200,000-300,000 in medical school debt is their reality.  Dental school is also one of the most expensive programs and can cost upwards of $70,000 or more per year.

Getting back to Mr. Meru, he was informed that going to dental school would cost anywhere from a price tag of $400,000-$450,000 in student loans plus interest.

For me, this is a red flag. Even if you can earn a six-figure salary as a doctor, I am risk-averse and would be turned away by this eye-popping amount. However, if your goal is to be a doctor and be of help and in service to others, then this is what the cost will be.

FROM $0 IN STUDENT LOANS TO $340,000 IN FOUR YEARS

He then chooses one of the most prestigious institutions for dentistry: University of Southern California.  This is what he paid for four years of school from 2005-2009:

Year one at end he owed: $43,000

Year two at end he owed: $115,000

Year three at end he owed: $230,000

Year four at end he owed: $340,000

Dr. Meru has now finished dental school. He owes over a quarter of a million dollars in debt within four years of graduating from college debt-free.

Keep in mind that college tuition goes up every year around the country. USC is no exception. In addition, interest rates have gone up on student loans as well. In the WSJ article, his loans were at various interest rates throughout his time at school. Also, tuition increases at USC would go for about 6%. This is a huge amount of money. For instance, a 6% increase over 3 years would be the equivalent of an 18% increase in tuition by overall from start to finish.

The cost of college is going up faster than the cost of inflation. Generally, inflation goes up by about 3% annually increasing the costs of goods and services. Therefore, if it cost a dollar ($1.00) last year it will now cost $1.03 this year. Imagine paying 6% on $50,000 and then 6% on 53,000 and so on, all the while you are also accruing interest on this borrowed amount.

You are getting hit with a two combo even worse than Mike Tyson could ever do.

First, you get hit with tuition increases of 6% in this case. Second, you pay interest on the loans you take out of approximately $50,000 per year. The compound interest is brutal.

In the article, it states that Dr. Meru found his calling as orthodontics changed his life as a teenager. However, the one caveat he did not take into consideration: inflation. If you want to learn more about inflation, read my article Money Lessons I learned from Scrooge McDuck. The cost of becoming a doctor 20-25 years ago was cheaper then as it is way more expensive now.

This is not the first time I have seen people take bets like this on their education.

If you were to do some research, you will find that 50 plus years ago education was pretty reasonable and in many cases more  affordable. I will provide one such case below.

In the book, Generation Debt by Anya Kamenetz, a Yallie that was born toward the end of the 1970’s, stated in her book that her parents old college professors were in shock at the sticker price of Yale over a seven year time period which had risen- from $30,000 to almost $39,000. Her own father, who attended Yale on a scholarship, had appropriately asked the justification of the tuition increases. This considering when he went there the price was…wait for it…$3,000. That means within one generation tuition has increased $1,000% or to roughly 10 times the cost.

The absolute saddest and funniest part of the book, in my opinion, was at the high school graduation brunch of her younger sister. Her parents also wanted her sister to go to Yale, but cited cost concerns and rightly so. The speaker said of the 180 graduates they would divide $18 million in scholarships- that’ll just about get them to Thanksgiving. That was putting it mildly.

The problem is that education is not an equalizer. Although, there is nothing wrong with getting a good education. And going to a great school with high-quality education is awesome; some people may have to simply understand that it may not be the best option for them individually.

The jury is still out on the value of an education. Sure, they let you know on college brochures and in the media that a college degree can net you more than $1 million more in lifetime income, but in Dr. Meru’s case did it also say that if you flip a coin, it could be the opposite and you could owe $1 million dollars? I don’t think so.

Many employers are paying in wages nowhere near the cost of college.

I have read that some places cannot put a dollar amount on how much to pay their employees for their degree, but colleges have put a price on it as USC cost Dr. Meru over $400k.

FROM $340,000 IN STUDENT LOANS TO $601,506 IN THREE YEARS

You would think by finishing dental school that his education was done and over with. Alas, then there is residency, which is training for doctors. However, for dental specialists this costs too. Many doctors are paid while in residency, but Dr. Meru must continue to pay for training for an additional three years FROM 2009-2012. This would increase his debt to over $600,000.

FROM $601,506 IN STUDENT LOANS TO $1,060,945.42 IN SIX YEARS

Pay close attention here because things move really quickly.

He consolidates after finishing all his education and training. He then owes $724,817 by 2012-2013. This includes in interest and principal as a consolidation not only changes your repayment terms, interest rate, and payment amount but interest can capitalize. Capitalization is what makes student loans such a slippery slope. It makes you owe interest on top of interest making it harder to get it paid off.

From there he continues to accrue interest and owes $882,300 by 2015.

Within 3 years, interest continues and grows the debt to $1,060,945.42 by 2018.

How is this even possible? In 2005, Congress created Grad PLUS loans that removed loan limits and allows student to borrow for every expense from tuition to rent and living expenses. Dangerous.

He is now making monthly payments of $1,589.97. He has two daughters, a wife, a $400,000 mortgage, a $225,000 salary and is accruing $130 per day in interest on his loans, which is $3,900 per month and $47,000 per year.

If not for Income-based repayment, he would have to pay $10,541.91 per month. Instead, he pays about $1,600. This does not pay all the interest that is accruing and does not even touch his principal. Within 20 years he will owe $2 million. If forgiven, he will owe $700,000 in income taxes. Currently, his take-home pay after income taxes is $13,333 per month. That means if he pays the $10k monthly payment, he would have his debt paid off in about 13 years, but bring home less than $3,000 per month.

 WHY SO MUCH DEBT?

Keep in mind that it is mostly graduate students that end up in the most debt. With the cost of graduate school (2-4 years) easily topping $20,000 or more per year, it can dwarf undergraduate costs. Over 20 years ago no undergrad or graduate students owed six-figures of student loan debt. Today, over 2.5 million of graduate students do.

After reading about Dr. Meru’s story, I feel that there is a serious problem with the funding of higher education. I want people to be doing the opposite of owing interest on a $1 million and instead be earning interest on this amount of money.

I want people to have the trifecta of retirement funds- pension or 401(k), savings, social security. Over a 30 year career you want to have a paid for home, 25 times your annual income in a retirement account, and be able to get social security or have at least two forms of income to supplement your savings.

In the article, his wife said there are a few things that are OK to go into debt for: a home, an automobile, an education. I have to disagree. I say if you can avoid all debt, then do it. Pay cash for all your purchases. For a car you need one loan. Same goes for a home. However, her husband needed 50 loans to fund his education.

If you are unsure why or how you will pay cash for all purchases, let the advice of these millionaires be your guide.

Mark Cuban, billionaire owner of the Mavericks, says if you use a credit card, then you do not want to be rich.

Kevin O’Leary, shark tank entrepreneur, says all debt is evil.

David Bach, financial advisor and author of the Automatic Millionaire, says all debt is bad debt.

I rest my case.

Celebrities and Money, Financial Freedom, Financial Independence, Self-Made Millionaires

3 Rich Habits of Millionaires

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After doing some research on millionaires and billionaires, I have noticed some recurring attributes among them, which include: reading, pursuing a passion, and setting goals.

READ

“The more that you read, the more things you will know. The more that you learn, the more places you’ll go.”

― Dr. Seuss, I Can Read With My Eyes Shut!

Many of the affluent read daily or often. They seem to set aside at least 30 minutes a day for reading. This greatly improves their knowledge of their products, brands, and businesses. When you know what drives the market, then it makes it easier to compete with everyone else. I even read that Marilyn Monroe was also said to be a voracious reader.

I know in my life reading has helped me a great deal. I was able to do better in school, make better informed personal and professional decisions, and increase my investment knowledge.

One of the most successful investors of all time, Warren Buffet, says he reads every day.  Buffet typically spends 80% of his day reading. Here are some quotes from interviews he has done over the years in regards to how to become successful.

THE KEY TO SUCCESS

The CEO of Berkshire Hathaway, when asked once about the key to success, pointed to a stack of books and said, “Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”

WHAT BUFFET READS?

Warren Buffet starts his days with an assortment of national and local news. The billionaire investor tells CNBC he reads the Wall Street Journal, the Financial Times, the New York Times, USA Today, the Omaha World-Herald, and the American Banker in the mornings.

Even though Buffet reads tremendously, it would mean nothing if he did not retain what he has read. Buffets says that knowledge builds up over time. Here are some tips to remember what you read – take notes, skim the text, read out load – are just a few things you can do to retain what you read.

PURSUE YOUR PASSION OR GIFT

“To give anything less than your best, is to sacrifice the gift.” – Steve Prefontaine

I have always had an affinity for writing. I write pretty much every day. My goals are that my writing helps to plant the seed that inspire people, motivate them, and make them feel good about themselves. Writing about finances is the cherry on top of the sundae for me. And I give it everything I’ve got. No less. When I’m sick. I write. When I’m tired. I write. When I was down to my last $2. Still wrote. I would write down my thoughts, hopes, dreams, and goals. I have crossed off at least 5 items on my 10 year to do list. If it can work for me and countless others, then I know it can for you.

Dreams can come true. You just have to believe and lay down the groundwork. There is no builder of a home that would not first lay down the foundation and then build up. The same goes for life. You do not start in at the top. Otherwise, if you do, you are more likely to have created a house of cards, that can easily come tumbling down.  Like the three little pigs, you want bricks and not sticks or straw. You want something that is concrete. Construct your life blueprint on building or creating something that is solid.

If you can, find a mentor. Mentors help guide and keep people on the right path to succeed. I suggest finding someone who has already done what you want to do successfully and then asking them for advice. You can also read their books or attend their workshops. Either way study their success and see if you can imitate it.

SET GOALS

“Set your goals high, and don’t stop till you get there.” – Bo Jackson

The best advice I have ever read was to write down your goals. I have heard this from numerous celebrities including Beyoncé. She said she would write down her goals; and that she wanted to go platinum and sell a million records. Well, she wanted to be financially secure. Well, she can scratch that off her checklist. Simply heed these words: Write it down.

When you set goals and pursue your passion it is a winning combination for success. Instead of watching the clock, you just keep on working. There are too many hours on the clock when you do something you detest, but no enough hours in the day when you do something you love.

Forget the naysayers. They are not you and you are not them.  Focus your energy on doing what you enjoy putting your effort into. The energy you use to pursue your passion or anything that you do well is never wasted.  When you can focus and limit or ignore distractions, you are well on your way toward success.