Brian Tracey 21 Laws of Money

8/12/2019 Brian Tracey 21 Laws of Money

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The 21 Absolutely

UnbreakableLaws of Money

Brian Tracy

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The Laws1. The Law of &ause and 'ffect( Everything happens for a reason;

there is a cause for every effect.

2. The Law of Belief( Whatever you truly believe, with feeling, becomesyour reality.

3. The Law of ')"ectations( Whatever you expect, with confidence,becomes your own selffulfilling prophecy.

!. The Law of Attraction( "ou are a living magnet; you invariablyattract into your life the people, situations and circumstances that are in

harmony with your dominant thoughts.

#. The Law of &orres"ondence( "our outer world is a reflection ofyour inner world and corresponds with your dominant patterns of

thin$ing.

%. The Law of Abundance( We live in an abundant universe in whichthere is sufficient money for all who really want it and are willing obey

the laws governing its ac&uisition.

'. The Law of ')chan!e( (oney is the medium through which people

exchange their labor in the production of goods and services for thegoods and services of others.

). The Law of &a"ital( "our most valuable asset, in terms of cash flow,



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is your physical and mental capital, your earning ability.

*. The Law of Time *ers"ective( +he most successful people in anysociety are those who ta$e the longest time period into consideration

when ma$ing their daytoday decisions.

1. The Law of %avin!( -inancial freedom comes to the person whosaves ten percent or more of his income throughout his lifetime.

11. The Law of &onservation( ts not how much you ma$e, but howmuch you $eep, that determines your financial

12. *arkinson+s Law( Expenses rise to meet income.

13. The Law of Three( +here are three legs to the stool of financialfreedom/ savings, insurance and investment.

1,. The Law of -nvestin!( nvestigate before you invest.

1#. The Law of &om"ound -nterest( nvesting your money carefully andallowing it to grow at compound interest will eventually ma$e you rich.

1%. The Law of Accumulation( Every great financial achievement is anaccumulation of hundreds of small efforts and sacrifices that no one

ever sees or appreciates.

1'. The Law of Ma!netism( +he more money you save and accumulate,the more money you attract into your life.

1). The Law of Acceleratin! Acceleration( +he faster you movetoward financial freedom, the faster it moves toward you.

1*. The Law of the %tock Market( +he value of a stoc$ is the total

anticipated cash flow from the stoc$ discounted to the present day.

2. The Law of eal 'state( +he value of a piece of 0eal Estate is thefuture earning power of that particular piece of property.





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21. The Law of the -nternet( +he nternet is a tool for rapidcommunication of information of all $inds.

The 21 Absolutely Unbreakable Laws ofMoney

ne of your maor goals in life should be financial independence. "oumust aim to reach the point where you have enough money so that you never

have to worry about money again. +he good news is that financialindependence is easier to achieve today than it has ever been before. We live

in the richest country at the richest time in all of human history. We aresurrounded by more wealth and affluence than ever before. "our goal should

be to participate fully in what many people are starting to refer to as the4olden 5ge6of man$ind.

(oney has energy of its own and it is largely attracted to people whotreat it well. (oney tends to flow toward those people who can use it in themost productive ways to produce valuable goods and services, and who caninvest it to create employment and opportunities that benefit others. 5t the

same time, money flows away from those who use it poorly, or who spend itin nonproductive ways. "our ob is to ac&uire as much money as you

honestly can and then to use it enhance the &uality of your life and the lives ofthose you care about.

7ere now are the +wentyone 5bsolutely 8nbrea$able 9aws f(oney/

1. The Law of &ause and 'ffect /'verythin! ha""ens for a

reason0 there is a cause for every effect.





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+his is the ron 9aw6 of human destiny. +his law says that we live ina world governed by law, not chance. t says that everything happens for a

reason, whether or not we $now what it is. Every effect, success or failure,wealth or poverty, has a specific cause or causes. Every cause or action hasan effect or conse&uence of some $ind or another, whether we can see it, or

whether we li$e it or not.

+his law says that all achievement, wealth, happiness, prosperity andsuccess are the direct and indirect effects or results of specific causes or

actions. What this means is that, if you can be clear about the effect or resultyou want, you can probably achieve it. "ou can study others who have

accomplished the same goal, and by doing what they did, you can get thesame results.

+he 9aw of :ause and Effect applies to money as much as to anyother subect. +his law says that financial success is an effect. 5s such, it

proceeds from certain, specific causes. When you identify these causes andimplement them in your own life and activities, you will get the same effectsthat hundreds of thousands, and even millions of others have gotten. "ou canac&uire whatever amount of money you really want if you will ust do what

others have done before you to achieve the same results. 5nd if you dont,you wont. t is as simple as that.

+he most important expression of this universal law is that, Thoughtsare causes and conditions are effects.


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simply this: You become what you think about most of the time.

t is not what happens to you but how you thin$ about what happensto you that determines how you feel and react. t is not the world outside ofyou that dictates your circumstances or conditions. t is the world inside of

you that creates the conditions of your life. >pecifically, it is the way youthin$ about money and about your financial situation that largely determines

your financial conditions today.

5ccurate diagnosis is half the cure. 9oo$ at the most important partsof your life your family, your health, your wor$, your financial situation, and

observe the causeeffect relationships between what you thin$, say, feel anddo and the results you are getting. ?e honest with yourself.

2. The Law of Belief( hatever you trulybelieve# with feelin!#

becomes your reality.

+his law says that you always act in a manner consistent with yourbeliefs, especially your beliefs about yourself. "our beliefs act li$e a set of

filters that screen out information that is inconsistent with them. "ou do notnecessarily believe what you see but rather you see what you already believe.

"ou reect information that contradicts what you have already decided tobelieve, whether or not your beliefs, your preudices, are based on fact or

fantasy. +his is especially true with regard to money.

+he best belief that you can develop within yourself is that you aredestined to be a big success financially. When you are absolutely convinced

that you are a financial success in the ma$ing, you will engage in thebehaviors that will ma$e it come true.

+he worst beliefs you can have are >elf limiting beliefs.6 +hese exist





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whenever you believe yourself to be limited in some way.

+he fact is that no one is better than you are and no one is smarter thanyou are. f someone else is doing better, it is largely because he has

developed his natural talents and abilities more than you have. 7e has learned

the laws of cause and effect that apply to his life and finances before youhave. ?ut anything anyone else has done, within reason, you can probably do

as well. "ou ust need to learn how.

What one great thing would you dare to dream if you $new you couldnot fail@ f you had no limitations, if you had all the time, money, talent, s$illsand contacts you could ever want, what would you want to do or be or have

in your life@

. The Law of ')"ectations( hatever you e)"ect# withconfidence# becomes your own self3fulfillin! "ro"hecy.

"ou are always acting as a fortuneteller in your own life by the wayyou thin$ and tal$ about how things are going to turn out. When you

confidently expect good things to happen, good things usually happen toyou. f you expect something negative to happen, you are usually not

disappointed.

Wealthy people expect to be rich. >uccessful people expect to be

successful. 7appy, popular people expect to be happy and popular. 5ndyour expectations are largely under your control.

Expect the best of yourself. magine that you have unlimited abilitiesand that you can accomplish anything that you put your mind to. magine thatyour future is only limited by your own imagination, and that whatever you

have accomplished up to now, it is only a fraction of what you are trulycapable of achieving. magine that your greatest moments lie ahead and that

everything that has happened to you up to now has merely been a preparation

for the great things that are yet to come.

,. The Law of Attraction( 4ou are a livin! ma!net0 you

invariably attract into your life the "eo"le# situations and





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circumstances that are in harmony with your dominant thou!hts.

+his is one of the great laws that explains much of success and failurein business and personal life. t says that everything you have in your life you

have attracted to yourself because of the way you thin$. "ou can changeyour life because you can change the way you thin$.

When you develop a burning desire for financial success and thin$about it all the time, you set up a force field of positive emotional energy thatattracts people, ideas and opportunities into your life to help you ma$e your

goals into realities.

9oo$ at your financial life today and see how it harmoniAes with yourthin$ing. +a$e full credit for all the good things in your life. +hey are there

because you have attracted them to yourself. +hen, loo$ around you at thethings you dont li$e and ta$e full responsibility for them, as well. +hey arethere because of you as well, because of some flaw in your own thin$ing.

What is that flaw, and what are you going to do about it@

5. The Law of &orres"ondence( 4our outer world is a

reflection

of your inner world and corres"onds with your dominant

"atterns ofthinkin!.

+his is an extraordinary principle. +his law explains most happinessand unhappiness, most success and failure, most greatness and meanness inlife. 5fter years of study in this area, still stand in awe before this powerful

law, li$e standing and loo$ing out over the vastness of the 4rand :anyon.Bust thin$= "our outer world reflects your inner world in every way.

Cothing can happen to or for you in the long term until and unless itcorresponds to something inside of you. +herefore, if you want to change orimprove anything in your life, you must begin by changing the inner aspects

of your mind.





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ndividuals become wealthy because they believe they have the abilityto become wealthy. ?ecause they believe this completely, they act

accordingly. +hey consistently do the things that turn their beliefs intorealities.

+he second corollary of this law says/ *eo"le are "oor because theyhave not yet decided to become rich.

n the boo$, The Instant Millionaire, by (ar$ -isher, the oldmillionaire as$s the boy who has sought his advice about becoming a

millionaire, Why arent you rich already?

+his is an important &uestion to as$ yourself. 7owever you answerthis &uestion will reveal a lot about yourself. "our answers will expose your

selflimiting beliefs, your doubts, your fears, your excuses, yourrationaliAations and your ustifications.

Why arent you rich already@ Write down all the reasons you canthin$ of. 4o over your answers one by one with someone who $nows youwell and as$ them for their opinion. "ou may be surprised to find that your

reasons are mostly excuses that you have fallen in love with.

Whatever your reasons or excuses, you can now get rid of them. +heworld is full of hundreds and thousands of people who have had far more

difficulties to overcome than you could ever imagine, and theyve gone on tobe successful anyway. >o can you.

8. The Law of ')chan!e( Money is the

medium throu!h which

"eo"le e)chan!e their labor in the

"roduction of !oods and services forthe !oods and services of others.





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?efore there was money, there was barter. n barter, peopleexchange goods and services directly for goods and services without themedium of money. 5s civiliAation grew and barter became too clumsy,

people found that they could exchange their goods and services into amedium li$e coins, which they could then exchange for the goods andservices of others, thereby ma$ing the whole process more efficient. +oday,

we go to wor$ and exchange our wor$ for money, which we then use topurchase the results of the wor$ of other people.

+he first corollary of the 9aw of Exchange says( Money is a measureof the value that "eo"le "lace on !oods and services.

t is only what a person will pay that determines the value of something.4oods and services do not have a value separate and apart from what someone is

willing to pay for them. 5ll value is therefore subective and based on the thoughts,feelings, attitudes and opinions of the prospective purchaser at the moment of the

buying decision.

+he second corollary of this law says/ 4our labor is viewed as afactor of "roduction or a cost by others.

We each have a tendency to loo$ upon the sweat of our brow6 orour wor$, as something special because it is so intensely personal. t comesfrom us and is an expression of what we are as a person. 7owever, as far asothers are concerned, our labor is ust a cost. 5s intelligent consumers, as

employers or customers, we want the very most for the very least, no matterwhose labor is involved.

-or this reason, you cannot place an obective value on your ownlabor. t is only what other people are willing to pay for your labor in a

competitive mar$et that determines what you earn and what you are worth infinancial terms.

+hird corollary of this law says/ The amount of money you earn is





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the measure of the value that others "lace on your contribution.

+he way the mar$et for labor wor$s is simple. "ou will always be paidin direct proportion to three factors/ the wor$ you do, how well you do it,

and the difficulty of replacing you.

7ow much you are paid will be in direct proportion to the &uantity and&uality of your contribution in comparison with the contributions of others,

combined with the value that other people place on your contributions

+he fourth corollary of the 9aw of Exchange says/ Money is aneffect# not a cause.

"our wor$ or contribution to the value of a product or a service is

the cause, and the wage, salary or earnings that you receive, is the effect. fyou wish to increase the effect, you have to increase the cause.

+he fifth corollary of the 9aw of Exchange says/ To increase theamount of money you are !ettin! out# you must increase the value of

the work that you are "uttin! in.

+o earn more money, you must add more value. "ou must increaseyour $nowledge, or increase your s$ill, or improve your wor$ habits, or wor$

longer and harder hours, or wor$ more creatively, or do something that

enables you to get greater leverage and results from your efforts. >ometimes,you have to do all of these together. +he highest paid people in our society

are those who are continually improving in one or more of these areas to addgreater value to the wor$ that they are doing.

9. The Law of &a"ital( 4our most valuable asset# in terms of

cash flow# is your "hysical and mental ca"ital# your earnin! ability.

"ou may not even be aware that, unless you are wealthy already, your

ability to work is the most valuable asset that you have. ?y utiliAing yourearning ability to its fullest, you can bring thousands of dollars each year into

your life. ?y applying your earning ability to the production of valuablegoods and services, you can generate sufficient money to pay for all the





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things that you want in life. +he amount of money that you are paid today isa direct measure of the extent to which you have developed your earning

ability so far.

+he first corollary of the 9aw of :apital says/ 4our most "recious

resource is your time.

"our time is really all you have to sell. 7ow much time you put in and howmuch of yourself you put into that time, largely determines your earning ability.


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out.

+he third corollary of the 9aw of :apital says/ :ne of the bestinvestments of your time and money is to increase your earnin! ability.

+he purpose of corporate strategic planning is to increase return one&uity6or 0E. +his re&uires organiAing and reorganiAing corporate activitiesso that the company is earning a higher return on the capital invested in the

organiAation. n your wor$ life, your personal e&uity is your mental andemotional capital. "our ob then is to earn the highest possible return on your

human capital, to increase your return on energy.6

dentify the things you do in your wor$ that represent the highest valueuses of your time. -ocus more and more of your time on doing those thingsthat represent the greatest contributions you can ma$e to the most important

results that you can achieve. :ontinually loo$ for ways to increase yourreturn on energy.

;. The Law of Time *ers"ective( The

most successful "eo"le in

any society are those who take the lon!esttime "eriod into

consideration when makin! their day3to3

day decisions.

+he higher a person rises in any society, the longer is the timeperspective or time horiAon of that person.


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success for a long, long time before they achieve it. +hey thin$ about the

conse&uences of their financial choices and decisions in terms of what theymight mean in five, ten, fifteen and even twenty years from now.


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+he third corollary of this law says/ %acrifice in the short3term isthe "rice you "ay for security in the lon!3term.

+he $ey word here is sacrifice.6 When you resist the temptation to dothings that are fun and easy and instead discipline yourself to do the things

that are hard and necessary, you develop in yourself the $ind of characterthat virtually guarantees you a better life in the future.

When you continually invest your time and money in improvingyourself rather than frittering it away in idle socialiAing or watching television,

you are putting yourself on the side of the angels. "ou are virtuallyguaranteeing your future.

1avings today are what guarantee the security and the

possibilities of tomorrow.

+he first corollary of the 9aw of >aving comes from the boo$ Theichest Man in !abylonby 4eorge :lasson. t is to/ *ay yourself first.

?egin today to save ten percent of your income, off the top, andnever touch it. +his is your fund for longterm financial accumulation and younever use it for any other reason except to assure your financial future.





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+he remar$able thing is that when you pay yourself first, and forceyourself to live on the other ninety percent, you will soon become

accustomed to it. "ou are a creature of habit. When you regularly put awayten percent of your income, you soon become comfortable living on the

other ninety percent. (any people start by saving ten percent of their income

and then move to saving fifteen percent, twenty percent, and even more.

5nd their financial lives change dramatically as a result. >o will yours.

+he second corollary of the 9aw of >aving says/ Take advanta!e ofta) deferred savin!s and investment "lans.

?ecause of high tax rates, money that is saved or invested withoutincurring taxes accumulates at a rate of 3D to !D faster than money that is

subect to taxation.

nvest in company pension and retirement plans, !1$F plans, 05s,Geough for long term

financial accumulation.

?egin today to put away ten percent of your income. >et up a specialaccount for this purpose and treat your contributions with the same respect

that you do your rent or mortgage payments each month.

f you are in debt and ten percent is too much for you, start by savingone percent of your income and living on the other ninetynine percent. When

you become comfortable living on ninety nine percent of your income,increase your saving rate to two percent. ver time, wor$ the rate up to ten,

fifteen and even twenty percent of your income.

11. The Law of &onservation( -t+s not how much you make# but

how much you kee"# that determines your financial future.

(any people ma$e a lot of money in the course of their wor$inglifetimes. >ometimes, during boom periods, people greatly exceed their





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expectations and ma$e more money than they ever thought possible.

+he true measure of how well you are really doing is how much youkee" out of the amount that you earn. >uccessful people are fastidious

about putting away chun$s of money regularly and paying down debt during

prosperous times so that they have reserves set aside when the economy orbusiness turns downward.

:alculate your true net worth as of today. (a$e a list of all your assetsand value them at the amounts you could actually get for them if you had to

turn them into cash &uic$ly.

5dd up all your bills, credit card balances and mortgages and thensubtract them from your assets to get your net dollar worth today.

Cow, divide the number of years you have been wor$ing into your networth. +he result is the net amount you have actually earned each year after

your costs of living. 5re you happy with it@ f not, start today to dosomething about it.

*arkinson+s Law( ')"enses rise to

meet income.


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+he first corollary of


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insecurities experienced by most people. +o achieve this goal, you need tomaintain the correct proportions of your finances in each of these three/

savings, insurance and investment.

+he first corollary of the 9aw of +hree says/ To be fully "rotecteda!ainst the une)"ected# you re7uire li7uid savin!s e7ual to two to si)

months of normal e)"enses.

"our first financial goal is to save enough money so that, if you lost yoursource of income for up to six months, you would have enough put aside to carryyou over. +he very act of saving this amount of money and putting it into a highyielding savings account or a money mar$et account will give you a tremendous

sense of confidence and inner peace. Gnowing that you have this money put away

will ma$e you a far more effective human being than you would be if you wereworried about your next paychec$ and your next bag of groceries.

+he second corollary of the 9aw of +hree says/ 4ou must insureade7uately to "rovide a!ainst any emer!ency that you cannot "ay for

out of your bank account.

5lways carry sufficient insurance to protect yourself against anemergency that you cannot write a chec$ to cover. :arry sufficient healthinsurance to provide for yourself and others in any medical emergency.

nsure your car for liability and collision. nsure your life so that, if somethingunfortunate happens to you, the people who are counting on you will be

provided for. ob.

"our life is divided into roughly three parts, although these three partstend to overlap. -irst, there are your learning years, where you grow up and





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get your education. +hen there are your earning years, from approximatelytwenty to age sixtyfive. -inally come youryearning years, when you can

retire, with the average life expectancy today approaching eighty years andrising.

+he simplest and most effective of all financial strategies is for you tosave and invest your money throughout your wor$ing lifetime until yourinvestments are paying you more than you earn at your ob. 5t that point,

you can begin to phase out of your regular ob and spend your timemanaging your assets.

+his seems li$e a very simple lifetime planning strategy, but it isremar$able how few people follow it and how many people end up at the age

of sixtyfive with very little put aside. +he average retired 5merican todayhas a total net worth of approximately H31, plus their social security

income. Iont let this happen to you.

The Law of -nvestin!( -nvesti!ate

before you invest.

+his is one of the most important of all the laws of money. "oushould spend at least as much time studying a particular investment as you

do earning the money to put into that particular investment.

Cever let yourself be rushed into parting with money. "ou havewor$ed too hard to earn it and ta$en too long to accumulate it. nvestigate

every aspect of the investment well before you ma$e any commitment. 5s$for full and complete disclosure of every detail. Iemand honest, accurate andade&uate information on any investment of any $ind. f you have any doubt

or misgivings at all, you will probably be better off $eeping your money in theban$ or in a money mar$et investment account than you would be

speculating or ta$ing the ris$ of losing it.

+he first corollary of the 9aw of nvesting is/ The only thin! easyabout money is losin! it.





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t is hard to ma$e money in a competitive mar$et but losing it is oneof the easiest things you can ever do. 5 Bapanese proverb says, Making

money is like digging with a nail" while losing money is like #ouring water

on the sand.

+he second corollary of this law comes from the selfmade billionaire,(arvin Iavis, who was as$ed about his rules for ma$ing money in an

interview in -orbes (agaAine. 7e said that he has one simple rule and it is(Don+t lose money.

7e said that if there is a possibility that you will lose your money,dont part with it in the first place. +his principal is so important that youshould write it down and put it where you can see it. 0ead it and reread it

over and over.

+hin$ of your money as if it were a piece of your life. "ou have toexchange a certain number of hours, wee$s and even years of your time in

order to generate a certain amount of money for savings or investment. +hattime is irreplaceable. t is a part of your precious life that is gone forever. f

all you do is hold on to the money, rather than losing it, that alone can assurethat you achieve financial security. Iont lose money.

+he third corollary of the 9aw of nvesting says/ -f you think youcan afford to lose a little# you+re !oin! to end u" losin! a lot.

+here is something about the attitude of a person who feels that hehas enough money that he can afford to ris$ losing a little. "ou remember

the old saying, 5 fool and his money are soon parted.6 +heres anothersaying, When a man with experience meets a man with money, the man with

the money is going to end up with the experience and the man with theexperience is going to end up with the money.6

5lways as$ yourself what would happen if you lost one hundred percent ofa prospective investment. :ould you handle that@ f you could not, dont ma$e

the investment in the first place.





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+he fourth corollary of the 9aw of nvesting says/ :nly invest withe)"erts who have a "roven track record of success with their own

money.

"our aim is to invest only with people who have such a successfultrac$ record with money that your ris$ is dramatically diminished. Iont lose

money. f ever you feel tempted, refer bac$ to this rule and resolve to holdon to what you have.

nvest only in things that you fully understand and believe in. +a$einvestment advice only from people who are financially successful from

ta$ing their own advice.

15. The Law of &om"ound -nterest(-nvestin! your money

carefully and allowin! it to !row at

com"ound interest will eventually

make you rich.

:ompound interest is considered one of the great miracles of all ofhuman history and economics. 5lbert Einstein described it as the most

powerful force in our society. When you let money accumulate atcompound interest over a long enough period of time, it increases more than

you can imagine.

"ou can use the 0ule of '2 to determine how long it would ta$e foryour money to double at any rate of interest. "ou simply divide the interestrate into the number '2. -or example, if you were receiving eight percentinterest on your investment, and you divided the number '2 by eight, you





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would get the number nine. +his means that it would ta$e you nine years todouble your money at eight percent interest.

t has been estimated that one dollar invested at three percent interest atthe time of :hrist would be worth half the money in the world today. f the

money had been allowed to grow and double, and then double again, andthen again, and again and again, it would be worth many billions or trillions of

dollars today.

+he first corollary of this law says/ The key to com"ound interest isto "ut the money away and never touch it.

nce you begin accumulating money and it begins to grow, you mustnever, never touch it or spend it for any reason. f you do, you lose the

power of compound interest, and though you spend only a small amounttoday, you will be giving up what could be an enormous amount later on.

f you start early enough, invest consistently enough, never draw onyour funds and rely on the miracle of compound interest, it will ma$e yourich. 5n average person earning an average income who invested H1 permonth from age 21 to age %#, and who earned a compounded rate of 1D

over that time, would retire with a net worth of H1,11),=

?egin a regular, monthly investment account and commit yourself toinvesting a fixed amount for the next five, ten or even twenty years. >elect a

company with a family of mutual funds and investment instruments, and $eepyour money wor$ing, month after month and year after year.

16. The Law of Accumulation( 'very

!reat financial achievement

is an accumulation of hundreds of smallefforts and sacrifices that no





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one ever sees or a""reciates.

+he achievement of financial independence will re&uire a tremendousnumber of small efforts on your part. +o begin the process of accumulation,

you must be disciplined and persistent. "ou must $eep at it for a long, longtime. nitially, you will see very little change or difference but gradually, yourefforts will begin to bear fruit. "ou will begin to pull ahead of your peers.

"our finances will improve and your debts will disappear. "our ban$account will grow and your whole life will improve.

+he first corollary of the 9aw of 5ccumulation says/ As your savin!saccumulate# you develo" a momentum that moves you more ra"idly

toward your financial !oals.

t is hard to get started on a program of financial accumulation, butonce you do get started, you find it easier and easier to $eep at it. +he

momentum principle6 is one of the great success secrets. +his principlesays that it ta$es tremendous energy to overcome the initial inertia and

resistance to financial accumulation and get started, but once started, it ta$esmuch less energy to $eep moving.

+he second corollary of the 9aw of 5ccumulation says/ By the yard

it+s hard# but inch3by3inch# anythin! is a cinch.

When you first begin thin$ing about saving ten or twenty percent ofyour income, you will immediately thin$ of all $inds of reasons why it is notpossible. "ou may be up to your nec$ in debt. "ou may be spending every

single penny that you earn ust to $eep afloat.

7owever, if you find yourself in this situation, there is a solution ?eginsaving ust one percent of your income in a special account, which you

refuse to touch. ?egin putting your change into a large ar every eveningwhen you come home. When the ar is full, ta$e it to the ban$ and add it to

your savings account. Whenever you get an extra sum of money from sellingsomething, an old debt is repaid, or a bonus comes unexpectedly, instead of





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spending it, put it into your special account.

+hese small amounts will begin to add up at a rate that will surpriseyou. 5s you become comfortable with saving one percent, increase it to twopercent, then three percent, then four percent and five percent, and so on.

Within a year, you will find yourself getting out of debt and saving 1D, 1#Dand even twenty percent of your income without it really affecting your

lifestyle.

18. The Law of Ma!netism( The more money you save and

accumulate# the more money you attract into your life.

+he law of magnetism has been a primary reason for wealth buildingthroughout history. +his law explains much of success and failure in every

area of life, especially in the financial arena. (oney goes where it is loved andrespected. +he more positive emotions you associate with your money, the

more opportunities you will attract to ac&uire even more.

+he first corollary of the 9aw of (agnetism as it applies to money isthat/ A "ros"erity consciousness attracts money like iron filin!s to a

ma!net.

+hat is why it is so important for you to start accumulating money, no

matter what your situation.


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+a$e time every day, every wee$, and every month to reflect on yourfinancial situation and loo$ for ways to deploy your finances more

intelligently. +he more time you ta$e to thin$ intelligently about your finances,the better decisions you will ma$e and the more money you will have to thin$

about. 5nd the more you thin$ about your savings and investments, the moreof them you will attract into your life.

19. The Law of Acceleratin!

Acceleration( The faster you move

toward financial freedom# the faster it

moves toward you.

+he more money you accumulate and the more success you achieve,the more and faster money and success seems to move toward you, from a

variety of different directions.

Everyone who is financially successful today has had the experienceof wor$ing extremely hard, sometimes for years, before they got their first

real opportunity. ?ut after that, more and more opportunities flowed tothem, from all directions. +he maor problem most successful people have issorting out the opportunities that seem to come at them from everywhere. t

will be the same for you.

+he first corollary of the 9aw of 5ccelerating 5cceleration says/ =ully9< "ercent of your success will come in the last 2< "ercent of the time

you invest.

+his is a remar$able discovery. Bust thin$= "ou will achieve onlyabout 2 percent of the total success possible for you in the first ) percentanticipated cash flow from the stock discounted to the present day.

A share of stock represents a share of the ownership of a company. This entitles





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the owner to all the benefits and risks of ownership, including profits, losses,stock increases, declines in value, good or poor management and increasing or

decreasing demands for the products or services produced and sold by thecompany.

When you buy a stock, you are investing a certain sum of money and bettingthat your return will be in excess of what you could earn in a guaranteed

investment, such as a bond or a money market fund. Purchasing a stock is aform of gambling because the future of the company and the value of the stock

are both unpredictable.

They are determined bycountless market forces such as sales, competition, technological change,

interest rates, quality of management, world events, weather and many others.

The first corollary of the aw of the !tock "arket is the #fficient "arket Thesis.This theory says that all the information known about a stock is incorporated

into the price of that stock on the market at any given moment.

The logical extension of this thesis is that any new piece of information havinganything to do with the possible future of the company or industry will beimmediately reflected in the rise or fall of the stock price. !ince individual

investors move quickly to take advantage of an improvement in the prospects ofthe company or protect themselves from a decline in those prospects, the stock

market appears emotional, irrational, excitable and unpredictablewith each new piece of information. of the time and money that you invest in an

enterprise, a career or a proect.

"ou will achieve the other ) percent in the last 2 percent of the time and moneythat you invest.


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strategy of pic$ing stoc$s for the long term eventually made him one of themost successful and highest paid money managers in 5merica.

1;. The Law of the %tock Market ? The

value of a stock is the totalantici"ated cash flow from the stock

discounted to the "resent day.

5 share of stoc$ represents a share of the ownership of the company.+his entitles the owner of the share to all the benefits and ris$s of ownership,

including profits, losses, stoc$ increases, declines in value, good or poor

management and increasing or decreasing demands for the products orservices produced and sold by the company.

When you buy a stoc$, you are investing a certain sum of money andbetting that your return will be in excess of what you could earn in a

guaranteed investment, such as a bond or a money mar$et fund.


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stock market is the best way to achieve lon! term financial security.

+he value of stoc$s traded on the 8.>. mar$ets has increased anaverage of 11D over the past ) years. 5s a result, a person who began

investing at the age of 2 and who invested H1 per month in a mutual fund

that increased an average of 1D per year would retire with a net worth ofmore than H1,,=

+he third corollary is/ Dollar cost avera!in! run will make yourich.

What this corollary means is that there is no such thing as J(ar$ettiming.J t is virtually impossible for you or anyone to consistently buy

stoc$s when the prices are low and sell them when the prices are high. t isalways better to buy the stoc$s of good, solid companies selling valued andrespected products and services and then hold those stoc$s for the long run.

:orollary number four says/ The stock market is mana!ed andmade by "rofessionals.@

+his means that every purchase of a stoc$ represents the sale of thatsame stoc$ by someone else. +he person purchasing the stoc$ is betting that

the stoc$ will increase in price. +he person selling the stoc$ is betting that thestoc$ will decline in price. Every stoc$ purchase and sale is therefore a Aero

sum game with one person betting his wisdom and udgement against that ofanother person. (ost of these people are professionals who do this for #

% hours each wee$.

+his means that your safest course of action is to invest in anndex -und that represents all of the stoc$s in that index and which goes upor down based on the average trend of the entire mar$et. +he most popular

ndex -und is the >tandard and


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of a "iece of eal

'state is the future earnin! "ower of that

"articular "iece of "ro"erty.+he value of any piece of property is determined by the income that

can be generated by that property when it is developed to its highest and bestuse from this moment in time onward into the future. 5 piece of property

may have sentimental value to a particular owner but its dollar value is directlyrelated to its future earning power.

+here are millions of acres of land that will never have any real value,li$e desert land, for instance that has no future earning power. t cannot be

developed to produce income, provide accommodation or satisfy anyparticular human needs.

+here are vast areas of many large cities where property values aredeclining because growth and development have come and gone and willprobably not return. Every day, men and women are selling homes andproperties at less than they paid for them, or losing them to foreclosure,

because these properties have declined in earning power and therefore invalue.

+he first corollary of real estate is/ 4ou make your money when youbuy and you realie it when you sell.

+his is very important. t is by purchasing a piece of property at theright price and under the right terms that enables you to sell it at a profit.(any people thin$ that they will ma$e their money when they sell the

property irrespective of how they purchased the property or at what price.+his is getting the cart before the horse.

+he more carefully you investigate a piece of property and the morethoroughly you prepare a purchase offer, the more li$ely it is that you will getthe $ind of deal that will enable you to sell that property at a profit later on.





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+he second corollary of the 9aw of 0eal Estate is/ The three keys toreal estate selection are location# location# location.

Each piece of property is uni&ue in that there is only one piece of

property li$e that on the earthKs surface. "our ability to chose a piece ofproperty in an excellent location will have more of an impact on the futureearning power of that property than almost any other decision that you ma$e.

. +he third corollary of the 9aw of 0eal Estate is/ eal estate valuesare lar!ely determined by !eneral economic activity in the area and by

the number of >obs and the level of wa!es.

+his is very important when you are selecting a neighborhood or acommunity in which to invest. 4enerally spea$ing, property increases at threetimes the level of population growth and two times the rate of inflation. Whenyou purchase property in a fast growing community, you are virtually ensured

of above average increases in value.

-or example, today in >anta :lara and around >ilicon Lalley, becauseof the incredible explosion of employment in high tech, high paying

businesses, real estate values have increased five and ten times over whatthey were a few years ago.

+he most important factors affecting the value of real estate in any areaare the level of new business formation and economic growth in the

surrounding area. (a$e a decision today to purchase a piece of real estatefor investment purposes. +he only way you can learn about real estateinvesting is by actually becoming an owner and then by putting your

$nowledge and s$ills to wor$ to increase the value of that piece of property.

21. The Law of the -nternet ? The

-nternet is a tool for ra"idcommunication of information of all





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kinds.

+he entire technological revolution involving the nternet has a singlefocus/ it is to increase the speed and reliability at which vital information is

transmitted between and among interested parties. Every single technologicaladvance or improvement is a way of increasing the speed at which thiscommunication ta$es place.

+he first corollary of the 9aw of the nternet is/ The three keys to-nternet success are @=aster# &hea"er# 'asier.

+oday, as never before, people are in a hurry. 5t the same time,everyone wants to get what they want at the lowest possible price, as easily

as possible and with the greatest convenience. >uccessful nternet companiesare those that offer products and services faster, cheaper and easier than their

competitors. 5ll three must exist for an nternet company to survive andthrive.

+he second corollary of the 9aw of the nternet is/ The value of an-nternet com"any is in direct "ro"ortion to the value of the information

it "rovides.

+he greater the immediate financial or personal impact of the products,services and information an nternet company provides to its customers, the

greater is the value of that company.

+here are many nternet companies that offer information, productsand services that are of limited interest and value, and then, only to a small

number of potential buyers and sellers.

+he third corollary of the 9aw of the nternet is/ The only real valueof information is what "eo"le are willin! to "ay for it.

+he primary use of the nternet today is to &uic$ly find information ona variety of subects. -or this reason, and because so many nternet sites

offerfree information, it is extremely hard tosell information on the nternet.





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n fact, because competition on the nternet is so fierce, companies must giveaway enormous amounts of information ust to get visitors to the site who

may be interested in purchasing a product or service. +he only thing you getfor free services is demand for more free services.

+he fourth corollary of the 9aw of the nternet is/ -t is only by sellin!sufficient "roducts and services at a "rofit that an -nternet com"any

can survive.

n the final analysis, an nternet company has to sell a product orservice at a profit and return a dividend to its shareholders. ?ecause of thecompetition amongst millions of nternet companies today, it is costing asmuch as H2# to ac&uire a customer for a single purchase. t may ta$e acompany several purchases from the same customer before it is able to

recoup its costs of ac&uiring the customer in the first place. ?y that time, thenternet company may be out of cash and out of business.

%ummary

+here are four $eys to success with money. -irst, earn as much as youpossibly can. Io everything possible to excel in your field so that you are

paid extremely well for what you do.

+he second $ey to money is for you to hold on to as much as youpossibly can. 0emember, it is not the amount you ma$e but the amount you$eep that counts in the long run. 0esist the natural tendency of most peopleto throw their money around, spend it impulsively and end up bro$e every

month, no matter how much they earn. IonKt let this happen to you.

+he third $ey to money is for you to reduce and control your costs ofliving. 9oo$ for every opportunity to practice frugality in everything you do.

?uy less expensive items.


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-inally, the $ey to money is for you to invest it carefully and ma$e itgrow as rapidly as you can. ?ecause of the miracle of compound interest,

combined with dollar cost averaging, you can become wealthy in a few yearsby saving and investing 1D to 2D of your income, every single month, off

the top, as you go along.

+his is a wonderful time to be alive. t has never been more possiblefor you to ma$e more, save more, accumulate more and grow your money

faster than it is today. "our ob is to ta$e full advantage of the wide range ofopportunities that are available to you. "our ob is to apply these laws to

fulfill your financial destiny and become wealthy in your wor$ing lifetime.4ood luc$=


Documents

Brian Tracey 21 Laws of Money