Millionaire

PHENOMENA

Discover How To Catch The Millionaire

Virus And Live The Life Of Your Dreams

Jon Giaan

Copyright Notices
Copyright 2007 by Knowledge Source
All rights reserved.
No part of this publication may be reproduced or transmitted in any form or by any means, mechanical or
electronic, including photocopying and recording, or by any information storage and retrieval system, without
permission in writing from the publisher. Requests for permission for further information should be addressed to
Knowledge Source, Level D 42 Upper Heidelberg Rd. Ivanhoe VIC 3079, Australia.

Disclaimer
Its sad that I have to include this, however we live in an environment that is continually being overlaid with legislation upon
legislation when it comes to financial advice. Heres how bizarre our legislation is interpreted... If a self-made millionaire
gives you a tip to buy XYZ shares at a BBQ, I dont know whether you know this or not, he is in fact breaking the law as it
stands.
However, if a pimple-faced graduate straight out of financial planning school, with no trading experience (never bought a
share in his life) gives you the same advice, thats OK. Obviously there is something wrong with our system, but its the only
one weve got. The bottom line is, if you become a millionaire as a result of this information - its not our fault.

While all attempts have been made to verify information provided in this publication, neither the author nor the
Publisher assumes any responsibility for errors, omissions or contrary interpretations of the subject matter herein.
This publication is not intended for use as a source of legal or accounting advice. The Publisher wants to stress
that the information contained herein mat be subject to varying state and/or local laws or regulations. All users
are advised to retain competent counsel to determine what state and/or local laws or regulations may apply to the
users particular business.
The purchaser or reader of this publication assumes responsibility for the use of these materials and information.
Adherence to all applicable laws and regulations, both federal, state and local, governing professional licensing,
business practices, advertising and all other aspects of doing business in Australia or any other jurisdiction in the
sole responsibility of the purchaser or reader. The author and Publisher assume no responsibility or liability whatsoever on the behalf of any purchaser or reader of these materials. We expressly do not guarantee any result you may
or may not get as a result of following our recommendations. You must test everything for yourself.
Any perceived slights of specific people or organizations is unintentional.

Acknowledgment
My name may be on the cover of this book, however like all wealth-building activities, you have to have a first class team of
experts behind you. The Millionaire Phenomena certainly has that.
No one-person could have such a diverse knowledge of all the wealth disciplines covered in this book. To make your experience more impactful and meaningful, we sought out specific specialists in our four chosen areas, business, real estate, stock
market and Internet.
By virtue of their generosity to share their knowledge, experiences and secrets, they have brought this project to life and made
it so much more than your typical paperback.
My tremendous appreciation and acknowledgment goes to the Millionaire Phenomena Wealth Team. Josh Hunt... Rick Otton... Dymphna Boholt... Stephen Jennings... David Galtieri... Andrew Baxter... Mike Filsaime... Christopher Guerriero...
Brett McFall... Tom Hua. Thank you guys for your contribution and support.
You are all truly amazing individuals.

CONTENTS
Section 1: Mindset Secrets of Millionaires
Introduction....................................................................................................................................................8

CHAPTER 1: JON GIAAN

Rich Thinking, Poor Thinking- Which One Are You?
Be Very Clear about What You Want ~ Versus ~ Dont Know What You Want..............................................11
Meet Jon Giaan.............................................................................................................................................11
5 Major False Beliefs About Money You Need to Tackle and Transform.....................................................13
What is Money? What is Wealth? 5 Key Life Changing Insights..................................................................15
How To Go Full Circle To Making Money and Creating Wealth - 3 Vital Ingredients . ...........................17

Section 2: Property Secrets of Millionaires

CHAPTER 2: DYMPHNA BOHOLT
How To Make Serious Money In Todays Real Estate Market - Even
If The Professionals And Your Friends Say Its Impossible
Meet Dymphna Boholt.................................................................................................................................20
How Long Could You Support Yourself And Your Family If Your Income Stream Stopped Tomorrow? . ......23
Social Security Mum Makes $160,000 In Record Time Legally And Breaks The Poverty Cycle.....................26
Cash Flow Will Give You Your Dream Lifestyle And Growth Will Make You Rich.......................................27
How Do You Find Cash Cows And Even Better, Multiple-Income Cash Cows?............................................28
More Cash Flow Property Strategies That Can Make You Rich......................................................................30
$25,000 In 2 Weeks Flipping Property Strategy.............................................................................................32
Where To Find Real Estate At 50-75% Discounts With Little Known Rate-Default Auctions.......................35
Amazing True Story Of How One Of My Clients Turned $25,000 In To $15 Million..................................38
A Magic Formula That Works.......................................................................................................................39

CHAPTER 3: JOSH HUNT

Amazing True Story of How An Aussie Surf-Bum Went From Zero
to Multi-Millionaire Property Investor in Just 9 Short Years...
Meet Josh Hunt.............................................................................................................................................41
A Major Revelation.......................................................................................................................................43

Dont focus on what you dont have. Focus on what you do have. . .............................................................44
How Do You Build Substantial Wealth? ......................................................................................................49
If you want to be an incredible person, you need to have incredible attitudes. .............................................51
Positive Cash Flow Properties........................................................................................................................57
Successful Property Investors Need to Forecast the Markets...........................................................................58

CHAPTER 4: RICK OTTON

Discover One Of The Most Jealously Guarded Secrets - Adapted And
Road Tested In Australia For Creating Positive Cash Flow - That
Works Even In Todays Property Market
Meet Rick Otton...........................................................................................................................................60
When you Make Property Easy to Buy for People Using Vendor Finance It Is Easy To Sell............................61
One Important Point Many Investors Forget When Buying..........................................................................62
How Do You Decide Whether To Rent Or Vendor Finance Your Investment Property?................................65
Trading Home Ownership for Profits Now....................................................................................................66
What Type Of Property Do You Choose When Investing: Units or Houses?.................................................67
Where To Start?.............................................................................................................................................68

Section 3: Stock Market Secrets of Millionaires

CHAPTER 5: ANDREW BAXTER
How To Take Advantage Of The Stock Market Trading Secrets of
Professionals
Meet Andrew Baxter......................................................................................................................................70
How To Be Your Own D.I.Y. Fund Manager and Copy The Professionals.....................................................71
2 Major Benefits of Trading CFDs Over Options..........................................................................................74
Big Profits Come From Big Trends................................................................................................................75
When The Process Is Right - Results ALWAYS Follow...................................................................................78
Power Triptych: Get An Advantage On The Rest Of The Herd By Combining 3 Forms Of Analysis.............79
Understanding A Simple Tool Like Supply and Demand Is All You Need To Figure Out Price Movement....80

CHAPTER 6: DAVID GALTIERI

How I Took A Complete Novice Out Of The Audience With No
Previous Trading Experience and With 30 Minutes of Coaching ,
Showed Him How He Could Potentially Replace His Income Fast...

Meet David Galtieri......................................................................................................................................84

How Many Trades Per Week and Where To Set Your Profit Targets...............................................................86
How To Increase Your Returns Exponentially With Leverage........................................................................87
How To Pick If The Market is Going to Go UP or Down.............................................................................88
THREE Rules To Get In, ONE Rule To Get Out.........................................................................................89

CHAPTER 7: STEPHEN JENNINGS

Futures Trader Reveals His Own High-Profit, Low-Risk Trading
Strategies. Easy and Simple to Implement Once You Know How...
Meet Stephen Jennings..................................................................................................................................98
How You Can Access $100,000 Worth of Shares for Just $2,250...................................................................99
What Are Realistic Profits For Traders?........................................................................................................101
Is It Possible?...............................................................................................................................................103
The Man That Made $1,000,000 In The Market In Just 24 Hours Back In 1929........................................104
Secrets To Picking Highs and Lows With Amazing Accuracy in Certain Commodity Markets....................106
My Simple Breakout Trading System That Could Have Turned $2,250 into $186,000 in 24 Months.........109
How To Put All The Pieces Of The Trading Puzzle Together........................................................................112

Section 4: Internet Millionaire Secrets

CHAPTER 8: CHISTOPHER GUERRIERO
Amazing Secret Weapon Hoarded By Business Leaders, Celebrities,
and Politicians Skyrockets Your Income, Transforms Your
Credibility, And Commands Instant Respect From The People You
Meet!
Meet Christopher Guerriero........................................................................................................................116
8 Steps To Creating A Book In Just 30 Days................................................................................................118
How To Develop A Hungry Audience For Your Book.................................................................................121
Non-Competitive Joint-Ventures Created A Truck Load of Sales.................................................................123
How To Become A Million-Dollar Author and Live The Life Of Your Dreams............................................124
Teleseminars and Product Launches............................................................................................................125
Automatic 12 Month Marketing Plan.........................................................................................................126

CHAPTER 9: MIKE FILSAIME

How I Went From Corporate Slave To Over $4,000,000 in Online
Revenue in Just 36 Months
Meet Mike Filsaime.....................................................................................................................................129
A Common Mistake That 90% Of Websites Make Is..................................................................................130
Once He Got It He Went From 0 To $50,000 Per Month In A Flash!......................................................132
My Step-By-Step System That Ive Used To Make A Fortune Online...........................................................133
Are You An Opportunity Seeker Or A Business Builder?.............................................................................138
Increase Your Sales By Up To 50% With This Cool Strategy........................................................................140
What Is Butterfly Marketing?......................................................................................................................145
The Challenge: Make Money Online From A Standing Start In Front of 500 People LIVE.........................148
Butterfly Examples: $500,000 in Sales in Just 5 Months..............................................................................149

CHAPTER 10: TOM HUA

How This Chinese Immigrant Went From $300 In His Pocket
Sleeping On Newspapers In A Tiny Apartment For Months To Self
Made Millionaire
Meet Tom Hua............................................................................................................................................151
The 3-Step System That Lay The Foundations to A Successful Internet Business.........................................154
Sharing Your Ideas Can Make You Rich......................................................................................................156
How To Find Out What People Are Looking For Online............................................................................157
How To Create A Product Without Being An Expert..................................................................................158
How To Generate Large Volumes of Traffic Without Having To Pay For It Up-Front..................................162
Your Job As An Internet Marketer Is To Get A Pay Rise Every Day. Heres How.......................................165

CHAPTER 11: BRETT McFALL

How To Convert Web Traffic Into A Virtual Cash Register The
Secrets Behind Online Copy
Meet Brett McFall.......................................................................................................................................167
Whats The Best Product To Sell On The Internet?......................................................................................171
How To Live The Perfect Lifestyle AND Make Money................................................................................172
How beginners can make a success of the internet. ....................................................................................173
3 Powerful Belief Systems of Millionaire Internet Business Owners..........................................................175
Let Me Detail My Research Process.............................................................................................................178
A Simple Formula To Create A Killer Headline...........................................................................................180

3 Ways To Generate FREE Traffic To Your Site............................................................................................181

What If You Dont Have Another Product?.................................................................................................183

Section 5: Business Secrets of Millionaires

CHAPTER 12: JON GIAAN
The 11 Steps To Take You From Zero Cash To Financial
Independence And Personal Freedom In Less than 24 Months.
Meet Jon Giaan...........................................................................................................................................185
How To Start A New Business Without Capital...or Raise Cash To Expand An Existing One.....................190
Why marketing is the easiest way to make more money in your business.....................................................192
How you can be a top Marketer. The Secret Method every successful Marketing Expert uses.....................194
How to collect your customers names, use them to make extra profit and turn them into a saleable asset....196
How to make powerful offers to instantly attract new customers to your business.......................................198

The End: For You, The Beginning...

The Millionaire Phenomena

Introduction

heres an epidemic out there that is sweeping

the planet. In fact, the spread of this epidemic is
spreading faster in Australia than anywhere else in
the world.
Whats the epidemic I hear you ask?
Well, for most, the word epidemic itself may conjure
up a negative spin in your mind. However, this epidemic
has an amazingly soothing ring to it. Especially if youre
suffering from it.
The epidemic of course is the Millionaire Phenomena. I dont know if you noticed, but millionaires are being created faster than any other time in Australia... And
in Australia in 2005 (the latest available World Wealth
Report figures) shows that a huge 17,000 individuals
became bona-fide millionaires.
That was a 14.8% increase on the numbers of the
previous year. In fact Australia is the fastest growing millionaire epidemic centre of any country in the world.
Faster than the U.S., U.K., China and even India.
The total number of millionaires in Australia is
151,000 based on the data from the World Wealth Report.
Heres something that I think youll find interesting.
The numbers quoted here are conservative at best.
The reason why is that the World Wealth Report was
conducted by the huge Capgemini Financial Group and
Meryl Lynch, and the data came out of financial planning
services.
So, I estimate that there are probably a lot more millionaires out there than we even think.
So what, I hear you ask...
Heres my point. If youre not a millionaire, and there
is an epidemic in Australia, where theres thousands of
everyday Australians hitting that magical mark every year
- then youre seriously missing out.

Thats why the Millionaire Phenomena Project was

born.
So what is the Millionaire Phenomena Project?
Well, let me tell you, its no ordinary book. In fact, its
a seminar in a book.
Its an opportunity for you to participate in the millionaire explosion that is happening right now.
It was put together using content rich wealth information from various seminars conducted in the country over
the last 12 and 24 months.
Some of these seminars cost anywhere between
$500 and $2,500 to attend... So the value you have in
your hands would far exceed any $29 paperback.
It features multiple ways of becoming a millionaire.
Property, shares, internet and business. It will inspire you,
motivate you and give you specific action steps and howtos to join and be part of the millionaire epidemic.
If you want to be rich, if you want your dreams to
come alive and you want to be part of this fast-growing
group, I believe youve never had a better chance in history to create the wealth and success youve always wanted.

A Word of Warning:
The Millionaire Phenomena Seminar-In-A-Book
was put together by using the transcripts from actual
events. So its not perfect. There may be some issues
regarding spelling, grammar and phrases. Ive also decided
not to use the Powerpoints from the presentations. When
we had the Powerpoints in the book, it was over 700
pages long. (Your printer would have a fit). Anyway, if such
things annoy you, then I suggest you do not begin this
journey.
If I was looking to create a literary masterpiece, then
the Millionaire Phenomena project would still be on the
drawing board... Perhaps never to appear in public.
I thought it best to simply ready, fire, aim and get this

Millionaire Phenomena: INTRODUCTION (continued)

information out there as fast as I could. Whilst Im making a small apology for its structure, I make no apologies
for its wealth-rich information delivered by experts in
their chosen field, practicing what they preach every day
of the week.
The Millionaire Phenomena mission statement is
simple.
To spread the millionaire virus one person at a
time... Starting with you.

So what gives me the right to lead this

project.. And why should you take
someone like me seriously?
I started life with no family advantages or contacts.
No university degree, in fact, I failed year 12 twice. I
meandered into adulthood with no specific direction, no
ambition, simply happy to live my life playing sport and
music... Which ironically was earning me a reasonable
income.
However, slowly but shortly I was conditioned out of
following my passion and conditioned in to getting a real
job.
I remember when I got my first pay packet working in
the real world. It was $183 for a 40 hour week. The irony
was that I was earning 3 times that living my passion.
I suffered from the common curse of being average.
You see, if youre dead broke youve got greater motivation to do something about it. When youre average, days
roll in to months and months roll in to years before you
realise youve achieved nothing.
I got to 36 years of age when I received my wake-up
call. A wife, 2 kids and another on the way. I ran out of
money. I had to sell furniture items simply to get some
cash to buy groceries, with Christmas around the corner.
That was a point in my life where I told to myself I
would never be in that situation again. I took massive
action.
8 years later, I went from that low-point to over $25
million in revenue. I now have a sizable property portfolio, invest in shares and a successful company. I live in one
of the top-10 desirable suburbs in the country and drive
fancy European cars.

I dont tell you this to brag. I have no need to do so.

I tell you this to instill confidence that the Millionaire
Phenomena is not based on theories and philosophies. Its
based on real experience, delivered by real people getting
massive results today.

How To Get The Maximum Impact Out Of

The Millionaire Phenomena
The course is designed in five sections.
Section 1, Millionaire mindset Secrets. Having this
opportunity to spend time with each contributor to this
course, Ive discovered that the rich think totally different to the poor. The impact of their thinking has been a
major contributor to their huge success. I know youd be
keen to rush to some of the How-To sections, however
I urge you to spend a moment and read through section
one. It will set the foundation and make the Millionaire
Phenomena experience a whole lot more profitable for
you.
Section 2, Property Millionaire Secrets. Here we
feature 3 diverse individuals. Dymphna Boholt, Rick Otton and Josh Hunt. Their stories are truly inspirational, as
well as their strategies for real estate success. Even if youre
starting from a humble base and dont have much money
to begin, youll be encouraged by what you discover in
this section.
Section 3, Stock Market Secrets of The Rich. The
stock market is certainly booming and has probably
contributed to thousands of individuals wealth creation
plans. Here we have three powerful traders and investors,
Andrew Baxter, Stephen Jennings and David Galtieri who
de mystify and simplify the key components to sustaining
a consistent and predictable return from the market. If
you are new to trading, then a must read section should
be David Galtieris presentation, where he pulls a complete novice out of the audience and within 20 minutes
has that person picking profitable trades.
Section 4, Internet Millionaire Secrets. This is perhaps the section where wealth is being created faster than
anything weve ever seen before. Its a great pleasure and
honour to have 3 international gurus on making money
fast using the internet. They are Mike Filsaime, Christopher Guerriero and Tom Hua. 3 - 5 years ago, some of
these guys didnt even know the Internet existed... And
today are pulling in millions of dollars and growing.

For more FREE Millionaire Phenomena lessons, visit www.knowledgesource.com.au

page 9

Millionaire Phenomena: INTRODUCTION (continued)

Section 5, Business Millionaire Secrets. This is my
expertise. The ability to do millions of dollars in turnover
year after year with my unique approach to marketing.
Ive always said that once you understand this, you will
never be broke again. In this section, I cover 11 freedom
steps as well as 5 of my favourite marketing secrets that
have literally made me millions.
So there you have it. Five massive sections. You dont
have to read the Millionaire Phenomena cover to cover,
you can simply pick a chapter or a section and then go
out, apply and implement the strategies... Or you can
read it all, let it sink in, choose which strategies suit your
personality the best and then set a path to joining the
next crop of millionaires.

For more FREE Millionaire Phenomena lessons, visit www.knowledgesource.com.au

page 10

Rich Thinking, Poor Thinking

- Which One Are You?
Part of the Millionaire Phenomena Series

ave you ever wondered why some people have

the natural ability to easily attract and accumulate wealth, while others constantly struggle and
never get anywhere?
Why some people do and others dont has fascinated
me all my life, as have the underlying consciousness
dynamics of rich thinking and poor thinking about success, money and abundance.
In my quest to uncover the reasons, Ive read many books
(Kiyosaki, etc etc etc) and have been an avid observer of
people - the successful and not so successful.
The two groups of people have distinctly different
mindsets, belief systems, and approaches to life and living. Its as though they see the world through two very
different sets of colored glasses.
The good news is that you can change your mindset, with
concerted and consistent focus and application.
Lets examine the key signs that differentiate both
groups. In the process, lets take it a step further and Id
also like to offer some practical action steps you can take
to change the way you think, what you do, and the results
you achieve.

Be Very Clear about What You Want ~

Versus ~ Dont Know What You Want
When you have a rich mindset, you have grand
Vision and see with crystal clarity what you want to
achieve, and believe you will achieve it with all your heart.
It starts at the ideas phase, you then nurture it, develop it,
feel it as if its happening now, and live and breathe it,
until it becomes your reality.
You get excited about it and your passion and natural
enthusiasm is so infectious it rubs off on others and enables them to see your vision too, and they get swept-up
in your excitement.
Conversely, with a poor mentality you may not be

Meet Jon Giaan

Eight years ago, I was searching for
a fast way to create wealth. Whilst
I had some success with property
investing and shares, I quickly realised that I needed cash flow and
lots of it, to accelerate my wealth.
I discovered a unique way of doing business and since that day Ive
never had to worry about creating money ever again. Ive gone
from humble beginnings to running a consistent multi-million
dollar business for the last 5 years.
Im regarded by many as the #1 player in my industry and often
sought-after coach and mentor to many high-profile speakers and
presenters.

clear, or even more sadly, you dont know what you want.
Youve succumbed to the conditioning about stereotypes and boxes you should fit into that youve been fed
throughout your life. This has blurred your connection
with going for and achieving the best in your life.
You may entertain some dreams, but either you lack
confidence in yourself, fear failure, or are concerned about
what family and friends may say, or that they may shoot
down or ridicule what you want to do - the tall poppy
syndrome.
Success Tip - Its the saddest thing to wander through
life not knowing what you want. So, take the time to get
clear and define what you want. Get visual and graphic
about it by using a picture or vision board to compile
your mind movie about your dream life.

Have Positive Beliefs around Money,

Wealth and Abundance ~ Versus ~
Negative Beliefs
We acquire our beliefs early in life from our parents,
upbringing, peers, and environment. It takes a healthy
level of self-awareness to know what beliefs drive and

Millionaire Phenomena: JON GIAAN (continued)

influence your life. It is oh so worthwhile taking the time
to clarify this for yourself.
The rich mindset rides high on the wavelength that
believes - everything I touch turns to gold, theres plenty enough out there for all and Im going to get mine,
money is easy and just energy, an exchange for value
Negative beliefs about money may be along the lines
of - theres never enough, it doesnt come my way,
as soon as it comes in, it goes out, if only I just had
enough to pay the bills
Be aware - and beware - of potentially contradictory
beliefs - I want the success and wealth, but maybe Ill get
stressed out, have to work too hard, get drawn into more
than I want to and can do, Ill lose my freedom, maybe
itll go belly up, and then what? Watch your buts as
they are clues to your inner conflicts.

Whether you know it or not, youre tuned into your gut

instinct, your intuition, you follow your hunches, and it
drives the way you approach your business activities.
By contrast, if youre in the battler, victim or poor
mentality, youre focused on surviving, security, protecting
yourself, and minimizing or defending against bad things
happening. Youre in defense mode most of the time. Its
a fear and siege mentality, which makes you want to
close down shop at the slightest threat of a bump in the
road.
Youre not a risk taker. Its best to do nothing than to
risk failing, because thats too big a risk, devastating and
bad. When presented with an opportunity or challenge,
you go through the filing cabinet in your mind of all the
things that could go wrong, that have gone wrong in the
past, to justify not taking action.

This thinking sends confusing mixed messages out

into the Universe that will be taken literally, dissipate
your original intention, and get you more of the negative
side of the equation coming your way.

With a rich mindset, you will approach a problem

as a challenge to overcome and tackle it head on. In the
poor mindset, you will see it as an insurmountable problem that is the bane of your life. Oh poor me - and
literally.

Success Tip - Monitor your dialogue for a day or two,

or even better, a week. Watch your thoughts, words and
phrases you use, write them down in a journal, and analyze them intuitively. You could also get a trusted friend
to monitor your dialogue and constructively feedback to
you.

Success Tip - Focus on the rewards rather than the

risks. Its all about how you perceive and approach an
opportunity, issue or problem - with the mindset that you
can do it, and solve it, no problem at all. Its like switching between the two sets of colored glasses, or changing
gears in your car.

When youve identified your limiting beliefs, draw up

two columns and write them in the left column. Then
rephrase them positively in the right column, and notice
the shift you feel.

Totally Committed to Success ~ Versus ~

Ready to Wimp-Out Anytime

This is a mindset thing that with concerted effort and

reprogramming you can acquire, change or make adjustments to help you achieve your success plans.

Winner Mentality ~Versus ~ Battler or

Victim Mentality
When youre in the winner mindset, you have confidence in your abilities and youre self- assured. Your
attitude is - I can do it, I can do anything I set my mind
to. Anything is possible. Bring it on. Let me find the
best way to get there. Its a challenge and I love it...
You take risks and get high on the adrenalin rush.

When you have the rich mindset, youre totally

Committed to Success. You go the extra mile, and do
whatever it takes to get there. You have clear, unwavering
focus and dedication.
You dont let doubts enter, and never allow them to
take sway. Youre determined, persistent and focused on
action to move forward. Whatever gets you the success
you want are the only things in which youre interested.
By contrast, the poor mindset will see you being
half-hearted and lacking tenacity, endurance and staying power, so you tend to give up as soon as the going
gets tough, or you have to step out of your comfort zone,
because its all too hard, really.

For more FREE Millionaire Phenomena lessons, visit www.knowledgesource.com.au

page 12

Millionaire Phenomena: JON GIAAN (continued)

Think Big, Dream Big, See No Limitations
~ Versus ~ Pull in the Reigns
When youre in the rich mindset, with your big visions and dreams, you focus on doing what you love and
are passionate about. Having fun and doing things that
exhilarate you are utmost important values to you.
You believe that you can always invent or generate
money on demand by creating new ventures, products
and services that provide value to others.
Youre rich not only in your ability to attract money
and material things, but also in understanding human beings, market demands and needs, state-of-the-art trends,
and in providing value and serving others.
As Zig Ziglar says - The best way to get what you want
is to help as many other people get what they want. How
true is that?
If youre stuck in the poor mindset, you tend to
under-rate and sell yourself short. You look for the easiest
thing to do and opt for what you can do comfortably at
the most basic level, or get some minimal skills training
so you can do it.
Sometimes you may even operate on automatic pilot
without a plan, or by default, and just settle for whatever
turns up. Itll do, its good enough.
Successful people constantly raise the bar and aspire to
greater things. They also invest in their personal development and ongoing learning and see it as a life long
journey.
Success Tip - Focus on your passion and commitment - it will override your programming. Focus on your
higher vision and purpose and do something youre passionate about. Do what you love and love what you do.

Take Responsibility ~ Versus ~ Blame

Everyone and Everything Else
When you have the rich mindset, you may fear failure, but youre so intently focused on succeeding, that you
see nothing else. Nothing else matters except for achieving the end goal. You take responsibility and step up to
the plate, and revel in it.

If youre in the poor mindset, you fear failure. You

may also fear success and the responsibility that comes
with it. You most likely will undermine or sabotage succeeding and say - see I told you so, I knew it wouldnt
work. Or blame external forces or other people.
Fear is the greatest repellent to getting what you want
and attracting what you desire.

Take Action ~ Versus ~ Procrastination

With the rich mindset, you act with speed. You
arent overly perturbed when something doesnt work or
fails. You see it as a way to de-bug what youve been doing so you can perfect and get a step closer to succeeding.
You have less emotional attachment, which frees you
up to try more things, in spite of the risks. Its a numbers
game for you, with percentage hits.
In the poor mindset, because you lack confidence
and fear failure as well as success, it all gets too hard, so
you delay taking action and procrastinate. You miss out
in terms of timing, and the opportunity goes elsewhere to
find a more ready and eager participant.
Success Tip - Fail forward fast. The faster you can
fail forward, the faster you will succeed. Think about it ...
If you have some or many of rich thinking qualities
above, congratulations, youre on your way. If you havent
yet, rest assured not all is lost, as you can cultivate it with
persistent commitment and application.

5 Major False Beliefs About Money You

Need to Tackle and Transform
Your beliefs about money form early in life by what
you see and experience around you. Things your parents
said about money, conflicts in the home about money,
what teachers said, and your own early experiences
around money.
Its really not your fault. But, once you know this, its
your responsibility to change and reprogram your thinking and belief system. You owe it to yourself.
Heres a major test - think back as far as you can
about your earliest memories about money. What was
the context, the situation? What did you hear said about

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Millionaire Phenomena: JON GIAAN (continued)

money? What were the messages you received about
money? How did you feel?
What you believe about money is how you see the
world and will determine the experiences you have with
it. Like a self-fulfilling prophecy, your beliefs around
money will result in what you experience.
Your beliefs may feel true and real for you, but its
not necessarily the truth or fact in reality.
Heres another test - If money is not showing up, its a
reflection of whats going on in your inner world - how
you see yourself, your own self worth. It means you need
to do some work on your inner world. If you dont go
within, you go without...
Money is a great teacher and an insightful coach about
YOU - if you will listen closely and learn, and use the experience to shift yourself in your relationship with money.
There are many erroneous beliefs about money - lets
examine 5 of them.

Theres Not Enough For All of Us

This belief is based in the scarcity mentality or poverty consciousness. Resources are scarce and in limited
supply, and you have to scramble over each other in
dog-eat-dog fashion and compete to get those limited
resources.
The truth is that money is just energy, an exchange for
value.
If you make the mental shift that money is limitless,
that it can be invented, created and generated on demand,
in line with the value you provide, it will open up all sorts
of possibilities. So its only your beliefs, imagination and
creativity that limit you. How liberating is that?

Rich People are Bad

Well, that has to be one of the biggest falsehoods Ive
ever heard. Its based in a mixture of envy, suspicion and
mystery - How come they can do it, and I cant? What
do they know and do, that I dont know? They must have
done something shady or deceitful to get their money.
Sure, there are some who do it that way. Equally,
there are less than desirable characters among the ranks of

the less than wealthy too.

Another justification is - Good people, spiritual people
dont chase after money. Its wrong to have money and
focus on accumulating material things.
The fact is, whatever spiritual or religious beliefs you
follow, it is your birthright to live an abundant life and
your higher purpose and vision. With abundance, you
have more options, resources, freedom, flexibility, and
abilities to live your best life to its fullest potential, and
help others achieve the same.

You Have to Work Hard to Make Money

This belief is anchored in the simplistic linear view
that the harder you work the more money you make.
Well, thats just plain not true!
You are remunerated in direct correlation with how
much value and service you provide, not how many hours
you work.
Successful people know that working smarter not
harder is the way to go and is totally achievable. We were
not meant to toil, struggle or suffer.
Heres a Tip - whether youre starting your business,
building it further, or taking it to its next growth level,
always be looking for the best ways to automate the activities in your business.
Create set it and forget it automated systems that systematize your client acquisition, contact and selling process. Technological developments such as auto-responders
and a range of software applications have done wonders
for automating routine time-consuming tasks.
Leverage your time. Shift away from trading time
for money. Focus on doing what you do best. The truly
wealthy put their money and the efforts of other people
to work for them, and outsource tasks that are not natural
talents for them. Like a virtual army always marching
forward, advancing your interests.
A successful life is a balanced life with time for work
and play. Otherwise, what is the point of working hard
if you dont enjoy yourself and get the benefits that flow
from your work?

You Have to Spend Money to Make

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Millionaire Phenomena: JON GIAAN (continued)

Money
Wherever you look, stories abound about people who
started their businesses in their garage, spare room, even
their car.
Anything is possible, if you believe it, and set your
mind to achieving the task, and taking the ACTION to
make it happen.
With the internet, this is even more so. Technology
has enabled minimal and no start-up money requirements. The huge growth in the home business sector has
meant minimal overheads.
Sure, its great to have some money to seed fund your
business, but its the other elements that are far more
important, like your success mindset, entrepreneurial
creativity, taking ACTION at the right time, repetition,
persistence, and the flexibility and resilience to bounce
back quickly to try the next thing that will bring success.

You Have to Have Educational

Qualifications to Make Lots of Money
Not true at all. How many wealthy teachers or university lecturers have you seen lately? Their salaries leave
much to be desired.
In recent times, we have seen more internet marketing made millionaires than weve seen previously in other
business sectors, and many with very little or no formal
education.
What they have is an entrepreneurial, risk taking
spirit, action orientation, and persistence to succeed at all
costs.
In fact, too much formal education can be a hindrance
as you may end up set in your ways with a standardized
cookie cutter approach to seeing the world that you will
have to un-train.
Another issue is that you can make the mistake of going on an endless quest of doing more courses to acquire
further knowledge, always on the lookout for the next
piece of the puzzle that hopefully will be the jackpot
answer.
Without adequate APPLICATION, there is no success. Success comes from applying your knowledge full

circle and seeing it through to the absolute degree of

completion with dogged determination.
The most successful people come to business and making money with an open mind, egalitarian in nature, and
willing to try new things. A success mindset and attitude
are all important, as is the ability to see and act quickly
upon opportunities with great timing.
When you know which particular false and limiting
beliefs you may have about money, you can go about
changing and reprogramming those beliefs so that you
can move closer to achieving the success you so richly
deserve. I wish you well on your journey.

What is Money? What is Wealth?

5 Key Life Changing Insights
Money and Wealth can be such a mystery for those
who dont have it, yet so natural a process for those who
do. Why is that? Where does money and wealth come
from? How do we create our money reality and destiny?
If youre ready, confronting these perplexing questions head-on will enlighten, educate and change your
self-awareness around your money energy, and help you
increase your understanding of who you are and whats
controlling your money reality and destiny.
Lets explore 5 key insights about money and wealth.

1. Money is Energy
Everything in our world is made of energy. All
humans as well as inanimate objects emit energy waves.
Theyre invisible to the eye, but if you can imagine if they
were visible you would see energy waves of varying intensity emanating from everything around you.
Money has its own energy frequency. Its like tuning
into a radio wave frequency. So if you arent tuning into
moneys energy frequency, youll have a difficult relationship with it.
Conversely, if youre able to connect with the energy
frequency of money and be on its wavelength, your relationship with it will be easy. Youll attract it effortlessly,
accumulate it, and when you acquire it, youll be able to
keep it and grow it further.

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Millionaire Phenomena: JON GIAAN (continued)

Youve heard the saying - he/she has good vibes what this means is that theyre projecting good energy
vibrations. Now apply this to wealth and money - if you
emanate positive energy vibrations about money, youll
connect with and attract it to you easily.

Money is the surface, symbolic, visual, representational level. Wealth goes much deeper, down inside you
at the level of your beliefs, conscious and sub-conscious.
This is at the very heart of this issue. Pay close attention.

Once you learn how the world works, that everything

is energy, you can then free yourself to believe that anything is possible.

Wealth consciousness is your level of self-awareness

about the wealth parts of your inner self. Wealth emanates from this part inside you and manifests as money, so
its important to identify it and then go about expanding
it.

2. Money is a Symbol of Exchange For

Value

The wealth part inside you is either lying dormant, not

connected, activated but on low, or turned up on high.
Its very adjustable, if you choose to do the work.

Money is simply currency, legal tender, an exchange

for value provided.
Before money was invented, people used a bartering
system to exchange value, where one person exchanged
what they had to offer with that of another person who
had something else to offer also, both needing what each
other offered (for example, a cow in exchange for two
pigs).
Value is also perception. We place value on the
material things in our lives, and we set the marker up or
down. Money is the physical representation of value in
the form of paper notes or figures in your bank account
balance. Its notional, not actually real.
When you shift your focus onto the value you provide, and others provide to you, the interchange between
you, rather than the illusion of paper money, youll find
that money will flow more naturally. It un-kinks and
debunks the flow in the process.
If you believe you have great value to offer other
people, and the skys the limit, you can easily create
products and services that meet the needs of many other
people, and thereby invent or generate money and wealth,
at will and on demand.

3. Money and Wealth ~ or ~ Wealth and

Money? Which Comes First?
Its important to differentiate between money and
wealth - money is the outward symbol of your inner
wealth. What does this mean?

If youre not experiencing wealth, you either have

chosen not to, consciously or sub-consciously, or dont yet
have the knowledge, insights, or skills, to connect with it.
Therefore, the first step to achieving success, wealth
and money is to become actively wealth conscious and
aware. Once you make the choice to experience wealth
and shift your mindset you can tap into that part within
you and develop and cultivate it further.

4. Money and Wealth are a Reflection of

Who You Are
Your outer world is a reflection of your inner world
- your experience with wealth is in direct relationship to
your inner view about money and wealth. Theyre a mirror, a reflector of whats going on inside you in relationship to them. Its like a wealth department within you.
In other words, a person with a healthy relationship
with money and wealth has a higher internal value and
exercises and uses a higher proportion of this internal
value where wealth consciousness is concerned.
Your inner value that relates to this wealth department inside you is what creates money (please note this is
not the same thing as your self worth).
When you consider that many forces have fed into,
influence, and shape your money and wealth reality, you
realize you may have much to undo and reprogram.
These forces include family background, upbringing, teachers, schooling, friends, social conditioning, our
resulting beliefs we perpetuate cyclically, like get a good

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Millionaire Phenomena: JON GIAAN (continued)

education, get a good job, work hard and climb the
corporate ladder, the middle-class trap, man-made social
structures, and so many more as the story unfolds

James Ray refers to it as Going 3 for 3 - Thoughts,

Feelings, Actions. Bill Harris refers to it as Attention,
Action, and Action of Value to the world, to someone.

You may have much to reprogram. Its a mindset shift

thing.

So, if you align your thoughts, and feelings, with action - you have a very powerful force propelling you forward. The momentum will build and carry you, success
will flow more easily and effortlessly, and you may even
find yourself on an unstoppable path.

You can learn to reprogram and turn up the volume

if you choose, make it work for you, or continue to not
fully understand it, and perpetuate the merry-go-round
of the victim/battler mentality in relation to money. Its
totally your choice. You choose.

5. Money is a Great Teacher and Coach

Money knows all the answers - look to it for the answers, the clues, the lessons it can teach you. You have to
be an open and willing student ready to apply your new
learning.
Let me take this a step further. All the answers are
actually inside of you. Money is simply the instrument,
the vehicle, the energy source that guides and facilitates
the answers from within you, if youre willing to look.
Are you with me?
When you realize how powerful you are and that by
changing your thinking and being, you can change your
experience - success, money and wealth will come to you
effortlessly.
Make the decision that youre already wealthy. Ignite
a mindset and paradigm shift within you. Remember - If
you dont go within yourself, you go without.
Do yourself a big favor and discover that wealth part
thats residing within you that you can change if you
decide to.

How To Go Full Circle To Making Money

and Creating Wealth - 3 Vital Ingredients
Making Money and Creating Wealth is a process that
requires several ingredients working together in sync as a
combined package.
Thats why some people find it easy, and others struggle, live in lack, and never experience plentiful money and
wealth.

Your thoughts plus your emotion creates your feelings

- and the feelings are the vibration, the energy current
you send out there, that either attracts to you what you
want and desire, or pushes it further away.
There has been quite a bit of controversy in the aftermath of The Secret movie about the
Law of Attraction - that it focused solely on the visualizing and materialistic aspects, and ignored the rest of
the formula, as though there was some kind of conspiracy
at play.
In fact, the featured teachers (like James Ray, Bill Harris and others) do talk about the full package of ingredients. It seems the critics probably just chose to see and
hear what they wanted, or that which fitted their level of
development and own life experience.
Those who are genuinely successful know these ingredients, even if some only know it intuitively, or recognize
it retrospectively as they look back and analyze what they
did.
One thing is certain - they definitely practice the vital
ingredients as a natural automatic way of life and living.
Anyway, lets dive into the necessary vital ingredients
you need to become a powerful and effective moneymaker, attractor, and wealth creator.

1. You Have to Focus Your Thoughts and

Intentions
You have to know exactly what you want with unequivocal conviction. Theres no room to be wishy-washy
or half-hearted.
You have to focus your thoughts and intentions with
crystal, clear clarity and with the sharp, piercing precision
of a laser beam.

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Millionaire Phenomena: JON GIAAN (continued)

When you do focus unwaveringly, the power of your
thoughts and intentions, in concert with the energy
systems around you, in the Universe, start rearranging
themselves and lining up to help you achieve your goals.
Youve got to get your head space right. Make sure
you dont harbor contradictory and negative thoughts and
beliefs, and eliminate any doubts - no ifs, no buts. When
you think contradictory and negative thoughts, you send
out mixed signals that dilute the power and clarity of
what you want. Your ability to manifest weakens.
Dont make the mistake of believing that just because
your thoughts are private to you, that they dont count
out there. They certainly do and each thought has its
own powerful energy system.
When you also ask the right questions, you provide
a focus for the answers and ideas to come to you. Questions like - how can I attract more money, more income?
What do I need to do? How can I generate the right
ideas to make this a major success? How can I make this
venture even better and bigger, so its even more successful? How can I make this venture as valuable to others as
possible?
The questions go out there in search of answers - the
Universe responds to the questions and loves to line up
the answers to solve and complete the puzzle.

2. You Must Take Action to Get What You

Want and Desire
Theres no point in wishful thinking, dreaming
and fantasizing if you dont go full circle and take the
required actions and steps to make it all happen and
manifest.
Yes, do create that Vision Board or Picture Board with
images of all the things you desire. Thats fun and stimulating. Yes, do stick that $100,000 or $1 Million Dollar
cheque or note to your ceiling over your bed so you see
it when you go to sleep and awake, or on your fridge,
bathroom mirror, or by your computer. Whatever takes
your fancy...
Those images and visual reminders are important and
give your intentions power, and heighten your good feelings.

But theyre not enough on their own. Youve got to

get off your behind and mobilize into action.
You have to be resourceful and take the step-by-step
actions to help those wished for items materialize. You
have to listen to the inspired ideas that come to you to
help you put into motion and manifest what you want.
Look for the clues - helpful people who appear and come
into your life, the phone call that comes about a new opportunity, a resource that presents. An idea that beckons
...
Looking at the happenings in your life in this way is
inspiring, exhilarating, positive and mind shifting. Its eye
opening
Its your job then to take up the challenge, work out
and dissect the individual steps required to move you
toward achieving your goal, and having the pieces come
together to deliver you the outcome.
And with all these things, dont delay, act with speed.
Be a doer, a mover and shaker, otherwise the idea and
opportunity is just as likely to go elsewhere and land in
the hands and energy system of the next willing person to
grab, run with, implement and achieve.

3. Make Sure Your Actions Provide Value

to Others
Every single person has a gift to offer, dont underrate yourself. Everyone has a skill or a talent that can be
of benefit to others. Everyone knows something about
a topic that others would be interested in learning more
about. Get out there and share it with the world.
Find a gap in the marketplace - a need that has been
identified, but currently is not being filled or satisfied.
In marketing terms, this is called market gap analyses.
Identify the gap and be inventive about using your skills
to create a solution to the needs, problems and pain of
others.
This is where you can be really creative and entrepreneurial and use your gifts, or even involve and co-ordinate
the gifts of others into services or products that provide
value to others. When you do this, you can create and
generate money on demand.
According to the Law of Income - you are paid in

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Millionaire Phenomena: JON GIAAN (continued)

direct relationship to the value you provide to others.
If your work and actions are such that they can help
increase the ability of others to succeed and live better
lives, your value contribution can soar significantly.
This is how the world works in full circle - to receive
value yourself you have to give value. This is how the
Law of Attraction works - you get back what you put
out.
If you align yourself, your thoughts and actions, with
your life purpose, you have a powerful formula to live a
successful, rich, abundant, fulfilling and happy life.
And if that formula is directed at genuinely helping
other people succeed more in their lives, on as grand a
scale as you can, you will be seen as a role model others will aspire to be like. You can live an exemplary life
experiencing all the riches that are your natural birthright,
if you choose to claim them.
So, remember - always combine the 3 vital ingredients
of Thought, Action and Providing Value - and when you
master that, youll be able to generate, create and print
money on demand.
Chances are that if youre not succeeding at the level
that you believe you should, then the problems lie within
your own wealth blue-print.
What Ive covered in this chapter are specific tools
which you can use to change your wealth blue-print
dramatically.
Let me say this...
Developing yourself as a person is an ongoing responsibility that you have. You never stop learning and
developing your wealth muscles. With that said, lets now
move on to the tactical part of the Millionaire Phenomena... And that is, the strategies, investment formulas and
specific systems that have all contributed to the explosion
of millionaires across the country.

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How To Make Serious Money In

Todays Real Estate Market - Even If The
Professionals And Your Friends Say Its
Impossible
Part of the Millionaire Phenomena Series

hear it everywhere I go. People say that you cant

make money out of real estate in a flat market or you
cant make money in a booming market, its too late.
Whatever you excuse is for not getting started, let me say
this to you right now. Some of the best opportunities to
make money in real estate exist today! Hence, this chapter
was written to give you ideas, secrets and strategies that
many of my clients have used in the last 12-24 months to
get out of the rat race forever using real estate.
In this chapter, you will notice that I have a bias
towards cash flow real estate initially. The reason why is
because thats exactly how I started and it enabled me to
buy back 40-60 hours a week. Why is that important? It
gave me time to focus on investing and creating not just
further cash flow, but capital growth as well full-time.
Youll discover in this chapter many different ways on
how to replace your income in the next 356 days, as well
as build growth and equity that will enable you to create a
balanced portfolio that never runs out of money.
Understanding this simple fact will teach you volumes
about what you can do to turn your life around. Real
estate is the one investment that can give you an instant
cash flow, that will continue to grow over years to come
and even if you really stuff up in the real estate market,
if you hang on to something long enough your stuff up
will become a good investment. In my opinion, no other
investment is as forgiving and gives you the security that
real estate does.
Yes Im biased.
I guess the reason Im biased is because real estate has
made me literally millions of dollars. But more importantly real estate has made my clients and students millions of dollars. Millions of dollars on their own are really
not that important. Its what those millions of dollars can

Meet Dymphna Boholt

Dymphna is widely recognised as being
one of Australias most successful property
investors, and leading real estate strategist
and educator specialising in tax, asset protection and international investment, its
no wonder Dymphna Boholt is known by
many professional and personal contacts as
Dymphna the Dynamo!
She focused on properties that brought in
more than they cost her. Within just one year she had accumulated
a $3.5 million property portfolio, boasting $1.55 million in equity
and totally replacing the income she was earning as an accountant
working 40 to 60 hours per week. Through just one property purchase, she managed to generate a passive income greater than the
average Australian wage.
The now happily married mother of three lives on the beautiful
Sunshine Coast on her 32 acre piece of paradise, completely surrounded by rain forest, birds, creeks and other wild life.

mean for you in terms of lifestyle, choice and freedom

that really makes a difference. For many its the ability to
have choices. Choices to stay at home and be with your
kids. Choices to do voluntary work. Choices to work part
time, or not at all. Choices which allow you to literally
live the life you intentionally designed (and desire).

Is It Really Possible To Break Out Of The

Rat Race?
What most people dont realise is that they have
many options to increase their wealth dramatically. They
dont realise that they can become their own banks and
stop paying extortionate bank fees and be at the mercy
of their bank manager. That they can pay as little as 9.5

Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

cents per tax dollar, (even if they are earning $100,000 a
year), if they are maximising all their tax benefits. That
even if they are only 18 years old, they can realistically
look to move out of home and into a property they own
if they play a few simple cards right. That they can retire
comfortably with more than the $29,000 a year most
Australians in our current state of affairs stand to rely on.
Its very easy to get caught up in the realities of every
day living particularly when your life is, lets say Comfortable. I call this comfort zone, this level of complacency the comfy couch syndrome. When you are doing
okay financially, but not brilliantly, its very easy to always
do what youve always done. And guess what? Thats going to always get you what youve always got. It usually
takes a major trigger, a major life event or situation, to
kick somebody off that comfy couch and get them to take
significant positive action in order to get significant positive financial results in their future.
Significant positive results give you choices, lifestyle,
time freedom whatever it is you want in your life. For
everybody this is going to be a different thing. If someone is in dire straits i.e. they have GOT NOTHING TO
LOSE, they are normally prepared to try anything. To be
resourceful. To give it a go. Youll often find in history its
the people who have come from the hardest backgrounds,
and experienced the most devastating circumstances that
make the biggest changes in their lives, and later the most
money, that means they become the seriously wealthy.
Being comfortable and suffering from the comfy
couch syndrome might just be your biggest obstacle to
achieving the level of financial and personal wealth you
desire.
If you are reading this whilst sitting on your comfy
couch or comfy work chair you can rest assured that you
are not alone. Australia is a nation of complacent comfy
couch potatoes.
We have a high tax regime, yet we do nothing about
it. Our rent return on investment (yield), are some of
the lowest in the Western world, yet we do nothing about
it. Our education system is inadequate, yet we do little
to rectify this. A large percentage of our population is
financially illiterate, yet we do nothing about it. Only a
small percentage ever seek out financial education and an
even smaller percentage of that small amount of people
actually act upon it.

Well theres good news. The comfy couch syndrome

is entirely curable through natural non-drug related selfmedication.
Every day, millions of innocent people are forced from
their homes by a disaster called work.
Who wants to change that situation? Well thats exactly what this chapter is about. how you can accumulate
the wealth you need in order to retire in the near future.
Now to give you a better insight into where Im coming
from, I want to tell you a little bit more about me.

Who The Hell Is Dymphna Boholt?

I grew up in Central Queensland and I grew up in
a traditional country family unit where the father controlled all of the finances and the females really didnt
have a say in any of that sort of thing. I was pretty lucky
in that I was a fairly smart kid and I started my first business at the age of four, where I negotiated the purchase of
Blackie the Cow.
Blackie the Cow was an old milking cow owned by a
neighbour who I convinced he should sell it to me for a
certain price, I cant even remember right now what it
was, but it was something very paltry. She became my
first investment because she was an income-producing
cow. She had calves that were worth something. I kept
the heifers and I sold the steers, over time I built up my
herd. I even convinced a few of the neighbours to lend
me their bulls.
Over time, this taught me the principles of a profit
and loss which Ive grown to become very familiar with.
Basically if youre buying something, regardless of whether
its a piece of real estate or whether its a business, if it
doesnt make you any money, youve got to question why
youre buying it.
Hundreds of people every day go out there and buy
negatively geared property that doesnt make them any
money. In fact, they cost them money, week after week,
theyre costing them money out of their pocket. Admittedly my entrepreneurial ability didnt stick with me in
my 20s, I went a bit ridiculous and did all the normal
things that twenty year olds do, including getting married
and running around and spending a lot of money on my
first husband.

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

Too Busy In Survival Mode To Even Think
About Investing? A Common Problem...
However, I found myself in my early 30s in a situation where I was going through a very messy divorce and
I had a toddler and was also heavily pregnant. So I was in
a situation where I had given up all work to try and make
things work. I had foolishly sold all the properties that
I had owned previously to buy cars and toys and useless
stuff, I had no job, a mortgage and two little beings that I
had to support.
It was at that point in time things really started to hit
home and I wondered what I was going to do? So I went
into survival mode.
Now survival mode to me was to go back to what I
found really easy, which was accounting, and thats actually when I moved up to the Sunshine Coast in Queensland
as prior to that I was living in New South Wales. I moved
up to the Sunshine Coast and I set up an accountancy
practice. I walked the streets, heavily pregnant and all,
you can just imagine it I looked absolutely beautiful
I walked the streets and I introduced myself to business owners and I said, If you want a second opinion on
anything, come and talk to me. Im setting up a practice,
etc And my fledgling accountancy practice blossomed
from there.

When I Discovered That Property

Investing Was The Answer For Me...
I dont consult anymore because some years ago I got
to the stage where I was sitting on the comfy couch again.
I had the practice running at a stage where I worked
in the practice and it was hard work, but I had enough
income coming in, I had the kids taken care of and things
were happening. I was actually speaking on stage and I
was talking about asset protection and taxation which Id
become an expert in and a public speaker on, I walked off
stage and this little guy walked on stage, he was the next
speaker after me, and I hadnt met him before. I knew
nothing about him and I thought Id hang around and
see what he had to say. He was speaking on property, and
within the very first ten minutes or so he said something
that really hit home to me.
It was about trading time for money, and even though
Id rebuilt myself up, Id regrown, things were going well,

I was still trading time for money, even if it was my business.

It was still time for money.
I still had to be at that accountancy practice, seeing
clients for some 40-60 hours a week and my kids used
to come to me and say, Mummy can you come to my
sports day? Or Ive got a reading day... Or Ive got a
whatever. Id have to say, No honey, Ive got clients, Ive
got responsibilities, Mummy has to work.
And it was at that point in time, my focus changed.
I realised that, yes I was successful in what I was doing
there but I needed to extract myself out of that business and I needed to have passive income coming into
me that I didnt have to work for. It needed to come in
regardless of whether I was sitting by the pool, watching a
sports day carnival of my kids, I was sitting on the beach,
whether I was sailing or whatever else I might like to do.
To me, the result of that was property. Now that
gentlemans name was Dr Dolf De Roos who I have
become great friends with and he supports me in a lot of
things that I do, including my mentoring program called
Wildly Wealthy Women.

So Why Am I Sharing This Information

With You?
As a result of my property investing, if I choose to,
I no longer need to work ever again. I dont need to go
out and speak to people at seminars and events, I dont
need to write chapters like this, or produce home-study
programs. But heres why I do it: I have a burning desire
to make a difference. When I worked as an accountant
I could only affect one persons life and I could only ever
feasibly fit in six or seven clients per day for an hour slot
each. Thats six or seven people I could help per day, and
only around 30 per week.
Now that I am an educator, speaker, and author I can
affect thousands of lives and I love that.
Through my work I come into contact with a wide variety of people from varying backgrounds, education and
financial strength and through a process of motivation,
education and support I see the dramatic effect my work
has on them, not just as individuals, but also the pebble
in the pond effect, of everyone that they are associated

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

with.
Whilst Im no social worker I know many social problems experienced in Australia stem from financial insecurity and the lack of personal empowerment. By bringing
that personal empowerment back to its roots, financial
independence can follow not just for the individual, but
for the whole Australian economy really!
Already, I have seen the result of my input impacting
thousands of lives thereby giving them the confidence and
know-how to then help their extended family, friends and
communities.
I know through hard core economic calculations that
if I can help one individual family unit to achieve both
their personal and financial goals the ripple effect that
this has on their family, friends, and community, not just
financially but in attitude as well can change the financial
and spiritual wealth of whole economies.

Get Serious, What Are You Really Worth

The Truth
Heres a little exercise for you. No matter if youre an
accountant, a lawyer, high-flying business person, teacher
or a factory worker, this little exercise will work wonders
if you take it seriously.
The only truth is the result. It doesnt matter to me
how much you know about anything, especially when it
comes to investing. The only truth is what results are you
getting right now in the market?
This is going to hurt a little bit at first, but what it will
do for you long-term will be worth going through the
exercise. As you can see, Ive put in a little box. What is
this all about? Simple.
All you have to do, is put in the space what you are
earning passively right now, without having to work. For
some of you, it wont take you long to add a figure.

If its a zero, dont be deterred, take stock of the reality

of your position and recognise you need to make serious changes and take massive action right now. Your goal
in the next 365 days is to put a figure in this box that
completely replaces your income. Impossible? Im going
to share with you the strategies, right here that will get

you there.

Were Richer Than Weve Ever Been So

Wheres The Money Going?
Although Australia has experienced high growth in the
economic sector over the past 10 years, few Australians
have capitalised on the opportunity to increase their personal wealth by using that growth to invest in assets that
will grow in the future. Much of this personal wealth increase has gone instead on consumable and lifestyle items
such as new cars, plasma screen TVs, holidays, swimming
pools, jet-skis and other luxury items.
The past decade of economic growth has bred a population of complacent Australians who expect this easy
money and easy growth to continue indefinitely.
Clearly this is not necessarily going to happen and the
complacency and comfy couch syndrome is a dangerous
mentality for Australian investors to have.
What happens when the unexpected happens?
The vast majority of Australians are ill equipped to
handle unexpected expenses or interruptions to their
income stream due to sickness or illness or other life
circumstances. In fact the Australian Bureau of Statistics
has estimated that 70% of the Australian population is
likely to be out of work for a period of six months or
more some time during their working life due to sickness
or injury.
How would you or your spouse fare if you were forced
out of the workplace due to sickness or illness for six
months or more? Would you have the savings, the passive
income or even the income protection insurance to fall
back on to see you through a period of no income and
possibly extraordinary expenses such as medical and travel
expenses?

How Long Could You Support Yourself

And Your Family If Your Income Stream
Stopped Tomorrow?
It may not be as a result of sickness or injury. It may
be due to a decline in the economy, restructuring, job
cuts, supply shortages it could be for any number of
reasons. How long could you last?

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Would it be a year?

basic budgeting!

Would it be six months?

It is going to take a long time before the financial

literacy education being introduced now will start to have
an impact on our society, and in the meantime there are
still vast tracts of the Australian population who remain
uneducated when it comes to personal finance, property
and getting ahead financially.

Would it be a month?
Or would it be next week.
Even as an accountant, economist and public speaker
I thought there wasnt too much that could stop me from
doing the work that I love. After all, much of my work
involves communicating verbally with others e.g. running
my property investment portfolio, standing on stage and
speaking etc. Clearly I was wrong. A couple of years ago
my son accidentally hit me in the jaw with a golf club and
broke my jaw (Ive now given up golf instructing as part
of my career path). Having to eat through a straw and
unable to move my jaw meant I was rendered incapacitated and unable to work. Fortunately not only did I have
the savings in place to see me through any down time, I
also had income protection in place which kicked into
gear soon after the accident.
Income protection insurance is payable at a rate of
75% of your current income stream and kicks into place
if you have a sickness or injury in or out of the work place
which renders you unable to work. Pretty good piece of
mind huh?
Getting things as essential as income protection insurance into place and other basic financial management is
not difficult. It might be boring and something we tend
to put off until later, but it is something anyone and
everyone could and should do, and regularly.

Our Education System Has Failed Us

Miserably
Historically, our education system has failed us miserably when it comes to equipping us with the financial
management skills we need to achieve financial freedom.
Thankfully, the wheels of change are starting to turn and
our education authorities are finally starting to introduce some basic money management skills as part of the
curriculum of our primary schools. Talk about overdue!
All those years of teaching kids subjects like geography,
history, calculus, stats which is all very well and good to a
certain degree, but although they might know an algebra
equation they didnt know how to apply that mathematics to every day life such as balancing a cheque book and

Where I believe an immediate impact can be made

is to encourage the educators and trainers themselves to
improve their attitude to wealth and their personal financial situation, so that they can not only set an example for
those they are teaching, but so they can better convey to
their students through their own life experience and successes how to create financial wealth and success from the
grass roots up.
One of the most important life teachings that we can
pass on to the next generation is one of attitude towards
success, money and wealth. Success and wealth after all,
is a positive thing. Especially when our next generation
truly gets the impact that wealth and success can have and
the amount of good that can be done when they come
from a position of financial strength rather than weakness.

Finding The Right Person to Help You

Get Off The Comfy Couch Or Out Of The
Gutter!
Getting started and finding the right person to take
you to where you want to be is only the start of the journey. When confronted with anyone suggesting that they
can help you get rich it is important to work out whether
the person selling you the idea or concept is actually close
enough to the source to know whether what they are telling you is the truth or whether they themselves are rich,
and practice what they preach.
Ive seen many people hurt financially, myself included, by often well-meaning people selling a concept
or investment which they believe in 100%. The trouble
is that they themselves have in turn been misled or sold a
concept fraught with lies or errors.
As hard as it was to learn my early lessons, I consider
myself lucky to have learnt the lessons I did when I had
little money to lose, rather than later on when the stakes
wouldve been higher and more money could have been
lost.

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

If youre starting from the bottom the only way is up!
Education and ongoing training is something that I
consider to be paramount for everybody at every level.
Once you have some education under your belt at least
you have the tools at your disposal to start working with.

Not A Property Millionaire Yet? Maybe

This Will Help You...
Now for every single one of you, that decision is going
to come to you in a different form. For every one of you,
youre going to have a trigger and that trigger might be
this book. It might be something thats said at a barbecue, it might be something that you hear me or somebody
else say, that makes you think, You know, thats right,
and that applies to me. And if I dont make those decisions and if I dont make those changes now, then in ten
years time or five years time or whatever else it might
be, then Im still going to be in the same situation Im in
now. So what has to change?
From the moment I made that decision, it took me 18
months to totally replace the income that I was earning
through the accountancy practice by being there 40-60
hours a week, passively, not having to get out of bed.
And I did that purely through investing in property.
I focussed on property that most people dont even
look at. Im a girl from the country. It doesnt bother me
if I invest in the country. Nice people live in the country,
believe it or not. Whereas most investors, particularly if
theyre city investors, they think, I live in this particular
suburb and Im a nice person so if I buy in this particular
suburb, well nice people are going to live in my house and
thats safe and secure for me. Ratbags live everywhere, so
do nice people. The difference is, how good your property manager is.
Now if you take on the role of property manager,
well then youve got to make sure that youre armed
with the knowledge, the strength and the guts to be able
to actually manage those properties effectively. I dont
do that. I find thats not an effective use of my time. I
prefer to manage my managers because I have property
all around Australia and in fact the world. If I spend my
time managing my managers, and they do the wrong
thing by me or my tenants, then they know about it. So
thats a more effective use of my time. But in saying that,
the types of properties that I focussed on were properties

that produced a positive income, regardless of what else

I did. There were properties that, from the day I bought
them, they put more money in my pocket than they were
costing me. And Im going to show you some of those in
this chapter.
In my home study courses I go through many, many
strategies as to how you can actually implement strategies
and make money for yourself, through real estate. Clearly, Im qualified on a number of counts. I can talk about
tax, I can talk about asset protection, I can talk about
superannuation, I can talk about investing in whatever
else. I can talk about how you should structure for tax,
I can talk about how you should structure for GST and
all that sort of stuff, but from personal experience I can
talk about how to make passive income work for you. I
can see what strategies have worked for me and for other
people, other clients. I know in detail what went wrong
and why it went wrong or why things worked.

You Can Stuff Up Real Estate and Still

Make Money... I Love It!
Investing in real estate is one of the safest investments
you can make. Theres a lot of room for stuffing up. You
can make a really bad property investment and so long as
you keep it long enough, youll still make money, whereas
if youre smart and you know the style of property that
suits your portfolio, you can make serious income, passive
income and growth very, very quickly. In that 18 months
time span that I totally replaced my accountancy income,
I spent the first six months thinking.
You might tell me Im a slow thinker, perhaps I am,
but also I was planning it. It was deciding on what strategies were going to work. It was putting into place things
to get me market ready, as I wasnt market ready. I didnt
have my loan structures in place so I could act tomorrow
if the right deal came along. I didnt have my tax returns
done. Remember the old story about the painters house
is always the worst painted house in the street and the
plumbers always has leaky taps? Well your accountant
always has the late tax return because theyre busy doing
everybody elses.
So I had to get myself in a market ready situation, so
in reality that passive income was created in a 12-month
period. Any one of you can do that.

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

The Millionaire Makeover Is Possible For
You...
In one of my mentoring programs, I remember I did
a Millionaire Makeover on a lady who had $300,000
worth of equity. Thats what she was starting with. I
just pulled her out of the crowd and said, OK, show me
your details, what have you got? And then I put up real
deals and the whole audience could work through and see
whether they would buy that property or not.
Now they were deals that I had either pulled off the
internet, found through my agents and sources that I deal
with all the time, or properties that clients of mine had
bought in the last six months so they were all real, live
deals.
I threw them on the screen and said, you know,
Would you buy this, can you buy it, how would you
structure it, how do you finance it, is this a deal thats in
your comfort zone or not? And she made yes/no decisions or even sometimes she was too late and missed it. If
she dithered around and carried on too much or maybe
she didnt do enough due-diligence, she got a dud.
So I didnt only put in good properties, I put in bad
properties as well, and over that period of what she
COULD buy in a 12 month period, she accumulated in
excess of $100,000 in passive income through the properties that I put up. She also accumulated over $700,000
worth of equity in the properties.
Now clearly, I selected properties that were going to
produce her income or were going to produce her growth
in a short period of time but I also threw some duds in
there to see whether shed take them or not. Now that is
not unachievable, with the correct education and knowing what you can do.
From 0 To $250,000 In Equity Growth PLUS A
Bonus $16,000 Per Annum Passive Income In Just... 12
Months.
I know what you are probably saying to yourself right
now... I dont have have $300,000 worth of equity.
If you have the knowledge, you can start with nothing. Heres an example. One client who had recently came
out of divorce and she had no money at all, incidentally,
when I came out of divorce, I had $40,000 in my back
pocket and that was it. So everything has been built from

that $40,000.
She was in a situation at the beginning of the program
where she was one of the students that I actually took on
and personally mentored. She accumulated in excess of
$16,000 in passive income in that year but her focus was
growth. She had nothing to start with, remember, and
she had over $254,000 worth of equity by the end of the
nine-month program. We had ladies that became millionaires in that nine-month program.

Social Security Mum Makes $160,000

In Record Time Legally And Breaks The
Poverty Cycle
We had ladies who bought their very, very first property. We had a lady who was a third generation social
security mum who broke the cycle. She bought a property, she renovated it, she lived in that property, she lived
through the bearers and the joists stage and the walls that
were hanging down and everything else but she made
$160,000 and I said to her at the last event, Could you
have made that money any other way, and she was actually very heavily pregnant with her second child and said,
Well, not legally.
So, what Im trying to get across right now is that it
can be done, it is something that if you make that decision, if that trigger happens for you while reading this
chapter, it is something you can act on next week. You
can make serious difference for yourself but it all comes
back to the knowledge of what the plan is for you, and
selecting the properties that are right for you, that next
move for you. There might be a great deal out there but if
it doesnt suit your portfolio, its wrong for you. So its a
matter of being able to put that plan together for yourself and the only way youre going to do that is to know
whats out there and what else you can do.
So lets have a look at some of the things that you
might be able to do.

Strata titling

Buying off the plan

External forces

Buying, immediate growth

Mortgagee sales

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

Deceased estate

Rates defaulters

Public perception

Emerging economies

Prime locations

Speculative building

Speculative land deals

Developments

Subdivisions

Flips

Options

Commercial

Equity drawdown

DA and BA approvals

Lease and sublease

Dual occupancy use

Renovations

Creative management

Creative contracts

Vendor Financing

Lease Option & Wraps

Re-zonings

Cash cows

Cash Flow Will Give You Your Dream

Lifestyle And Growth Will Make You Rich
What Im going to go through are things in broad
terms and just pull out a few of those that I think might
interest you. But first youve got to understand exactly
what growth is? A growth property is going to produce
you wealth. Its going to produce you equity that you can
use to borrow against. Its going to give you the ability to
have security to go out there and buy the next property.

But its not going to give you lifestyle. Its income thats
actually going to give you lifestyle.
Its income, cash flow coming in that says, I dont
have to get out of bed today. Ive got my money coming in that I would normally need to go out and work
for, coming in passively. Its the one that says, I can go
on a three month holiday. Its the thing that says to the
doctor client of mine, I can take three months off and
go and work for the tsunami appeal, because I want to,
because I can. Previously when they were focussing on
growth property, they were not in a position to do that,
which is something that they really, really wanted to do.
It gives you the ability to be able to implement some of
the more community-related things that affect you.
Most of you reading this at the moment will be sitting
there, thinking...
This chapter is all about making money.
...And yes, youre right, it is. However, theres a point
that I hope you experience down the track by following my strategies here where you dont have to focus on
selling your time for money and doing what your totally
passionate about. Thats total freedom, and thats why I
keep teaching these strategies.
Youll get to a stage where mes taken care of and then
youll get to a stage where you ask, What else do I want
to do? What difference do I want to make? Whats the
mark that I want to leave on this earth? Theres a particular client of mine who comes to mind and I always get a
little bit teary when I think about this girl, but, four years
ago she came to me and we started to work through a few
issues with her and her passion was property, through her
real estate investing, what shes been able to do is set up
orphanages in China.
Shed had an experience where her business partner
was Chinese, and they were over in China and she saw
first-hand, outside the tourist route, what happens to babies, particularly baby girls. In China youre only allowed
to have the one child so the second child is often killed.
And today, that girl is rescuing hundreds and hundreds
of babies lives because of her efforts, because of what she
wanted to do what she decided to do. Now thats the
impact of one person. If you can affect one person, if you
can get it right for me, for the you, the individual, you
can affect your whole community. You can affect everyone around you.

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

Have you read The Richest Man in Babylon? Its a
beautiful book. I give it to my kids to read. The underlying message behind it is, save 10% of your income. But if
you look at it a little bit deeper, its about whole economies. Im actually an economist, and it goes through the
economics of how one persons wealth can change a whole
community. Now I know by changing your financial
wealth, I can not only make a difference in your life, but
also in the lives of everyone you interact with everyone
you spend money with, everyone you communicate with.
Just like the pebble in the pond and the ripples that filter
out over the entire pond, whole economies are affected.
You may not realise it, but from an economics perspective, it does. And thats why Im writing this chapter.
Because I know the difference I can make if you let me.

The Perfect Time For Cash Cows Is Now...

So whats a cash cow?
Where can we find these cash cows, where do you
buy a property and it produces you more income than it
cost you? Well a cash cow, basically, if you take all of the
income, less than all the expenses, and its still positive,
then thats a cash cow. Thats the kind of property were
looking for. So how do we do that when were out searching for a property?
Well theres a little thing called The Rule 2 that I use.
Now this is only a rule of thumb, but basically if
youre looking at a property and you want to know how
much rent you need to make the property positively
geared then this is what you do. You take the purchase
price of the property and multiply it by two and divided
by 1,000, this then gives you the weekly rent required to
make the property start to be positive cash flow. If its
anything more than that, its an even better cash cow. So
if youre buying a property for $200,000 and it produces
$400 a week rent, that meets the rule two. Its a cash cow.
Now obviously rates vary from council to council, so do
interest rates, so do other charges and things that you
might have but just as a general rule of thumb, if it comes
close to that, youre getting to the stage where youre starting to look at something thats going to be positive cash
flow to you.
Now thats after youve paid your agents commissions,
and after youve paid interest on 100% of the mortgage.
Now the reason Im saying 100% of the mortgage is

because, if youve got your principle place of residence

and its worth $400,000 and you get a line of credit on it
which at 80% be $320,000. But lets say your mortgage
is only $100,000. So what youve got there is $220,000
worth of available equity. This is on your PPR, principal
place of residence.
Now you might say, OK, thats where Im starting
from. You might form, for instance, a company and a
trust that goes out and buys its first property. Now lets
say that first property was a $200,000 property. What
you would do is go and get a loan on that property of
80% which means youd be borrowing $160,000 secured
on that property. Wheres the rest of that money going to
come from? It comes from your available equity, your big
credit card that youve got sitting there available to you
secured by your PPR.
So in order for that property to be a cash cow, it has
to support the interest on not only the $160,000 but
also on the $40,000. Thats a cash cow. There are a lot
of agents, salesmen, people out there that will sell you
negatively-geared properties based on a deduction for tax
purposes that you might, after claiming the deduction for
depreciation might be marginally positively cash flowed.
My definition of a cash cow is one that is positively cash
flowed on a cash-on-cash basis. Forget the tax, I want
to be making money, real money, and thats how you
calculate a real cash cow. Anything above the rule of two
minimum means youre better off.

How Do You Find Cash Cows And Even

Better, Multiple-Income Cash Cows?
So where do we look for these kinds of cash cows?
Well theyre going to have certain characteristics. They
might be in a regional area and Ill show you some of
those that Ive bought. They might be a dual occupancy
property where upstairs and downstairs are both rented
out separately or where youve got a granny flat to rent in
addition to the main house, or youve added a second residence to the property or it might be a duplex or a triplex
or a four-plex. It might be a six-pack or an eight pack.
Go to the United States and it might be a 57-pack. Their
developments over there are huge. But thats great. It just
means theres more money to be made.
So what are multi-income stream cash cows? Heres
how they work. Youve got multiple income streams com-

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ing from the same piece of land that youve purchased.
It might be a shopping centre. It might be a development or an office development. It might be an industrial
warehouse development where youve got a number of
different incomes coming from it. You might buy a piece
of real estate and you say, OK, how else can I increase the
income on that property? I might be able to sell signage,
I might be able to rent out the back. I might be able
to do something else. How else can you get that extra
income coming in?

Heres an example of a multi-income stream cash cow.

Simple, easy, anyone can do this. This particular cash
cow cost me $250,000. Most of you reading this chapter
could have bought this property. Here are the figures
on it. It cost me $8,000 in purchasing costs and it has a
rental income of $52,000 a year, which is $200 per week
in the five units. Its a block of five. My costs on it are
only $24,000, which means that this property puts a passive income in my pocket, every week of $527.00. And
thats $527.00 that I no longer have to go out and work
for. Its passive.
Do I have to pay tax on that? Yes but if I went out
and worked for the income, Id have to pay tax on it
anyway. Do I have to pay tax on all of that? No, because
I know my tax laws. I know that I can get a quantity surveyor in there and maximise my tax deductions. I know
that I can go and visit it and claim it as a tax deduction. I
know all the appropriate tax deductions that I can claim
by sitting in my office and not going anywhere near it. So
no, I wont be paying tax on all of the income whereas if I
go out and work, chances are, for that same $527 a week,
I would be paying tax on all of it. And if Im working for
somebody else, then Ill get the tax taken out first, thanks
very much, and then have to prove that I need some of it
back. Thats how it works.

Retire Rich, Retire Early - If You Want

So if I can get one thing across to you, this is the
way to go. This is what you need to be doing, because
income, regardless of whether you love your job and you
think, This is wonderful. Ive got the best job in the
world and I dont want to leave it. Thats great. But
what happens if you cant do it? What happens if in five
years time you want to have a baby? Not men obviously,
but, what happens if you decide to have a midlife crisis

and go sailing? Then youve got this as a backstop coming

in.
Now this may not be your plan right now but ultimately it is going to be and it is this positive cash flow
that will make your retirement a whole lot easier.
Now when I say retirement, most of you think, Oh,
thats too far out, I dont even want to think about that.
Well think again! Retirement could be next year. You
know, there doesnt have to be a specific age requirement
that the institutions like to put on us. When youre
financially able, you can retire any time you like. Now,
retirement is not something that is actually desirable to
me. Its not something Im actually going out and chasing
because I love doing what Im doing, but I do want that
passive income so Ive got a safety net in case I change my
mind.
Multiple income stream properties are properties like
blocks of units. I love blocks of units. The reason I love
blocks of units is because Ive got multiple income streams
coming in from the one purchase. Its in the residential
market which means it is easy to get into and its one of
the first investments that most of you will make. Most of
you wont jump out there and go and buy a commercial
property up-front, even though commercial properties
do have a higher income yield than other properties. In
the commercial world youve got to know a little bit more
and be a little bit more aware when youre buying commercial properties.
When we look at multiple income stream residential
properties, youre talking about having an amount of
income coming in from a number of sources so if any
one of the units is vacant, then chances are youve still got
enough coming in from the rental of the other units to
make your repayments and other costs. In fact you can
actually work out your break-even point.
You can also manufacture a multiple income stream
property, and Ill tell you about a couple of clients that
have done exactly that.
Ive got a client in Bendigo, Victoria who bought a
two street frontages property. It was an old house at the
front, which they renovated and then rented it out. They
then put storage facility units at the back, put a fence
down the middle and guess what? Theyve now got an
passive income producing property. They could only fit
six storage units on the block, but six storage units rented

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

out at $25 per week makes a whole lot of difference to the
passive income of that property.
I had another client who bought a block of three up in
Nanango. Same kind of situation. He actually bought it
in his superannuation fund so he had to buy the property
outright with no borrowings as superannuation funds
cant borrow. It cost him a grand total of $68,000. The
income that came from that property each year was sufficient to allow him to build a few storage units on the
block every year. So every year he builds a few more storage units with the passive income the property produces
and every year his income gets more and more and more.
He decided to do it completely inside his superannuation
fund. That wasnt something that he had to do but he
figured that he was a better manager of his money doing
something like that than putting it with a fund manager.
That was his decision.
Ive got a another client that runs a golf driving range,
and he was sitting one day, thinking, and he noticed
that the golfers never ever hit the balls down to the end
of his property. So he thought, what else can I do with
this? How else can I make money on my golf course? So
he decided to put industrial sheds at the end of the golf
driving range with a laneway down the side. He painted
a big circle on one of the industrial sheds and he pays the
golfers an extra bonus of a free lesson and some golf balls
if they hit the circle of the shed. None of them do. They
still cant hit the ball to the end of the property but at
least now hes got some commercial properties down the
end that produce him more income.

How To Create Your Own Bank And

Leverage
Now this strategy is a double-edged sword because
not only is the property producing more income, its also
worth more which means he can borrow more against
it which means he has more equity available for him to
invest in more deals.
By doing this, you are creating your own bank, a bank
of equity that can be used for further investment. Taking this concept a step further, your own equity bank can
then start to take second mortgages on your properties
in exchange for the lending and thats the situation you
want to be in. Where youre accumulating your wealth
and, over time, youll paid taxes through your bucket

company(because you will have exhausted all of your

other avenues to minimise your tax) and your bucket
company will then be the company that lends money to
other structures and it take registered second mortgages
on your property for asset protection reasons Not only
are you protection your assets you are being tax efficient
and smart with your money. Youre using your money,
over and over again, and youre getting a tax deduction for
it. But thats a whole other story!

More Cash Flow Property Strategies That

Can Make You Rich
Properties like strip shops, and I dont mean strip
shops - I mean a strip of shops, have multiple income
streams coming in as well. Office blocks, shopping
centres, (I love shopping centres even though theyre more
expensive than some of the others) are all examples of
multiple income stream properties. But you dont have to
start with the biggies, you can start with a duplex, or you
can start with a triplex or a block of fourAs most of you
will once you start to really see the figures and how they
can impact your finances.
Ive got a block of four in Central Queensland. Ive
got a couple up there actually, but one in particular I
bought for $176,000 and there are four units. Each of
them earns an income every week of $120 a week rent. Is
that a cash cow? Well, do the figures. Four times $120 is
$480. What did I buy it for? $176,000. Does it meet
the rule of 2? Yes, its a cash cow. In fact, it produces
about $5,000 to $8,000 a year positive cash flow.
Now that is just as sweet as the other one I showed
you. And if you have a number of those, you accumulate
that $2,000, that $3,000, that $5,000, that $8,000 or
$10,000 or $15,000 worth of passive income, then it suddenly makes a whole lot of difference to your lifestyle.

Everyone Saw It, But No One Bought It...

I was speaking to a group up in Yeppoon a couple of
years ago and this ad was in the local paper, the Morning
Bulletin, and it said House divided into four units, all
returning $100 a week, urgent sale $135,000. Is that a
cash cow? Yes.
This came in the paper on the Saturday and I was
speaking on the Monday night and I put this up on the

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

screen and I said, So, who saw this ad?. And about
of the room put up their hand. I said, So which one of
you bought it?. They all went down. Which one of
you rang up about it? Not a single person. Why not?
Oh, this was on or It sounded too good to be true or
whatever else.
The fact is that this property put $11,400 a year, per
annum, into your pocket. Not just the first year when
you buy it but every year. This thing is an annuity. This
is like buying a pension, and all you have to do, to get
that pension, is fill out a whole heap of forms, bend down
and pick it up, and come back next year and bend down
and pick it up again. Thats what cash cows do. They
have so much passive income coming through that you
just accumulate it, year after year and it becomes your
income. That is your lifestyle. This stuff happens all over
the place. Just about everywhere I speak, I can pull out
properties that will produce income, passive income, and
people dont realise, they dont know where they are, they
dont know how to look.
They may not be standing out there with a sign on
them saying Im a cash cow, come and buy me. Sometimes you have to make them into a cash cow. Sometimes
you might have to increase the income by doing things to
them.

How You Can Creatively Manufacture A

Cash Cow...
I had a student who bought a block of four units in
Toowoomba. She bought them for $230,000 and they
produce $440 a week rent. Is that a cash cow? Not really,
but its getting close.
After buying the property she decided she would
manufacture a cash cow. What she did was put in four
washing machines, four driers, a pinball machine, a
coke machine, a chocolate machine and a space invader
machine. And she did this in a little lean-to that was out
the back that she carpeted and did up a little bit. As most
of her tenants were students, they threw in an old TV and
an old lounge, and the old lean to became a little epi-centre for the students. Mates come around there and they
played space invader machines and did their washing.
On average each week, out of those machines, she collects
$500 in coins. Now thats creating a cash cow.
There are lots of ways you can be a little bit creative

and manufacture additional income. Thats one of them.

Heres some more...
Things like negotiating commissions and starting to
reduce your expenses on a property. If you have a property that only has one water meter, get them separated
amongst all of the tenants because otherwise youre paying for the water, not your tenant. Same thing with the
electricity. You can have services provided that cost you
X amount that you can charge out at a higher amount.
Services like cable TV, high-speed internet. It depends on
your client as to what they consider to be desirable.
In some places where Ive got properties, having cable
TV is something thats the norm. How could you possibly rent something that doesnt have cable TV, my goodness! Theres nothing else to do out here. However, there
are other ones where high-speed internet is really whats
important. Its a matter of understanding your tenants
and working out how you can produce more income out
of your properties. Heres another good example...
If a carport costs you, say, $5,000 to put on but youre
going to get an extra $20 a week rent if you rent it with a
carport, roughly speaking thats $1,000 a year extra that
youre going to get in rent. Now youve paid $5,000 for
the carport, so whats your return on money invested?
20%. Is that a good investment? Can you get 20%
somewhere else? May be not.
The fact is its actually higher than 20% because youve
probably increased the value of your property as well.
So what you need to do, before you spend money out of
your pocket, on your properties, you have to look at it
on a cost-benefit analysis. You need to do your own little
feasibility study, if I spend this money, then what return
am I getting on it? Is it worth my while spending that
$5,000 on the carport, or is it not? Whats my income
yield coming from it, whats my potential growth coming
from it?
No Money... No Problem.

Use Someone Elses Money And Create

Cash flow...
When youre at a stage when youre capable of doing
things like that yourself, then you would be astounded at
some of the deals you could start to put together. I had
a lady out of Sydney that, Im sort of calling the vendor

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

finance queen. She buys commercial property with no
money down. She did her first one by approaching a
developer and it was the last in an industrial warehouse
estate that he wanted to get rid of and she convinced the
broker that she needed to talk to the developer herself.
Two hours later, she had a contract in place that said that
he was going to vendor finance her, 30% of the value of
the property over two years.
She subsequently got a tenant, she got it rented out,
it is positively cash flowed, shes done improvements to
the property, so in two years time she will be easily able
to revalue that property, in fact she can do it now and pay
out the developer. Did the developer even think that he
was going to sell it that way? Under no circumstances.
Im not a bank, he said. But she was able, through her
knowledge, to present such a good argument to this guy
that she was in a situation to be able to seal the deal and
shes done it over and over again thereafter.

$25,000 In 2 Weeks Flipping Property

Strategy
Flips are buying and selling a property with in quick
succession and making a profit. What you need to recognize is when a property is undervalue and what it is really
worth the whether you can on-sell it relatively quickly.
This means you have to know your market. Sometimes
you can even organise a simultaneous settlement, that
means that youre buying and selling the property on
the same day. So all youre effectively doing is taking the
profit margin.
However, I will caution you that you must have your
finance in place to be able to settle on the property if
anything goes wrong. This is an example of a little flip
that a mate of mine did in Maroochydore. It was a two
bedroom, one bath, lock-up garage, 6 year old unit. The
property was listed for $165,000 and he bought it for
$163,888 the seller was Chinese and had this thing
about numbers. He paid her a $500 deposit and he had
in his contract a clause that said, able to show the property to potential occupants during the settlement period.
Now what that meant was that during that period he
was able to bring other tenants through, other occupants
through.
Now the selling party thought he was getting tenants
through and that he was going to rent out the property.

In reality what happened was, he on-sold the property to

a third party because he knew that property was undervalue. This is what happened. He actually on-sold the
property in two weeks for $195,000 which incidentally
was a little under market value as well because he wanted
a quick sale. He made a profit of about $25,000 in his
pocket. He did a simultaneous settlement. He paid
stamp duty when he bought the property and the new
owner who paid $195,000 also paid stamp duty when
they bought the property. Had he bought the property
under an option contract, he would have been able to sell
his option contract and not paid stamp duty. So it depends on the contract and how it is worded as to whether
double stamp duty kicks into place or not. Either way,
he needed to be in a financially secure situation so that
if anything went wrong, he was able to buy the property
anyway, and then on-sell it at some point in time in the
future.

How To Create Positive Cash flow From

Real Estate Without Owning It With A
Little-Known Sub-Lease Strategy
The reason I talk about leasing and sub-leasing is
because youll probably hear it from someone else so I
may as well give you the whole story and not just the
rose coloured glasses story. I have a business associate in
America who has perfected this to the T - and on speaking to him, he was talking about how he started with no
money. You can do this with no money, but believe me
you need to be exceptionally gutsy. He signed a commercial lease on an ugly, vacant commercial building and
he then went about sourcing tenants for his ugly, vacant
commercial building. He had the gift of the gab. He
knew his market, he was in the business of gaining tenants for properties anyway. He signed the master lease,
and in the master lease, he had the ability to sublease. He
signed it over a long period of time I might add, where
he had the only option to renew, not the sub-leasees. He
also physically improved the property through renovation
to make the property more attractive than the current
owner did.
One of the great things about the real estate market, is
that it is imperfect. In an imperfect market place, youve
got opportunities to make money because not everybody
knows what you know. Not everybody is working from
the same level playing field. The current owner of that

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

property was probably not very good at managing his
properties. The current owner of that property didnt
realise with a few subtle changes the property would be
more desirable to tenants. It was information he didnt
have whereas this business associate of mine did. The
sub-leasees paid him more than he had to pay on the
master lease and he made himself a tidy passive cash flow.
He went on to repeat this process many times.
Hed get an ugly building, normally vacant but not
always, sign a long lease, and hed sublease it at a margin
to other tenants, so it didnt actually cost him any money.
As he moved forward, he actually got a little smarter and
took out options to purchase in a five year time span at an
agreed value which meant that any time in that five year
time span he was able to buy the property at an agreed
value which meant if the market shifted and went up in
value, hed exercise his option at the lower value and buy
that property.
He told me his income from his lease and sub-lease
business, let alone his landlord business, was around
about $100,000 per month. Hes been doing it a long
time and when I say a long time, hes been in it for six
years which really I guess is not a long time but hes now
in a secure situation where he can afford to make a mistake.
But if you intend to implement this strategy up front,
you cant afford to make a mistake on your first deal. So
keep that in mind. Whilst it is a strategy that you can do
without any money at all it can be risky if you are unable
to lease out on sub-lease contract as you are still stuck
with the responsibility of the master lease.
You know, in leasing an ugly, vacant building, generally speaking, you can get big periods of time rent-free, so
long as youre prepared to sign a long lease. Well its that
period of time that he uses to actually get his tenants in
and renovate the property if necessary. But I caution you,
its not for everybody.

More Strategies For Manufacturing Cash

Cows
This is like the lady that I spoke about who puts in
the washing machines and the driers. Its all a matter of
analysing your property and working out how you can
increase the value of this property. Just think what are
some of the things that you might be able to do? And if

your going to spend money on the property, then whats

that going to mean to you on a cost benefit analysis? If
you spend the money, whats your benefit and how much
is it going to cost you?
Maybe look at things like the sale of signage. I was
speaking in Sydney a couple of weeks ago and a gentleman was telling me about a property in Melbourne where
a telephone tower was stuck on the top of a commercial
building which produced a ridiculous amount of $28,000
a month additional income just for having a Telecommunications tower sitting on top. Those are the types of
things that you need to be constantly thinking of.
Ive got a block of units up in Rockhampton thats
a block of five. It is property that, on its own, is a cash
cow. It puts about $6,000 or $7,000 a year positive cash
flow in my pocket. Its obviously gone up in value and I
can re-borrow against it to go and do the next thing. But
on its own, it put about $6,000 or $7,000 income in my
pocket. But on top of that, the land is also big enough to
build another four units on the back, possibly strata title
and even sub-divide. You see youve got to constantly be
active. Once youve got a property, you dont sit back and
go Oh phew, that was hard. Done it now, got my annuity. That might be the case, but the fact is there might
be a whole lot more that youre missing out on if youre
not active on the properties that you already have.
How To Buy Property At A Massive Discount That
Very Few People Even Know About
The public trustees and the perpetual trustees are
private and government organisations that sell off properties from deceased estates where either there isnt a will
in place or that the deceased has elected to have a public
authority settle their estate.
Now the public trustee sites are particularly interesting
because they do it themselves. In Queensland for instance, they list every month the auctions that are coming
up, which is similar to the process in all the other States
except they are all autonomous and are different bodies
in each State, but they all work pretty much the same.
Now theres a gentleman in Brisbane who looks after all of
Queensland, and its the same in all the other States. One
man cant possibly know what the current market value is
on all of those properties all around the State that go up
for auction.
Some of them are sold by auction on the site itself and

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

others are just listed for sale. A little while ago I missed
an absolute bargin and I was so annoyed. If you know the
Sunshine Coast, theres a little area there before you get
to Nambour and the land up there is relatively valuable.
It has views and its rural and its beautiful. There was a
ten acre property, which had an old house on it and the
land had been subdivided into four blocks, about 2
acre blocks. Now a 2 acre block up there would sell
for around about $400,000 / $440,000 thereabouts. The
whole parcel already subdivided, sold for $550,000. Do
the maths on that one, and I missed it. Never mind,
theres more out there.
But thats the sort of thing, if you know your market,
you can pick up deals significantly undervalue and I can
give you countless cases of those types of situations. Its
all about buying immediate equity. Sometimes you do
have to do things to those properties to improve the
value. Sometimes you dont. It really depends on the
circumstance, so have a look at that sort of thing. Normal deceased estates, are dealt with by the executors of
the estate. Now sometimes thats a solicitor or an accountant. They usually put the property through the real
estate agents. Some of them dont. Some of them do it
themselves.

How To Buy At A Discount With

Deceased Estate Opportunities
Heres what to look for when youre looking at deceased estates.
The more beneficiaries there are, the more bargaining
power you have - so you must always find out how many
kids are involved. The bigger the number of kids, the
less differential its going to make per-child in a negotiation. Now what I mean by that is, if theres say ten
kids and youre negotiating a $20,000 discount on the
property, thats only $2,000 each. Its not so much. Oh,
just get rid of the house, Id rather have the money, its
only $2,000 is the usual reaction per beneficiary. Dont
worry about it. The greater the number of beneficiaries
also means they are harder to deal with as everyone usually has to agree. So, make sure you understand all the
background behind these properties when youre buying
them but also understand if you buy at an auction, youre
buying under auction conditions which means that its a
30 day unconditional contract, you need 10% normally
within 24 to 48 hours to be able to settle on the prop-

erty. So if youre going in with limited funds, you need to

make sure that youre able to settle.
I remember a case, it was a property that a young
guy was looking at down the Gold Coast and he found
out all the information behind the unit sale and why the
seller was selling. In this particular unit, it was an old
guy who owned it. He was moving into a nursing home
so the young guy asked, Since you are moving into a
smaller unit, do you need all the money now? And he
said, Well, I probably dont but you know, why are you
asking? He said, Look, Im only young, I havent got a
lot of money. Why dont you leave some of your money
in the property Why dont you leave in, say 30%, I can
borrow the rest from the bank, I can improve the property and I can pay you a good interest rate on the money
you leave in. At the bank, youre only going to get 5%
at best. Ill pay you 8%. A relationship was born. That
young student bought his first house. He was able to improve the property, renovate it and revalue the property,
and hes off. I think hes got about four others since then.
But the old guy still keeps his money in the property
because the young guy goes to see him all the time. He
takes him his cheque for the interest and he buys him his
smokes and whatever else he wants and theyre mates now.
Theyve helped each other out. The old guys getting
more than he would have at the bank anyway. So dont
be afraid to ask. The no youve already got. Whereas if
you ask, you might just get a yes. You never know.
Theres lots of those kinds of circumstances where you
can turn things around and by being a little bit creative,
particularly now the market has changed, theres a lot of
deals out there that can be bought on terms rather than
dollars. Things are starting to get a little bit harder to sell,
particularly when youre dealing with the bigger people.
The end of the line of an estate, the industrial stuff, the
commercial stuff, the ugly stuff. The ones that have been
on the market for a little bit of time. I know of a property in Brisbane that was on the market initially for over
a million dollars. It had been on the market and nobody
even bid on it. I know for a fact that a contract went on
that property for $354,000 because the seller was desperate but who would normally even think to offer such a
low amount on a property that was initially listed for over
one million dollars.
Ive got a mate who religiously offers 70-80% of list
price, doesnt matter what it is, doesnt care whether he
buys it or not. Its called the scatter technique. 70-80%

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of list price, buy it or not. You would be surprised how
many times he gets laughed out of real estate agents offices only to be called back the next day. He says he cant
believe it. They accepted. Never hurts to ask.

Where To Find Real Estate At 50-75%

Discounts With Little Known RateDefault Auctions
A rates defaulter is basically when somebody cant
afford to pay their rates on a property. The Council,
normally after three years, sells up the property for whatever they can get for it. The council usually advertises
the property about three months prior to coming up to
auction, and you have to be there on the day, with your
money, to buy the property, normally 10%, settles in 30
days.
In some States they are called Sheriff Auctions or Bailiff Auctions. Then in other States, particularly in New
South Wales, you can actually get whats coming up in
a few months off the State Government web-site, where
properties are listed and then cleared every Friday, so
you have to be quick. In Queensland, you cant do that.
Youve actually got to talk to the local Councils or search
through the newspapers.
On a particular property that a girlfriend of mine
bought in Caboolture. She really didnt intend to buy it.
She actually just wanted to go to the auction to see what
happened but she couldnt believe how much it was going
for. She bought the property for $52,000. Now if you
know the Caboolture market, that is exceptionally cheap,
no matter how bad it is. She didnt get inside, there was
no inspection on this property. It was a drive past, like it
or not. So she bought it for $52,000.
Out of her own money it cost her $8,000. This was
the deposit she put in and she borrowed the rest. Normally speaking, when you buy a rates default auction, you
are buying someone elses problem. They are either in jail,
they are mentally insane, they are dead (which is the best
option), there can be squatters in the property which was
sort of the case with my girl friends property. Well he actually owned the property but he had a mental condition.
and didnt understand the auction process. The plumber
that came in to fix the toilet said that particular room had
not been used for about five years, so you could imagine
what happened in there. It was disgusting.

However, she did the right thing because he was still

living there and he did have a problem. She went to him
and said, Look you understand that Ive bought this
property now and you cant stay here. And he sort of
said yes. She said, What Im going to do is Im going
to find you another place to live which is what she was
most concerned about. She had contacted the Salvation
Army and he moved into their hostel and he now has a
bath every day, he now gets three meals a day, he now gets
the pension that he didnt know he was entitled to. And
hes as happy as Larry. This is the best thing that could
have ever happened to him. She on the other hand, got
industrial cleaners in, painters, scrapers, put in a new
kitchen, bathroom, not an expensive one though, it cost
her $12,000 all up and she revalued the property.
The property revalue for $115,000. This property is
obviously worth a lot more than that now but she rented
it out then at $165 a week and she put about $36,000 tax
free in her pocket. The property is still positive geared by
$2 a week and shes got $36,000 a year, thank you very
much, plus the potential growth on the property into the
future. Thats how rates defaulters work.
Some people say that these properties no longer exist.
Well, one of my mentoring students found out that there
was one in Ipswich coming up and I suggested attend it.
So I said, well go out and see what happens. Its a good
experience for you, so she went out there and when she
came back she said, it was good. It was a vacant block of
land. I said, So, did it sell?
Yeah, yeah, it sold.
I said, What did it go for?
Five thousand dollars.
I said, So, did you buy it?
She replied, You didnt tell me I had to buy it!
You have got to be kidding!
Five thousand dollars for a block of land in Ipswich.
Now admittedly it did have its problems. It was beside
the cemetery but it was still only $5,000.
Another mentoring student bought a unit on the Gold
Coast for $42,000 through a rates default auction.
Another student of mine missed out on an auction
because she didnt think she was in a position to buy it.

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

The reality was, she was. This particular property was
worth about $140,000. At auction it sold for $65,000.
However she redeemed herself because she got the next
one that came up and she bought it for $65,000 too and
shes now living in that as her principal place of residence.
It needed renovation but she made good money on it. Its
now worth about $175,000 with the renovation in place.
Another client of mine bought a vacant block of land
out at Roma. Now you all know where Roma is, west of
Brisbane, about 8-10 hours, for $600. Now, you laugh
but vacant blocks in Roma at the time of this purchase
were really only worth about $20,000. Did he want a
vacant block of land in Roma? No. What he anted was
to buy a place in Maroochydore but he didnt have the
money to do it, he didnt have the deposit.
So he bought this place out at Roma and he waltzed
up to the bank after he found his place at Maroochydore.
He said, OK, I want to buy this place in Maroochydore.
And they said, Ooh, what have you got for security?
He said, Well, I havent got much saved but what
I have got is this block of land, its a house block out at
Roma that I could put up as security.
They said, Is there any mortgage on it?
No, no, I own it outright. He paid cash at the auction. So because he owned the block of land out there
and he uses that as his deposit for his place in Maroochydore, he got a $20,000 benefit for a $600 outlay.
But please make sure if youre going to go down
this track, that you ring up the rates department of the
Council on the Friday afternoon and make sure that
that property or properties are going to auction the next
day. Theyre normally on a Saturday and if they are, then
sometimes you have to jump in the car or take a plane to
go to wherever it is to attend the auction and see. Its only
Johnny on the spot that ever gets the opportunity to buys
these things so if its your daughters wedding or Great
Aunt Berthas birthday party thats on at the same time,
you have to make a decision as to which is more important to you.

Get Instant Capital Growth With Cheap

Renovation Strategies

Renovating is an excellent way to accelerate growth.

But let me tell you this, renovating is a business. Regardless of whether its an investment property or even your
principal place of residence, you could be caught for capital gains tax and/or income tax depending on how long
you hold that property in the renovation process.
I wont go through this in this chapter, but I do have
a lot of clients who specialise in renovations and some
earn a very tidy income as well as accumulate a significant
wealth portfolio in the process.
The advent of shows such as Ground Force and Location Location and Auction Squad, have meant that the
renovating industry has become a $3.6 billion industry
in this country. That is huge, and its something that you
certainly can make some money out in. Be careful with
the GST issues and the capital gains tax issues though
as there are a few traps and remember with capital gains
tax, if youre buying and selling a property, it goes from
contract date to contract date, not settlement date to
settlement date.
Heres a couple of properties that we did. This property had a 12 carpet snake in the ceiling, it had lantana
growing over it. I cant understand how people can actually live in these conditions.
It was about a $100,000 renovation profit on that one.

$1,200 Spend Creates A Huge $68,000

Return...
A mentoring student from Western Australia bought
a waterfront property in Port Hedland. She bought it for
around $220,000 and rented it out for $300 a week. Its
not positive cash flow but the renovation on the property
is what made her the money. The renovation only cost
her $1,200 and a lot of hard work.
Well thats what she told me on the phone. However
when I went across to Port Hedland to check out what
shed actually done on this property, shed only painted
the front of the house, not all the way around.
We dont do that in Port Hedland, you only paint the
front. was her retort.
Uh huh. But she did have it revalued after her $1,200
and hard work and it was still valued at $300,000 so she
made $68,800 on the property in a short space of time.

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

So, it can be done. Its something anyone can do.
Obviously for a lot of you, if youre just starting out, maybe this is what youre going to have to do, and you might
have to do it yourself. As you move forward and you find
its something you absolutely love, then you might get to
a stage where youre actually using contractors to do all
the work. Just one word of advice with contractors, now
I shouldnt have to say this but I feel I do, be nice to your
tradesmen. You get far better results, it is much nicer,
they like working for you, they will come back and work
for you again especially if you bring them a case of beer
on a Friday afternoon.
And the other thing is, things that contractors generally hate is paperwork so if you can make their job easier,
youre going to get a better deal. Identify the job, write
it out, detail out exactly what you want done because
thats half their quote done. All theyve got to do is fill
in a figure. Whereas if you leave it up to them to write
it out, thats paperwork. Nobody likes doing paperwork.
Not even accountants like doing paperwork so the more
you can do for them, the better the results youre actually
going to get.

How You Can Make Big, Big Profits In

Real Estate With Just A Bit Of Paper Work
I love this strategy. Its the fastest way to create instant
capital growth without getting your hands dirty. Its
called, Strata Titling. This is the process of taking a property on one title and applying to the local council to have
it broken down into individual titles so can either sell
them off individually or have them revalued at a higher
price because they are individually titled. So if you buy
a six pack and you break it down into individual titles, it
means from a banking perspective, that the property is a
lower risk property to the bank when it is on individual
titles as they can sell the property more easily and to more
people than if the property was all on one title. When
the property is on one title the only buyer is an investor,
where as on individual titles anyone could buy the individual units separately, even owner occupiers.
So the banks market for on-selling the property is limited when the property is on one title and because theyve
got the additional risk, in their opinion, then they dont
lend you as much on that property, generally speaking.
They might only lend you 70% or maybe 65% whereas if
its a single block, theyre more inclined to lend you more

even 90% or 95% if you pay mortgage insurance. By applying to the Council to have that property broken down
into individual titles (and that cost varies depending on
your local council and your State some States are horrendous), then the value of that property goes up in value,
simply because youve used your knowledge and your pen
to create some growth on that property.
This is called manufacturing growth. This is where
you buy a property and you do your due-diligence on it.
You can cost out the whole feasibility study on the property even before you sign the contract. I dont like to rely
on external growth. Growth is something that happens
in the market place that you have no control over, whilst
I can show you how to do due-diligence and how you can
look for transition zones and how you can look at market
trends and the economy and supply and demand, and
all these other things that give you better odds, its still
gambling, in my opinion.
I like to have certainty in what I do. So if Im going to
have a growth component in my portfolio, I will try and
look for something where my odds are exceptionally good
or theyre guaranteed. Now when you look for results
where your growth is guaranteed, strata titling would
have to be right up there on the list. You can do all that
due-diligence before you ever buy it. You know what that
property would be worth in todays market, not relying on any increase in the value of the property through
market trends. How much that property would be worth
if it sat there today and it had individual titles on it as opposed to one title. How much you could sell each one of
those individually AND youve got the ability to borrow
more on it which means youve got more available equity
to borrow and invest somewhere else, in perhaps a cash
cow thats going to produce you more income.
You see, its this balancing act. Im all about balance.
Im all about diversification. Im all about knowing what
your business plan should be for you, and being able to
take into account your risk profile and what that means
to you, and how much you need in a safety buffer in case
interest rates rise, or in case this happens or that happens.
You know if you need $5,000 sitting in a bank or if it
needs to be $100,000. Is it a years income, sitting there
just in case things go against you, or is three months sufficient? I cant answer what that safety buffer is because its
going to be different for every one of you. But strategies
such as this for those of you who are a little bit more faint

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

hearted when it comes to investing in the property market, where the results are a little more guaranteed because
you know at the outset, how much youre going to make
on the property are certainly worth the effort of learning.
Barring the market crashing, youll know your minimum
profit. So basically, with strata titling, the result is your
property will be worth more, you will have more equity to
borrow against, and potentially you get a tax-free growth
profit. If you dont sell it, its tax-free profit. You dont
pay tax on that money until you sell it.
Heres one that one of my mentoring students bought
in Mt Isa. It was a sweet little block of four for $275,000,
its rented out at $600 a week. On this particular block
the units were all on separate meters, they all had separate
water meters and electrical meters so none of that had to
be changed.
The firewalls in between each of the units went right
up to the ceiling. These are all the things that you need
to know and understand if youre going to go down this
track. But its not that hard. On this deal strata titling
only cost $10,000 and that was for a consultant to do it
for her.
That included all of her council fees and everything
else. She didnt actually even have to do any of the
paper work and post strata titling each individual unit
was worth $95,000 each. Thats $380,000 for the block
which is a manufactured growth of $95,000. Now, is it a
cash cow? Yes, it is. She paid $275,000 for it and she had
$600 a week rent. Is it a manufactured growth deal? Yes
it is. She made $95,000 profit for signing a few papers.
Its all about knowledge. You dont know what you
dont know till you know what you didnt know.
That is so, so true.
Youre One Deal Away From Making An Absolute
Killing...

Amazing True Story Of How One Of My

Clients Turned $25,000 In To $15 Million
I had a guy come to me who was a new Australian,
hes from Germany and he was in property back in Germany and he told me about a deal he was doing where
he was investing in a business. He was buying a quarry.
It just so happened that this particular quarry was on

waterfront land. It happened to sit on a piece of land

160 acres that happened to run onto the beach. But the
owners were so fixated that they were selling their quarry.
They had figures on how much ore body was there and
this machine had this much capacity and the productivity
of the employees was this, that and everything else.
So he went along with them, he put down an option
fee. Now I love options, its how you can get a Development Approval (DA) and a Building Approval (BA)
without actually spending much money. He put down an
option fee for the right to buy the property any time in
the next 6 months and in that 6-month period he could
buy that property at an agreed price. He did his duediligence. He also applied to the council to have the 160
acres broken down into 250 land lots. He was knocked
back. They only granted him 200. That property was
then immediately worth a whole lot more than he was
paying for it. His option was for $1.4 million.
He said, OK, I cant do this development alone, I
need someone to help me out because I dont have that
amount of money. He opened up the financial review,
and decided to talk to Lend Lease. He sold half of the
development which was a $250 million development in
the end, for $15 million. He put down a $25,000 option
fee for a $15 million return on half the project. Thats
how land subdivisions can work. It might be a small one.
It might be breaking a property in half. There are lots of
client situations where I can they have used these strategies that I teach and how the figures panned out, but Im
afraid this chapter is too short for that.

Putting Investing into Perspective

Regardless of any strategy you undertake, heres the
process that I and all the students I mentor go through to
see whether a particular investment strategy will work. I
believe individual investors need to base their decisions
on my test and measure formula called The P.I.T.A Test.
This formula puts into perspective the way an investment
should be analysed.
The P stands for Personality. Any investment must
first suit the investors personality. Many strategies work
well for certain people but not necessarily for others. Its a
matter of finding a strategy that suits you.
I stands for Investment. If you are buying a piece
of real estate it needs to be a good investment. Does the

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

investment make sense? Do the numbers stack up? Does
the due diligence indicate that it is a good investment?
T stands for Taxation I dont believe an investment
should be bought purely for taxation reasons. Taxation
and the most tax effective way to buy something only
becomes important after the investment has first passed
the test of suiting your personality and being a good
investment.

What I wish is that people could decide to take action

on their own accord without having to have a major life
event or life trigger shock them into taking action. I wish
more people would stop and really think about what it is
they really want and commit to making a change and not
get caught up in the busyness of everyday life.

A Magic Formula That Works

Finally, A stands for Asset Protection which is something I am really big on. It is no good building up a substantial amount of assets, only to have them taken away
through frivolous law suits something I have sadly seen
happen many times over. When buying an investment asset protection is just something you do. Its like brushing
your teeth. It should be a part of astute investing.

In my experience, those that actively seek out education to provide them with the momentum and strategies
to kick start their wealth creation journey are half way
there. However what is even more interesting is that those
who attend seminars tend to have lower success rates than
those who have engaged in longer term mentoring support programs. Ive experienced this first-hand.

Too many investors get hung up on all the wrong

things and in the wrong order. For instance, they invest
purely for tax purposes when the investment they are
going into is questionable. Or they get hung up on the
asset protection issues and fail to look at the big picture
of whether the investment really suits their portfolio. Its
so important for investors to never lose sight of the big
picture.

On average only 5-10% of the people who attend

seminars actually take action from what they have
learned.

Why Some Students Succeed and Produce Incredible

Results and Others Fail Miserably
I have spent quite a lot of time considering this question, talking to seminar attendees, those that buy my
home study courses and those that I have mentored and
spent time with, even those that I have worked with for a
matter of weeks.
What I have found is that although attending a fantastic seminar or purchasing a home-study package and
thoroughly going through all the materials may leave you
feeling completely hyped up and motivated, the fact is
many people soon go back to sitting on the comfy couch
watching the idiot box (i.e. the TV), doing their weekly
groceries, paying their monthly bills, getting up and
working from 9am until 5pm (or more) and gradually
they are lulled back into inaction mode.
The weeks, then the months, then the years pass and
suddenly they realise that they are 10 years older and still
in exactly the same position they were 10 years ago because they are doing the same things they were doing 10
years before, except now they are 10 years older!

You have to be steely determined to walk out the

doors of the seminar venue and start making changes on
your own accord. Even if you have got what it takes to do
this, you may find that you have a few wobbly moments
when you find yourself doubting your abilities, questioning yourself when the good old fear monster starts to
creep into play or the nagging voice of your husband, wife
friends or family gets the better of you.
By engaging in a longer term mentoring program, you
are immediately increasing your chances of succeeding.
Straight away you are surrounding yourself with likeminded positive people who are out there achieving the
things that you are doing. Sharing information with your
mentor and others helps you to put into perspective what
you are doing, stay focused and achieve what you really
want.
Mentors of course can also offer you advice and be
your voice of reason as you make decisions along the way.
The great thing about mentoring programs is that they
also usually utilize a range of learning methods. So if
you know youre not the type to soak up information in
a classroom environment, being part of a mentoring program offers you the opportunity to learn via the written
word, audios, tele-classes, doing exercises, question and
answer AND seminars.
As an educator and a speaker I know I can teach

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Millionaire Phenomena - Property: DYMPHNA BOHOLT (continued)

people a lot more when I have them with me over a longer period of time because they have the ability to absorb
information, process the information, act on the information and then come back with questions based on real life
experiences rather than just accept what is said from stage
when theyre in a false environment of excitement and
motivation.
Real life doesnt happen in a staged environment.
The fantastic thing about STAGED learning is that results are shared, analysed and processed, improved upon,
practiced and ultimately magnified by joining together in
a staged learning experience over a period of time.
What Ive put together here is a chapter that is giving
you multiple ways which you can use to get started in the
real estate market right now. At the moment, were at the
accumulation stage of the cycle. What I mean by this,
is that now is the time to start to build a portfolio, just
before the next cycle kicks in.
How do I know this?
Im out there every day, looking at real estate and I
get lots of people offering me stock. Vendors are nervous,
theyre not quite sure whats going to happen in the next
12 - 24 months. Wherever there is fear, you can profit.
There are plenty of deals right now that were not around
2 years ago, with large developers holding off on putting
new stock on the market and rentals increasing, there will
be a point in time where novice investors will start entering the market again.
You need to get ahead of the pack and start right now.
Youll thank me in the long-term.
Good luck guys. Im sure its all going to be a breeze
for you, but please, please take action next week because
that means Ive done my job.

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Amazing True Story of How An Aussie

Surf-Bum Went From Zero to MultiMillionaire Property Investor in Just 9
Short Years...
Part of the Millionaire Phenomena Series

ts good to be here folks, let me start off by saying that

there is an amazing buzz in the room at the moment.
Obviously everybody has had a very inspiring weekend so far. So Im going to get straight in to it.
You know, the thing thats very important for us to
understand is that I am no better than you. Were all different and you know what this whole weekend is about is
about education and inspiration and all the rest of it.
I think something thats very important for us to do,
and that is dont try and be Keith Grisman. Dont try and
be Josh Hunt. Dont try and be Dymphna, dont try and
be anyone else other than you.
So what you do, you actually take bits and pieces from
different peoples lives and you mould them together and
say, this is who I am and this is what Im going to do because youre going to ask for failure if youre going to try
and become somebody that youre not.
Youve got to be who you are. Thats why Im up here
with jeans on because its who I am and I dont want to
try and portray something to you that Im not. This is
just who I am and what I do.
What I do I hope Ive done a lot of property stuff
and Ive done a lot of business things and hopefully I can
give you some keys over the next little while that will
actually help you do what you want to do.
It probably wont look exactly like what I do but you
need to take some things and say, Ill have that piece and
Ill have that piece and Ill have that piece and itll make
it into me. The plan for me to come to things like this is
not because I like to do professional public speaking but
what I like to do is help people get the best out of their
life.

Meet Josh Hunt

Josh Hunt was at the cross-roads
9 years ago with the bank and
creditors knocking on his door,
his traditional small business was
spiralling out of control after a major customer decided to change its
business direction.
Josh was financially exposed and
totally left out in the cold...
Fast-forward to 2007 where Josh
appeared on national television receiving nation-wide acclaim for
his purchase of Fitzroy Island for $100,000,000.00.
How does someone go from literally ZERO to building a massive
multi million-dollar real estate empire in just 9 years?
Josh reveals his humble beginnings on how he got started with zero
cash to buy his first property and how he quickly got to 30 properties... All with no money.

The beauty about it is the reason I will speak at things

like these is because you have made an investment in
yourself. Thats the first big step. If you can sort of say, I
want to become a better person, I want to become a bigger person, a more successful person, youre a large part of
the way there of actually going there.

So let me give you a bit of background

on who I am.
You just saw some of the companies and stuff that we
run and some of the things that we do. But to give you a
bit of an idea, because you need to understand my perspective and the way that I look at things to see whether
you look at things or you can say, well, I think Josh is a

Millionaire Phenomena - Property: JOSH HUNT (continued)

bit screwed up in his head and thats the reason why, so
that you know.

I found is that I really had to ask myself, is this what I

want for my life?

I grew up with mum and dad and a brother and sister

and we travelled around in a caravan starting churches.
Thats what my dad did and so I was the annex putterupperer until the age of about 11 or 12 when we settled
down in Newcastle where I got right into the surf scene
which was fantastic.

The person that I ran away from home with, his mum
was a counsellor to the police force. And the police found
us in Newcastle and were 15 years of age and they put us
in the paddy wagon and they took us to the police station
and divided us up and I spent three days and three nights
in gaol, separated from my friend.

About four years after that, or three years after that

when I was about 14, we moved to Broken Hill. Now,
Broken Hill didnt go down real well with me. It was a
bit far from the beach. Have you ever been to Broken
Hill? Its a really great place to stay for about three to six
hours. Beyond that it really gets a bit bizarre.

Now, I dont think thats actually legal but you know,

when your mum works in the police force, they can do
whatever they want. When youre 15 years of age, youre
really not going to argue with them, are you?

One thing that you find from Broken Hill if youre

talking to someone from Broken Hill, theyll say, where
are you from? You dont need to tell them which part of
the country or internationally, geographic location you
come from.
Its youre either from Broken Hill or from away. Its
bizarre. You say, Im from Sydney. Oh, away. Either
youve got to say a street within Broken Hill or youre
from away. So we came from away and moved to Broken
Hill and away people didnt fit real well into Broken Hill
and so I got into a little bit of trouble.
I was involved in the wrong crowd and so anyway, one
day when I was 15 years of age, I found myself back in
Newcastle, which is not far from here. Just up there. I
was with my mate and 15 years of age and we had a car
that we borrowed from a local car yard.
A guy became a good friend of mine because I had to
wash his cars for a long time afterwards. We were really
quite close. But you know, my claim to fame when I was
growing up was that Angry Anderson, a lot of years ago,
were talking 20 years ago, he came on the TV and he
said, if youre homeless there was this big thing about
homeless kids him and Greyhound, well get you home.
We were the first two kids to actually use that but we
didnt really want to go home but anyway, that was us. So
I got into a bit of trouble but it brought me to a T intersection in my life. It was really, very important for me to
hit that T intersection at an age of 15.
I say its better to hit it at 15 than to hit it at 35. The
earlier you can hit this T intersection, the better and what

But it really brought me to a decision, a point in my

life where I said, well, what am I going to do with my life
and so what I did, I moved out of Broken Hill, with my
parents blessing. This time I left with my parents blessing and I moved to Ballarat and did an aircraft engineering apprenticeship. So I left home at 15.
Anyway, thats the first thing I ever did well in my life.
Up until then, I was a kid and an idiot and then after five
years, I was a qualified idiot. I became really good at it.
So at the age of 20, I was a qualified aircraft engineer.
I had a wife and a child on the way started young
quite young. I thought Im going to do the responsible
thing and resign from my aircraft engineer and Im going
to work for myself because I thought Ill make heaps of
money. Yes, right.
I think for the first six months, I was on unemployment benefits, making heaps of money, convincing a guy
that I was looking for a job, but it was interesting.

Then I went into business for myself.

I did some kitchens and kitchen design and I got stuck
into that and it was funny because I got caught up in a
world that I thought was profitable but it wasnt really.
So I worked, worked, worked and we did this for about
five years and I came to T intersection number two. You
know, youre going to come to a lot of T intersections in
your life and you choose at that point which way youre
going to go.
We came to this point where all of a sudden what
we were doing, we had kitchen designers all around the
country and we were working very, very hard in business

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Millionaire Phenomena - Property: JOSH HUNT (continued)

with some other large businesses. They made some decisions and basically what I had is I had too many of my
balls in one court.

hes got this nervous cough.

What they decided to do was actually say, well, were

going to sort of slow this area of the business down and it
was devastating for my section of the business.

You know, when you start putting pressure on some of

these guys, they have this [coughs] and he gets about one
word out between every cough and its really annoying.
I said, well, maybe you should have something for your
throat. Give me a call back.

When youre reliant on just one or two forms or

streams of income and they make a decision to change
direction, all of a sudden you dont have many choices.

But anyway, what Im going to do, Im going to talk

to you about my journey and whats happened over these
past things.

So I was very young in business and found myself in

a position where it was best just to close the doors. And
that was devastating for us because wed sort of worked all
this time and we went up and we felt we were doing really
well for a while and then we went back down and went
back to zero.

And Ive got a couple of points for you and what Im

going to do, Im going to give you practical point, Im
going to give you personal points and then well tie some
business strategy in with it.

So about eight or 9 years ago, we were at that point,

zero. I like zero. Its a good place. You can think clearly
at zero. Often you find, dont despise zero. Zero will actually do numbers of things for you. Ill talk about those
a little bit later.

What Im going to do, Im going to tell

you about my journey over the past 8
years, from zero to where I am today and
hopefully you can get something from
that.
What we do, I work very hard. Its like, you know, retirement people say retirement. People confuse working
for yourself and retirement.
I dont work because I have to. I work because I love
it. I guess thats the difference.
You see that Lotto ad or Powerball theyre all the
same thing but whatever it is, where it says, work as if you
think you dont need to. Well, thats fantastic, thats what
I do. I work as if I dont need to. That doesnt mean there
arent things during my day that I dont like doing.
At the moment, Im working with the insurance
broker. So Im on the phone and Im crunching this
guy, right, because he sends me this bill for an added I
extended the premium over this property for four months
and hes sent me a $23,000 bill for four months worth of
extra insurance cover. I said, youve got to be joking and

So Ill give you personal things and say, this is what

weve got to do and then Ill give you some very practical
things about development and what we did and the way
that we structured it so that will hopefully help you as
well.

A Major Revelation
So Ive bought myself to this point and I read this
quote. I thought it was very interesting. Let me read it
to you. It was an article in The Bulletin by Mr Rodney
Adler who knows who he is? Currently in gaol.
Anyway, this was around the whole HIA insurance
collapse and what he was doing, he was this article was
interviewing Rodney Adler and he said, you dont understand the pressures and expectations and the disadvantages in coming from a rich family. I thought, isnt that
interesting? Isnt it funny that we always want to be on
the other side of the street?
I grew up in a fantastic, loving family that had nothing. I was just a kid, I didnt think that why dont I have
steak rather than sausages? I was happy with sausages. Id
never had steak. I didnt realise what I was missing. I was
just growing up.
But here I read this article when I was back to zero
where Rodney Adler is saying, you dont understand the
disadvantages of the pressures coming from a rich family.
I thought, you know, one thing that Ive got to do and
you need to write this down.

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Millionaire Phenomena - Property: JOSH HUNT (continued)

If youre going to be successful in life or
make a killing in the property market,
Ive got some timely advice for you...
Stop playing the Blame Game.
No matter what point of view you have, no matter
where you find yourself in life, you can always play the
blame game and Rodney Adler is playing the blame game
saying, you dont understand what its like to come from a
rich family.
Then theres other people that are making nothing of
their life and theyre saying, well, Ive got nothing.
So weve got both opposite ends of the spectrum and
the scale saying, if I was in the other persons shoes, Id be
able to do something with my life.
We have people say, well, my eyes are too close together, my mothers too ugly, my dad was on the dole.
We can all find excuses and what we find, we put so
much effort into finding quality excuses of why we cant
do something when we should be putting our efforts
towards finding a solution to the problem that we are
currently in.
Stop playing the blame game.

Take Responsibility
I had to come to a point in my life when I was 26
years of age, about nine years ago, where I said, I am
going to take responsibility for the position that I find
myself.
Someone said to me this quote and I believe it and
I dont like it but you have today exactly the amount of
money you deserve. You dont deserve any more money
than what you currently have. You have the amount of
money that you deserve.
I have the amount of money that I deserve and I really
dislike that because I think I deserve more. You probably are in the same category. We think we deserve more
money but the fact is, its skill, education, commitment,
desire, work and time.
I dont want to win the lottery. I dont even sometimes I go to the casino. I go to the casino for enjoyment.

I dont go to the casino to win because I normally dont.

Learn to Create Money

But I dont go in the lottery because I dont want to
win money. I want to learn how to create it.
Money is like water. Youve got to learn how to direct
it, like what Keith done. Keith, hes very good at what
hes done and what he does, he learns how to direct money in his favour. Well, I want to do that. I want to learn
that skill, rather than be the type of person that needs to
win something to bail me out of my next problem.
Thats not the skill that Id like to be working on.
Weve got to stop playing the blame game. Weve got
to move beyond that point and say, Im going to take
responsibility for who I am and Im going to make it happen.
So once I came to that point, here I am on the Sunshine Coast with nothing. I had no family that lived on
the Sunshine Coast, I had no money but I had a job and
what I also had was a desire, passions, skill, health. There
are so much that we do have.

Dont focus on what you dont have.

Focus on what you do have.
What I started to do, I had this job and Ive never
been a very good employee. I like to think Im a better
employer but employee has never been one of my, you
know, right up there skill sets.
So anyway, I had a job and I really didnt like it but
I was putting in a lot of work and so I got nothing and
I thought, how am I going to build beyond this point?
Now, what youve got to understand, prior to this, I had a
company that had about 60 staff around the country. We
were really doing very well.
So, I had a lot of experience but I had no money. So
anyway, I came up with this
idea but the bank would never give me money for my
business.
At one stage, we were turning over something like 14
million bucks a year or something stupid and that was all
just in small turnover. So we had a lot of turnover, a lot
of staff, but the bank would never give me any money for

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Millionaire Phenomena - Property: JOSH HUNT (continued)

business.

My Move into Property

But I found that the bank would give me money for
property. When they told me theyd give me 80 per cent.
I thought thats fantastic because that means Ive only got
20 per cent left to find. Im just about there.
So I thought what Im going to do, Im going to go
into the property sector. Im not going to sell it. Im going to find a way to actually get this extra 20 per cent and
Im going to get the bank to give me the rest.

day and I thought Ill go and anyway, I came up with

this fantastic plan and the vendor actually agreed with it.
He said, yes, no worries, youre on. So he thought hes
going to get his price and all the rest of it.
So all of a sudden Im in the property market. Now,
what Ive got to do, Ive got six months and so I work out
in this six months, what do I need to do to actually increase this propertys value by at least 20 per cent so that I
can actually buy it.
So I worked out my time lines and my renovations
and all this sort of stuff and I came up with this fantastic
plan and this is my third point.

So what I did, I went to I found this property on

Buderim Hill. Now, if you know the Sunshine Coast,
Buderim Hill is a nice place and there were a couple of
limiting factors with this. It was an absolute renovators
delight and had some big trees in the back yard and it was
a real mess.

I went and saw my solicitor. I didnt actually know

what a solicitor did at this point of my life as far as property conveyancing is concerned. I knew of plenty of other
solicitors. The correspondence that Ive ever had from a
solicitor up to this point was always negative pay me,
you bastard, you know, this sort of stuff.

So what I did, I went and I negotiated the deal with

the vendor.

So I went to this solicitor, I looked him up and I went

and said, Ive got this plan and I told him this is how I
want to do it. He says, Josh, thats not legal. I said, okay.

Now, this is when the property market was dead.

Property wasnt moving. It gets back to the blame game.
Yes, the markets booming, you cant do that now, the
markets booming or you cant do that now, the markets
dead.
Theres always an excuse why you cant do something.
Stop making excuses, starting finding solutions. Thats
what weve got to do. Move beyond that point.
So anyway, the market was dead but I thought 80 per
cent. I can make a go of this property thing, itd be all
right.
So what I did, I went and negotiated with this vendor
and I said, theres a couple of things that I want to do. I
want to buy your property, Im going to buy it at the list
price and he thought, thats fantastic, its been on the
market for a while.
I said, but its got to have four things. No deposit, six
months settlement, I want the first six months rent free -because I had no money and then the last one was youve
got to give me the approval to do renovations, because I
thought what Ive got is cash flow from my job.
So me and my wife were off working and we were
working long hours. We were working 10 hours every

You know how like you come up with a really good

one-liner, like its normally a day late? You shouldve
thought, if I was quicker, I couldve just cut the guy down
at this. So I thought about that a day later. So I went
back to my solicitor the next day and I said exactly the
same thing verbatim and he thought he was in some form
of time warp like, didnt you say this yesterday?
But today I had a come back because I wanted to
bring him to the same point where I had a come back.
I had to bring him to the same point. So I thought to
bring him to the point, Ive got to go through the whole
thing again. He says, Josh, didnt we have this conversation yesterday? Thats not legal.
I said to him, have you just not done it before or have
you looked into it and you know its not legal? Then I
said to him, Im going to give you two days to come up
with the answer and Ill come back and see you. I no
longer use this solicitor.

Dont Take No For An Answer - If You

Want Something Bad Enough, Youll Find
a Way to Do It

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Millionaire Phenomena - Property: JOSH HUNT (continued)

So anyway, I come out of the solicitor and I go back
two days later and he says, Josh, I found a way. Fantastic. The first thing youve got to do, dont take no for an
answer.
You know, the thing is if you want something bad
enough, youll find a way to do it.
A lot of times youll come up with problems when
youre doing property deals and all the rest of it. I just
refuse to take no for an answer. I heard this stat once that
98 per cent is why and only 2 per cent is how. In other
words, if you know why you want something, youll find
a way how to do it. Dont take the no for an answer. Often youll go to your solicitor or go to your accountant.
Now, my accountant is not here. Its just fantastic.
Accountants take the crap out of me. Do you know why?
Because were out there doing decent deals. I do deals
that my accountant could never even dream of doing.
But then you go to him for financial advice. I dont want
to drive the car that he drives. I dont want to live at the
standard that he lives but then you ask him for financial
advice on how I should run my affairs.
I normally have a fairly rocky relationship with my accountant because he says you cant do something and we
are good friends. But were always like this because I think
theres got to be a give and take because these guys have
sat down in a room with a text book and they have their
degree and they say, this is what you are allowed to do.
Well, it doesnt gel with me. Youve got to push.
Dont take no for an answer. You know, the thing that I
love about where we live, is we live in Australia and its
not illegal for you to own everything.

hurdles with that.

I always have this thought that if anyone can do it, I
can do it. Now, thats probably pretty arrogant but youve
got to have self-belief and there were times during this
transaction that I thought I dont even know if this is possible. The hurdles are just massive but you cant take no
for an answer. Youve got to push, push, push.
If youre going to make it happen, youve got to make
it happen. Dont take no for an answer.
So anyway, we signed this property up and we moved
beyond the point. The next thing youve got to do, after
you dont take no for an answer and you sign a deal up, a
lot of people think like Im talking to this girl yesterday
whos trying to pull off this property transaction that is
ten times beyond her.
Anyway, she thinks that just because the vendor has
accepted her offer and that shes got it under contract,
that shes going to make the money.
Let me tell you, just because youve got it under
contract, theres a lot more beyond the point. Like what
Keith was saying before, negotiating with people.
Hes got these properties and hes had to re-negotiate.
Just because you can sign the deal, just because the bank
gives you the money, it doesnt mean that the profit is in
the bank.
What I had to do, and the next point is, is youve got
to work. Youve got to work, work, work. I was talking
to a guy in Noosa a couple of days ago. You could say
hes retired.

Serious, its not. There is not a law that says you own
too much and you cant go beyond that point. We live in
a free country.

Hes got 160 commercial properties. Ive got no

idea what hes worth but itd be a substantial amount of
money. All of his properties are prime properties but he
understands the fact that he is a full-time landlord.

What you do and how successful you are is totally

reliant on you. Youve just to get out and make it happen
but dont take no for an answer. If my solicitor says no,
then I come back a couple of days later see, I could have
left at that point and who knows where I would be today
purely because a solicitor said, no, you cant do that.

When youre a landlord, youre involved in other

peoples businesses. The failure or success of their business is absolutely your responsibility because if they fail,
that means theyre not paying you rent. When theyre not
paying you rent, you cant cover your mortgage.

Youre always going to come up with hurdles and this

is the thing. When youre doing property deals, let me
tell you, the hurdles are massive. This thing said Ive
just bought an island. You should have seen the flipping

So just because youre sitting in a position where youre

cash flow positive today, if all of your tenants stopped
paying rent, all of a sudden you might find that youre not
sitting in such a glamorous position.

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Millionaire Phenomena - Property: JOSH HUNT (continued)

So youve got to stay on top of it, youve got to stay
in front of the ball. Youve got to work. Thats what we
found. We had to work. Ive never been afraid of work.
I love it.
My wife and I, we would probably work 12 to 15
hour days every day. Not because we have to, because we
want to. We love it. Its the thrill of the chase, its something that we do.
Youve got to find out whats right for you. Thats just
what I do.
Were building a brand and were about to franchise
restaurants and Im about to build a $100 million project
in Cairns well, its not Cairns, Fitzroy Island. But work
is what we do and what I found in this particular circumstance, when Im getting back on my feet, because I had
to work. So Id work a 10-hour day and then come home
and renovate all night. Sometimes youve just got to do
it.
Youve got to know where to start. A lot of people
say, I want to go straight into commercial property. A lot
of times you cant go straight into commercial property.
LVRs are lower. Youve got to put more capital in.
You could go and buy a house and get 95 per cent
mortgage insurance and ask your mum for five and youre
away. Youve got to know where to start, youve got to
work and thats what we did.
I remember I just finished sanding the floors, because
weve got polished floorboards. Three oclock in the
morning I get a knock on the door. You know its never
going to be good. Bought around some cup cakes, just
saw you working.
Anyway, it was the neighbour and she says, you know, its
illegal to work before 6 but youve got to work and thats
what we did.
In this particular property, we work, work, work. All I
had was the cash flow of my business and just pumping it
in there. The beauty about it was I had 6 months.

on the property. We paid 180, we got a 275 valuation,

just by using the cash flow and hard work to actually
build it.
So we ended up selling that property before we actually even purchased it for 275 and we made about $80,000
and I thought that was fantastic.
I do it once, I can do it again. So we went from doing
one property to two properties and then we started saying, rather than me do the work, Ill start to get builders
to do the work.
So then what Id do, Id go out and Id negotiate with
developers and buy parcels of land out at Chancellor Park
there. There was a whole heap of land at the back there
and backed on behind it were these power lines and no
one was buying land in there.
So I said to the developer, Ill take that whole suburb,
that whole back section. They used to call me the power
line boy.
My dad lives in there now. Hes got a twitch like that
thats okay, hes had a good life. We had it tested, theres
no problem. That wont stand up in court. No, it was
fine but the thing is when there was no houses there, the
power lines were the only things youd look at and as soon
as the houses so we went in and Ill slow this process
down because its very easy to sort of go from one to 30.
What we did, we went in and we said to the developer
of the land often youve heard of builders terms. Now,
this is when the market was tough and so there was a
whole heap of land there that wasnt selling.
Often what builders terms will do, the builders will
say, you can build on my block of land and then when
youve built the house, then you pay me for the land, but
that didnt work for me. The reason it didnt work for me
was because if I was going to finance it -- I didnt have all
of the money if I was going to finance it, I needed to
take security over the land.

So then I allowed a month for settlement, 5 months, a

month for evaluation, 4 months. Then I had 4 months to
actually do my renovation.

So what Id do Id go in and Id negotiate with the developer and Ill say, Ill buy your block of land but I only
want to give you 60 per cent on the day of settlement.
Then you can take a second mortgage.

So we would work all day and all night. No such

thing as weekends. It was just more opportunity to work.
We basically did it. In 4 months time, we got a valuation

So the difference was that then my financier could

actually use the land as security. So then they would
lend me 80 per cent on the land and the build and then I

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would say 60 per cent. Because theyd give me an 80 per
cent lend on the land and then Id take some of that land
money and give it to the builder as the deposit for that 20
per cent and I was actually fully funding these developments.
So what I would do I would do 5 at a time and then
10 at a time and 30 at a time and basically just keep rolling them out and Id sell them to investors.
One of the things that we were doing when the market is tough is that we were selling them to self-employed
people because a lot of self-employed people can only get
an 80 per cent lend, a low dock loan.
Some of the low docks now have gone up a little bit
but at that stage, it was about 80 per cent. So what we
would do, wed do a house and land package and we were
buying land at about $80,000 and then we were putting a
$120,00 house on it, so it was $200,000.
But we were then selling them for 240,000 with vendor financing, 20 per cent.
So therefore they could come up with a few thousand
bucks to pay their stamp duties and all the rest of it and
basically we would vendor finance them into these houses.
The fantastic part about it is we would just make our
interest rate a little bit higher than the bank so that we
were first priority to sort of pay us out.

Think Outside the Box - When the Market

is Tough
What we found is then the boom hit and we had
about 30, 40 of these houses all with second mortgages
on them. We were just looking for ways, when the market is tough youve got to think outside the box.
When you say, Ive got to move property, how am I
going to do it? It was a way that we found to do it.
We were offering we were selling to investors and
doing rental guarantees and we were selling to people that
needed LVRs and only 80 per cent, whether they were
investors or whatever it was.
So were looking for all of these opportunities and
basically structuring our houses and properties so that we
could do more and more and thats how we built.

Then the Boom Hit

And what happened is all of these $240,000 properties
are now worth $440,000 and they were just paying out all
of our vendor finance. We actually got all of our money
back, which is fantastic.
But the money that we actually we were vendor
financing basically the developers margin. We would get
all of our costs back, wed pay everybody else back and we
might get $5000 so that we could eat for the next couple
of weeks and the rest of it would basically be sitting there
and basically building this equity pile.
The equity pile wasnt giving me anything but I knew
one day Id get it back. So thats how we started to build,
but it took a lot of work.
Ive got a quote here and this is my next point. Sometimes when things are tough and youre in the trenches
and youre working, what youve got to do, youve got to
unleash a bit of future into your present. The power of
your future into your present.
Let me tell you how powerful this is. The market for
psychics and palm readers and those sort of people Im
not really into them but the market for those people in
Australia and internationally is massive.
Let me tell you why, because some people say, today
my life sucks but if I can be told that my future is good,
it will help me through today. So they pay a lot of money
to these people to say, dont worry about it, your future
is bright and it means that you can actually get through
today.
Sometimes when youre in the trenches and youre
working hard, sometimes you need to unleash a bit of the
future potential into your life today. You look forward
and you say, my life is going to be fantastic, even though
its not real good today.
But youve got to look to the future, dont just get
caught into your present.

Choose to Enjoy the Journey

When youre in the trenches working, sometimes thats
what youve got to do. The last thought before we stand
up and stretch our legs is youve got to enjoy the journey,
like Rodney Adler, hes loving it.

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Millionaire Phenomena - Property: JOSH HUNT (continued)

No matter who you are, where youre at today. My
wife and I, we talk about this all the time. No matter
where you are, what you do, my life probably seems glamorous to you. Thats because youre not living it. Anyone
can stand on a stage and paint a picture that people will
envy and Ive got a lot of stuff going on but I work hard.
What youve got to do, youve got to learn to enjoy
the journey and I love it and I love it because I choose to
love it. Even when things are tough and things are tough
normally on a regular basis, youve got to choose to enjoy
the journey and choosing to enjoy the journey is a choice
that you make.
No matter where youre at today, life is too short to
live purely for tomorrows enjoyment. If I saw a snapshot
of my life today when I was 20, I wouldve thought I
wouldve made it. But you know the problem about it is?
It moves. You never catch it.
Life goes on. You know, I live in a really nice penthouse overlooking the water and I drive nice cars and just
bought an island, if I had of taken that snapshot at the
age of 20 and said at 35 this is what youre going to have,
I wouldve went, yeah, you beauty, Ive made it.
But I dont think Ive made it today because it moves.
Now I want something else. You can have the best car on
the street. After a few weeks, you want something different, just because it moves.
You think youve got the best looking man in the
street. It will move. He may not move out but it will
move. Youll find that hes not all that hes cracked up to
be. I am. My wife she knows it moves.

Enjoy the journey. Lifes too short not to

enjoy where you are today.
The sun is shining, the surf s breaking, theres so much
good stuff going on that in the midst of battle it was
funny, I was in this very tense negotiation with a guy last
week. This guy like I dont take life too serious. Ive got
a lot of very serious things going on but I just think lifes
too short not to be enjoyed.
Anyway, this guy is getting all hot under the collar and
he says -- theres nothing personal against me and him.
Its a body corporate issue and this guys going off and he
says, if you want to take me on, I love a good fight, Ill

take you right to the end. Hes talking legally, right? He

saying, Ill get my barristers onto it and all the rest of it
and I just flipped.
I probably shouldnt have but I did. I said, I tell you
what, why dont we take our shirts off, go out onto the
grass and Ill kick your arse, I said, because if you want to
act like a little schoolboy and say, look how tough I am, I
said, why dont we take it the whole way and have a fight
on the grass?
Youve got to learn enjoy the journey. The ulcer is not
worth it. No matter what you do, youre going to have
problems. Its a fact of life.
You know, the fact is my problems are bigger than
what they ever have been because my worlds bigger.
I remember when I was running a business, I used to
have thousand dollar profits. My problems now come in
hundred thousand dollar lots. Its not, I need a thousand
bucks. Its, I need $500,000 and your friends really get
sick of you calling. Dont call me. Your problems get
larger, life goes on, it moves, enjoy the journey of it.

How Do You Build Substantial Wealth?

I have no idea. Let me tell you what I do know and
Ill tell you what Ive done and what Im currently going
through and hopefully you can pick something up from
it.
Let me tell you the biggest difference between winners and losers. Theres a big difference. You probably
see them in your street. This is the difference between
winners and losers. The difference is winning and losing.
Its true. Thats the difference between winners and losers.
Some people win, some people lose.|
Who are you going to be? Are you going to be a winner or a loser, because its up to us. Its up to me. Ive got
to take responsibility for who I am. Ive got to take responsibility for my businesses, my cash flow, my property
deals, my kids. Ive got to take responsibility.

So Im going to give you some keys,

some thoughts on how do we build
substantial wealth.
First point, very important, write it down. Be con-

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Millionaire Phenomena - Property: JOSH HUNT (continued)

fident. Let me tell you why you need to be confident.
How do you build substantial wealth? You build it by
being confident.
I enjoyed reading Richard Bransons book and hes
talking with some of his management team about what he
should call his book and his thoughts were, screw it, lets
do it.
Now, he ended up bringing out another book called
Screw it, Lets do it, later which basically was the same
as the first book, just re-badged to generate more money
from suckers who bought the second book. There was
nothing new in the second book. If youve got the first
book, dont buy the second book. Same book, different
cover.
Screw it, lets do it. What a fantastic attitude. That
summarises Richard Bransons life. He lays an opportunity on the table and then he looks at it and he says, screw
it, lets do it. We can pull this off.

Confidence - Releases Opportunities,

Releases Finance,
Builds Relationships
You need to have that as a backstop to who you are if
youre going to build substantial wealth, that you can pull
this off. Be confident.
Let me tell you what confidence does. Confidence
releases opportunities. People want to do business with
confident people.
Opportunities will come to you when youre confident. Youll find investors will come to you when youre
confident.
I was talking to a guy the other day and he said theres
a bit of a problem in this syndicate that hes got going
and the syndicate has bought five houses and theres
five people in it. I said, who runs the syndicate and he
says, theres no one leader, we all just put it together in a
forum.
Thats never going to work. Youve got to lead. Youve
got to take responsibility and what theyre finding is, that
all of a sudden theres different opinions in the room because people have different risk profiles. They see things
through their own perspective.

What youve got to do, youve got to say, this is who

I am, this is what Im going to do and I try and glean as
much information as I can off everybody but I am going
to make it happen. Im going to take responsibility for it.
What youll find is people will appreciate your confidence and join themselves with you. Youve got to lead
from the front.
Even with my staff, Ive got to lead from the front. If
youve got staff, the most important thing in my life with
staff is my fortnightly management meeting because its
where I actually share with my staff, this is where were
going, this is what were doing because let me tell you the
massive difference.

The Massive Difference is Vision.

People want to feel like theyre going somewhere. If
they dont feel that with you, theyll go somewhere else
where they can feel it.
So what I do, I share vision with my staff. I say, this is
what were going to do, you know, were building a brand.
With our brand, weve got a couple of restaurants on the
Sunshine Coast and next year were going into franchising
and then we bought this island and were going to brand
it and were going to build a Hunt island resort and thats
going to really help our brand.
What we want to do, we want to build a brand that
represents everything five star. So we could do things
better, Im sure we can, but the thing is, I need people
around me to connect to my vision.
How are they going to do that if I dont share it with
them? Youve got to be confident; youve got to take a
lead role.
Let me tell you another thing confidence does.
Confidence releases finances. A bank will look at your
spreadsheet and give it a tick. They wont look at your
spreadsheet and give you the money. Confidence in your
confidence. Thats enough on that point.

Confidence builds relationships.

People want to do business with confident people.
I dont know if youve seen the media well, probably
not that much down here. The media has gone ballistic

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Millionaire Phenomena - Property: JOSH HUNT (continued)

last week with the island purchase and it went national
on Today Tonight, a big story and Im getting phone calls
from everywhere and the phone has gone ballistic at our
office this week because everyone wants to do business
with a confident person.
So they see it on the TV and Im talking to a guy this
morning and he says, I dont know you but Im inspired
by the thing on Today Tonight and I think we should get
together.
I could be working 25 hours a day if I met with everybody thats basically called me over the last two weeks.
But confidence builds relationships. Its amazing that
when youre a confident person and you start pulling
things off, people want to know you.
People want to build a relationship with you and that
in itself releases opportunities. You get together with likeminded people and confidence builds relationships.

So how do you build confidence? How

do you build it?
This is the next point. Communicate. I think this is
one of the most powerful things that you can conquer, if
you want to build substantial wealth in your life. Youve
got to learn to communicate.
Youve got to learn to communicate with the staff,
youve got to learn to communicate with the wife, youve
got to learn to communicate with the kids and youve got
to learn to communicate with yourself.

grumpy mood. I read this quote once and I thought it

was exceptionally powerful and it was this, that a happy
person is not a person in a certain set of circumstances
but its a person with a certain set of attitudes.
Weve seen it, weve seen inspirational stories of people
that have been in tragic circumstances but they have
incredible attitudes.

If you want to be an incredible person,

you need to have incredible attitudes.
Dont let circumstances dictate to you your attitude
because what you find is when time gets tough and it will,
because your property wont settle in time, your vendor
will be wanting to pull the plug and take your deposit.
Youll find that all of a sudden everything is going to God
and youre about to be sued and youre going to lose it all.
Theyre the times when your attitude is most important, where your confidence is steadfast and youre saying,
youll be right. You need to have like the island project
was delayed by it was supposed to settle in September
and it settled late November. I just kept telling them, itll
be all right, boys, dont worry. The funny part about this
was I went up and I negotiated this deal and at this particular stage money was really tight. So I thought Ill go
up and have a look at this project. I went up and I really
liked it but I really didnt have a lot of money.
So I thought I need to somehow lock this up. So I
formulated this heads of agreement and I thought how
much will I put down as a deposit and I thought a dollar.

You can be having a bum of a day and the truth is I

think that if youre a leader, there is no excuse for you to
be in a bad mood. Its not on. I tell my managers, dont
ever come to work grumpy because you lead people and
the last thing that I want is my key people to be second
guessing, is Josh going to be in a good mood today?

So I bought this island with a dollar deposit and its all

about confidence and communication. Now, I had to put
a hell of a lot more money in it than that but I secured
it with a dollar and the funny part about it is, I got this
photo, its fantastic because the deal was so complex. Ive
never had a settlement like it.

I cant afford that sort of thought process in my managers minds that Im pushing to go forward. I want them
to be not focussed on, am I in a good mood? Id rather
them to be focussed on, how are we going to grow this
thing, what are we going to do next, what ground are we
going to take? You cant afford to be in a grumpy mood
but youve got to learn to communicate.

What I actually did I bought a company that owned

the shares in the island and so what it was was a change of
directorship and share transfers, nothing like a property
deal that Ive ever done. I had to go up to Cairns and
attend this meeting and I had to run this meeting and in
this meeting. The owners were there and then the owners
solicitors and then my solicitors and the bankers and the
bankers and banks and there was about 15 people in this
room and Ive got to read through a pile of documents

Some people think that they are in entitled to be in a

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this high.
Im thinking, man, and theres all those big words in
them that just dont make any sense. You know when
youre halfway through a sentence and you think its not
making any sense, will I continue?
So you just keep ploughing and then you hope at the
end of it that nobody says, that didnt make any sense. I
had like that high of documents and every sentence was
like that. But it was interesting because part of that transaction there was some large numbers in there but a
part of that transaction was that we had to pay $1 to seal
this part of the contract.
So I said to the boys, I bought this thing with a dollar
and now Im paying you a dollar for it. So we got up
and shook hands and I paid them their dollar and I got a
fantastic photo of me buying this island with one dollar.
It wasnt really the case but anyway, it makes me feel
good about it. But youve got to communicate . We had
extension after extension after extension and the only reason they hung in there was because they had confidence
in my ability to complete. Where did the confidence
come from? Communication.

Youve got to keep communicating.

Now, the thing is we were talking about moods before.
You cant afford to be in a poor mood. Imagine if Im
trying to pull a $100 million deal off and the guy calls
me and today Im grumpy or today Im, I dont know if I
want to do it today and tomorrow, yes, I want that deal.
Im telling you, you wont pull anything off.
Youve got to be consistent, always positive, always
confident. How do you do it? Communication. Let me
tell you the most powerful thing in the world today is
words.
We saw at 9/11, 9/11 changed the face of the world.
Two planes crashed into a building and killed some
people, which was tragic, but a lot more people die every
day than that in Africa from starvation and all the rest
of it but that particular incident that happened one day
around our globe changed our world. Let me tell you
why it changed our world because then some guy with
a tea towel on his head gets in front of a camera and he
says, Im a terrorist and Im here to kill you.

What it does, his words basically reverberated through

just about every community around the globe and
changed the way that people behaved. Thats the power
of peoples words.
Let me give you an illustration that youre probably
closer to. Youre in a heated argument with your spouse,
lets say that youre a male, and you say, Im sick of you,
you fat tart. I would never say that. Let me tell you what
your words have just done and how powerful they are.
Your words do three things. They create, they control
and they accomplish. They create an environment that
you now have to live in.
Bin Laden did it. His words created around the globe
an environment that we all live in. I was astonished.
Years ago I was going to go to the Grand Prix. This
is just after the 9/11. The rumour around was be careful because its a likely place for a terrorist attack. I made
the decision not to go. I thought later this guy with his
words somewhere else, off the planet, living in a hole, has
got a $3 movie camera, shows it on Arabic TV and I dont
go to the Formula 1. Thats the power of words.
Just like you just bagged your wife, theyve created
a world now that youve got to live in. They create and
then they control and they control the behaviour within
the world. So now all of a sudden, youre making yourself
dinner. Theres no snuggling or whatever.
They create, they control and they accomplish. They
accomplish what you sent them out to do. What youve
got to understand is your words do this.
I saw this in my kids. When this became a reality in
my life, I said Im going to unleash this for the positive in
my kids lives.
I was dropping my kids to school at that stage and I
drop them off and theyre Sarah and Jessica and as theyre
getting out of the car Id say, Sarah, I think you are an
absolute champion. I reckon youre the best looking girl
in the school. Look at them all here. Theyre all second
rate to you. Youre beautiful. These kids, they jump out
of the car, Im all right. Why?
Because my words created, controlled and accomplished what I sent them out to do. Its amazing you can
change the environment within your world by unleashing
the power of your words.

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Youve got to understand how important this is.
When youre in a grumpy mood, when youre in a poor
mood and we all have them. Dont think youre alone,
dont think that I never get them. We all get them.

He arrived and before I could even get upstairs, which

is about five minutes after he arrived, he was painting
with this spray gun and Im thinking, no preparation, no
masking, no nothing. No drop sheets, just paint.

Youve got to use your words to pull yourself out because let me tell you, sometimes nobody else will take the
responsibility to do it, bar you. This one thing alone will
inhibit what you can achieve in your life because people
dont like to do business with up and down sort of people.

Anyway, it was a disaster. Fly screens and everything,

windows, this guy was a legend. He love his painting. I
should have been more specific. I should have said, please
prepare the surface, please mask up things that you dont
want painted.

If you can learn to do this skill, be consistent. Youll

find that youll be a lot more successful person and things
will come into your life because of it and then unleash it
on other people around you.

I just asked him to paint and paint he did, even plants

outside the windows were painted. We had to do a
massive prune job and take things to the tip to actually
because we couldnt scrub the leaves clean.

Thats what I do. I unleash vision everywhere I go. I

say to the guys on my team, this is what were creating,
this is what were going to do. Im taking all of my management team and most of my staff away to this island
party because Ive got to share with them vision. This is
what were doing.

This guy gives me a deal and he calls me a couple of

weeks later and he says, have you paid the bill? I said, before we talk about the bill, can we talk about the job? His
response was, if you dont effing pay the bill, Im going to
come around there and rip your effing arms off. I said,
youll have to leave it with me.

Theyre working in a restaurant, theyre taking drinks

out to people. Why do they need to see a development
that Im doing up there? Because it forms part of the vision. They feel like theyre connected.

Anyway long story short, I paid him most of the

money and told him if I ever heard from him again, Id
ring the BSA and everybody else but his words controlled
my world, because now all of a sudden Im looking over
my shoulder thinking I hope I dont see this guy down the
street.

I was saying to my management staff that they have to

tell their staff about vision, because if I dont share vision,
the only thing that theyve got left to compare is dollars
and cents. So what makes my $20 an hour any better
than next doors $20 an hour? Nothing.
But if they feel like theyre connected to a vision thats
going to be on and theyre building something great and
they want to be a part of it, let me tell you, you can pay
them 15 and theyll still work for you. Not that you
should do that but Im illustrating the point that youve
got to communicate.

The power of communication is

absolutely important.
A couple of years ago on this house, about eight years
ago, that I was renovating, I wanted a painter to come
through and paint while I was at work.
The guy gives me a quote. He didnt actually come in,
looked through the windows, this guy gives me a quote. I
thought well, get it on. So he arrived. I was downstairs.

I memorised his number plate, knew the colour ute

that he drove, made sure that I dont go anywhere near
where I know he works. This guys words over the phone
created, controlled and accomplished what they sent them
out to do and that was bring fear into my life.
Youve got to understand how powerful your words
are.
My words call deals off. Thats what they do. If you
want to be successful in real estate, learn how to control
your words.
Youve got to know in your head thats what Keith
was going through youve got to know your numbers
but then youve got to communicate them through words.
People have confidence to do business with you and youll
find that it will work out.

Next thing, youve got to be Committed,

youve got to work hard.

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What Im going to do, Im going to tell you some
things here about the things that Ive learnt while being in
the trenches, while being committed. In other words, the
things that didnt quite work out and I thought Im never
going to do that again. I thought this is where I can actually tell you when youre committed, this is the crap that
comes into your life that I swear Id never do again.

$250,000 commission because what it says in the agents

agreement form is that the commission becomes payable
when it goes unconditional.

I was in a project and Id sold this property and it

was about a seven and a half million dollar sale and so it
wasnt like just a little unit. It was a decent block of land.

When you get an agents agreement to list, the thing

that Ive learnt is you put a line through unconditional
and you write settlement.

Made this sale, guy went unconditional and paid a

$50,000 deposit, which was nothing, understanding the
reason its nothing because on a seven and a half million
dollar project, thats a months interest. Its a bit more
than a months interest, it doesnt last long. This guy goes
unconditional and he says to me, your DA thats currently
in, I want to do something different so pull your DA out
and Ill submit my DA.

So in other words, I will pay you if it sells, not if it

goes unconditional because what I found and the same
thing happened to a friend of mine two weeks ago where
an agent comes in and I dont know if it was as calculated
as what it seemed.

Thought hes unconditional, paid a deposit, no problem. So I withdraw my DA. We get to settlement, cant
settle. Extension, extension. Two months later, cant
settle, I cancel him. I get to keep his 50 grand. Who
cares? By this stage its cost me 500,000 bucks in extensions.
I dont have a DA any more because he asked me to remove it. He didnt actually get around to submitting him
so now what Ive got is Ive got a raw block of land that I
was selling with the DA for $7.5 million and I got a guy
that was unconditional. That I could now sue, that owns a
$2 company and hes well structured hes the Teflon man,
which youll find that most thats what we do, we want
to structure ourselves well.
Terry, my solicitor, whos coming to talk to you tomorrow, I call him Terry Teflon. Fantastic. Nothing sticks to
him. Hes a good man and he does a lot of our soliciting
work. Really switched on and knows what hes talking
about but Im in this position where its cost me a lot of
money and Ive now got nothing and I have to put the
thing back on the market and I sell it again and Im about
to settle.
What happens? Two days before settlement, the agent
that sold it the first time calls me and says, you owe me
$250,000 commission.
I said, bull crap. He says, yes, no, you do, you owe me

It doesnt say, and youll find this and so this is a lesson

that Ive learnt that will save you could save you hundreds and thousands of dollars.

This guy puts a $2000 deposit down on a million

dollar property and these small deposits Im into them
because thats what I like to give but I dont like receiving
them. I like to see the people are people of substance.
But anyway, he puts a $2000 deposit and then the
guy, he takes it off the market, the owner takes it off the
market, the agent is all of a sudden able to say that my
commission is now payable.
So this agent, youve got to understand, and Im not
saying hopefully they dont do this but Im tell you its
possible. An agent could sell your property four times to
bogus buyers with $2 companies that you could theoretically sue.
Then when you come to settle ask you for four times
commission because its payable when it goes unconditional.
So I had this property and the agent calls me and says,
you owe me $250,000 commission. I said, bull crap. So
anyway youre two days off a seven and a half million dollar settlement and you dont want a delay.
By this time, youre a developer and now youve asked
your mums mum for money because your mum has run
out of money and youve got nothing and you need to get
this thing through.
This agent says, Im sending you through a letter, Im
sending it to your solicitor that is going to say that he is
going to disperse the $250,000 settlement directly to my
account. If you do not sign that, I will put a caveat over

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the property and you will not settle.
So they have every right. They can put caveats over it
and all of a sudden you dont have a choice. So you can
go and try and fight it and delay the thing and all the rest
of it and then go to a court of law.
So basically what I did, I had to pay the commission.
$250,000 for a guy that basically cost me $500,000 in
delays. A very expensive lesson Ive learnt. You learn it
from being in the trenches.
One point, another thing that Ive learnt. Let me tell
you how I structured a particular deal that I thought was
a good deal and then I had somebody else tell me that Im
an idiot. This person actually knew what he was doing
so I took his advice. What Id done, Id structured a deal
and you might this is the way that you might think
about doing a deal and I used to and hopefully after today
you wont.
What I did, I found this block of land and it was code
assessable for about 350 units. So what I thought Id do,
Id go in and I negotiated with the vendor and it was an
option to purchase.
I said Im going to pay you $100,000 for this option and the option lasts for 18 months and I thought in
that 18 months Ill get a DA and Ill get an uplift on the
property and therefore Ill have plenty of equity to go into
the next stage. So what I do, I put a hundred grand down
and I put 150,000 bucks into all of the design and getting
the DA and then Ill get the uplift and Im right.
Then I thought Ill be really clever and if I dont settle
on this date, I can actually have six months worth of
extensions by paying you $100,000 a month. I thought
thats pretty pricey but Im not intending to use them.
So anyway, I go into this deal and I thought for a
couple of hundred thousand dollars Ive secured a $10
million project. Thats the block of land and then the
uplift and I thought I can make a squillion on this, just
fantastic. Anyway, I get into the position where things
arent going the way that I thought they were going to go.
Code assessable, all of this sort of stuff and all of a
sudden its just not falling into place. So I get to the stage
where Ive got to sell the thing and try and recover what I
was going to pay for it because Ive invested at this stage
100,000 bucks in my initial option to purchase and Ive
invested about 150,000 bucks in plans.

Then Id paid four of these extensions so thats another

400,000 bucks. So Im going down the tube for about
800,000 bucks and I think the only way that I can do
this is basically exercise my option and re-sell the block
of land. So now Im on this massive time thing and Im
thinking what am I doing?
So anyway, I went and saw this guy whos got a lot of
experience and hes the son of a publicly listed company,
a big property company. He says, you are a fully fledged
idiot. I thought I was really smart and it was a very good
learning curve.
He said, this is how you structure a deal. Its been
very, very valuable. He said, Ive just negotiated on this
deal and let me tell you how it went. He said, I went
in and I said a $5000 deposit and his block of land was
about five million. $5000 deposit, an option to purchase
it for two years, subject to a DA.
It wasnt just subject to a DA. It was subject to a DA
of his satisfaction.
So basically what it was, hes going to put his money
into a DA, hes got $5000 that wasnt releasable that hed
actually get his five grand back if he wasnt happy with it
any stage because of any one particular reason.
Then his next stage was, and then when we move from
that to actually settling the property, Im going to give
you 50 per cent of the purchase price, then Im going to
give you 25 per cent more at the first 12 months and then
Im going to give you the last 25 per cent at two years.
Im thinking who would accept a deal like this? Who
in their right mind, what sort of vendor because if he
gets a DA on this $5 million property, its probably going
to be worth 7, but hes not going to give him 5 million.
Hes only going to give him 2.5 million dollars at settlement, which was just a fantastic deal because all of a
sudden you can roll into construction, not put a cent in
because the thing cash flows itself because youve got so
much equity.
I said, who would do a deal like that? He says, I just
pulled off with Stocklands. Make Sure All the Cards Face
You, not the other way around
Im thinking what am I doing? What I learnt is when
youre doing a development, make sure all of the cards
face you.

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The big problem was in my first development that I
thought that Id allowed plenty of time but Id faced the
cards to them to say if I dont perform, Im out of pocket.
Where what this guy had done, hed flicked them
around and said, if it doesnt happen these are the options
that Ive got and he remained in control all the time.

Calculate the Risk

When you talk about calculating risk, the best thing to
do when calculating risk is understand this. Risk can be
calculated. So we say yes, this is a calculated risk because
my mum told me it was a good deal and shes lived here
for a long time.
When you say calculate the risk, it means put numbers
beside them and really calculate them. Calculated risk.
Have the cards face you. Another thing that Ive learnt.
Someone said this to be one. I thought it was absolutely priceless. Pioneers end up with arrows in their arse.
It was a revelation. What he was basically saying is
if youre out there trying to find a new price point in an
existing market, youre a pioneer.
If youre out there trying to buy some form of exotic
island, youre a pioneer. No, dont go there. I could
possibly fall into that category. But what hes saying is if
youre going to be on the forefront of trying to establish
new markets, theres a better chance youre going to end
up dead.
So what youre best off doing is going in and try and
negotiate in existing areas.
A couple of weeks ago, maybe a couple of months ago,
I had the valuer on the island when we were talking about
the island project. Were talking about whats been DA
approved and what the price point is and all the rest of it
and I said I want to change this, I want to make it more
like our brand and make it more five star and do this and
do this.
I could get a massive uplift on the potential of the
property. A bit like what Keith did with his commercial
property. Get a massive uplift by modifying it slightly.
The valuer says to me, why would you do that when
youve seen that the market is very acceptant of this price
point?

Existing Market, or New Market Pioneer?

In other words he says, why try and change the culture
or try and be a pioneer to establish a new market when
the existing market is there hungry?
Sometimes we do things because we want to do them,
rather than its what the market wants. If youre going to
be a pioneer, prepare to be shot. Its a challenge because
sometimes we like to push new ground and we like to
take on new things but just remember that. Pioneers end
up with arrows in their arse.
So if you want to be on the more conservative side of
radical property development, because theres two sides of
this crazy game you can be on.
I say try and be on the more calculated side, try not to
be so much of a pioneer.
We just drove on the way here past a property that
were doing in Orwell Street, Potts Point. Now, the thing
that I love about that is the block is about this big. I
think it should be illegal to build on anything so narrow
but I can go up five storeys on this block. Its incredible.
The beauty about it is Im not establishing a new
market. All Ive got to do is try and squeeze it in into the
existing market thats there and I know that the whole
thing will boom.
The thing is we try and say yes, I reckon that land
there, out there near Toowoomba, beautiful. Ill just buy
this guys farm and Ill break it up and make it into million dollar rural-res estates.
Well, the fact is youre a pioneer. Youre better off going and negotiating. If youre going to do a development,
youre better off trying to negotiate a development in a
booming area rather than go and try and create your own
boom.
Theres a lot of developers, big developers, that their
point is build it and they will come. Thats true. I just
hope youve got big, deep pockets waiting for them because often you need them.
People will often say that the first guy goes broke, the
second guy goes broke and then the third guy makes a go
of it. Thats when youre establishing a new area.
So youve got to look at that and say, well, where am I

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going to do try not to be a pioneer, try and go into an
established area, build something that people want, not
what you want and youll find therell be a good take up
for it.

better off walking away.

Another thought. When people offer you money, take

it. That sounds funny but we often dont do it.

When someone offers you money, it may not be as

much as what youd like. Sometimes youve got to look
out, whats the benefit of me getting that money now
and moving on to the next thing rather than holding out
because we dont know whats around the corner.

Let me tell you, when youre on struggle street, you

wont be able to get a credit card. When you dont need
one, you get them offered all the time.

So when Im doing property deals and deals in general,

if someone offers me money, I think very, very seriously
about taking it.

When I get offered a credit card, I take it. The NAB

just said lets up your limit from 50 to 80. Thank you,
Ill have it. I dont want to use it but if Ive got a million
bucks worth of credit cards sitting in my drawer, if I do
need them and things are tight, let me tell you the bank
wont give you money then. What youve got to do when
people offer you money, take it. Have some self control
and dont spend it until you need it.

I ask myself the question, is it a pride issue? Am I not

taking it because I believe that its worth this and therefore Ive got this pride issue and Im not going to accept
anything or should I just take it and move on to the next
thing?

When people offer you money take it. I also say that
with property.

My last point, things that Ive learnt when Im in the

trenches. Cash flow. Just because youve got a positive
cash flow property doesnt mean you can retire because
cash flow, cash flow.

Keith would probably know of a property that Im

about to tell you about. Its in First Avenue at the back of
Mooloolaba and theres two houses in there and there was
developers on both sides and theyre trying to buy these
two houses and its in a very downtown sort of Mooloolaba spot.
These guys are saying, no, well wait. Theyre getting
paid way too much for these crappy little houses but what
theyve done now is -- the developer said, no bugger you,
youre too hard.
So what theyve done theyve now built their developments either side and theres these two little houses in the
middle but the land is so small that a developer cant use
it any more.
So now theyre getting nothing for their houses because the only thing that theyre good for is parking your
car on because you cant build a high rise there any more.
When people offer you money, think very seriously
abut taking it because there is a number of things that it
may cost you.
Momentum, you know, holding out for a better day.
Well, thats sort of almost like when I play blackjack.
Sometimes that better day just doesnt come. Youre just

Positive Cash Flow Properties

Often a positive cash flow property is a false sense of

security.
Let me tell you what a positive cash flow property
does.
A positive cash flow property helps you wait while
capital gains or capital growth hits you.
If you dont have a cash flow positive property, if its a
cash flow negative property, that weight hurts you.
So cash flow, you need to work out where am I going
to get the cash from. Because we had a builder on the
Sunshine Coast recently go broke and he had something
like $30 million worth of work in his pipeline that he
could get to but he had a cash flow problem today that he
couldnt get over and he went under.
Cash flow. They dont care about what work youve
got in the pipeline. Theyll bankrupt you today. Youve
got to work out where your cash flow is coming from.
When youre a landlord, understand this. People dont
like you. A tenant is not going to thank you for being a
good landlord. Dont think that if youre a landlord and
own multiple properties and youve got properties, that

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people are going to, here comes my landlord.
Landlords are despised. Theyre like tax collectors.
Theyre the people that you pay money to and you feel
like youre getting nothing for it until youre a landlord
and you sort of feel like youre bending over backwards
for these people, trying to help them wherever you can.
But let me tell you, when youre a landlord, youre not
a very liked person.
What youve got to understand is, youre in business
and when youre a landlord, you are in business. Youre
not in retirement phase. Youve got to make sure that
people are successful.

Negotiate
The last point Ive got here is negotiate and Keith said
it before. Win-win.
There is no such thing as win-lose. You win, they lose
because it will ultimately be lose-lose. If its not winwin, it will be lose-lose. It may not be today but it will
ultimately be.
When youre working on commercial property or even
residential property and youre saying I need this to generate the return that I need to pay the bank, let me tell you,
the tenant dont care.
The tenant doesnt care that youve bought this thing
with an 8 per cent yield and interest rates have gone to
14. Theyre just trying to make their business work. They
look back and they say, well, you do nothing but I work
here a hundred hours a week, slaving my guts out to pay
your rent.
Youve got to understand that its got to be win-win.
Theyve got to win and youve got to win.

Commercial Property - Understand

Youre in Business With Your Tenant
When youre looking at commercial, make sure that
you look at it in the light of not what you can get but
how well the person thats in your tenancy is going to do
because if theyre not doing well, or if theyre not going to
win, you will lose.
This is the thing with commercial property. I like

commercial property but theres different dynamics of

different property.

Residential versus commercial.

One of the challenges with commercial is if your
tenant goes under, youve got to find a new one. If you
cannot find a new one, the value of your property has
substantially dropped.
So you might think youre sitting on easy street because youve only borrowed 60 per cent against the value
of this property. Well, if this person is Eagle Boys and the
price of pineapple goes through the roof and pizzas have
got to go to $33 each and nobody decides that pizzas are
good for them or someones been poisoned in Sizzler by a
pizza and nobody is eating pizza any more, anything can
happen.
All of a sudden that tenant goes down, the valuation
plummets.
All of a sudden you are now 100 per cent lend against
your commercial property and then the bank looks and
they say, Eagle Boys has gone down nationally, who do we
have that owns property with Eagle Boys as a tenant and
were going to call in all of those mortgages.
So all of a sudden youve got to sell a property thats
got no tenant, thats basically 100 per cent LVR now
because the valuation has just dropped. Youve got to
understand, youre in business with the person.
Life continues to roll past and its up to us to keep up
with it.
I was at a school presentation for my daughters the
other day and it talked about that the jobs that the university students, people that are going into university next
year, the jobs that they will most likely go into, 80 per
cent of those people go into today have not been invented. Those jobs do not exist. Technology is moving so fast
that the university courses that people start today, the jobs
that they go into dont exist on the day they started their
university course.
That is just amazing. Our world is evolving so fast.
Weve got to stay on top of it.

Successful Property Investors Need to

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Millionaire Phenomena - Property: JOSH HUNT (continued)

Forecast the Markets
If were going to be successful property investors, we
need to be able to forecast the markets. We need to say
whats this area going to do? Whats business doing in
this area?
You might own a fantastic commercial property, its
got an IGA and its got like its own little community and
its just going ballistic and you think that you can just
rest on that for the rest of your life, its going to pay you a
fantastic income? Then what happens? Woolies moves in
next door.

not going to come from me.

It comes from within you and its going to look on
you different to what it looks like on me. It looks different. Youve got different risks profiles, youve got different
goals and dreams and all. It looks different on you to
what it does on me. That doesnt make mine any better
or any worse. Its just different. Were all different. So
I trust that youll be very successful in whatever you put
your mind to because I know you can. Thank you.

Then all of a sudden, thats the poor sister. All of a

sudden, nobody goes there any more because theres a
fresh thing across the road. Youve got to stay on top of it.
Youve got to know whats happening, how its happening.
You could do things like what Keith was saying before.
Youve got to re-think your tenancy shuffle. IGA might
be in there, you might need to cut that up and make it
into a medical centre.
Youve got to stay on top of it but most of all while
youre doing all of that, youve got to enjoy it.
Thats a challenge. It would be nice if it was easy,
wouldnt it? I find it really easy.

You Can Do It!

Now, I hope something that Ive said has helped you.
The thing that I want to put across most is that you can
do it.
You dont need to be smart because Im not. You dont
need to be well educated because Im not. You do need to
be good looking. That wipes most of you out. No, just
joking.
Success lies within. Success is within us. Its up to us
to pull it out.
Weve got to negotiate with people, weve got to
develop it. You know the thing I love about what youve
done here this weekend is that youve put yourself in a
position to develop success out of you.
Youve got to understand that its not going to come
from Dymphna, its not going to come from Keith, its

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Discover One Of The Most Jealously

Guarded Secrets - Adapted And Road
Tested In Australia For Creating Positive
Cash Flow - That Works Even In Todays
Property Market
Part of the Millionaire Phenomena Series

irst things first, people say to me all the time, a lot

of people wont even know who I am, and I know
theres a bunch of people thinking, Well, who are
you and what are you going to say, and Ill probably be
think youre a Wally anyway and I can understand that
because my wife says that to me all the time.
So, Im just going to tell you, about five minutes,
about who I am and where I come from and how I think.
Im going to run you in to I buy and sell and houses
and home units and then I was going to run this into how
I buy houses at a substantial discount which I think you
might find interesting. And then I was going to get into
how I add value to houses and Ill take you back to the
beginnings because if you know, how, like when you get
something like a famous person like Stephen Spielberg or
something and they go, Well, where did you start? and
they always say, Well he started off as a shoe, you know,
or someone started off as some really macabre job, they
started off as a tyre on a car or something and then they
became
Well, I sort of started off in a bit of a strange environment. I worked for a guy, when I was 20 years old,
I wasnt a yuppie. That was so long ago, I was much
younger, I was 20 years old so I was more like, well, a
puppy yuppie, and a guy recruited me, called Allan Pease
and I worked with Allan for many, many years and I got
very much involved in human communications, body
language, talk language, and a whole lot of this sort of
stuff.
In actual fact if you have a copy of the book that came
out in 1981, youll see me there on page 90 in my $97
brown Rubeneff Scarf suit. I dont think Rubeneff Scarf s

Meet Rick Otton

Rick Otton, the showman of property entrepreneurs and original
pioneer of creative property strategies, is internationally admired by
the property industry for his maverick real estate concepts. A man of
dedicated vision heis founder and
CEO of We Buy Houses, a leading property enterprise which Rick
has successfully expanded into the
international markets of America,
the UK, New Zealand and Australia.
Ricks success has been achieved through recognising property
profits can be maximized when you start to create strategies relating to the terms under which the property is acquired or sold, and
not simply relying on price-led strategies.
Ricks refreshing concepts allow the buying, selling and trading of
houses using little or no money of your own to create what everyone is looking for, super-cash flow as well as profits.

around anymore. That brown suit was my first suit, it

was pretty rough material, we use it in the back room
for sort of holding spuds. After I left there, I left Allan,
we worked together for a bunch of years and then Allan
went off to the UK to start his business in the UK and I
went to the United States. While I was there I thought,
well, what am I going to do? I had a couple of things in
mind and Id learned from Allan that a lot of people think
visually.
So I thought, well, maybe I could come up with something visual for the U.S. market, and so I got into this.
I created a television show and it was called The Couch

Millionaire Phenomena - Property: RICK OTTON (continued)

Critic and it was pretty out there, and it was very visual.
What happened was, unbeknownst, I was just trying to
make a few dollars at the time and I sort of got away and
went into syndication and then it sort of got a bit out of
control and this sort of happened.
The Couch Critic aired on cable TV and I thought
it was OK until a couple of big boys turned up from
Houston in their suits and said, Well, boy, you Richard
Atton?. I said, Well, thats close, Im Richard Otton.
They said, Well boy, seen you on the TV and we dont
know if we like that because we reckon pretty soon youll
be in the theatre and weve had a look at the visa, and
what sort of visa status you got boy? I sort of pulled out
the passport and went oh, one of these little ones here.
They said, well, thats not going to work. So they
threw me out, in a really nice way. They gave me two
days, and I came back and I thought if I wanted to
continue it took me a while and I came back to get a
journalistic, to be a journalist, come back on a journalist
visa, and actually it was really quite funny. At the time I
did this - you saw the big rubber boomerang - I used to
sleep on a big six foot thong and if I got really cold I used
to sort of climb under the straps.
So anyway, it was around this time in the United
States I came back in for another hit and things had
moved on. I got involved in what was called the Savings
and Loans. And quickly, to give you that savings and
loans was where the American real estate industry collapsed in the southern states, in respect that the banks
disappeared.

If I Could Figure Out How To Finance

Property Without The Bank, I Could Be
Rich!
We could go into more detail but its enough to say
that virtually every financial institution in the southern
states of the United States failed to exist. They all just
went, and as a result no one could buy or sell a house
with a bank loan. In actual fact, the Federal Government
made it illegal for banks to give you housing loans to buy
a house, and for a while there the houses became so cheap
they dropped down to maybe 5 and 10 cents on the dollar.
You could buy packets of them. This was the very first

one I did. I bought in there 20 home units at $4,000

each. Its funny, when you look at these buildings, I was
putting this slide up to show today and it reminds me of
the old Elvis Presley movies. You could sort of see Elvis
out the front of that sort of thing, doing his guitar as he
goes around the pool.
And that sort of started me, and I found that the only
way I could make things work was I had to create a whole
bunch of ways where I did have no money, to get sellers
and buyers together and trade real estate.
What I did was, I never went to Real Estate school
and hadnt read too many books but I just thought that
maybe there was another opportunity here and I used to
buy houses from sellers and pay sellers, make payments to
the sellers and turn around and make payments to buyers
and bring in joint venture partners and private lenders
and did everything I had to do where there is no banking
system and I just learned a different way of doing things.
With that in mind, I wanted to share some of those
ideas with you today because that was about 15 years ago
and a lot of those ideas and concepts, weve still got the
business, it still runs there today. We brought those into
Australia about 99 and then back into England a couple
of years ago, and I wanted to share some of those ideas
with you today, that we might be able to benefit from.
What I wanted to start with is, I think this is pretty important, how do you make a profit when you buy houses?
I think its a case of well, what house are you going to
buy? And I just wanted to run you through a few houses
Ive recently bought and see if it makes sense to you.

How To Buy Houses 30% Below Market

Value
Now I do things a little bit differently. I buy houses,
I dont know, I never understood this, I buy houses and
I trade houses, so I buy and sell houses and I find that
if I can add value to them, these houses, I like buying
houses on the main road which I dont want to say too
much more about it at the moment but I buy them for a
substantial discount, about a 30% reduction.
No one wants a house on the main road but I find
when the valuers value them and appraise them, they
only discount them about 5% so they dont take a lot
of money off the value. Im going to tell you why I do
that, a little bit later, why I buy these houses and mainly

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Millionaire Phenomena - Property: RICK OTTON (continued)

because no one else wants them. I buy the houses that no
one else wants.
This is a great example of what happens. If you ever
find a house that has the real estate agent in a distant
suburb, which is the other side of town, you can get great
bargains on the house. What happened on this house
was, I went to this house to buy this house. It was in a
suburb called Tragea, and as you can see from the sign the
real estate agent is from another suburb called Quakers
Hill. Now how does that happen? Well normally what
happens is, someone goes to a dinner party and they say
I want to sell my house and someone is at the dinner
party who happens to be a real estate agent, and the real
estate agent might be from another part of the world, and
people will say well, I can list your house and probably
give you a discount on the fee.
The other person says Oh, really? Yes, great.
Fantastic, pass the milk, lets do that. And the next
minute youve got your house listed with a real estate
agent who comes from out of town, in another part of the
world.
So heres what happens. When I rang up the real
estate agent, I rang him up in March and I said, Had any
offers on the house? He said, Oh, yeah. And I said,
Oh, when?. Oh, last October. It was like, Have you
shown anybody since? Do you want to have a look?
And I said, Yeah. He said, Oh well, back doors
open. So and I knew where this guy was coming from
because after a while the real estate agent, you know, he
goes, drives over there, shows someone the house, they
tyre kick it, you know, they dont want to buy it, you
know, and they have to go back to their office again, and
they might miss out on the coffee or something. I said,
Look, what do we have to do?
And at the end of the day I got this house very, very
cheap because he wasnt aware, the market was moving
very, very quickly and when they checked the valuations
at the Lands Title Office and all their little equipment to
find out what things were selling for, quite often theyre
out of date and I bought this house for a very substantial
discount because the agent had no idea what things were
worth in the area, and I think basically he was just too
lazy to show anybody the house. I remember when I rang
him up and I said that I thought Id buy it and he said,
Ohh, it seemed like such a problem, Ohhh, forms Ive got to fill out forms.

Now, this is an interesting one. Im going to jump

down on the floor for this one because the lights get me
a little bit. This house was near power wires. Now these
houses sell for a massive discount. I probably bought this
house for, oh, I reckon I bought that for about $80,000
under market. What happened was a lot of people believe
that if you buy a house anywhere power wires youll get
cancer and maybe pass away, and its not a really good
thing. Heres whats interesting.
Other people believe thats a whole lot of baloney and
that whole thing about near power wires doesnt matter
at all. Just because I thought it would be good to do a
room survey, and its usually pretty divided, half the room
thinks some ways and half the other. If you think youre
going to get cancer from having a house near power wires,
put up your hand. Thats all right. Now if you think
thats a whole lot of baloney, and you dont think youre
going to get cancer, put up your hands.
So heres the trick. If you buy this house at a big discount and you go to sell it, you only sell it to the people
who think its a whole lot of baloney. And thats what I
did, and they paid $80,000 more for it, which was the
market price for the house, and then they bought the
house and I said, What do you think about the power
wires?
So, heres the interesting. These things, ladies and
gentlemen, are out there all the time and its the difference between people who get emotional when they buy
and sell, and the pure logistics, the pure logic. Now,
driving down the street in the little car and theres these
nice houses in the street. Look at that, nice houses, theyll
probably sell for full retail but look at the house across the
road. Wheres the door? There wasnt one. So no wonder
it was so cheap. No one could get inside. We had to go
around the back. Theyd bricked it in. They thought
they were going to add on an extra room. Got half done
and just, said, Oh look, just finish up, weve got a door
around the back, they can get in anyway.
Now, then you get these houses. These houses sell
cheap. These are houses that are sort of side-on so you
drive by and every now and then, if you ever see a house
like this, people dont like buying these houses and developers when they develop suburbs had the little sections
of land left. Like this suburb was built 30 years ago but
where the little sections of land are left, they cant get the
house facing the other direction so they put it like, butt

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Millionaire Phenomena - Property: RICK OTTON (continued)

forward right? So, there youve got this butt house and
these houses just sell cheap.
If youre a buyer and you have a choice of what house
youre going to buy, youre probably not going to buy this
house. It was funny, I was actually taking the photo of
this house and the agent just absolutely out of the blue
turned up. He was so excited because he thought I was
a potential buyer, and it was great because he could keep
his job.
This house was interesting. I bought this house and
it had termites. We did the pest and building inspection and heres what was very interesting. Something
to take on board here - when you buy house or a home
unit, quite often the agent will say, Look, would you
like me to organise your building and pest report?. This
is an absolute no-no. Do you think its possible that the
agent is going to organise a building and pest report thats
probably going to show theres not much wrong with the
house?
Yeah, because he wants you to buy it. So, we did a
building and pest report, and the first one came back and
it said theres no pests, the house was fine. And I dont
know what it was, but I just thought, you know, I tell you
what, I think Im going to do another pest report. The
first pest report was $90. I had another pest report done
and it was $145. The difference between the $90 guy
and the $145 guy is the $90 guy has probably got to do
12 a day and the $145 guy doesnt have to make as many
houses so he can spend more time, and he can put an
ultrasound on it.
Now when it came back, I said to the agent, I said,
Mate, Ive just had a termite report done on this house
and its full of termites. I thought you told me you did
a pest report and there were no termites. He said, Oh
mate, when we did the report, the termites must have
been sleeping. I said, Well weve got to do this.
So I went and saw, I spoke to the seller, and said, I
want to buy your house but Im going to need a termite
discount. And he said, Well, whats a termite discount? I said, I dont know. You havent given it to
me yet. So, he gave me a $50,000 termite discount on
the house. Now does anybody know how you get rid of
termites? With a cheque. It cost me $1,611 and all the
termites went to sleep.
Now this house a lot of people do extensions on

houses. This is a council-approved extension, its absolutely fine but youll see the house is a brick house but
they have not used brick for the extension. What happens is it doesnt make the house look appealing and I
bought this for a substantial discount because the extensions council-approved but people dont like extensions
added to houses unless they totally fit in with the dcor
of the house. The man who wanted to buy this house
came to me and said, Mr Otton I have one problem
with this house. I said, Whats the problem?. He said,
Im a brick layer. If I bought the house would you get
really upset if I rebricked this back room so it looked the
same as the rest of the house. And I thought about it. I
thought, no, no. Okay.
This is the last one Im going to show you. This house,
I bought this house for a big discount. The man who
sold us this house, he puts tar on the roads. He owned a
company that puts tar on the roads, you know, when they
spray that black stuff on the roads, put the tar down for
them? He had a few investment properties, he was a bit
tight on the money and he had to paint the house so you
can imagine what he did, how he painted the house.
He just thought it was cheaper to tar it and I bought
this house. Being a black house and it was the only one
in the street, I was able to buy it for a substantial discount
and what happened was, that was the gentleman and you
can see, he bought the house from us and theres a reason
Im saying this. When you make it easy for people to buy
houses who cant normally buy a house, theyll do everything they can to turn it into a home.
Especially if theres a woman involved, because I can
promise you, from the look of old Sam over here, he
would have left it black, okay? But his wife was saying,
theres no way Im going to be continuously living in
this black house. And so shes obviously been involved
in putting up the pot plants and I reckon he was in there
painting the place, improving the value.

How To Get The Seller To Pay Your

Stamp-Duty
So theres a bunch of different ways to buy houses at
a discount, and something, let me just say, when I buy
houses, stamp duty you should never have to pay stamp
duty when you buy a home. The government says that
someone has to pay the stamp duty and the transaction

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Millionaire Phenomena - Property: RICK OTTON (continued)

but it doesnt say that the buyer has to pay the stamp
duty.
So most of my students, when they buy houses, and
the way I buy houses, is you know when you go to McDonalds and you can either buy the burger or you buy
the whole packages and they throw in the chips and the
drink and the fries and stuff? Well its the same thing. I
like to buy a house with the stamp duty paid and so the
seller actually pays my stamp duty and it comes out of his
disbursement side of the statement at the time we go to
settlement. Does that make sense?
Sometimes people leave in furniture. I love people.
Usually when you sit on a house contract, Im going to
get off the track here and use up all my time but it normally says, you know, what are we leaving in the house?
The blinds, were leaving the stove and the floor coverings,
right? Well mate, I write into the contract, what are you
taking?
We walk in and say, youre taking the television and
then they just leave everything. Youd be surprised the
amount of people when you actually say to them what are
you taking? And they go, Oh, I hadnt thought about
that. Were going to Queensland. And then you look
at the husband and say, Youre going to be packing a
truck for three weeks are you? Oh, no, no. And youd
be surprised how many people will leave all their furniture
behind and throw it in as part of the package except for
bits and pieces they need and then you can make that a
furniture package for your next rental. So when you rent
the next house, you can rent it out and super-size people
up, just like McDonalds for the furniture pack.
Anyway, so get the sellers to pay your stamp duty. A
lot of people have started doing it now because Ive been
telling people to do that for a while and a lot of the legal
people are quite used to seeing this done.

My Convenience Store System To Making

Fast Profit from Real Estate
How do you make a profit when you sell? Now
theres a whole bunch of different ways people can make
profits when they sell houses. They can do these things
called DAs Developments, cut the back off blocks, they
renovate and they do a whole bunch of things. The only
problem was, ladies and gentlemen, when I started I
didnt know any of that stuff. I didnt know about DAs,

renovating, all that stuff, I didnt know. So I had to create

another way. Now, how do you make a profit when you
sell?
Well, I said, maybe I can provide the marketplace with
something they havent got. And I remember Allan said
to me once, he said, Rick, do it different. Figure out
what everyone else is doing, and do it different. And
he was so right. I remember we used to have to go and
knock on doors because when I used to work with Allan,
we sold insurance and I used to knock on doors. And
Allan used to say, when we told them we were from the
insurance company, and theyd like want to slam the door
and stuff, he said, never stick your foot in the door, always stick your head in the door because when they slam
it, you can keep on talking.
7-11. Anybody, is it fair enough to say that everybody
in the room, has anybody shopped at the 7-11 or the
convenience store? Yeah? Well, its more expensive than
Woolies, why are you doing it? Thank you. 7-11 figured
out that its never about price. Its all about what people
want. Its all about what people want. Why will people
got to the 7-11 and pay more? Do you know why theyll
pay more? Cause its convenient, they get it now, they
can get on down the road, they can get to where theyre
going to, they can get to their next destination or journey
in life. And the money is not the issue. The moneys
not the issue. 7-11 figured it out. Theyre all around the
world now.
Heres something else thats interesting. I went to
Hoyts Movies yesterday. Now, I said to the lady at the
Hoyts Movies, I was just trying to remember what movie
I saw. Oh that new one with Sandra Bullock in it, the
second one. Wheres the camera? Its not as good as the
first one. Okay, now. I said to the lady, What is the
difference with this between it being full or empty? She
said, $7.50. And I said, Well, how much is the popcorn that goes in it? She said, About 4 cents.
I know that to be right because a friend of mine, he
runs United Artists Picture Theatres in the United States
and they sell these packets of M & Ms for $2.75 but he
only pays 8 cents for them. I thought, this is interesting. Why are we prepared to pay $7.50 for this, we know
that Hoyts is putting that little popcorn in there because
you buy a whole packet in the supermarket for like 35
cents. They put about 4 cents worth of popcorn in there.
But we all pay the $7.50 dont we? Well up here, wed

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Millionaire Phenomena - Property: RICK OTTON (continued)

probably pay $6.50. Down there they let us have hire
purchase. We pay $7.50. But why do we do it? Is it
fair enough to say its because thats what we want to do?
Thats what we want to do. You know whats going to be
really terrible about this now, were going to finish today,
and heres what I dont want. I dont want to finish today,
someone go to the movie next week, be sitting there
with their popcorn, unable to concentrate on the movie
because youre thinking, God it only cost them 4 cents!
Okay? Its the point.
So, I had this idea. I said, well, what could I do different? I cant renovate, I cant subdivide, maybe I could
create value. And if I can create value, is the marketplace
prepared to pay for the value, and it all boils down to
what the value add is, whats it worth to the marketplace,
what do they want to do? Now, run with me on this. An
option is a choice to, but its not an obligation to. Its
something you can do if you want to, you dont have to.
Its just if you want to. Its the option to, its the choice
to.

The Rick Otton, No Money Down System

For Accelerated Real Estate Profits
What I want to speak to you today about is renter
homes. Renter homes, more technically known as lease
options but rent/buy, rent/purchase, rent/owns, and why
now? Because the market for this is the market timing.
Now I know that right now in Sydney, were having a sale
in Sydney, everythings 20% off and the market is moving
all round the country. Theyll probably push interest rates
up a little bit more, maybe, because they want to quieten
down an overheated market. So, the reason why lease
options or rent to buy is right out there is, its the most
flexible trading instrument that Ive ever seen in property.
Theres just so many different varieties. People say to me
all the time, my students say, Can I do this?. Yeah, if
thats what you want to do. Can I do that?. Yep.
Can you do this? Yep. Yep. Yep. Yep. Its a very flexible
instrument. And Im going to show you a few examples
today.
The market timing. Market timing for this will
become evident as I go along. Theyre easier to fund. Depending on where you fund your properties and how you
finance properties, these things, to get money for a rental
house, is very easy to fund. And what youre going to see
as I go a little bit further on, these can require very, very,

very little money, if any money at all.

Now, so the question becomes, why not just rent?
Well if were talking about rent to buy or rent/own, if
Im a landlord, do we have a few landlords in the room?
Yeah? Thank God Im in the right room. Okay. If were,
funny if were all share market people why not just
rent? Well that depends on what your exit strategy is. I
never, never, never, never, never buy a piece of property
and go in if I do not know where the exit is. If I do not
know how Im going to get out of it, why Im in it, I
wont buy it. And I think one of the things weve seen in
Sydney, a lot of people have jumped into a lot of properties, theyre losing a lot of money at the moment and then
theyre wondering why they ever went in it because they
didnt plan the exit strategy when they went in the front
door.
So its a little like when you go into the movie theatre. You always look when the exits are, so how youre
going to get out when the guy starts smoking next to
you. Now, so why dont you just rent? Well it depends
on what your strategy is. You might, if your strategy is I
just want to buy and hold because you feel the markets
in a rising market, absolutely. You might decide though
if its not a rising market or the capital gain returns or the
profit margins have become significantly reduced, you
might decide, well, thats not a good strategy right now
because Im negatively geared, Im losing a whole bunch
of money, Im not making enough tax deductions. It just
doesnt make sense. So it all boils down to, what is your
exit strategy?
So lets have a look at why sellers would ever want to
do a rent to own or theres a more technical sense, a loose
option. Some of this isnt as clear as Id like it to be so Ill
just talk a little bit about this. Youre appealing to a very
large pool of buyers. If you put a sign out there that says
RENT, you get some renters. If you put a sign out there
that says IM SELLING, youll get some people who want
to buy.

How To Create Your Own Mini Property

Boom Even In A Flat Market
But if you get a RENT TO BUY or RENT PURCHASE, you get all the buyers and all the renters. You
get a bunch more people who want your property. You
havent segmented the market. When you dont segment

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Millionaire Phenomena - Property: RICK OTTON (continued)

the market, ladies and gentlemen, what do you reckon
happens when youve got too many buyers or too many
people who want in and too few product? Price goes up.
Yep. You get the price you want. You dont have to sacrifice the price because youve got a bigger pool of people
who want in.
Depending on how you structure these things, well
talk a bit more about this later, how you put them together, and where you get them, no agents commission,
so as the seller youve got to move this property on down
the road, your costs of getting out are much, much, much
less.
Ive got the next one, it says test the buyer before vendor financing. There are some people in this room who I
know are in the vendor financing business and extremely
successful at it, although some of them are a bit shoddily
dressed Ill have to speak to them later. But Ive got
one, the lady I bought a house from a real estate agent
who called me up some time ago and he said, Look,
this lady owns the house, shes gambled at the casino and
theyre going to foreclose on it in the next few days, can
you do something about it? And I bought the house and
I said to the lady, Look, it is your house. Would you
like to stay here? And she said, Yes, Id like to stay. So
I said, Look, why dont you stay as the tenant, at least
you dont have to move out of your own home. At least
youve still got your home. Now, then shes rung me up
and shes said, Look Id like to buy the house back.
Is there any way I can vendor finance it? Make payments to you? Because shed wrecked her credit by gambling the house away, she couldnt get any credit to get a
loan and she simply said, Could I, we buy house, vendor
finance of the house?.
Well, here is my concern. If I vendor finance her
the house and shes just gone broke because she couldnt
make payments to somebody else, maybe shes not going
to be able to make payments to me. So I said, Look,
why dont we do this. Why dont we try before we buy.
Let me set you up on a rent to own and you can make
payments to me on a rent to own so if it doesnt work for
you, youre just a tenant, you just move out. And if it
does work for you, you can buy it. But youve got no obligation either way. So its try before you buy. I also get
to try before I buy. Im not committed to providing this
person with a contract on the house and Im not committed to vendor financing them a house. I can see how their

payments go. If theyre all right with their payments, Ill

do this.
So, in this case, what shes doing is shes doing a rent
to buy for two years and if the payments are on time and
good, in two years it will automatically transfer over into
vendor financing, which Im happy to do. So, you get to
test a buyer if you like, if youre thinking about vendor financing a house to somebody. It also moves an unsolved
property. If youve got a property that you just cant sell
because its one of those properties that I showed you
earlier. Doing a rent to own to somebody, youre getting
a person whos not just renting, theyve got the opportunity, if they want to, to buy that house? Boy, youll find
that moves that house very, very quickly. Weve still got
benefits to the seller.
Usually when you do a rent to buy to somebody, if
youre the seller, the persons going to give you some money. Theyre not going to give you a deposit, theyre going
to give you some money. Some up front money to say,
Look, I dont know if I want to be a tenant and I dont
know if I want to buy but Im prepared to pay you some
money up front so that I can have the choice. People like
choice, people like to pay the money to have the choice.
Delayed settlement for tax planning. This is really
important guys. If you buy and sell and trade properties, as you know, we get whacked with capital gains tax
within the first 12 months. I think we pay a much higher
capital gains rate here, within 12 months. If you do a
rent to own, a rent/purchase but the settlement doesnt go
through until after 12 months, youll find it considerably,
makes it differential to your tax position.
I know in the United States, when I buy and sell houses, if I buy a house on Monday and trade it on Tuesday, I
get whacked for a massive amount of taxation. If I let the
buyer, whos going to buy it from me anyway, do a rent to
buy, so he doesnt actually buy until 12 months and one
day, my taxation drops through the floor. I pay very, very
little tax. So for a lot of people, this delayed settlement,
their tax plan.
You can decide when that person can exercise that option. They actually buy, and thats when you get triggered
for tax. Its fast. Its pretty quick. The average person
who goes to buy a house, if they want to buy a house
from you, youve got to put it out on the market for a
couple of months, then theyll get some people to tyre
kick it and then theyre going to take six weeks to get a

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Millionaire Phenomena - Property: RICK OTTON (continued)

loan or do the papers and all this sort of stuff. With this,
youre probably done in ten days.
You may have a tenant who may improve the value
of the property. Im going to show you a couple of these
today, and youll just see what some of these tenants did
to improve the value of these properties. And you can
receive above-market rent. Now, thats what is in it, why
people may consider as a landlord as to why youd want
to consider offering someone a rent to buy. So the next
question is, why would somebody want to get involved
with you on a rent to buy basis. Because its all about
solving peoples problems.
You cant, Ive always found over the years, if I go in
and I try to say to somebody, you know, Ill give you a
lot less money for your house, theyre not interested. But
if I solve the problem and find out why theyre selling
the house and what theyre trying to achieve, and then I
solve the problem for what theyre trying to achieve, the
price they get for the house is not as relevant. I find that
when I offer houses to people, if I find out what theyre
trying to achieve, if I can give them what theyre trying to
achieve, thats much more important than the price. The
price consideration comes back to the popcorn. What is
it you want? I want to chew popcorn because I like doing
that.
So its all about solving peoples problems and here we
have a situation where, sorry, Ive got the buyer here who,
Im standing there with him, and oh, can I just make a
little point? Do you notice how, Ive got a buyer whos
speaking to me about why he wants to do a rent to own
with me. And hes come to look at my house to do a
rent to own. And youll notice that, rather than standing
across from him, do you notice how Im standing next to
him? What happens is, if I stand next to this gentleman
right there, the house that were talking about becomes
the third position.
Does that make sense? So were now both looking,
solving the problem which is the third thing. If I stand
opposite that man, sorry Ive got off the subject a little
bit, if hes talking like this and I talk to him like this,
Im in pure confrontation with the guy. Were across the
fence from each other. But if were both standing like
this, talking about the house over there, and solving the
problem, now suddenly were both on the same side. So
its just a little bit of body language there.
But thats whats happening here, so this gentlemans

telling me hes a car dealer, he owns three car dealerships

hes involved in, he cant get financing because of the way
the companys structured and how hes paid and all these
sorts of things, and he cant get in, hes in the car business.
So, I said, Well, do you want to rent this house? Oh,
maybe I do. Do you want to buy it? Well, can I have
the option to do that? Yeah, okay. Whats the price
going to be? Well, lets just work it out. And thats
just what were going.
So then we get down to whats the benefit for the
buyer? Okay. From a buyers point of view, if a person
comes in and they want to do a rent to buy and they go,
yeah Id like to rent to buy, well, what they do is they
actually get to save up a deposit with a seller for future
financing. So, what they could do is, Im going to show
you an example of this in a minute. They get to save
up, they cant get the financing now but they can get
the financing down the road. So for instance, the seller,
the rent/buyer might be giving you money every month
and the way youve put the paperwork together, is in 12
months time he can go and get a loan for say 95% at the
bank. Well, you can show youve already collected the
other 5%. Does that make sense?
So heres the seller, youve already got 5% because hes
paid you some money, hes gone to the bank and got a
90/95% loan, whatever it is, and you as the seller can
show the paperwork to show youve got the other 5%. So
he can save his deposit with the buyer.

Buyers Love My System Because They

Lock-In A Future Value Up-Front
The other thing is too, the reason why buyers like it,
is they can lock in the future price up front. Now this is
very important because theres a couple of different ways
people do this. The way we always do it, we buy houses,
we tell people right up Day 1, you can buy the house if
you want to and here is the price. If the house races up in
value, who do you reckon gets the profit? He does.
Now, what does not work is when people say, Well,
we will figure out the price based on an 8% increase every
year and a margin, some sort of formula that says, what
I called the Rubber Carrot formula which is the person
never gets the thing. Ive seen this done where people go,
Well you can rent it for a couple of years from me but
the price will be based on what it is today plus 8% every

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Millionaire Phenomena - Property: RICK OTTON (continued)

year. Well guess what, in the Sydney market, how many
people do you reckon are going to ever get to exercise
and own that house. Its not going to happen. Its whats
called the Rubber Carrot.

Buyers Go Crazy With My System

Because They Can Try Before They Buy
We always like to keep it cleaner and have the paperwork very clear and straight up. Thats the price. If youd
like to go along, thats it. Youll see a couple of examples
where this works really, really well for people. Again they
can try before you buy. Some people, and Ive been there,
I have a place at Kirribilli across from the Opera House
but I dont live there anymore. Ive had to move because
when I jumped in there and I bought it, I didnt know
that every Saturday night at 11 pm, all the little disco
boats come by.
Right, this bopping thing, and Sallys going, oh, come
on Johnny, go on, no, no, no, one more drink, go on
Mary. You end up yelling out, go on Mary, go out with
Johnny. The thing is, thousands of these little boats
Sydney Harbour is so noisy, trying to watch a movie on a
Saturday or Friday night is absolutely impossible.
Now, do you think I might have been better off trying
before I bought? So Ive had to move around the corner
to McMahons Point, right around the corner and rent
Kirribilli, and then if I rent Kirribilli, the people will be
up, and theyll go, the little party boats are loud arent
they? Yeah, they are.
They just say, do you mind if I just rent it for a while
but we agree on the price now so that as I get used to
it and I like the neighbourhood, I can buy it down the
road? Absolutely. A lot of people love to do that. They
just want to get the feel, feel comfortable about the house,
before they commit. They might never have bought a
house before.
Also, for investors, you can control the property for a
very small deposit. You can start controlling properties
for a very, very small amount of money invested in the
property which well look at. And from a buyers point of
view, do you reckon there might be a few buyers out there
who are just sick of paying dead rent? Goes nowhere.
How many buyers, tenants go, Im always paying this
dead rent. I want to buy a place.

Well under a rent to buy, they can do exactly that.

Also, no legal fees or stamp duty. Thats really important.
For buyers, they start getting into $300,000 or $400,000
houses, I know down in Sydney, the stamps are about
$13,000. If they go into a rent to buy, there is no, virtually no legal expense and no stamp duty. Thats great.
And for those people who need to know, its very hard
for lawyers to attach the asset. Ive had a couple of people
who buy properties under a rent to buy with their option,
by the way, I cant get out of it. If they decide they want
the house, its theirs. I cant change my mind but guess
what? Its really, really hard for people you dont want
to know, to know about what assets you have. You can
renovate to sell without tying up cash. Im going to show
you a couple of those. A lot of people, when they go to
renovate, by the way, people who renovate is there anyone in the room who actually renovates, knowing theyre
going to renovate then sell the property? Has anyone ever
done that? Okay. Did you go and get a bank loan to do
that? Well heres something to think about. Why would
you go through all the expense of getting a bank loan,
simply because youre going to renovate the house and
then youre going to sell it.
This way, ooh, you can renovate to sell without tying
up any cash. You can be the rent to buy, youve got it
guys? You renovate the whole place and Im going to
show you this, right, and sell it, you didnt have to get any
bank loans. Do the whole thing.
Now, the other thing is the rent is set. The payments
dont go all over the place. When youre paying a mortgage, the interest rate goes up. What happens to your
payment at the bank? It goes up. With these, its set.
Once youre locked in, thats it. Im paying you this, Im
turning this house into the Taj Mahal, putting seven more
bedrooms on it, putting more subtenants in there, but the
rents set, and from the buyers point of view, its pretty
fast to move in.
Okay. Lets look at a couple of practical examples
with some real people. This is how it worked. I paid
$220,000, Im taking you through the steps of the basic
and were going to work up into something a little bit
more sophisticated, Okay? But this is the very, very start
off. Okay, so house was $220,000 and I got a loan for
$184,000. Just went and got a loan for $184,000. The
first one. Now, the people come along and they gave
me a $20,000 option fee. And the option was, can they

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Millionaire Phenomena - Property: RICK OTTON (continued)

move in? And can they have the option to buy that house
down the road for $250,000. Okay?
Can I have the option to buy the house down the
road? Now I bought the house at a discount so they
want to know, if they want to, can they buy that house
down the road for $250,000? Was it worth $250,000?
Yeah. To them it was. Was the market $250,000? Yeah,
probably was. $250,000, thats where the market was.
So heres the interesting thing. Do you know, anybody
know why they gave me $20,000? Not because I asked
for $20,000. The people turned up and they said, can we
have the house? And I said, Well, yes, let me run an application and check with your old landlord to make sure
you pay your rent on time.
Because you like to check with the old landlords to
make sure with the real estate agent that they paid the
rent on time. Its always important, just make sure the
people have been good tenants because youre going to be
a tenant of mine and I said, Well how much have you
got to get started? And they said, $20,000? And I
said, Okay and they gave me $20,000 and that moved
them into the house and its a silly thing but I never say to
people on a rent to own, its $5,000 or its $6,000 or its
$7,000 because Ive actually found that I get to know a
lot of my people very, very well and a year down the road
and youll say, I couldnt understand why you only wanted
$5,000 for you to move into your home because I had
$75,000 sitting there from my Workers Compensation
claim. So now Ive just found its better to say, well how
much have you got, and youll be absolutely staggered.
Today Tonight did a story on our company, we had
4,000 enquiries in 24 hours. We had people up there
with $105,000 in cash they just wanted to put down and
move into one of our houses.
So people have a lot of money. In actual fact, Im
absolutely surprised how many people in Australia get
Workers Compensation payouts. So many people move
into their homes and say Im just waiting for my Workers
Comp payout because theyve usually hurt their back or
something. And usually if Ive got to go and pick them
up, pick up the cheque, theyre usually up on the roof.
Now here is the paperwork. The greatest thing about
this, and this is what youre going to love guys, do you
know when you buy and sell a house, the lawyers do the
paperwork. Guess what, its the same thing. Im walking you through this thing so you have an understanding.

Let the lawyers do it, I dont do this stuff. Here are the
three things youre going to have. Youre going to have a
standard rental agreement, it is a standard residential rent
agreement, nothing fancy, standard residential rent agreement.
Theyre going to have this other piece of paper, couple
of forms called The Deed of Option which is the piece of
paper that gives them the right to buy the house. And the
other thing theyre going to have is just the sales contract
for the house which basically is the contract filled in, that
says here you go, if you want to buy the house down the
road, when youre ready, theres the paperwork. And its
in rough form, but the lawyers do it. And youll see my
paperwork in a little minute. But thats the paperwork
you need. Those three things.
Now, this buyer has moved into my house, right? Hes
given me $20,000 to move in, hes been there for a little
while, the next screens a bit of a surprise so I wont think
what are his exit strategies? What can this guy do, after
a couple of years, hes got to make some choices. What
do you want to do? Do you want to move out, do you
want to stay as a tenant? Do you want to buy the house?
What are his strategies? Well, he can go and get bank
finance and he can just pay me out and get a loan.
Yeah, okay, we want the house, we really love it, weve
bought a dog, fallen in love, well just get some bank
financing. Or, theyll say, well its been a couple of years.
Can we renew the option and go for another couple of
years? Yeah, they can do that. Could we just stay as a
tenant? Could we just stay as a tenant? Um, sure. Yeah,
they can do that. Can they sell the house? Absolutely
they can. They can sell the house. Theyre absolutely free
to do that. They can move out. Oh, dont like it, you
know, we got into a fight with the neighbours next door
or whatever, they killed our cat, whatever, they move out.
Or they can get, they can say to you, look, could you
finance it for us?
We cant get a bank loan right now, is there any way
you can finance it? And me being the seller, sure I could
finance it. Does it make sense guys? About six different things can happen. In this particular case with these
people, heres what happened. Whatd they do? They
stayed for about 18 months and then they sold the house
for $320,000 to somebody else. Now, bit of a quick
quiz. Does anybody remember how much they owed me?
$250,000. Great. Theyve sold the house for $320,000

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Millionaire Phenomena - Property: RICK OTTON (continued)

to somebody else. Okay? Now the bit above the $250,00
to $320,000, who do you reckon gets that? They do.
How many bank loans did they get? None. Okay.
Now, here they are, living out of their house. Made
$70,000, theyve made $70,000 on the house, theyre
moving into the next house. There is the sign, the little
real estate agent came in, so they didnt do it themselves.
The little real estate agent came in, got them a buyer for
$320,000, packed up the truck and off they go. I even
followed the truck and they went to a big five-bedroom
house. Okay? And because they had such a large deposit
now, they had $70,000, they were able to get themselves a
low-doc loan. Does that make sense? So they got a lowdoc loan, When they did all that, I got $51,000.

Secrets The Banks Dont Want You To

Know...
Now, I want, some people wont know about this,
substitution of collateral. Write this down, its really
great. It means that if you have a loan, once youve been
given a bank loan, you know how much paperwork we
go through to get a bank loan? Well once you get a bank
loan do you realise its yours for life? Thats it. You only
ever qualify for it once. People dont get this. Once you
get the bank loan, the bank loan is yours for 30 years,
regardless of what you do with it. And you know what
you can keep doing?
Taking it to the next property, to the next property,
to the next property. I know it sounds crazy but you see,
they have substitution of collateral. Now, its written in
50% of the home loans and its not written in the other
50%. If its not written in, just say to your lender, could
you please put in substitution of collateral for me or Ill
go down to Westpac. Substitution of collateral means that
you can find another house. So when you sell house 1,
you can transfer the loan to the next house.
So, heres what that means. Youre doing really, really
well now and youve got 5 or 6, lets say you do lots of
these, and you get like 5 or 6 of these and all these people
have got these rent to buys and stuff, when the rent to
buy people move on, youve still got the loans. You with
me? And you dont have to requalify. You just keep going
the loan to the next house, to the next house, to the next
house.
So eventually what could happen is, you can be ab-

solutely out of work, be back down to your shorts and a

T-shirt with no job for the rest of your life. Right? Youre
an absolute wipeout because your business went crook,
youre unemployed, youre over the age of 95, no one will
employ you anymore and they cant take the loans away.
Youve got those loans for the rest of your life.
So, substitution of collateral, its so great and you can
just keep these loans forever guys, and we all dont know
whats going to happen with our lives, so you never know
when you might need a loan in your back pocket. Okay.
How to buy a property with very little cash, no credit
or bank finance. Now before I go into this. Ive got to
stop here because theres two stages to this whole exercise.
The first stage was, remember I got a house, weve got the
house and youre going to rent it to this person down the
end of the table who may want to buy it.
A rent to own lease option on this one. And in the
first stage, you went to the bank and got some money, or
you went to a lender. You with me so far guys? Standard
rental house. All right. Were going to mess it up a little
bit. A sandwich lease is when a person rents from the
seller at one price and then sublets to a tenant buyer at a
higher price. This is what happens. Remember how you
got the loan from the bank and now youve rented this
house. What if you did this?
What if you rented that house from this man? And
this man had rented you this house, and then you would
just sublet it to this person. Does that make sense? Okay.
Depending on where you are on your different leases,
I know the New South Wales lease says Landlord wont
unreasonably stop someone from subletting a house.
Theyre all different youll find, or youre just writing
your lease that you have the right to sublet. Some of
them already have it depending on what lease youve got
around the different parts of the country.
What youve got is, youve got a situation where youve
just decided that you, you might have decided not even
to rent to buy lease option with this guy. You decided that
this man, you liked this place, six months ago you rented
this place from this man with the option to buy, and lo
and behold youve been transferred to Western Australia.
So youve put a little ad in the paper and a stick out the
front and youve said, maybe somebody wants to pay you
a higher rent than what youre paying this man because
this man gave you really cheap rent because he liked you

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Millionaire Phenomena - Property: RICK OTTON (continued)

and you put in some pot plants, and youre getting below
market rent.
Would there be some people, anybody here who rents
and they think they get below-market rent from their
landlord. Yep? Okay, good. So it happens. People get
below-market rent. Youve decided youre going to move
on and you just say, who wants to rent from you? And
this man comes along and pays you more rent than what
youre paying this man. Okay. You have the right to buy
it from him, and this person has the right to buy it from
you.
Let me walk you through the people involved. Here
we have a seller, here we have what motivates the seller.
Okay, whats going to motivate the seller? Hes got a
vacant property. Again, Im reinforcing what Ive already
come back to before but its just reinforcing some of the
stuff. Hes got a vacant property, he cant get rid of it.
Theres so many, theres no tenants anymore. They all
went and bought houses. He doesnt want to sell it but
Ill let somebody rent it and maybe if they want the option to buy it, Ive got more chance of getting someone.
Voomp! Itll go very quickly.
Youre an unhappy landlord, you just want to get out
of the whole show, you just dont like this whole renting
business. The cost of maintenance, rates, insurance, the
costs of operation are just killing you. You just dont want
to do this stuff anymore.
Youve inherited an unwanted property. A lot of people
inherit properties. They just dont want to be in that
business. Okay.
Loss of job, I tried and failed to sell it. Youve tried
to sell it, Im going to show you some great examples of
people who have tried to sell houses and because they
couldnt sell it, theyve said to me, look would you like
to do a rent to buy on it? And Ive said, well okay. Well,
actually I made the suggestion to them and they said how
does it work?
Negatively geared. A lot of people dont want to be
negatively geared right now. Theyre stuck in bridging
finance, property has little equity. They know that by
the time they, gee, by the time I pay the agents fees and
all the holding costs, Ive got a $300,000 house, I owe
$290,000 on it, theres virtually no equity.
By the time I keep making these payments, paying

agents commission, Im going to be bringing money to

the settlement table, I dont want to do that so maybe I
could rent to buy at $300,000 and when he exercises, he
just pays me the $300,000 and pays out my whole loan.
And I dont lose any money.
Debt relief. They just want the pain to go away. They
simply cant afford mortgage payments and Ive got a
couple of examples of that. Theyve got financial problems. The investor, so Ive said theres three components
here. Weve got a seller, landlord, were going to have an
investor and a buyer.
So, whats in it for the investor? He can buy property
with very little cash, no credit or bank financing. Im
going to guess thats what some people in this room are.
Youre the investor, thats why you want to be involved.
Theres buyers, just happy people, just want to buy a
house. Just want to do a rent to buy, want to buy a
house, the wife says Well you know what, Im not too
sure, can we rent it for a while and if we like it well buy it
towards the end of the year. Thats fine.
Benefits for the buyer. Why are they doing this? Ive
already been through this. Again, its just pure reinforcement. Theyre saving up a deposit, theyre locking in the
future price, they can try before they buy. If youre the
investor, they can control probably a small deposit, reduce
dead rent.
No legal fees, went through this, the rents set and
its fast to move in. And they can renovate. And those
people you just saw standing there in that doorway,
theyre renovating a place. Yeah, thats great, theyre in
there. Theyre renovating it, putting in some paint and
carpet, cleaning it up and all that sort of stuff.
Now, here are some real-life examples. This gentleman, I was shopping for some houses and I was out
looking in a real estate window, just looking as you do,
just looking at the little boxes, and this gentleman came
to the real estate office on the outside and he just had a
look about him, and I mean Ill talk to anybody, Ill talk
to a blind dog. And this guy comes, and he just had this
funny look about him, what are you doing, are you buying or selling or what? He said, Im going to sell my
house.
Are there any real estate agents here? Ive got to sell
my house. Are there any real estate agents here? And I
said, Well, I can understand what youre saying. be-

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Millionaire Phenomena - Property: RICK OTTON (continued)

cause if you ever try to ring a real estate agent, notice how
nobodys ever there and no one can tell you the price of
a house? Whats the price of the house? Im sorry, all
the agents are out right now. Theyre in a meeting.
When I sell houses I always reckon you put the price
on the sign. Its a little bit like food. I want to know
what Im paying and I figure if I put the price on the sign,
and the people ring me from the sign, I kind of know
they can afford it. Does that make sense? I dont get all
the people who cant afford it because the price is on the
sign. Now, just imagine if you went and bought your
food and you turned up at the checkout and she said,
Well, what have you got? And you said, I dont know,
how much is it? Well, I dont know.
So I put the price on the sign and its a little bit like
when you call real estate agents. I dont understand it.
You call them and you say, can you tell me the price of
the house? And they go, Im sorry, all the agents are in
a meeting. And then if you want to speak to, oh by the
way, if you really want to know about a property, ask the
agent is he the listing agent for the property.
This is important. If you want to find out about a
property, why a persons selling, what their situation is,
you want to be speaking to the listing agent. Okay? Because he knows all those details.
Now heres something else, while Im on it. If an
agents taking you out and telling you what a deal this
house is and youve got to buy this house, its the best
deal, ask him, is it his listing or somebody elses listing. If
its his listing, he gets double the commission. Now, do
you reckon its just possible that the best deal in the office
happens to be his listing? Yeah, so ask the question. Is
that your listing or someone elses listing? I feel more
comfortable sometimes with someone elses listing and
yet its still the best deal in the office. Cover those sorts of
little things.
So this gentleman, we started chatting and I said,
Look, we could probably go in and look for an agent
but Im sure theyre all in the back room hiding. So he
said, Look, Ive got to sort it out. And I said, Where is
it? And he said, Oh, its just out here at Bidwell. And
I said, Why have you got to sell? And he started to tell
me. People who have to sell, will just tell you why theyve
got to sell.
He has a tenant, the tenants keep moving out, he

owned the family home, he bought it as an investment

property, he took, refinanced the family home up to all
its top debt to buy the investment property, cant keep
the tenants in there and now hes lost his job. Now his
wife has to be paying all these mortgages and working 24
hours a day and things arent really happy at home. He
needed to get out of this property but the problem is, hes
tried to sell it before but the markets no longer going up,
its going down, hes got to be able to cover the mortgage
expense.
I just basically said, Can we go have a look? So, he
said, Do you want to buy it? And I said, I dont know,
lets go have a look. And thats all we did. So we went
up the road, and theres the house. Went up and looked
at the house.
Then I said, Look I tell you what I can do. I dont
think I can buy this house but I tell you I think we could
work together. You told me what the mortgage was, why
dont we do this. Let me work with you, what are the
payments on the house? He told me what the payments
were, he has a mortgage of like $247,000. I said, What
are the payments on the house? What do you have to get
covered?
What if we could do this. I can get these mortgage
payments covered and get all your outgoings covered so
youve got no more expense on this house and you get
peace of mind. But look, let me tell you what Im going
to do. Im going to find another family and Im going to
put them in this house and theyre going to make payments to me and Im going to make payments to you and
theyre going to get looked after. Now what Im going to
do is, Im going to get these people in a position where
after theyve made a series of payments over a period of
time, Im going to get them into their new bank loan and
when they get into their new bank loan, that will automatically wipe out this loan and the issue youve got.
Let me walk you through this again. I said heres what
well do. Lets work together on this as a team. Ill organise to get these things covered. Youll have no more outgoings, no more expenses on the house, but what I need
to do is, before I can do this, I need to see if I can get
another family who wants to get a home who cannot get
a home today or I want an investor who wants another
home whos happy to come in and make some payments
to me so I can make payments to you and down the road
well get this guy refinanced into his own bank loan and it

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Millionaire Phenomena - Property: RICK OTTON (continued)

will extinguish everything and it will all disappear.

the lawyers sit around the table and do it for you.

The man wanted relief from a problem but I said,

heres what were going to do. I said, Im going to need
time. He said, Yeah, but hang on, whos making the
payments today? I said, Well, the house is empty, you
are. Im going to need 4-6 weeks to see if I can get the
right person. Now if I cant, I cant. But if I can, I can
and it will solve all your problems. But in this situation
right now, are you going to be any worse off. Whos making the payments today?

Now, this house here. This is one Im doing today, as

Im speaking to you today, this one is happening at the
moment. All right. I was simply driving down the street.
This is not a fancy story. I was simply driving down the
street in my car. Now, the guy was sitting, [audience
speaks], different car but I didnt want you guys to think
I was a yuppie. And the guys standing in the front yard
of this house. I just drive up and I just said, Hey, selling
your house?

He said, he is. So if I cant get anybody tomorrow,

whos making the payments? He is. Hes still making the
same payment. So I said, okay, heres what Ill do. We
organise the paperwork, you go and see the lawyer and organise the paperwork I need. I need the deed of option,
I need a contract for sale, a contract selling the property
to me or whoever I want it to go to and I want this rental
agreement.

He said, yeah, yeah. I said, Well my wife and I were

thinking about moving into the area and by the way I
never try to negotiate prices behind an agents back with
a seller. I wont do that. But Ill talk to people about
houses. Ill chat to them about houses, but people are
funny. Some people who own a house and want to sell
it, will talk to you for hours about their house. Other
people go, oooh, a buyer, and hes not with the agent.

And he went away and got all that created for me. As
I said, lawyers do all that. Him and I dont have to do
that. He just goes and gets that. All Ive got to do is go
to the marketplace and I sign an undertaking that says
Upon me entering into some paperwork with some
other people, Im happy to complete entering the paperwork with him. Does that make sense? But I get that
right up front.

Anyway, were just chatting. You know, whats the

neighbourhood like? What are you doing? Where are
you going? Blah, blah, blah. And he was just saying, hes
moved around the corner and doesnt live in this house,
hes got tenants in this house and chatted some more and
then he went on about, has it been on the market long?
Blah, blah, blah, and in a quiet market, if houses dont
sell, who do the house sellers usually blame? The agent.
Oh. Agents cant sell the thing, Ive had no offers. No
people coming through. When houses dont sell, people
will always blame the agents and the house wasnt selling. So were just chewing the fat on the front yard and
talk, talk, talk, talk, talk. And I just asked him a couple
of things about the house and he said, Do you want to
come in? And I said, Oh, look no. I dont know what
Im looking for. Just popping around. And I think I
might have said something to him like, How olds the
stove? or something that made the guy say, and I find
this too from sellers, sellers will go, and he eventually
said to me, Look, speak to the agent but if you need any
more information on the house, just call me.

Im not going to go in to a lot into the legalities of

this. Im going to walk you through, you have an understanding of it but as I said, lawyers do it all. What youve
got is your new man has the rental agreement with me
and I have a rental agreement with this gentleman down
here. I have the right to buy that house from the man
you saw for $X. The person has an option to move in
to buy the house from me at $Y. He pays me Y, I pay
this person X. Okay? By the way, if this person down
the road decides not to buy off me, they just say, I dont
want to buy it, Ive just decided not to, am I under any
obligation to buy it from the other fellow? No, so I said
lets get this looked after, lets get these people to look
after it. Well create a system here. Im under now obligation but if I can, I will. The reason where its blank is because we have a situation where we have the contract that
goes from the seller, hold onto me and when this man at
the very end decides to exercise and says he wants it,
you want the house, the contract just gets passed across.
We dont need to go much further on this, simply because

And I sort of gave him my business card and we

swapped business cards and all that sort of stuff, and he
rang me about a week later. And he said, I dont know
if you remember me. You came and saw my house. I
said, Which house was it? And he told me. And I said,
Hows it going? He said, Oh, mate, still havent sold
it. You know, blah, blah, blah, blah, blah. I said, Yeah,

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Millionaire Phenomena - Property: RICK OTTON (continued)

I looked at a few different houses that day and the markets quiet isnt it? He said, Well yes, the markets really
quiet. I said, Look, Ive called the agent and shes off on
Mondays and Thursdays. He said, Look, as far as Im
concerned, why dont we just work something out and Ill
work out something with the agent.
And I said, Oh well, if thats what you want to do.
And he started to tell me about and heres the thing
one of the most important things theres three or
four questions I always ask. Why are you going to sell it?
Where are you going?
Now, heres what I do. If you say to people sometimes, why are you going to sell it, some people will sort
of cross their arms and get really, really defensive. So I
dont say that. I might say, dont tell me youre selling
and going up there to Queensland because thats where
the Big Pineapple is? And I know that sounds silly but it
breaks down peoples defences down. They go, Well, no
were selling because of blah, blah, blah, blah, blah. You
know, Aunty Giseldas just died or my wifes run off with
the postman, I dont care.
But people will start telling you stuff if youre pretty
open. So I dont say why are you selling, its too confrontational. Ill say, Dont you tell us youre selling and
youre going up to Queensland with that Big Pineapple.
And as silly as that is, and then theyll start telling you
why theyre selling, what theyre going to do with their
life. And this particular case, the guy has the other house,
he has the first and the second mortgage on his house and
he has debt on this house of $265,000. Thats $265,000
worth of debt on this house and I just said, and it all sort
of further came out that his wifes not working and he
cant really afford these investment houses at the moment.
The market wasnt what it used to be, and I said, hows the
agent going? Hasnt the agent been able to sell it?
Now, heres the interesting thing, ladies and gentlemen. He hasnt got much equity in this house. I reckon
this house is worth about $260,000. Okay. He owes
$265,000 on it, the house has only got, my feeling is
about $260,000. Im not going to tell him that. In actual
fact, if you ever go in, oh, sorry guys, let me, if you ever
go in and look at peoples houses, this is really important.
A lot of people go in to see a house and to get the price
down, theyll walk into the house and theyll go, Look at
this, oh thats worn out, look at that, kick the kid, walk
into the backyard the fence has fallen down and they

start ridiculing peoples houses, thinking that will help

them get a discount.
Let me tell you what that really does. That just really,
really irritates home owners. Home owners, if you all saw
the movie Castle, its absolutely true. People believe that
their house, as bad as it is, is the greatest kingdom in the
world. And Ive always found that Ive had much more
negotiations with sellers, much better negotiations with
sellers when theyve really, really liked me, as someone
who saw the house as against someone who went in there
and started picking holes in their house.
A lot of people dont get this. They go around picking
holes in the house, thinking that the seller doesnt notice.
The seller knows whats wrong with the house. I mean, if
Ive walked into a house and I will go straight through the
rotten floorboard into the basement, I will jump up and
Ill say, Isnt that fantastic. Its got a granny flat down
below. Right? And Ill chat to people, Ill talk to people,
Ill go into a house, the time I like to inspect houses is at
6 oclock. Do you know why I like to inspect houses at six
oclock at night? The sellers are always there, having dinner. The agent takes you in, the sellers are always there.
Normally what the seller will do, youll turn up with the
agent, you walk in the front door, the agent goes, Hello,
bringing a buyer through and the seller instantly grabs
the dog and they go straight up the backyard and hide behind a tree, while you go and inspect through the house.
The first thing I do, I go running out straight there after,
big smile, going Hello Mrs Smith. Did you wallpaper
that yourself? I just love those colours.. Well, yes I did
actually. And look, can you tell me who did those hardwood timber floors down there. Would you know who
did that? And then they kind of like, see theyve never
been treated this way before. So they look at the agent
and they think, why did you sort of bring someone whos
like one sandwich short of a barbecue. And its like, and
heres the thing, theyll remember you. And Ill ask them
stuff about their house.
People will chat about their house, tell you how I did
this, I did that, I did this. And guess what happens with
people? At the end of the day, when theyre looking at
offers on the house, people, they will do this, if the offers
are close, people will go, Ive watched them do it, Ive
been involved in it, Ive just sat there. People will go,
Yeah, but do you know what? I remember that guy, he
was a really nice guy. I really felt he respected me and I
think hed look after the house and those other people

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Millionaire Phenomena - Property: RICK OTTON (continued)

they brought over, he was just an investor, what a jerk he
was. I would never sell him my home. People sell you
houses.
Im off the subject of lease options a little bit but its
all about just speaking of sellers and stuff and even if you
go through the agents. So chatting with this guy, and I
said, Look, heres an idea. Could I do this, because you
told me about your mortgage payment, your outgoings
and this and this, is there any way that I could just, what
do you owe on the house? And people who want to
sell houses, chat out the front, Oh $265,000 and you
know, I said, Could I do this? Could I sort of like, I
havent got, Im short of $265,000 at the moment. He
said, How short are you? And I said, The whole lot
but what I could probably do is, if I could just make the
payments for a while and Ill look after all your expenses,
your payments, the stuff like this, and when I get more
organised, can I pay this off? And he said, Over what
period of time? And I said, Oh, 60 months? And he
said, Five years? And I said, Oh, well yeah because,
heres what Im thinking.
Its going to take me that long to get organised.
Well look, he said, Ill run it by, lets get my . I
said, Get your lawyer to call me, just to verify that you
can do this and that its okay. So his lawyer called me
and I said, Ive been thinking about this. What Im
probably going to want to do is Im probably going to
want to put someone else in this house because I actually
live on the other side of Sydney and its a heck of a long
way to come just to use the bathroom. Do you mind, Ill
put someone else in the house but the same rule applies.
The person will come in, they make the payments to me
and Ive got the 60 months and what Im going to do is
Im going to get it refinanced, pay off this loan, do this
whole thing.
He said, Is that legal? And I said, Get the lawyer
to call me. And lawyer guy calls him and says, Yeah
thats fine. Just lets get the paperwork, how are you guys
putting it together? So I said, Look, now. Then this is
paperwork that I use to put these together. I just faxed
him this thing on the fax and I said, Listen, can I just fax
you what weve agreed on and just fax it back, and away
we go?
So hes happy for me to rent it to somebody else, he
doesnt care. He wants the pain to go away, he wants
peace of mind. He doesnt care, he just wants all the pay-

ments made and when the lawyer signs all the documents,
hes alright. And within five years, I know theres an outstanding balance of $265,000 thats just got to be paid off
over the next five years. Okay? Im just going to see what
I can do. I said, Lets see what we can do.
Do you know what I mean, but do you really want to
say, Tell me how the carburetor works? Thats what hes
there for. So, all my things, just a little piece of paper,
and I just give it to the lawyers and say, Do that. And
then I just send the other guy a piece of paper saying Is
that what were doing? Yeah. Write your name on it
and send it back. Alright. They sent it back. Now, put
a little sign on it, Rent to Own. You with me, Ive got a
sign on it. You got me? I put a sign out the front, a little
classified ad in the paper. By the way, one of the greatest, oh Ill get to that in a minute, how you find all these
motivated sellers, how do you find these people.

Sandwich Lease Benefits To The Buyer

And Investor
Now the sandwich lease benefits. To you guys, the
investors, youve got to get positive cashflow because
the person over here, oh by the way, that house, do
you remember how the house that Im looking after his
mortgage for $265,000? The persons coming in and
looking after it for $295,000. Theres $30,000 in there
so he comes in at $295,000. All right. Option fee, as an
investor you get an option fee. People are going to pay
you money just to get involved with you. They have to
pay money but if you want to move them from the house,
thats fine. If you want to rent it and you want the option
to buy it and you want me to guarantee you the price,
how much are you prepared to give me now for that
guarantee? Oh, Im prepared to give you $10,000. Im
prepared to give you $5,000. Im prepared to give you
whatever.

With Only $1 You Can Be On Your Way To

Making Big Chunks of Real Estate Profits
Youve got the back-end profit when these people refinance, youve got no bank loan guys. This is just a little
system, you just spin it over and over and over and over.
Youre just renting to people who rent to people who rent
to people. Theres no bank loans. Youve got very little
cash invested. Zip. Ive done bunches of these. Ive vir-

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Millionaire Phenomena - Property: RICK OTTON (continued)

tually got nothing, nothing invested. Oh, usually I pay a
dollar for the option. I give the seller a dollar quite often.
Im serious. No maintenance because, by the way, Sir, remember how youre doing that rent to buy from me, and
since youre a tenant, who do you reckon is best to fix the
toilet if it goes wrong? I am, arent I the landlord?

$20/hour. And we screamed out there and it took us an

hour to get out there and we had four people waiting outside, wanting that house, and I kept the engine running
and she said, Why is the engine running? I said, Well
Im not planning on being here too long. 17 minutes
later, somebody came out, it was funny.

But dont I also have a landlord? He needs the toilet

fixed. Seller, peace of mind, peace of mind is phenomenal. Why do people do things? Just to get problems out
of their life. They get their debts covered, they get mortgages looked after. They get houses they cant sell, they
get them sold out, delayed settlement, they can keep the
tax deductions because its only when these people actually buy the house, that the sale takes place. No vacancy,
little vacancy, why do buyers like these things?

The guy who sold the house, had half-painted it and

you know how men are always meant to renovate the
house before they sell it because the wives say, I want
you home every weekend to fix this house for sale. So
the guys in there painting, right? I look at the house, the
guys up the ladder, hes halfway painting and I said, Ill
only buy this house if you get off the ladder now. The
guy was like, Oh God, yes, yes. So he gets down. I
bought the house. The person who bought it, came up to
me and said to me, God, Jeez Im glad youve only halfway painted that house Mr Otton, because the colours
youve picked are absolutely disgusting and hideous.

Low deposit, they get to try before they buy. Its

fast-moving. So everybody in the equation loves it, they
just love the opportunity. You do bunches of these and
when all these people refinance, and pay it off, you get
these little cheques. Gives you the choice. You start getting little cheques, you can do this sort of stuff. Right? I
mean, what are we all around here? I was reading something the other day outside that talks about health and it
talks about how stress is killing us and it goes on with this
sort of, I only got to read half of it because it was a short
trip between Sydney and Brisbane but it was all about
how stress is a disease that 70 years ago never existed.

How It Took Me 17 Minutes To Sell A

House
These things can go really quickly. Im running behind time but I want to tell you an interesting story here.
A lady rang me up and she said, Mr Otton, can I help
you move these houses on, Im a real estate agent, Im
really good at what I do. I said, How long does it take
to sell a house? And she said, Oh, well run a campaign
and it takes about 6 weeks. How long does it take you to
sell a house? And I said, Oh, probably a day. And she
said, Well look, Id like to work with you.
And I said, Look, Ill tell you what Ill do. Ill pay
you 1%. Theres a $300,000 house here. You go and
show the house and Ill pay you 1% which is $3,000 or
Ill pay you $20/hour. And she said, Look, its a six
week campaign, you cant see a house in a day. Youve got
buyers, you need to do this, this, this and this. I want the

17 minutes to sell the house and I said to the lady,

Look, I want to be fair. It took us an hour to get here,
an hour to get back. I know weve sold the house in 17
minutes, but Im actually going to pay you for the full
three hours. So it was a big day for her.
Something else. These are great. I bring these in from
the United States. If youve got kids at home, contractors, forget going over to see contractors and stuff. You
put these little lock boxes on your house, you put the key
to the house in there and the house shows itself. Because
I figured out, when the real estate agent shows you the
house, you know what he does? He says, Come on in,
Ill show you where you can find the kitchen. Theyll all
walk through and hell go There it is! Right, now let me
show you where the bedrooms are.
Now, Ive figured out over 15 years of putting a lock
box on a house, and saying to people, Do you reckon
you can find the kitchen and the bathroom? Not one
couple has got lost. Theyve gone in there, and I reckon
they like the fact that theres no one in there, hassling
them, and people dont steal stuff out of empty houses.
Let me ask you something. If youve got a house full
of electronics and youve got an empty house, which
house is the burglar going to break into? So, people dont
take stuff out of empty houses. Theres nothing there.
So, I just found over the years, its worked really, really
well and people go in, look at the houses themselves, I

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Millionaire Phenomena - Property: RICK OTTON (continued)

stay doing what Rick Otton wants to do and they call
me up and they go, Thats great, well take it. I had
some people, she said, Can I show my husband? I
said, Show your husband. She came back and she said,
Can I show my nephew? Can I show my sister I said,
Listen Wendy, show everybody in the whole street. She
showed everybody, she rang me up and she said to me,
Were going to take the house. But I really, really like
the lock box, can I have that little lock box? And I said,
Well, Wend, youve got to understand mate, the lock box
is $145,000. Its the house thats free.

Sellers exit strategy. Peace of mind. The

investors exit strategy, control property
with little cash and no bank loan
liabilities.
How many people have we got locked in a bank loan
that cant get out. I saw this in Dallas Texas, where I
started 15 years ago. Property prices dropped 90%, everybodys massively upside down and youre reading about
all bank loans, liabilities, you dont need it.
Where to find motivated sellers. Where do you find
these people? Financial planners. Great source. Pass out
business cards. Word of mouth, Ive got door hangers,
word of mouth. People say to me all the time, many,
many, many years ago, I saw a guy in the United States
and I said, Hey mate, and he said, You must be the
Australian. I said, How can you tell? I said, How do
you get your He said, Word of mouth, mate, flap
your gums. Flap your gums, let people know what you
do. I said, Get out of here.

who really want to sell a place or rent a place, youll get

so many calls from people saying that they actually really
want to sell, you sound like you cant find a buyer but if
you sell it, you want to rent it and buy it later.
Thats it, I use the Overseas Executive, looking for
place to rent for future purchase. Only last week we were
doing home units in Sydney, I was picking up the papers
in the inner city, I was ringing up the ads from the little
ads in there, saying oh look, are you renting a place?
Yeah, Im renting a place, blah, blah, blah, blah, blah.
Look, it sort of works but my wife said to me we cant
rent any more houses unless she knows she can stop moving and maybe we can future buy it down the road.
This lady said to me, Oh, Ive been trying to sell this
thing for six months. I couldnt sell it, Ive been forced to
rent it but if we can figure out a way and did we figure
out a way. Now, her problem was, shes a university student, had no money, bought it off the plan to flip it and
make a whole bunch of money, and she could retire at
university. Well, did that work? No. So, now shes stuck
with this massive payment, and the fact that I could come
in and help her get out of it.
Internet websites. Let me tell you, if you type in a
Google, For Sale By Owner, websites, youll have a bunch
of websites that come up around Australia with people
whove put their house on the websites to sell them. They
wont sell ladies and gentlemen. Houses dont sell that
way. They wont sell. So you go on there and say, Hey,
can I buy your house but do you mind if I rent it for a
while just to try it, take it for a bit of a run? And go
from there. Thanks very much.

Well, can I tell you something? Its absolutely right.

The amount of people who just say to me, you buy houses? If you take on a hobby, fixing PCs, I promise within
12 months everybody that you dont even know, has
heard about youre the guy who fixes PCs and comes over
and says, Hey, can you fix my PC? Ive heard that you
fix PCs and I cant make the Windows thing work. Do
you know what Im saying, you just get word of mouth.
People ask, buy houses, buy houses.
Newspaper ads. For sale and ads. Let me tell you, an
ad to write in the paper which is great. Ive done exceptionally well. Executive, Overseas Executive. Looking for
place to rent with ability to purchase for future purchase.
Now youll get bunches of people who will call you up
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How To Take Advantage Of The Stock

Market Trading Secrets of Professionals
Part of the Millionaire Phenomena Series

s always we appreciate the opportunity to come

and speak at these events and good afternoon
everybody. How are we doing? Its always interesting when you get to speak at the end of the day and I
appreciate you guys have been sat there all day long, and
you must have some constitution to be sitting there and
listening for the duration. One thing I will say and mentally, as youre probably picking up through the course of
this day today, trading and being successful in markets is
as much a mind game as it is understanding things about
the market. You need to understand yourself as well.
While were on the subject of this fellow here, mind
games, as we get towards the end of a day, our attention
span starts to wander and you might be thinking do I
need to fill the car with fuel before I go home, is that bald
tyre going to make it, if things are a bit hard for you at
the moment, or perhaps someones stolen my car, who
knows. But Id invite you not to dial into this, because for
the next 90 minutes its absolutely crucial that I have your
full and undivided attention. I would also add that its not
crucial for me. Its crucial for you.
You guys have given yourselves up a couple of days
to come here and learn and I believe Steven mentioned
earlier there are two things that are very important in
todays session. The most important things, one is yourself
and the second one is dollars. I want you mentally to be
thinking that everybody else in this room is here as filler.
Theyre rent a crowd. Im going to look at each and everyone of you in the eyeballs and talk to you today about
some techniques which will enable you to make money,
to enable you to secure your financial future, to buy some
time back and in many cases to put a smile on your face,
because theres nothing better than having money to put a
smile on your face.
No money doesnt buy happiness, but it buys you
lots of toys and lots of time to enjoy your life, to spend
time with your loved ones, maybe to have a new car or a
jet ski. Whatever the thing may be as far as your goal is

Meet Andrew Baxter

Andrew Baxter has a Bachelor of
Science Honours degree in Business and Finance, gained at one of
Europes leading business schools.
He has 12 years professional investment market experience, six of
which was obtained on the London
Stock Exchange, with two of the
UKs leading investment houses,
covering local and international
markets. Since then, his experience in Australia has ranged from
delivering accredited training to in excess of 4,000 private traders, teaching them how to trade the equity and derivatives markets, through to consulting on Corporate Development Management. Throughout that time, he has continued to trade his own
account.
His approach to the market is based on a blend of technical and
fundamental analysis and embraces a true, All Seasons Investing
style that has successfully withstood the test of a number of full
market cycles. As a Director with a leading brokerage and investment management firm, he is a Licensed Equities and Futures Broker and with the highest industry accreditation to advise and trade
Derivatives, Andrew is a widely respected and highly sought after
industry speaker.

concerned. Im not going to get into that today, but that

is the reason why were all here right now. Sounds like a
mortuary after that doesnt it? Its interesting, sort of sat
at the back listening to a few of the speakers today, and
theyre coming up and saying theyre a tough crowd so
Im going to sort of have a mental mindset today like I
was presenting in North America which I will be doing
in a couple of weeks time, over in New York and San
Francisco. Its interesting when you have these cultural
differences and you go to different countries, if you ever
present in the States, and youre going to tell a joke, you
have to do it like this. You say look, Im just about to tell
a joke. This is the joke. That was the joke and now you
can laugh, so youre getting with the program. Weve all
got the oil moving around the machinery.

Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

What were going to talk about here is contracts for
difference. Im a director with Halifax Financial Services and Ive got quite an interesting role. Im a licensed
equities broker. Im a licensed level one and two derivatives advisor, Im a licensed futures broker, I cover managed investments, and the predominant amount of my
work involves managing a hedge-fund and private client
money. Throughout my time around markets, one thing
Ive never lost a passion for is trading my own account.
Why, because like you guys, I like making money.
Im not greedy; Im just in it for the money, like we all
are. So what were going to look at as we go on through
the session today are a few things that I hope are going to
be able to help you pursue that. Structure of our session,
were going to look at contracts for difference. How they
compare to other investment tools, how to trade and
invest with CFDs. The big advantages John talked about
with CFDs, offer great leverage. Theres a low cost of
trading, fantastic liquidity. That all sounds really exciting
doesnt it. Accelerated returns on your portfolio. Whos
fired up about that? But what if you dont know how
to trade? You get accelerated losses on your portfolio.
Leverage is the best thing in the world when you know
how to trade and its the biggest demon youll ever have if
you dont.
It is like a mortuary, a few people with black armbands
in here now going gee hes seen my brokerage statements,
whats going on? But in all seriousness it is an extremely
dangerous place to be if youre not on top of your game.
What were going to do is go through some simple stats.
Im going to share with you how I trade, how I generate
my recommendations and how over the period of time we
generate consistent low volatility returns on our portfolio.
Why low volatility? I dont like having a massive spike in
my equity curve one monthly and a big draw down the
next. Im losing enough hair as Im getting older anyway.
I dont need it to fall out any faster. And leverage instruments can also accelerate your receding hairline. Word of
warning there too.
Were also then going to look at knowing what to
trade and when, and then a couple of case studies. I will
probably run through some of the open positions Im
involved with at the moment as well so you get a feel for
where were at. So what are contracts for difference?
Just before we do that, todays session, the best way to
get anything to of this is just to be honest with yourself.

If you cant be honest with yourself youre on a sticky

wicket arent you. No ones judging, no ones counting,
no ones looking. Just as a show of hands, how many people here have presently got a live position and they reckon
thats the market. Just put your hand up. Thats terrific
guys good on you. Just so everybody gets to play, who
doesnt have a live position at the present. Thats terrific.
Theres a few people arent sure. Its one of these things, its
black and white. Youre either in the market or youre not.
Its not a spectator sport. You never make money watching it. Youve got to be involved. I want to come back
and talk to you guys about some of the things that youre
doing, but the first thing Ill ask is anyone a little disappointed where they are at the moment in terms of their
overall trading results. Be honest guys. Does anyone think
they could be doing a bit better than they are now? Whos
surpassing their expectations, because Im recruiting some
fund managers at the moment, if youre doing pretty well?
Anyone interested? Suddenly weve got one, we like that
gentleman; well be speaking to him a bit later on.
So what are contracts for difference? Theyre an
agreement between two parties which allow you to make
a profit or loss by reference to price fluctuations in an
underlying instrument or security. Thats a very technical
definition, so we will get into the meat and guts of our
session. What is a CFD; its an instrument that lets us
trade a price difference. Contract for difference trades a
price difference. We can trade the market in either direction, up or down, and its extremely important to be able
to trade the market in any direction.

How To Be Your Own D.I.Y. Fund Manager

and Copy The Professionals
One thing Im extremely passionate about is empowering people to take control of our financial management,
but not just take control of it, to be able to run their own
money like a hedge fund, hence the concept of Elite Traders Group. What does a hedge fund do that retail people
dont? It trades the market in various directions, up or
down or sideways. It trades various instruments, equities,
options, futures, foreign exchanges and CFDs perhaps.
Being able to combine those skills in a way where your
stock selection is finessed to a level that enables you to
get consistent low volatility returns is why anyone would
recall the charts that Steven Jennings shared with you on
some of the bigger hedge funds in the States, why they

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

outperform year in year out.
Thats what your equity curve needs to look like. By
the way I just threw equity curve in there. Whos got an
equity curve at the moment? Who hasnt? Were all going
to play this game today; someones got sweaty armpits
as well. Got to have an equity curve, just like youve got
to have a trading plan. If you dont know where you are,
how the heck are you going to know when you get there?
If you got on a plane like I did this morning, and theyd
done the safety drill and the captain comes on and goes
hey guys, how are we going, captain so and so. Welcome
you aboard. Look weve just taken off, and I just want
to let you know now Im not sure where were going, or
when we get there. I dont actually know how much fuel
weve got on board either, but rest assured when we run
out of fuel we will be landing somewhere, it may not be
voluntarily but well be landing. How confident would
you be about flying there again?
But the seriousness of what Im just saying is you
wouldnt get on a plane with someone like that so why
would you manage your portfolio like that, without an
equity curve that tells you where youre at. By the way
an equity curve is a chart that looks something like this.
This is time, and this is the dollar value of your portfolio.
Im sure wed all like it to be a bottom left to top right.
Ideally its going to look something like that on the grind
if we smoothed it out. Its more likely in reality to look
something like that, isnt it?
But overall we can see that were building our wealth.
If you dont know what your equity curve is like, how do
you know how good a trader we are? Were all excited
about leverage instruments yet we dont know how good
a trader we are. Its getting a bit scary isnt it? Its really
gone quiet, gee guys what have I done. Get the defibrillators. You dont want to have an equity curve that looks
like this. Thats lunar park stuff, and were not into that
in the market, were in there to make consistent returns
over time, and well come back and talk about that. Open
ended time frames is something thats extremely exciting
about CFDs.
We can use leverage, and the great thing, particularly
with the platform that we have, it covers 19 different exchanges globally, so we can get exposed to the US market
or the Japanese market or the European market, or the
UK market, wherever it might be. As well as the top 200
stocks here plus features and other commodities on there

as well. Very very powerful instrument. Simple example,

CFDs are a derivative. That means their price is derived
from an underlying asset. Thats all a derivative means.
Theyre synthetic. Theres no tangible asset behind it. Its
not like a share where you have a share in a business. Its
an intangible. Its a derivative. So lets say were bullish on
our view. This is pretty obvious. Generally speaking if
youre bullish on a stock you buy the share or the CFD, if
youre bearish on the stock, you sell the CFD. Whos with
me so far? Basic stuff so far, well we will see how we can
take this view going forward.
An example, if we just want to put some money to it,
if were going long. Isnt the market funny, we took, words
like long and short and naked and covered. It sounds
almost perverted. Im naked and long, you talk to your
broker. You imagine the day when youve got a video
phone, you talking, youre on conference call and you
say Im naked and long, you go no no mate, thats short,
youre not long. End of conversation. Interesting.
Its better were warmed up, its easier, isnt it? What
were looking if were going long, no dirty laughing now,
buying an initial price, what were looking is to buy at
one price and sell at a higher price. Thats very simple isnt
it? Its a simple rule of thumb. If youre trading and your
share prices are doing something like this, you want to be
buying here and selling there. And if weve bought for
4.95 and sold at 5.40, lo and behold weve made a unit
price of 55c.
The key thing were talking about here, and well keep
coming back to this, is price difference. Because CFDs
relate directly to a price difference. How many people
here have traded options, or have had some exposure
to options? Thats terrific. How many people have ever
bought a call and the share price has gone up, but the
call has gone down in value? You think gee how did that
happen, its not supposed to go like that. Something
called time delay. Data. Well talk about that as we go
on. You dont have that problem with CFDs which is a
great thing. Similarly if were going short, were selling at
initial price and buying back, so we might be selling here
at a higher price and buying back at a lower price. Selling
at $8.52, buying at $7.26, the profit margin or the price
difference is $1.26. Its again fairly simple. So thats how
a CFD works. What Ive done on the screen is grabbed
the spot price in the market. Were just looking at AMCOR, and what we can see as the market on AMCOR is
trading, gee anyone else got the shakes or is that shaking

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

around on the screen there?
The products on there were looking at, AMCOR in
the market, the share price is $6.95 bid, $6.98 offer. So
theres a bit of a spread of about 3c. What we can see
lower down is the fact that the price of the CFD, just
look over here, or on the other side there if you look at
the green boxes, 695 6, 699 4. So the price of the CFD,
price of the underlying share, you can see theyre very
very closely related. In other words if thats a share price,
the CFD price is going to be extremely close to it. Youre
trading the same thing, its just not the actual share, youre
trading a synthetic version of the share. Well come back
and look at that in a moment.

Should I Trade Options or CFDs?

Whats The Difference?
Now one of the things Id like to talk about, how do
they differ from options, because you think why do I
own these options if I want leverage? The CFD price is
directly related to the underlying security but the options
price we know is a little bit more complicated than that.
For example you get those concepts like in, at or out of
the money. You are all options strategists so you know
about that. And you get this lovely creature here called
volatility or Vega to give it its Greek name. You go to the
market and go gee whats happened to the price of this,
volatilitys increased. Has anyone ever had that one? Its a
sneaky shadowy figure called volatility which just increases randomly and goes down. Its not actually random
its a whole process behind that but it is a factor in an
options price. So you might find yourself buying a call
option when volatility is very high and you pay quite a lot
of money. A couple of days when volatility comes in the
value of your call option is worth a lot less because theres
less volatility. Do you understand what I mean by that?
Its an issue you dont get with CFDs because its a
purer form of trading. The time value or data, time decay,
when you buy an option, and we get that chart that looks
something like that. The time decay chart. Thats a great
thing if youre writing options, because you want time
decay to work for you but not so good when you are a
buyer, because its working against you. There is no time
decay per se, as far as CFDs are concerned. Things like
interest, options have an interest components in their
pricing as they do dividends as well. Not so for CFDs.
So if we were looking at trying to price options, and we

wont spend long on this because its not the guts of what
I want to talk about, but its important to understand an
options price is derived by what its intrinsic value is if
its in the money, and also things like the strike price, the
interest rate at the time, dividends, mysterious framed
volatility and time to expiry. Theyre all the components
that make up options pricing and if you ever got a spare
couple of hours and you want to send yourself to sleep,
theres the Black & Scholes model that you can have a
look at and get very excited about that.
Once weve calculated all those, put them in the
blender, we come up with a buy and sell price for option, correct? A bit complicated, so with a CFD, much
more simple. We just look and see whats the price of the
underlying, okay, well thats the buy price of the underlying, thats the sell price. Theres your price of the CFD.
Very very clean pricing model and thats very important.
Thats why more and more people are looking at this form
of investment.
Its also important to know how to choose the best
trade available in the market at any one time. We could
be looking at the stock and the bid offer spread was
$6.95, $6.98 on the stock, a 3c spread which is about .4
% of the value of the stock.

How CFDs Give You Ten Times Leverage

On Your Money
Now, CFDs, they trade on a leverage of 10 1. In
other words for every $100 in your position, youre trading an amount of $1,000 in the market place. Thats 10
1 leverage and you might be thinking I want more than
that. 10 1 is more than sufficient for everybody in this
room. If you need more adrenalin than that, youre probably in the wrong room. There are some foreign exchange
instruments that trade on a 200 times leverage. Little bit
of a different beast again, but 10 1 leverage should be
enough for most people, and as youll understand, getting
a bigger bang for your buck, lets face it, if youve got 10
grand to trade with, you want to get as much value out
of that as you can. If youve got 10 grand, youre going
to be fairly limited in the number of shares you can buy.
10 grand you can buy 10 times as much position in the
market place.
Bigger bang on your dollar, leverage is a great thing
when you know how to control it. Very dangerous thing

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

if you dont. So we can make our decision, what do we
want to trade? We could trade the stock. Buying 1000
units in Amcor cost us $6,980 and wed have to buy it in
full. With regards to the option, 1,000 contracts or one
contract that will cost us $340 or 699 for the CFD.
We can see the amount of money that we outlay
with derivatives is a lot less and therefore we are getting
far more leverage. Thats a good thing. Because leverage
as I say will help you accelerate your returns, provided
you understand the importance of being able to harness that. I dont know whether its a male thing or not
but when you talk about derivatives, yeah, Im a bit of
that. Get geared up and away we go. You probably come
across that. How many people have lost money trading
derivatives. Not necessarily on the ground, but whos lost
money? Come on, be honest guys, lets rip the scab off
and get into it. Weve got to be honest with ourselves.
Picking away, Im not making as much as I want to.
Lets get structured about what we do because when
you harness the power of derivatives, best instrument
in the market place to trade, but if you dont youre just
picking at that scab and its not a good place to be. Weve
got to look at the benefits of using them but we need to
be mindful of the risks. Dont get me wrong, Im not bagging options here either. As I said Ive got an extremely
large options business, options are very very versatile,
theyre perfect for non directional trading, theyre also
good for generating income but for a directional player,
straight move on the market I think CFDs probably win
hands down.
There are benefits to using options, and when youre
looking at CFDs or futures or whatever it might be, I
think it very important that you actually use these strategies in addition to having exposure to equities, in addition to having exposure to options, in addition to having
exposure to foreign exchange or futures or whatever it
might be. These are all assets classes which are complementary not contradictory.

2 Major Benefits of Trading CFDs Over

Options
But directional trading, as I said CFDs have big
advantages. One is the fact that theres no time limit on
the trade. The second thing which is the thing that kills
most options trade is the time decay, weve got people to

run funds that just trade other peoples data and decay
and volatility. No volatility factors, dividends can impact
positively and the great thing about CFDs are extremely
liquid. Sometimes when you phone up to say, wheres the
market, its a long way from where your expectations are.
Generally speaking with the CFD you will find it carries
the underlying price fairly closely, particularly with some
of the better providers like the platform Im going to
show you shortly.

How Do Dividends Affect My

CFD Open Position
How about dividends? This is nice and clean. When
a stock goes ex dividend there is an impact on the share
price. Therefore there is an impact on the CFD. So if
youre longer stock, youre in a long position on the CFD,
what you actually do is receive the dividend equivalent
in terms of cash into your bank account, but no franking
credit.
So that does have an impact, theres no franking credit.
Likewise if youre short stock, if youve sold the CFD and
the stock has gone ex dividend the dividend amount will
be taken out of your account to pay that amount. Bear
in mind of course what happens when a stock goes ex
dividend. What usually happens to the share price? Goes
down, doesnt it. So really whilst youre getting the dividend taken out of your account, the actual value of your
positions become more profitable, because the share price
has fallen, so its like a zero sum. So just bear in mind
dividends.

Whats The Cost of Trading CFDs?

CFDs also have interest on there. If youre longer
CFD youre going to incur interest charges. These amount
generally to the bank rate plus 2 3%. This is still competitive when you compare it to margin lending. Bear in
mind with options, there is also an interest component
in an option, you all know that, dont you. The interest
component then causes much harder than it puts, because
theres a cost of carry. So theres an options, theres interest
when you look at an option price also, youre still paying
it. You cant trade in the leverage position without interest
coming in somewhere because youre using somebody
elses money. If youre short CFD though you actually
receive interest. What you actually get is the bank rate

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

less 25 going into your account every day, so youve got a
short position open for six months, every day you will be
getting a trickle of interest. Whatever the bank rate is less
2% on that position so thats a nice way of considering
earning income.
Okay, interest is not a significant price when you look
at puts on options as I mentioned before, but it is still
a factor. Lets have a look at an example of a trade. All
were looking at here is a trade on Rio. Its just a fairly
short trade, 15 days. Weve bought 1,000 Rio. Trading at
$36.65. This was a while ago. Your initial margin which
will be 10% of that was $3,665, the commission you pay,
$109. .3% on this particular trade. And the interest daily
on the position, $7.28. Close the position at 15 days later,
$114 to close it up, were selling our position for 38,000,
the share price moved up to $38. So were closing out our
position at $38,020. What weve done is made a gross
profit down the bottom here of $1,370 less commission
of $224, less our interest of $109, what weve done there
is made $1,036 in 15 days on an outlay of around about
$3,365. About a 30% return in 15 days. I mean, thats
not a bad return. Better than a poke in the eye with a
sharp stick. I think it is, isnt. Someone was talking about
tax before. Tax is the best barometer of how lifes going.
Can you imagine the pleasure you get getting $5 million
tax bill? Id be throwing the biggest party ever and youd
write the expenses off of course.
Lets look at a short trade on PBL.
Selling 1,000 shares of 1581. Were going short, we
think its going to fall. The margin wed have to put down
10%, so $1,500 or thereabouts. The commission we pay
$47 to sell. We close our [position] out, we sold them for
1581, buying them back at 1487. So we sold them at a
higher price, bought them back at a lower price, commission of $44. Total commission we paid is $92 but because
we were short we received the interest, instead of paying
it, so we received $22 in interest and that gives us a net
profit of $870 on an outlay of $1,581 again in the space
of a relatively short period of time. Just looking there in
the space of maybe about 20 days. Thats a pretty reasonable return on your money again. What are we looking
at there, a 50% return. Small position, fairly aggressive
trade. You can start to see the benefits of leverage there.
Assuming youre in the right stock. We will get on and
talk about identifying the right stocks as we go through.
Basically as I alluded to before, paying interest is a fact

of life. If you trade using leverage, doesnt matter what

platform, what instrument, if you use any kind of gearing
you will be paying interest. You do receive interest for
being short which is the big advantage of CFDs. One of
the things I also caution you towards, some people when
you talk to them they say oh gee Ive got to pay all this
interest, is it worth it. If the trade youre identifying is so
crap that you cant actually make enough profit out of it
to cover the interest, its probably a bad trade.
Is that a reasonable working assumption? If you cant
afford to pay the interest, same with brokers. If your trade
has got such a thin profit margin you cant even cover the
cost of interest, odds are you are probably not quite picking the best trade in the market place. Thats something
to bear in mind. Believe it or not that is an objection
that some people use. Thats fine. It just means youve
identified the area you need to work on which is stock
selection.

Big Profits Come From Big Trends

Trade time frame, this is something that I find absolutely fascinating. The fixation of trying to trade shorter
and shorter time frames. Steven Jennings that was presenting earlier and I work very closely together, and one
of the things we both noticed, is that when things start
to go wrong, you might find someone thats been trading
over a couple of months, trading like a position trade and
had a couple of losing trades, and think this long term
stuffs a lot of rubbish, lets go and focus on trading on a
weekly time frame, and they dont make so much money
there, so they start trading daily, and they start to get
smaller and smaller. Time frames, theyre almost trading
ticks on the chart.
Youre completely missing the point if youre focused
on time. If you can trade you can make money over any
time frame. If you cant make money over a big time
frame, sure as eggs is eggs, you definitely cant make
money over a shorter time frame. But people seem to
have this fixation wanting to draw down into smaller
and smaller day trading. People aspire to be a day trader.
And if thats your, thats fantastic. Been there and done it
myself, it can be a bit of fun but you have no life. You go
running to the bathroom to go for a wee, or you might
have chamber pot, its your house, youre naked, youre
long. There could be anything going on in there. But you
cant get away from the screen. Cant watch the Bold and

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

the Beautiful, the markets closing. Whatever it might be.
Whatever positive you feel you had with during the day.
Its an extremely dull thing to do. You have no life.
You maybe go in a few chatrooms and talk to other sad
individuals wearing anoraks in a dark room somewhere.
Bottom line is big profits come from big trends. As a
takeaway point, write that down. Big profits come from
big trends.
Isnt that a dumb thing to say? Isnt it funny, when I
was growing up the advice my father gave me, hes given
me a heap of great advice over the years, but he said
Andrew, if something sounds like it makes sense from a
logical or common sense point of view, its probably right.
And if it doesnt make sense or it sounds a bit complicated, its probably because someones trying to pull the wool
over your eyes. Anyone relate to that? Big trends from big
profits is a very obvious and logical thing to say. Hence
why its a great takeaway point because its so true. Look
at the trend following system Steve talked about with the
hedge funds. All trend following systems, all turning in
massive returns, the duration of a trade and this is something we all need to really get embedded in here when
were talking about mentally conditioning ourselves, the
duration of the trade is based on the potential return that
the trade can give you, not the calendar. Thats a massive
takeaway point and if you pick up nothing else this weekend but what Ive just said there, youre well on the way to
being able to make money out of markets.
The profitability of the trade is not defined by the
calendar. Its what the trades got in it to give you. Gee it
really has gone quiet here. Theyre a bit scared. Who likes
to look at this chart. Is there a trade in it? Do we see a
timeframe on there? What about this, do we like the look
of that chart? Is that a trade? Has there been a trade in?
Im not talking specifically now but just looking at the
time frame that weve got on there. Through that period
do you reckon theres been a trade there? Maybe. I wonder. What about this one here? Is there a trade in that?
Ive been a bit sneaky, because youre probably all scrambling around, A trying to look up in the corner to see
what stock it was. B, youre probably looking across the
bottom to see what the time frame was and C you were
probably trying to look at the vertical axis to see what the
price move was. Who was doing that?
Youre all traders. Interestingly because theyre all the
same stock. This is a price move on a pretty small com-

pany called Rio. Anyone got Rio in their portfolio? Who

hasnt got Rio in their portfolio? Why not? I missed that
one, it was a goodie. Interesting. This is specifically time
sensitive trade. Its a special situation. This is around the
annual results day. Just have a think from a logical point
of view. Commodity prices have been doing what?

Trade Less To Make More Money

Okay. And Rio does what? Okay, so odds are what
are the results going to be like? So when its coming to
results day, there is no surprise to see in the immediate
run up to that there is a move in the share price. 1% in
two days. Who likes that? Dont forget the opportunity
is great but it only comes up once a year. Youre assuming
its a positive announcement. What about PVL last week.
Slightly different announcement. So theres an inherent
risk there. But 1% in two days is a pretty solid return,
isnt it. Lets take a look at something different.
Lets look at Rio over 69 days. Thats a 24% rise
over 69 days. Whos interested in that? Are more people
interested in 24% over 69 days or 1% over 2 days? Theres
a lot of short term people who want to get into that short
term rating dont they? No, you cant go there. I will just
give you an example. This is quite interesting maths just
to have a bit of a think about. Now, if you make 1% in
two days, okay, and you want to trade that two day time
frame, how many trades are you going to have to make,
in order to achieve a 24% return. I will just put a caveat
on here, because it will be too easy to say 12 trades. Lets
work on the basis that you get 3 out of 4 trades, or 75%
of your trades correct, and thats an extremely good hit
rate. Operate on a basis where consistently over years,
75% of your picks go up in value, youre doing very well.
Do you know how many trades youd have to do in order
to make 24%? 2% each trade. Youd have to do 32 trades,
because dont forget, one out of every four trades youre
going to lose money on. In my assumption there, Ive
assumed that when you make a losing trade you actually
lose zero so its a ridiculous assumption. Lets get real for
a minute. Lets say when you get things right, three times
out of four you get it right, and when you make a losing
trade, youve got a 5% stock loss. Is that a fairly reasonable working assumption. The maximum loss youre going
to make on a losing trade is 5%. How many trades have
you got to make now? A lot more.
Lets take a look at a slightly different one. How about

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58% in 308 days. Is that a bit long term and boring for
some, gee, long term investing. The market is not about
being excited, its about making money is it not. Just correct me if my assumption is wrong there, just yell out. So
58% in 308 days. Following a major boom in resources,
now lets just have a look at that for a moment. Lets just
say youre back in your old 75% of your trades are accurate. Three out of every four you make money on. One
out of every four you dont make money on but you lose
zero, which as I say is a ridiculous assumption to make.
How many trades have you got to do now to make 58%?
Anyone know? Youve got to make 78 trades.
Would you rather make one trade, and take away your
58% or do 78 trades to make the same return? Whos
happy being a busy fool? I want to have a life, the market, I want to have a life. Who wants to be in that space?
Sometimes if the trend is moving as weve seen in resources, or oil stocks and a lot of those other things, do you
know how you make money in that situation, go and sit
on the bench out around your pool and let it do its thing.
How many people want to sit in front of the screen and
go thats my trade on the market, that is ever so cool. Any
one ever print one off, be honest now. Whos ever done
the screen grab and printed off something when theyve
got an order working. Yeah theres one or two, thank you
for helping me out.
Weve all done it. We just dont want to admit it. The
markets there to make money, its a business making
machine, but we all treat it as a piece of entertainment.
We want that excitement. Weve got to get out of that
mindset because businesses make us money and hobbies
cost us money. Doesnt matter if its golf, sailing, whatever it might be hobbies cost money, businesses make
money. Let your business do its thing. If youre into a
good thing, fantastic. Let it do its thing. Why worry?
Why spend all that time in the front of the market when
you could be living live? Whats important, who wants
to have more time. Do you reckon sitting in front of that
box all day is giving you more time or letting your money
work for you in the market so youre getting that passive
income happening, giving you more time. But everyone
wants to gravitate back to that short term trading because
its exciting and I can say Im a day trader and Im extremely pale because I last saw the sun nine years ago, and
Ive just had a margin call so all the fluids drained out of
me. Its horrible.
The point Im trying to make is take a trade and take

the profit out of a trade rather than be fixated. Youre

going to go yeah but Andrew, Ive got a years worth of
interest to pay, out of 58%, what do you care? Net 50%,
who cares about the interest, really doesnt matter does it.
Its a cost of business. So looking at trade time frame, its
extremely important, because weve just looked at some
winning trades, to be able to positively identify high
probability trades. Lets have a game, does anyone have
a coin I could just borrow a second. You didnt want it
back, did you? Its mine anyway, its one with the Queens
head on the other side. Thats the one yeah. Heads or
tails, who wants to play? Anyone want to call it. Heads.
Theres 50 grand on this, who still wants to play. Thats
not a high probability trading strategy is tails, youre in
trouble at the back, Steve dont let them out. Thanks very
much for that.
Bottom line is we want high probability trades because
if were mixing this high octane trading strategy using
leverage and were not able to positively identify high
probability trades, were going to be in a bit of trouble,
arent we. So it requires more than just technical analysis.
It also requires what weve just looked at on the previous
chart, patience. One of the core holdings in my portfolio
and I know at least one other person whos beaming almost as broadly across the chops as I am about this stock,
is a company called Babcock and Brown. Anyone else
get a bit of it? What a darling. We floated it off at $5, its
traded at $18.25 on Friday. We had Phil Green the managing director in for lunch on Thursday, give us an update
on the strategy. Trading at a multiple of 26 times, overvalued in some peoples case not when you consider the
prices going on and on. Macquaries trading at 16 times,
so its at a premium ship, but its still moving ahead.
Why? Because its got a great business model and
we just sat back letting the trade do its stuff. Now $5
to $18 is getting up to 390% return. How many 1% or
2% trades have you got to do to make 390? Specially
if youve got a three out of four hit rate, which is pretty
good. What if youre only 50/50? Youll be there for
years trying to do it. Let your trades do their stuff, hence
patience and being able to let a trade develop is extremely
important. So knowing what to trade, very important to
have a structured approach. Needs to be process driven.
Very good friend of mine, guy called Adam Dale, know
the Australian cricketer, fast bowler a few years ago, hes
not a bad trader himself, and Adams always had a very
very process driven approach to his cricket and to his life.

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When The Process Is Right - Results
ALWAYS Follow
I remember one of his comments once is Andrew
when the process is right, the results always follow. Thats
a good takeaway point for you too, when the process is
right the results always follow. You need to be process
driven, because when youve got a process you have consistency. Theyve got process and consistency. The worst
place you can ever be as a trader is to have a fantastic
month this month and a shocker next month and not
know what the difference was. Lets be honest, who can
relate to that? Weve all been there at some point, youve
had a really solid month and you go got this market down
pat. Next week and youve got the weight of the world on
your shoulders. We can all relate to it. Weve done well
one week and weve done badly the next week and we
didnt know what the difference was. So what does that
mean? That means heads or tails. Is it going to be a good
or bad week this week, who knows. Who wants 50 grand
on that? Or 100 grand or multiples thereof. Its about
being very consistent and I cant stress that enough. You
dont have a trading plan, who here does not have a written trading plan. Be honest guys. One of the things that
you need to have a trading plan. It taught thousands and
thousands of people over the year how to trade and I go
through probably about 8 or 10 different approaches to
constructing a training plan to give yourself consistent
results. One of the key things to also have in a plan is
multiple layers of analysis.
To give an example, a lot of people rely on technical analysis. We know what its like crossing a road in a
city. How would you feel if you got this approach, youre
standing on the pavement, imagine youre in the city
and youre on the corner of Bridge and George Street.
You probably all know that really dangerous corner there
where the McDonalds is in the town and youre just about
to cross the road and youve got your eyes closed and you
know the lights are red, and you start to hear the beep
beep so its safe to cross and you walk straight off the
pavement. Whod be going to do that, because the green
light was on? Whod do it? Because odds are youre going
to get T boned by a taxi, or worse yet one of the couriers with the satchel across there. Theyre pretty good for
taking you out and that hurts a bit or a motor bike or
whatever. You dont just step out because the green light
is on. You go is it safe to step off the pavement, yeah it is.
Think about when weve had a few drinks we miss that

step. Thats why a lot of accidents happen, when people

have been drinking. They miss that crucial step. My point
being relying on just one form of analysis is just like having the green light, bang youre dead. Do you want that in
your trading system.

How I Analyse Trades & Market Trends

Multiple layers of analysis have got to be better. We
need something thats going to be simple. We need something thats going to be easy to use. If you use something
thats easy to use, you use it often. How many people at
home have bought a juicer, for doing fresh juice and you
get it the first week, and in the first week youve got this
shopping trolley full of celery, carrots and ginger in there.
How many people after a month have gone thats too
hard, to clean the thing every time I use it, it takes two
days to clean it. You need something simple. If youve got
something thats simple to use, you use it often. If you use
something often it becomes habit and once it becomes
habit, it becomes something thats bred into you and its
just a process you do time and again, and to go back to
what we started talking about when the process is right,
the results always follow.
So we took our time going around that but that slide
is extremely important. Because we got really excited. We
were almost foaming at the mouth about the leverage of
CFDs, gee Ive got to get some of those leverage, great
lets go gang busters. If we dont know that were looking
in the right part of the market were in trouble arent we?
What do we use? One of the models weve put together
is something called a power triptych, its a proprietary
approach that we use. Its based on three levels of screening hence being a triptych, fundamental, quantitative and
technical. And you will find if you did a straw poll in the
room, most people would probably use either technical
or fundamental or maybe a blend of the two, but most
people dont understand quantitative as well. But its what
we use in our approach. Level one, in terms of the fundamentals. Things like the business cycle. Where are we
in the business cycle, why is it important to do that. Its
like going fishing, if you dont have the right gear, youre
not going to catch what you want. Its very hard to catch a
crayfish when youre fly-fishing. You dont generally catch
a trout in a lobster pot, do you? You need to have the
right gear at the right time. Got to be looking in the right
spot at the right time, in the right sectors.

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

To give you an example, how many people here have
got Woodside Petroleum or Oil Search in their portfolio
at the moment?
Okay, just so we all get to play, I want to see a few
blue hands going up, who doesnt at the moment? Why
not? Because you cant say I dont understand about
economics. Because every time you go to the petrol
bars, whos going $1.20, gee thats getting expensive.
Has anyone failed to recognise that over the last year?
The informations right in front of us but its being able
to convert that information from seeing it to trading
it, and one of the quotes that I like to use particularly
when we talk about a research, everybody looks but we
see. When I say we what Im talking about are successful active professional traders in the market place. They
dont just see something and go thats interesting. Anyone
remember when [unclear] came out. As soon as that
was announced. See theres a difference. We all read the
papers and knew about [unclear] but we didnt translate
that into an investment decision. We all looked but only
some of us saw. Thats understandable because youre not
necessarily trained to be a trader, and its what I do. Im
actually an economist by profession. I did economics and
finance degree, and let me tell you something now this is
an amazing statistic. If you took every economist on the
planet and put them end to end, you still wouldnt reach a
conclusion.
Level two on the quantitative side of things, stock
screening. Looking for value investment is one buffered
approach, growth investing, but most importantly growth
at a reasonable price, what we call GARP. Were looking
for growth but its got to be trading at a decent valuation.
This is our quantitative layer that we put into our research. And finally when it comes to technicals, technical
analysis is definitely going to help you better than any
other form of analysis with your timing, and its going to
help you with your entry and exit and its going to help
you with your stock loss strategy.
Most of the people in the room I would say have
probably got a more heavy bend towards technical analysis than anything else Ive talked about so far. Thats the
way most of us are trained, trained to use charts for all
of our information. But thats crossing the road without
looking.

Power Triptych: Get An Advantage On

The Rest Of The Herd By Combining 3

Forms Of Analysis
So the power triptych, a blend of these three things.
Fundamental analysis, quantitative analysis and technical
analysis. This is where we want to be because we want
high probability trades. High probability trades generate
profits, they generate consist low volatility returns over
time and thats how your equity curve starts to build up.
Trade one out here or here, or here, or anybody else on
here with the exception of that area in the middle and
youre going to have a spike in your equity curve, you
might call a couple of good trades. Do you know something, thats the worst thing that can happen to you as
a trade, that you hook into a couple of good trades and
you didnt know how. You think hah, Ive made 30% this
month Im the king of the hill, and you give it all back
next month because it was luck and one thing I do know
is luck runs out.
Were not in the game for luck that was heads or tails,
50 grand. We didnt want to play that, we want a structured approach where were operating right in the middle
of that diagram there. Lets have a look at a case study
shall we and just bring this to life a little bit.

There Has Never Been A Better Time To

Take The Stock Market Seriously
Case study number one. Were looking at global economic growth and generally speaking the world economy
is in a super cycle. Personally speaking I think over the
next 8 10 years, we are in the most opportunistic wealth
creation that we collectively are going to see in our lifetime. Were in a super bubble if you like or a super wave
and there are going to be money making opportunities
that were never going to see again in our lifetime. Weve
got two choices. Youre either going to be actively participating in those for profit, or youre going to be one of the
people that didnt and goes its alright for them they were
lucky. When you make money everyone else says oh you
were lucky. Theyre the people by the way that didnt get
off their backside to give their weekend up to come and
learn more like you guys have.
I can only applaud for making that decision. But we
are in a super cycle of wealth creation and youve got to
make sure youre in the box seats proper from it. As I say

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

its not just about money, it is just about money.
Global economic growth, economys booming at the
moment. Theres been some supply disruptions. In case
you missed it theres been some trouble in the Middle
East, a bit of a war and stuff. Theres been increasing
demand for oil also. If we look at this on a more serious
basis, I told you Im an economist, these are the sorts of
things we look at, if we look at the global trend, this is the
increased demand for oil from 1999 to 2005. How does
that trend look to you? Bottom left to top right, which
means there is an uptrend. The demand is increasing.
Look at China, how much is that expanding, plus the rest
of the world. Steve was talking about the expansion in
China.
One of the signs of the middle class when the Indian
economy was booming is the fact that when you become
middle class you buy a car. The middle class in China
is going to be 300 million people. What are you going
to do with 300 million new cars on the road. What do
you reckon is gong to happen to the price of oil, because
there is likely to be more demand for oil. Its going to
go up, isnt it. Lets look at something else which is quite
interesting, and again I think Steve mentioned this earlier.
Capacity, OPEX capacity is this purple line here. This is
production. There is not a lot of spare there, is there. And
its growing. Okay. Fortunately there is new sources of oil
coming and fortunately for those of us who happen to
have Woodside and BHP and that, its happy days. Now,
this is the economics. I spent years studying economics. I
will just distil this down until the next minute or two if I
can.

Understanding A Simple Tool Like

Supply and Demand Is All You Need To
Figure Out Price Movement
This is a supply and demand function. This is supply.
When prices are higher, companies want to supply more
of their product. Say Mars Bars were $50, Mars would be
queuing up to sell them wouldnt they? But if Mars Bars
were $50, very few people would want to buy them at
that price, so demand is inversely related. Does that make
sense. As economists we like to sound smart so we have
this point called equilibrium, which is that little spot in
the middle. It just means where the two lines cross. Thats
where price is set. Once supply meets demand thats
where we establish price. The interesting thing about oil is

the demand doesnt really get affected that much by price.

When you are driving along in your car and the tanks
empty, you dont go past the garage with the red light
flicking in your car, and go $1.20, I think I will just run
out of petrol instead, and just, youve got to pull in and
fill up. Youve got no choice.
So the demand function for oil is a little bit steeper.
So demand, you notice its not as flat, its a little bit
steeper, its inelastic to give it its technical term. And
inelastic things tend to get taxed. Cigarettes are extremely
inelastic. Demand for alcohol is inelastic. So too is petrol
or oil. What weve also seen is the supply of oil has been
disrupted, had problems in the Middle East and Iraq and
so on and so forth. So supply has moved up. The new
equilibrium is where, at a higher price point. Thats the
economics behind why prices are rising. Overlay on there
the fact that demand is also increasing because weve got
all these people demanding more and more, is it any wonder looking at the simple economics that price is getting
higher? Thats pretty obvious isnt it?
Now you dont to speed the time at uni doing economics like I did to understand that, because youve just
got to go to the petrol pump and do that. The key thing
and we talked about trading with leverage before is how
to translate this investment idea into something thats
going to make us money. This contract here is a futures
contract. Again whats the overall trend on that. If its
trending up isnt it the sort of thing that we should have
in our portfolio, and if were very confident that its a
genuine trend, its not just a bit of a speck and it sort of
moved, shouldnt we be getting long a bit using derivatives to get that maximum leverage because isnt it a high
probability trade? If more and more people are demanding oil and supply is reasonably fixed or theres a lead time
before more supply comes on and prices are moving up,
we should be long oil stocks using as much leverage that
we can get our hands on because I would think, its an
easy word to throw in, but I would think thats a pretty
strong case for prices moving higher, is it not?
Its a pretty high probability trade. Now heres the big
thing. Its one thing knowing its a high probability trade.
Its another thing trading it. Because a lot of people have
got approach which they go ready, fire, aim, boom. How
effective is that? We want to ready, aim, fire, we want to
be able to identify what were looking to trade and then
trade, and be able to trade it confidently. Its one thing
to have a think about. How many people here have gone

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

to buy some shares, and theyve gone I bought ended up
buying five or ten grands worth, I didnt buy the 50 that
I wanted to. Can anyone relate to that, where they havent
bought as many shares as they wanted to. They say how
come you didnt load up and get the full position that
youre after. They go I didnt know if it was going to go up
or not. If you didnt know if it was going to go up, why
did you buy any? Youre either in or out, youre pregnant
or youre not. Its black and white. Theres no, we might
have a few, youve got to be decisive. Youre in or youre
out. So youve got to be confident, if youre going to be
decisive. Is that a fair assumption? Thats why you need
a trading plan and you need to understand this sort of
thing.
Dont worry if you dont understand this because were
going to help you with that in a moment. We need to be
long either by our futures or investing in oil companies.
Theres over 180 oil producers in Australia so you have got
to be a bit selective. This is where our quantitative overlay
comes in. the sort of stocks that Im looking for have
got growth and value, at a reasonable price. The GARP
model. And the stocks, and this is quite well documented,
because I do a recommendation service, which we will
run through shortly. The kind of companies Ive been
looking at and had in my portfolio not Johnny come
lately five minutes ago, when everyone worked at oil, but
Im talking well over a year ago, Woodside Petroleum, Oil
Search, BHP, Stewart Petroleum and Australia Worldwide
Exploration. Did you know for every one dollar moved
in the price of oil adds $55 million to the bottom line of
BHP? Is it any wonder their share price went up? Who
had BHP in their portfolio by the way? And who didnt?
Did anyone know that oil had that much impact
on BHPs share price? Its good you came today, at least
youve learned that. Thats the sort of information you
need to have, and as professional traders and researchers
and providing advisory services, thats what we do. So we
can guide our clients to be in the right stocks at the right
time. Not. Retrospectively going oh yeah, if youd done
this you would have done that. Anyone can look at the
chart and make the curve fit. As I say Im on record back
on the first of June 2004 recommending these stocks at
these price levels. Thats a subsequent price levels, obviously theyre slightly higher than that now. 101%, I mean
okay thats a cracker jack. Oil Search 182%, more leverage play right the way through solid returns. Now was it
rocket science how we actually arrived at investing in the
oil sector?

Pretty intuitive really wasnt it, but did it help that I

sort of guided you through the thought processes a little
bit? Did it sort of make a bit of sense there? Thats what
our business is all about with DIY hedge fund is to help
guide you to the areas of the market where youre likely
to find value and growth. When weve found that area of
the market to identify the specific stocks, which are going
to give you the better returns? That sort of makes sense.
To go back to my dad, if it makes sense from a common
sense point of view, its probably right really isnt it?
Lets have a look, Woodside Petroleum, theres the
chart. Nothing surprising there, sort of bottom left top
right, lets have a look and see how wed have gone then
trading our higher probability trade using a CFD. Lets
just say we bought 1,000 Woodside Shares back in the
first of June as per my recommendation which was
published back then, first of June. Trading in 1665. Cost
of 1665 initial margin, $49 in brokerage and interest on
the position, so thats 434 days later. Lets say we close
that position up. To close it up wed have to pay a little
bit more brokerage, $95 which is built into the spread on
the CFD. And altogether we paid nearly $2,000 interest.
People went gee thats a lot of interest, forget about the
interest. Youve just made a gross profit of $15,270 less
your costs, of giving you a net profit of $13,186 on an
initial outlay of $1,665. Now I appreciate its getting a
bit late, so lets look at that in percentage terms. Thats a
790% return on individual margin. Thats a nice return.
Im just trying to feel, you set some high goals in here
today, and rightly so, but they dont come along that
often, so when you do weve got to jump on then. How
did we decide to trade that trade in Woodside? Did we
look at what was going on in the economy, did we have a
look at what was going on with supply and demand, did
we look at the 180 sale of stocks in the oil sector and did
we identify growth at a reasonable price? Yes. Then having
identified a high probability trade, ready, aim, bang, fire,
were in a high probability trade and because we were
confident, it wasnt heads or tails. We were confident,
we wanted to have a go at it, so we got out position in
and fortune favours the brave, but not really that brave,
fortune favours a logical, intuitive approach, really. 790%
return. You might be after more than that, I dont know if
I can help you, Ill find some tea leaves, see how we go.
Lets have a look at case study two, because that was
a fluke wasnt it? Reserve Bank of Australia. Our mates
down there that really like making our mortgages painful

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

if were unfortunate enough to have a mortgage. Rates
raised in March to 5.25 %. Part of a series of interest rate
rises, now when rates are going up, generally speaking
if your mortgages are getting more and more expensive
because you went to a property seminar and you got 9
geared properties all over the place and they are all negatively geared, its a mess. Sorry thats the wrong seminar
group, beg your pardon. Interest rates are rising, would
you feel more comfortable going down the high street
spending or less comfortable if your mortgage payments
are going up. Whod be more comfortable? Lets see whos
gung-ho here. Okay, unless youve done the hedge with
Steven weve gone on the bond trail. Most people are
going to go well Im going to sit on my cash here, raise
interest rates, things are getting a bit more pricey, I have
to be careful about how I spend. Is it any wonder in that
case that consumer confidence dropped? So likely slow
down in consumer spending, but which stocks? What
were going to focus on is consumer discretion.
Why, because it doesnt matter how tight the economy
is, stocks like Woolies are always going to perform because people need food. A grocery store is very different
to consumer discretionary. You have to buy food. However some of the other areas which might be considered
luxuries, flat panel screen because youve just renovated
your house or whatever you do, that goes out of the
window.
What Im looking at here, though are three retailers,
Colorado, Just Jeans and Pacific Brands. Slow down in
consumer spending is likely to affect clothes shops more
than Woolies. So were going to go short. Weve given
ourselves a little bit of time after the interest rate rise to
digest the impact of it, short on 11 April. Weve seen our
share prices move down, thats a negative move of 21%,
31% and 10% respectively. High probability trade do
you think because the fundamentals and the technicals
and the quantitative approach all combined to give us a
good shot on goal. Lets take a look at Colorado. Theres
the chart, if you long this stock theres a very technical
expression which describes this, called brown trousers. Its
not a good place to be in.
So lets take a look at a short trade. Weve sold our
Colorado shares at $5.70. Why did we sell them, because
we were confident we knew logically that a rise in rates
would slow spending so lets get exposure to the retail sector and be sorted. $171 to short $5,700 initial margin,
trade open for 66 days, we sold our shares to $57.00, we

bought them back for $45.00, our gross profit is $11,700.

Thats on an outlay of $5,700. Thats their $300 cost,
remember were short so we actually receive the interest,
we didnt pay it, we received it. So we got $206 as well, a
nice bonus. And thats given us a net profit of $11,599
on a $5,700 outlay. Thats only a 2035 return, Im sorry
to disappoint you with but it was a high probability trade.
We are using gearing in high probability trades. Gearing
in low probability trades, you can do that. I will leave
that to you.
Lets have a look at something. Why the power triptych. Remember there are three things we are looking for.
Sure we want a technical analysis to support what were
doing, sure we want a quantitative analysis to support
what were doing, but importantly is that fundamental
overlay. Remember all three were looking for trades in
here. Correct? Thats the reason why we have this approach. Dont get me wrong, we didnt just happen on
this. Ive been trading for years. And you work out what
works and what doesnt. Likewise with Steven, we sat
down and built a model and it works. Thats, the benefit
of having somebody elses experience. Let me tell you
experience is a great teacher. But its even better when its
somebody elses because its a heck of a lot cheaper when
it comes to investment markets. Whos had a double on
shares without knowing what theyre doing? Anyone get
cooked, fingered, smoked, or whatever the expression is
you like to use to describe it?
Not good, is it. So lets look at our chart for a moment, why the power triptych. Anyone that knows
anything about charting, looking at this little baby here,
is going to be going well what have I got, Ive got a break
of a down trend, Ive got some support here, Ive punched
up through that down trend there, its formed a higher
bottom. Youre probably familiar with some of these
terms. Im trying to get away from bottom things, but
a higher bottom. Weve recovered support, its held that
support. Technically looking at that, what would you be
thinking of doing? Its a buy isnt it, its a screaming buy if
you look the technicals on its own. Its a higher bottom,
brokered down, trend strong, closes up. Higher bottom.
All the things you look for in a buy, except in our case
what were going to do is overlay the fundamentals so
technically its a buy, quantitatively its a buy but fundamentally its a sell because as a retailer and weve just seen
interest rates go up. You dont want to be buying retailers
where no ones spending. Does that make sense?

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Millionaire Phenomena - Stock Market: ANDREW BAXTER (cont.)

Had you bought there and done exactly the same
trade on the CFD but bought instead of sold, brown
trousers were back again, buying at $5.80 instead of selling, the same position size, that will be a loss of 80c or
$8,000. Who likes that one. Thats the benefit of having
the wisdom of the business model and the trading model
that weve put together. The power triptych. Very very
important, $8,000 that could have saved you there and
then. Thats a painful wrap across the knuckles, isnt it?
Dont forget being especially if were guys and were using
derivatives, weve got that type A personality, Im right the
markets wrong, it will come good. Whos been there? Just
an interesting take away point while were on the subject
of whos been there. All big losses used to be small ones.
We just let them get out of control. Who can relate to
that?

No matter what wealth creation strategy you have a

bias to, I strongly recommend that you add to that the
stock market as a way of building equity and also generating cashflow.
Thank you for being a terrific audience, and I look
forward to being of service to you in the future.

Well the proof of the pudding is in the platypus, did

you say? Proof of the pudding. These are some of the
recommendations for my quarterly economic outlook and
briefings that I do around Australia every quarter. As I say
these are documented, theyre video, weve done them all
over the capital, around Australia every quarter. Going
back to June 2004, 69% average gain. Theyre reasonable returns. Thats on the share, thats just on the equity.
Imagine gearing that up now by using the leverage. By
the way the average return on these recommendations
that Ive been doing now for the last 18 months or so, the
average return per recommendation is 35% on these ones.
Thats annualised at 40%. Thats not using leverage,
thats just the straight share. Now, how does that look, is
that alright? Is that the sort of thing that might help you
with your equity curve when you come to look at it, that
goes something like that instead of one of these? What
have we done? Weve taken high probabilities, no heads or
tails in this room anymore.
What Ive attempted to do is give you an overview of
how the professionals trade the market. There is lots of
money that can be made from trading and investing, but
what you must do is make sure that you are around to
enjoy it.
Anybody can make one option or CFD trade and
make 250%... But very few ever stay the course and make
above average returns consistently year-in, year-out.
What Ive delivered here is the process that Ive used
for years that has enabled me and a select group of clients
to consistently trade profitably.
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How I Took A Complete Novice Out Of

The Audience With No Previous Trading
Experience and With 30 Minutes of
Coaching , Showed Him How He Could
Potentially Replace His Income Fast...
Part of the Millionaire Phenomena Series

adies and gentlemen, my name is David Galtieri,

and I am going to introducing to you and taking
you through the world of trading in the sharemarket, or better still, trading in a product called CFDs,
which is just a bit of a more powerful way of making
profits out of shares.
What we are going to do is I will take you through a
very simple step-by-step process on how to actually do
this and John set me a task and that task was that I need
to take someone out of the audience, stand you up here
with me and we will play some trades together with all of
you as well. And obviously, the markets are closed today
so I am not going to do anything live but we can always
test our strategy. So trying to create cash flow, that is
what I am going to talk about this afternoon. The basic
is that we can use the sharemarket to go and generate
us cash flow that you can then go and use to buy more
properties, buy more businesses, and start up new ventures. Cash flow because the words cash is king is very
important.
Before I get started, everything I say this afternoon is
general information. It is general educational information. I have got to say this, okay? I have done all the
exams and studied for a financial services license. I am
not even going to worry about that right now. What I am
saying here is that anything I say to you is general information, and if I say something that might lead you to
do something, well then the old saying is Future performance is not guaranteed by historical performance. But
you know what? Mark Twain said that History does not
repeat but it damn well rhymes and it is pretty close.
Okay, how do we do this? We trade the financial

Meet David Galtieri

David Galtieri pulls back the curtain on CFDs and shows how they
work and how you can benefit
from trading them, using one of
the most advanced, yet simple to
use award winning trading platforms in the market.
David has been an investor and
trader for over 14 years. His strategies combines both medium-tolong-term investing in equities and
also short-term trading in options, equities, CFDs and futures on
local and international markets.
He has spoken on the topics of trading and investing to thousands of people both in Australia and New Zealand. David was
key a contributor into the development, sales and marketing of the
highly acclaimed charting and market information software, The
Bourse, by Bourse Data.
David has opted-out from the corporate world and lives a relaxed
lifestyle trading from home and enjoying the company of his wife
and 2 young children.

markets to create cash flow. There are risks in everything

that we do when it comes to investing. And what is the
key thing that we need to sort out? It is to know those
risks, to manage those risks, and to minimize those risks
at all times. Now, if these risks are minimized and managed and our profits are let to run, then what happens is
we can create additional income, correct? We minimize
and manage the risks. We let our profits run and cut our
losses short then we can create some additional income.
Now, if we do this consistently, we can create wealth.

Millionaire Phenomena - Stock Market: DAVID GALTIERI (continued)

How? By, as it says, purchasing assets that experience
passive income and capital growth. Now to do this, you
need to be a profitable trader, yes? No use in doing it
if you are losing money every trade. You need to be a
profitable trader. In my 14 years as a trader and an investor, I started off as an investor just investing in shares and
spent the last 10 years trading, and having been involved
in a company like Bourse Data and having spoken to
thousands of our clients and other traders and investors
that are colleagues and friends, I come across a lot that are
profitable and I come across a lot that are not so profitable.

My 3 Secrets For Trading Success

The three key things that makes a profitable trader
are these: They have a simple and proven trading plan.
Proven to who? To themselves. They have confidence in
their trading plan. They know it works because it is proven, and because it is simple, they do not get confused.
Because when there is confusion, there is fear, and where
there is fear, friends, there are losses. And finally, they
are disciplined to sticking to that plan. A simple proven
plan, stick to it, confidence in it, discipline. Their trading
is clear cut. Why? Because it is simple. They know when
they have got to buy something and sell something. Their
trading is not emotional. They know that when they buy
something, they are buying it not on emotion. They are
buying it because their trading plan says so. They have
got simple strategies because we remove confusion, and
of course there is no doubt in any trade. We have got all
that? That is pretty simple.
So let us have a chat about what we actually do. What
we actually do is we buy something when the price is low
and we sell it when the price is high. Pretty simple, yes?
We buy it when it is low and sell it when it is high. But
you are all saying, Yes sure. But if it was all that simple,
come on Dave, go on and show me too. Yes. Let me tell
you this. John mentioned I have got two little children,
twins, James and Lauren. They are four years of age. My
little boy James, he comes in to my office every afternoon,
really every five minutes, and he says Dad, what is the
stock market doing today? Can I see the stock market?
Here you go son, here it is. He says Is it going up
or down today? and I say, Well, let us have a look if it
going up today or it is going down today. Okay. What
do we do, Dad? We buy when it goes up? Yes. And
we sell when it goes down? Yes. That is it. Four years

old. We buy when it goes up and we sell when it goes

down. The problem with the rest of us is that we get too
involved in this the grass is green, the sky is blue, the
sun is yellow, the divergence is like this, the convergence
is like this, the technical indicators are doing that, or I
know it is going up but you know what? I am going to
sell anyway. We make it confusing. So we need to take
all of that out.
When we buy, we need to make sure that we avoid
these. So if we bought all the way down there and we
hold it to up here and then we watch it going down, and
down, and down, why do we hold on? Why do we hold
on? We hold on because maybe we have an emotional
attachment to that particular company, or maybe our father or our mother left us, or maybe we got shares in this
company because we had an insurance policy with them.
Why do we hold on? The reason we hold on is because
we do not have a plan. We do not have a strategy. We do
not know why we got into something and so we do not
know why we should be getting out., and so we watch
our money go up, up, up, up, up, and then we watch it all
wither away. That has to stop today. Okay?
So, we have got to avoid capital loss at all times. The
problem with most traders is they do not have a plan,
they overtrade or overextend their finances, and they
attempt to predict the market. That is bad. Do not ever
pretend that you can predict the market. They think they
know more than the market. I am buying here, it is
going to go up for sure. And then it goes down. But it
will all come back, I am sure. No. We will see how that
works in a moment.
And of course, they get wiped out financially. And
then they are looking a bit like this dude: empty pockets.
We want to avoid that, okay? That we need to avoid at
all times. So how do we succeed? We need to develop
a trading plan. I am going to help you do that this
afternoon. We need to keep everything simple. Avoid
confusion. We will back test the plan. Now how you
do this is you basically take a stock, any stock as long as
it is liquid and as long as it staying in the Top 20 stocks,
whether it is New Zealand market or whether it Aussie
market. It might only be the Top 5 in New Zealand but
Top 20 in the Aussie market, and Top 100 in the US market, these are all the highly liquid stocks that are traded
everyday by the professionals, so there are a lot of shares
going through. We pick one of those. We go back five,
six, or seven years and we trade it day by day in history.

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Millionaire Phenomena - Stock Market: DAVID GALTIERI (continued)

Remember, I said history might not necessarily exactly
repeat but it rhymes? Well, if we know how something
worked in the past, that gives us a good probability of
how to work going forward and it will prepare us for what
this stock does going forward. So we will back test the
plan.
And then finally, we need to follow the plan. Nothing
about emotion. It is about If my plan says today I have
to buy this share, then today, I have to buy the share. It
is not because My tummy is sore or I have got a fever
or a headache or My kids are sick. Obviously, you
take things as priority. If you are kids are sick, well then
forget the sharemarket, another opportunity will come
up tomorrow. But if my plan says buy the share and I am
sitting there in front of the screen watching it, well then I
have got to buy it, folks. That is as simple as that. And if
my plan says, Time to sell, then you have got to sell.
So before we begin, let us set some expectations.
What is it that I am talking about? I am not talking
about ringing up your boss on Monday morning and
saying You know what? I quit. No. Forget that. I
have been working full time for 13 out of the 14 years of
my trading and investing. Why not? Why let that other
$50,000 - $150,000 paycheck go just so you can say You
know what? I am going to be a full-time trader. No.
You have to work your trading in with your work. And
then once you know that you can create the cash flow
you need to service all your other investments and your
lifestyle, then we get rid of the job.

How Many Trades Per Week and Where

To Set Your Profit Targets
So, how many trades per week? Not 10 or 15. One
or two. One or two trades per week. Now it might mean
that it is only one trade a month, but if the trade that
you have selected in that month is meeting all the rest
of the criteria we are going to put up, well then it is only
trade for that month. But we work on one to two trades
a week. You might look at the sharemarket everyday, but
we will do one trade to two trades a week. The best one
or two. Let us expect a percentage profit. 1.5% to 2%
profit on that trade. So what does that mean? It means
that if it is a $30 stock, 1% is $0.30, correct? So if you
bought shares in a $30 stock, 1.5 to 2%, let us work on
2, you would want to make at least a $0.60-profit, okay?
1.5% to 2%..

I know one or two traders that, for the last year and
a half, have had pretty much a 100% win ratio. Every
single trade. It is amazing. These guys, it is like there is
an aura shining behind them. And you know the one
thing that they know is that they can never be too cocky
because the minute that they think that they are beyond
the market, it comes around and whacks them around the
face. But let us be realistic. Let us work on seven wins
out of 10 trades. So we will expect three losses but seven
of those should be profitable, alright? You know, I could
give you a strategy today and the strategy could be let us
get the shares page out of the newspaper on a Monday
morning, stick it up on the board, get a dart, close your
eyes, throw it, and then flip a coin. Whatever share the
dart lands on, that is what we are trading today, and if
the coin lands heads, we buy, and if the coin lands tails,
we are going to sell short, expecting the price to go down.
Do you think you can make money that way? Yes. Yes,
you could because if you managed your money, if you
said I am going to buy this today and if it does not go
up, I will just sell it and take a small loss. The next dart
you throw and coin you flip, you buy it, it is probably going to go up, and all you have to do is hold on to it until
it stops going up. Yes you could make money because as
long as you manage your money and manage your risk,
that is all it is at the end of the day.
A lot of people do not manage their money and manage their risks. So those three losses that we are going
to get, they are going to be very, very small losses. They
might be 1% losses but very, very small losses. Whereas,
the wins, they are going to be 2, 3, 4, 5, or 10% wins.
We are going to let our profits run and cut our losses
short. Always remember that. Let your profits run. Cut
your losses short.

Achieve 50% - 60% Return on Your

Capital
Now, we only do this 48 weeks of the year. You work
for your boss 48 weeks of the year, probably some of us
work 60 weeks in a year. You need a break. So even if
you were doing this full time, if you had left your work
and you are doing this full time, you need a break. So if
you apply all the mathematical models onto that, you get
a roundabout of 50 to 60% return per annum. If you
manage your risk, manage your money, cut your losses, let
your profits run, one to two trades a week, 2% per trade,
seven out of 10 wins, you get a 50 to 60% return per

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Millionaire Phenomena - Stock Market: DAVID GALTIERI (continued)

annum on your capital. Who thinks that is okay? Who
thinks 50 to 60% per annum on your capital is okay?
Very good. Who wants more? Very good. Excellent. Let
us see how we get more.

How To Increase Your Returns

Exponentially With Leverage
What I have talked about so far folks is just trading
shares. No leverages. Just trading shares. That is, you
put $10 in you get $10 worth of shares. You cannot do
that. You put $500 in you get $500 worth of shares. No
leverage. There are other things that we call derivatives.
Some of you who are into sharemarkets and understand
share trading, derivatives; there are warrants, warrants of
a share, and options of a share. Now they also give you
leverage. What it means is that a warrant will give you a
roundabout of four to five times leverage. So if you put
$100 in, it is actually allowing you to control a roundabout of $400 to $500 worth. If you put $1000 in, it is
allowing you to control $4000 to $5000 worth. Options
give you eight to 10 times leverage. So you put $1000 in,
it is like controlling $8000 to $10000 worth.
CFDs. Who has heard of a Contract for Difference?
A CFD is exactly like a share, just like you could buy a
share in Carter Holt Harvey, you could buy a CFD in it.
Just like you could buy a share in Fletcher Building, you
could buy a CFD in it. But what it is, is as long you are
buying one share which is worth say $20, a CFD allows
you to buy it for only 10% of that or 3% of that or 1% of
that. We will go through an example. Futures, they give
you about 25 times leverage and the Foreign Exchange
Market 100 to 400 times leverage. A lot of you are not
even ready for that yet. What we will do is we will stick
to the CFDs. Contracts for difference. They are very
similar to buying a share. A CFD price mirrors the stock
price. The key difference though is leverage. $1 of your
money allows you to control somewhere between $10
to $50 worth of a stock. It is the leverage. Let us stick
to 90%. So if you put in $1, it allows you to control
$10. Consider it like a 90% margin line. A margin line
is where you go to a financial institution and you say I
want to buy some shares. And they will say, Okay, we
will put in half the money and you put in the other half.
That is a margin line. Well here, the CFD, the contract
for difference provider, they are putting in 90% of the
money and you put in 10%. How good is that? That is
very good.

So, the difference is when you are buying a share, you

are putting in 100% of the money. The whole blue bar.
Using a margin line, you put in 30% and the bank puts
in 70. Using a CFD, you put in this bit and the bank
puts in the rest. Here is an example. You bought a share
for $4.00. You have to put in $4.00. The share goes up
by $0.30. This is the profit for here. $0.30. So you get
a 7.5% gain. That is the example I was talking of before.
Remember I said let us make 1.5 to 2%? Well here, we
just made a 7.5% gain. Let us talk about a margin line.
If you bought it on margin, what it means, let us say this
was a 70% LVR, that is, you put in 30%, the bank puts
in 70, that is the bit you put in and that is the bit the
bank puts in, you still make that 30-cent profit as before,
so now your $0.30 on the money that you put in before
we put in $4.00, now we are only putting $1.20. So
that is a 25% gain. Now let us have a look at a CFD. A
CFD, we have the same $4.00 share. It means that you
only put in 10% or $0.40. The same $0.30-gain or profit
now means that you make a 75% profit on your money.
So, not all of your money has to be tied up. It can be
doing other things. Not all of your money has to be tied
up. Only a percentage of it has to be tied up and you
are making a higher return on that money. So this is the
summary of those three examples.

Demystifying CFDs - Understanding the

Risks and Rewards
Now, CFD, it is a loan. Consider it like a loan. So
you have to pay interest on the money that you borrow.
And normally, the interest is a roundabout the reserve
bank right plus 2 to 3%. Now, that is when you are
buying stock. If you are buying stock and the price goes
up, that is what we call going long. When we are buying
something, we are going long. We longed the stock. If
we are short, that means I sell something that I do not
own. Yes, you can do that folks. You can sell something
that you do not own as long as you buy it back a little
while later. That is called going short. That is how we
make money from the markets when they go down. If
you think that a company is going to go down, if you
think that XYZ Company is going to go down, then you
can sell shares in XYZ that you do not own, and when
the price gets down to where you think it is going to get
to, you can buy them back and just settle your obligation.
Your obligation is when you sell those shares that you do
not own, you just need to buy them back, and you keep

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Millionaire Phenomena - Stock Market: DAVID GALTIERI (continued)

the profit in between.
Now when you go short, when you this making
money as the market does down thing, you actually get
paid interest while you are short. You also get dividends
on CFDs. So if you buy some stock, if you longed some
stock and you are holding it when the stock goes exdividend, well, bingo! You actually get paid the dividend.
The cash portion. You actually get paid the cash portion
of the dividend straight into your CFD trading account.
That is good! You are putting in 10% of the money, you
are controlling the whole thing, and you get paid the
full dividend as well. However folks, the opposite side
is that if you are short of stock, that is if you sold a CFD
and you are waiting for the price to go down and there
is a dividend, well, you have to pay the dividend. That
money comes out of your CFD account. If this is a little
bit confusing for you right now, do not worry about it
too much. Let us just think about the long side, okay?
So we are buying something low and selling it high. Let
us not make it too complicated. But we can make money
in the markets three ways. When prices go up, when they
go down, and when they go sideways. You make money
all the time on the markets.
There are risks. You are working on leverage. Remember, I said you are putting in $1000 and you are controlling $10,000 worth, so you can actually lose a little
bit more than you put in. But there are ways to avoid
that so we would not let that worry us too much. But
you need to understand that risk. So at the end of the
day, remember I said that one of the problems with most
unsuccessful traders is that they stretch their finances?
That last line says Do not take a bigger position than you
would with your own cash. Therefore, if something goes
against you, then you could always cover it, and leverage
is your friend.
So, summary. How do we profit from trading? We
need to step the odds in our favor. Everything that we do
before we buy a share, we need to make sure that those
things are stacked in our favor. We need to make sure
that the reason we are buying it is because it meets our
trading strategy. It is not because it is an emotional decision and it is because we are expecting at least a 2% profit
out of that trade. That is why we buy it. We let our
profits run. Once we get to 2%, we do not stop there. If
it wants to keep going, let it go. But if it goes against us,
we must cut our losses short. And that is what we call a
stop loss. Using a stop loss to exit.

How To Pick If The Market is Going to Go

UP or Down...
We are going to start doing some analysis. I am going
to teach you the absolute basics, which is where you make
most of your profits. The software I am going to use
today is a software by the company that, of course I own
part of, why would not I use it? Bourse Data

Understanding Trends in The Market

So first, we are going to look at trends. A trend. We
talk about trends in the market. There is a property
trend? There are trends in residential property. There
are trends in commercial property. There are trends in
marketing and business. What businesses are good to get
into? What are in an uptrend? I invest in commercial
property and residential property, and I like meeting with
my bank manager because I ask him this question. I say
to him Keith, tell me, where are most of your loans going out to these days? And he tells me. There is really
big growth in this area or there is really big growth in
that area. Alright. Really? Oh, okay. Good. Are they
mainly business lines or investment lines or what? And
he tells me all these information. You could get that from
your banker, these trends. So what are the trends? When
in the sharemarket, there are trends as well, and it is quite
simple that if a trend is up, what do we do? We buy. And
if the trend is down, we sell or stay away, if you do not
understand the concept of selling short. So we need to
now recognize these trends and as it says in that second
point, most inexperienced people try to trade against the
trend. Why go buy a residential property in an area that
is going down? It makes sense, yes? So why buy shares
when the sharemarket is going down? We need to be
looking at selling shares.
The key with trend analysis and the reason it works
is because the biggest money is made during the longest
trends. You can see here the red line is the actual share
price. It is going up. Do you all agree with me that the
red line is going up because it is starting down here and
it is forming highs and high or lows, that is a low there,
it is a higher than this one? It is forming a higher high
because that high is higher than this one and a higher low
again because that low is higher than that one. You got
that? So it is going up. So therefore, what can we do if
the stock is going up, we can only buy. We can only buy.

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If the stock is going up, we buy. If the stock is going
down, we do not buy. You do anything else but do not
buy.
So an uptrend. A definition of an uptrend. Do you
remember that first chart I showed you where the share
price went up and up and up and up and I said avoid capital loss and then it fell? Let us see if we can avoid that by
learning just one thing today. One thing. The definition
of an uptrend is that a stock must be going up by forming higher highs and higher lows. There is a low. That
is a higher low. Low, higher low. This is a high. That is
a higher high. When a previous high is broken, that is a
confirmation that the share is going to continue up. If
you have a sequence of higher highs and higher lows in a
series, this share is going up which means that increases
your chance of a profit if you buy. Let us have a look at
that on a real share chart. You can see quite clearly that
we have got higher highs and higher lows. Low, higher
low and higher high. We are breaking the previous high.
So let us go back to that example. You bought it all
the way down here. You are whistling Dixie really happy
up here. How do we avoid holding on to this for too
long? For this to continue going up, what needs to happen? Now that you know that it has got bright previous
highs, for this to continue going up, what does it need to
do? Higher high. So if that is our current high, this here
needs to break past it. Did it ever do that? No, it did not
do that. It is like a ding-a-ling-ling-ling! Alarm bell. It
did not break the previous high. So if you are holding on
to this share hoping, it has got to break the previous high
for it to continue going up. That alarm is saying to you
just get ready. You might need to sell this. But not yet.
If an uptrend is higher lows, if I flip that piece of
paper over, a downtrend is lower highs. Let us have a
look at what we have got here. If your alarm had gone
off, it never broke the high and it started to break a previous low, you could probably set a stop loss right here,
and when it get to here, you sell. But if you were saying
Look. I am happy to hold on to this a little bit longer.
Let us have a look at the next previous law, it is that low.
When it breaks that level, we will sell. If you are still not
sure, well then let us wait to see if it continues breaking
lows, now we have got a lower high. It never even came
back near this. We would need to consider selling.
So the points of interest there are the ones marked in
the green circle. You would not hold on to this share all

the way down here. It is clearly now in the downtrend.

So now, let us build the trading rules. We have got one
concept. You could take that concept that way today and
if you are holding on to some shares that you have had
for a long time, have a look at their share chart. Now
with The Bourse software, you can only get Aussie shares,
so unfortunately, you cannot go and have a look at your
New Zealand shares if you have them. But if you have a
charting service with your broker or a web-based service,
go ahead and have a look at the share price chart and ask
yourself: Are the shares that I am holding forming higher
lows or are they starting to form lower highs? If it has,
consider what you need to do.

THREE Rules To Get In,

ONE Rule To Get Out.
These trading rules, I am going to give you three of
them. Three rules that we are going to get in and one rule
to get out. Three rules in, one rule out. I will write them
up on the flip chart. I want you to write them down and
then we are going to play a trading game, and we will
have our volunteer come up and trade with me.

Rule #1:
What Is The BAR Telling You?
We are going to look at three things. The Bar. What
is the bar? It is not where we go and get drunk. Every
time and everyday when the share market opens, there
is an opening price of a stock. There is a high price on
that day. There is a low price on that day and then there
is a closing price. When you join the dots on that open
high low close, we can draw a bar or a candle. We need
to analyze what that bar looks like. The days price. We
need to analyze the overall trend and then we will analyze
the overall volume of shares that are traded on that day.
Bar analysis, trends, and volume. Let us go.
We are going to get ready for rule number one. If the
share is going up, and we want to buy something, let me
show you what a bar looks like. I will just flick over to
the software and I will expand. That there is a bar. See
that? These things here are different days. One bar per
day at the moment. What I have got up on the screen
here is the SMP 500 Index. It is the New York Stock
Exchange Index. But everything does not really matter. I

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could put up the XJO which is the Top 200. Again, same
bars. Pretty long ones. Each one of these is a bar and
they tell us a story on what the traders were thinking on
that particular day. If we are looking at something that is
going up, then you see here? We would expect the bars to
be going up. Each bar will be higher than the one the day
before and they would look something like this. Yesterdays bar will be down here and todays bar will be higher.
In an uptrend, this is an uptrend, there are more higher
lows. See? Higher low. There are more higher lows. So
if we just picked the share that was going up and we just
closed our eyes and dove in and picked one of these bars
to buy on, which one would you like? You would want
an up day. You would want a bar that has a higher low.
If you just picked a bar with a higher low in an uptrend,
you have got a high probability of making a profit. Because as you can see, if you picked a bar anywhere in here,
the next days would be high. If you picked one in here,
the next days would be higher. Picked one in here, the
next days would be higher. Okay? Excellent.
Now we need to have a specific type of bar. This also
forms the rules. I will just put up something else. I will
put up a stock. Easier to handle. See, this types of bars
here, they opened over here and then closed at exactly
the same price. It is like the market does not really know
which direction it is going. I will draw this on the board
for you. It will be much easier to understand. So this is
yesterday and here is today. There is the low price and
the high price. That was the price where it opened. And
we read it like a book. We read a book from left to right,
so we will read a bar from left to right. The first thing
that happens in the morning is it opens. We have a low
and a high during the day and then we have a close. This
is a confident day because the buyers started down here
and they pushed it all the way up and closed the market
there. That is a confident day. There is a high likelihood
that tomorrow, we will have another one of these days.
Higher low.
Now we need to have a specific type of bar, a bar that
oozes confidence. Oozes buyers confidence. This is a bar
that oozes buyer confidence. If that is a bar and it opened
here and then closed there, the buyers started buying and
it went all the way up, and then they dropped it. Does
that ooze confidence? No. Absolutely not. Because the
sellers came in and pushed the price down at the end of
the day. Whereas, a bar that opens low and closes high,
the buyers are in control. They pay more. They are happy to pay more to push that share price up. And so we

need a bar that looks like one of the ones that is one the
screen. In fact, we need the one that is on the left. Here
is yesterdays bar. Here is todays bar. It has to open low
and close nice and high. That is what we call a bullish
up day. A bullish up day. And there it is there. Exactly
what I have drawn on the board. And that will form rule
number one. Rule number one: a bullish up day.
Now let us get ready for rule two. Easy so far. So let
us have a look because you might say Yes, but how do
you recognize this? If we just have a look at the very,
very last bar on the screen, I will expand that a little bit
more, have a look at that very last bar. So when I ask you
to do this in five minutes time, this is what we are going
to be looking at. Is that bar, where my mouse pointer is,
a bullish up day? No. Very good. Does that ooze confidence? No. What about that one? See what is happening? They are not bullish up days. Which direction is it
going? Down. Very good. That one? Let us have a look.
This is an up day but you see it opened here and closed
down there. It is not like one of those where all is one, is
it? Next one, does that look like this? Absolutely. That
is a bullish up day. Let us have a look. This is only one
rule. We are going to add another two. I have no idea
whether we should be buying on that day or not, but let
us see just based on one rule. And we do not even know
the overall trend because this is so expanded, we have only
got two months of data on the screen. There is no way
that we can work out a trend with just two months of
data, correct? Could you work out a property trend with
just two months of data? No.
But let us have a look. If I am saying that that is the
day we should be buying on because it meets just rule
number one, let us see what happens the next day. It has
not gone down. It still has not gone down. That is only
one rule. Now, that was just a fluke. I will just scroll
back. Just on that one rule, we made money. Let us have
a look at making sure that we could add another couple
of rules to make sure that we just have that added extra
probability of a profit. Are you all with me? Fantastic.
Before I get to rule number two, here is the question you
ask yourself. When you look at a share price chart, most
of the websites that you go to will have a line and that is
great, but it does not have bars. You need to make sure
that your software, whether you are using The Bourse
or not or whether the website allows you to go into this
mode here, either bars or colored bars or High / Open /
Close or even Candlesticks if you understand them. But
I am not going to confuse those who do not. So there are

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our bars. You look at that and you say is today a bullish
up day? No. So that means you do not trade that one
today. We do not even look at that stock anymore. We
move on to the next stock and ask ourselves, Is that a
bullish up day? If it is, then there is a possible trade and
we need to add the rest of the rules.

Rule #2:
Only Buy When Trending Upwards
Rule number two talks about trend and it talks about
that you are only allowed to buy when the stock is going
up, and you only sell when it is going down. To make it
easier for you, I am going to show you this. I am going to
scrunch this up. I am going to show you one thing. One
little rule that could have made you a fortune over the last
three or ten years. I am going to add what we call a longterm moving average. What is long-term moving average.
If you want to be in the market for more than 90 days,
90 days is probably a long term for a trader. When you
are in and out of the market in five to 10 days, 90 days is
long term. So I am just going to add a squiggly line. I
will just put 90 in. It does not really matter whether you
put 60, 70, 80, 90, or 120. The financial institutions
use 200 so I do not. But let me show you this, and I am
even going to turn this into a line now and I am going to
go back a little bit further. I am going to say to you that
every time the black line, which is the share price, crosses
above the squiggly blue line, which is our long moving average or our slow moving average , I would buy and every
time it crosses below, we will sell. Let us see if we would
make money. I am going to buy there because it crossed
above. Sell there. Did we make money. Yes.
Next one. Buy there because it crossed above. Sell
there. Did we make money? Yes. A few days later, buy
again and sell there. Did we make money? Yes. Let us
move on. We buy here. Sell there. Did we make money?
Is that enough evidence? Let us go for a bit more. There
is a bit of buying and selling here, that is okay. Our
brokers got to feed the family too once in a while. So
we buy here. But you see, in that buying and selling, it
would have been break even or a little profit. So we buy
there and sell there. Did we make money? Yes. From
$38.00 to $45.00. Convinced? That is one rule. So that
is a good rule because it is a money-making rule. So if
we add another money-making rule to the one that we
already have, we have got two money-making rules.

So here is the rule. You only buy when it crosses

above our slow-moving average. Rule two. To go long, it
is desirable that the price, the closing price on the day just
before the market closes, is above our long-term moving average. So you see here, it is above it. This is where
we could buy, somewhere in here. See here, it is sort of
not doing uptrend and not doing downtrend, we do not
touch that. That is sideways. So rule number two is the
close price, the closing price for that day, is close as possible to the close. Even if it is one minute before the market closes. The closing price needs to be greater than our
slow-moving average. And the one I used on the software
there was 90. A 90-day moving average. Now, 90 does
not mean that that is the factor of the world. Each stock
would have something that suits it a little bit better but I
am just trying 9o on the screen. I think I was looking at
Commonwealth Bank stock. So that is rule number two.

Rule #3: There Must be Good Volume On

The Stock
Rule number three: If you are going to buy something, do you want to buy it on the day that no one
else is buying or do you want to buy it on the day that
everybody is buying? It would be good to buy it on the
day when the institutions are buying. If the institutions
are buying on that day and they know something, then
I want to buy on that day. So we do that by a thing
called volume. And these green lines down the bottom of
the chart are volume. Let me show you. We will apply
volume and I am going to expand this and I put back
those bars. So you see the volume down here? And that
red line is telling me the average volume for the year.
So do you see how some of these green bars, they stick
their head above the red line? That means there is good
volume on that day, and to exceed the average volume
for the year, it means that there is probably more than
just the general public buying it. Just the general public
buying a stock would not normally exceed the average
volume for the year. So that means on these days, I have
got good volume.
But the rule is, and here is rule number three, the
volume for today needs to be greater than the average volume or, a big or, greater than the previous days
volume. An example of that is, you see here, right down
the bottom where my mouse is, the volume is not quite
at that red line. So it is not quite at or above. I could say

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the volume has to be greater than or equal to. See how
that volume is not at the red line? That is fine. But you
see how it is greater than the previous day? That is okay.
That gets a tick. So we could have check boxes here and
as long as we are placing big ticks and we are looking at
it and it says, Is that a bullish up day? You bet. Is the
closing price above our slow-moving average. You bet.
And is the volume greater than our average or previous
days volume. You bet. We have got three out of three.
We have got a high probability that this trade is going to
be profitable. Are you all with me so far? Fabulous.
Okay, so that is how we get in. What about how we
get out? To get out, we need what we call a stop loss. I
have added another line here, this green one. It is what
we call a fast-moving average.
To get out, we need what we call a stop-loss and I have
added another line here, this green one. It is what we call
a fast moving average. Fast, because it is a shorter term.
If you are expecting to be in the market for say only 10
days, or 12 days or 15 days, then we might use a 10, 12,
15 day moving average. Let us go and add one of those.
There is our slow moving average that we were using
before, see how it sort of quite flattened that area but if
I scrunch it up, you can see what it is doing. It is telling
you uptrend, downtrend, sideways.
Now, let us go and add our fast. Moving average and
I said let us say we only wanted to be in the market for
say 15 days. We will just put a 15-day moving average
in there and there we are. We do not really worry about
this one on entry for today. We will just use this red line
as a when we need to get out. Let us go back and just
have a look at quick trade so we get all of this info. Let us
expand it so we have a look at the bars.
Is that what the last bar that is on the screen, is that a
Bullish up day. Does it look like rule number one?
Okay, let us have look at the green line but you see
the green line is more flat and the red line is the one that
follows the price more so that is how you know the difference. The one that follows the price more is the fast
moving average and the one that is slow is the slow moving average. We have got a Bullish up day. Rule number
one. Is it above our green line? Yes. We are not worried
about where it is on the red line for the moment but it is
above our green line.
Is our volume at the average or greater than the previ-

ous day? Both, excellent. The rule says we need to get

into this trade so let us get in. Now, what I am doing is
I am just flicking day after day. This is where we got the
interest in our market for you so you know. That is were
we got in just before the close on that day and let us see
how we go. Not bad so far. Now, we have got to get out
some time. This is the nerve racking part. When to we
get out? I am worried so much it is on paper but what
happens if it drops?
When do we get out? When it breaks below the red
line. I need other one. So our exit, I will just write it
here, our exit is when the closing price is below our fast
moving average. When the closing price is below our fast
moving average. We are waiting for it, is that the day we
get out? Have a look at that and see our closing price.
Our closing price is below the red line, that is where we
get out.
So how much did we make on that? Let us measure it.
We got in here on the little yellow blot. We got out right
here. This is our worst case scenario, we made $2.90 on
a $38.00 share. So 1% is $0.38. We made $2.90. How
many $0.38 is that? It is about 5 or 6% so that trade was
okay yes? All right.
Now, what we are going to do is I am going to load up
the trading simulator. It is going to put the rules up on
the screen and I would like for someone to volunteer.
What is your name?
John:

John.

David:

My goodness, how are you John? Pleasure to

be up here.

John:

Yes, thank you.

David:

Thank you, all right. John, this is actually

really freaky. I was up in my room just before
coming here to speak and I was sort of thinking about what was going to happen and I
thought right. We will get someone up on
stage and I am thinking his name is going to
be John. It may be just that John is a common
name, I do not know.
We will let the software come up and we will
just pick a day and what we are going to do

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John is have a look at this last down the screen
and we will see if it meets the rules. You have
never tried it before?
John:

No.

David:

Excellent. You do not know me.

John:

No.

David:

Great. Magic. Everybody in the audience, let

us have a look at that one, John, is that a Bullish up day?

John:

Yes.

David:

It is, do you all agree? Fantastic. That is rule

number one ticked. Rule number two. Now,
the colors have changed here but you can see
that this wiggly one is the fast moving average. We will ignore that for the moment and
that one there is our slower moving average.
Is that above the slow moving average? John
says yes. Do we all agree?
Okay, excellent. Let us have a look at rule
number three which is the volume. It is
higher than the previous day. We are all
agreeing? Okay, John do you want me to ring
your broker? Shall we buy some shares? John
says Let us buy. Next day so you bought right
here at $29.52 and that is where it is right
now. Feeling okay about that?

John:

Do we buy at the end of the day?

David:

You buy just before they are closing the day.

Just before the end of the day yes. It is at the
end of the day that that buyer is confirmed
that is the closing price that is going go be
above and meets all our rules. What you now
have to do John is have a look at the fast moving average which is this green line here and
we stay in until it crosses. You are going to
tell me when to get out. So next day? Feeling
good? We are still in? Everybody is still in?
Yes? Next day? Good. Still very happy. Yes.
That is all good, we will move one.

The next day we are still all in this trade

because we do not want to break any rules.
Getting close?
John:

Getting close now. Paying a bit more attention but I am still in.

David:

You cannot play golf this afternoon. You have

got to be here watching it now. Do you play
golf ?

John:

No.

David:

Do you go fishing?

John:

No.

David:

Do you run or train or anything?

John:

Yes, I run.

David:

There you go, okay. So you cannot run this afternoon, you have go to run later. Keep your
eye on it. You see on this day here, it did not
cross. It did not close below it so we are still
in. Next day above so we are still in.

John:

I think we will get out.

David:

What do you reckon, we will all get out? You

are with John? Okay excellent. We are going
to ring the broker now and place the sale
order to exit this trade and let us have a look
at how we did.
Now, John, what you did is you actually
placed $10,000.00 on the market using a
CFD. Your risk was $10,000.00. Your
position size, there is your risk. $10,064.00.
Your position size was $100,000.00. You are
controlling $100,000.00. You are putting in
$10,000.00. The risk is a little bit more because you could actually lose more than what
you put in but we know that do we not?

John:

Yes.

David:

Okay good. You were in this trade for 22

days. Lots of golf, lots of fishing, lots of going

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for training and running and going to the
gym and you made $5,672.00. How does that
sound?
John:

Very good.

David:

Can I ask how long it would take you to make

that kind of money on an hourly rate?

John:

Longer than that.

David:

Longer than 22 days. Let us have a look at

another one?

John:

Yes.

David:

You are happy to go through another one?

Okay. We have a mic for you, look at that
because we want to hear what you are saying.

John:

I am dangerous with the microphone.

David:

Do not start singing. Excellent. Let us have

a look at that next one. Are you all with us
now? Let us have a look at this last bar. Rule
number one, is it above?

John:

Yes.

David:

Is it Bullish up day, all agree? Excellent. Rule

number two, is it above the slow moving average, the purple one?

John:

Yes, it is.

David:

Have a look at the volume?

John:

Yes, it is above.

David:

He is quick. We all agree, we are going to take

this trade. What is the worst thing that could
happen? If this goes against you and crosses
either one of those squiggly lines, we would
have to get out yes?

John:

Yes.

David:

We are going to try it. We are going to buy

this?

John:

Let us buy it. All right let us get out.

David:

Let us get out. Very good. Excellent. You

thought I was just going to give you the good
trades. All right, so we will get out of this
one and again, you are controlling nearly
$100,000.00 worth. Your risk was $9,285.00.
You were in only three days because you
bought on a Friday, Saturday, and Sunday,
sold on a Monday. So you made a loss of
$1,800.00. Does that hurt?

John:

Since I have made $5,000.00 the other day, it

is okay.

David:

That is good. Let us have a look at the next

one. Are you happy to continue on or?

John:

Let us keep going.

David:

Does anyone else what to come up here? He

is doing all right. Okay. Rule number one
Bullish up day, John let us have a look at that.
Yes, good. Rule number two above the slow
moving average. Yes it is. Let us have a look
at the volume. He is quick. Yes, it is. It is as
quick as that. We are going to buy?

John:

Yes.

David:

The next day. The first few days of a trade

are the airy fairy ones. But once it starts to
move and once this fast moving average starts
coming up behind you, that is your protection
right? Because it will get closer and closer.
Are you still happy?

John:

Yes. Very happy

David:

He is happy. Very happy. Look at that. I

know a lot of people who would have just
gotten out there because they would have said
I have had enough of this but the whole point
is you let the moving average get you out.
Every morning, we are going into our broker
website and we are putting in an order to
either sell or to alert us. Next morning, you
would say right, that is where my stop-loss

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is now. The next morning, that is where my
stop-loss is now. Are you still in?
John:

I am still in.

David:

He is still in. Let profit run. Still in? Okay.

Now, it is right on it. Here is another little
rule. If it is on it the first day, you are allowed
to stay in. If it is on it the next day, get out.
Indecision. When in doubt, stay out. We will
stay in on this one yes? Have a look at the
next day? Close drawn on it again.

John:

I will get out.

David:

We will get out. Let us have a look. You were

in that for 29 days. Again, controlling that
same $10,000.00 that you were putting in.
We are going to increase it a bit now because
you have made some profits. $103,000.00.
So you made $7,459.00 on that trade. Not
bad for 29 days effort.

John:

That is excellent.

David:

29 days of running, playing golf, fishing,

spending time with family. Let us move on.
The next one. Does it meet the rules?

John:

Yes.

Speaker: So we are going to get in. All right, we are in

David now the next day. Let us do that again,
I was too fast for you. It met the rules. Let us
say it is above, it is a Bullish up day, it is above
the 60s. The volume is great. Remember if
it crosses any of the lines. Not just the fast,
any of them. We will get out. Who would
like to stay in a bit longer because it is actually
above? We have got one. Let us have a look if
we stay in. He was right.
Let us have a look at the next day. It has broken the line again. Would you like to say in?
You were out already. We are going to get out
yes? He is out. He is saying cut is. Sell. Are
you not lucky you got out? That is why we
have rules folks. I will give you three chances
strike. We only stayed in after one day. We

got out. So it was a $1,600.00 loss on that

one. Let us quickly go through the next one.
Again, it means the rules. It is a Bullish up
day, it is above the lines and the volume is
good. We get in? You are buying? All right.
It makes you feel good the next day.
It might slight off. It has got to slide down
a little bit, it might go sideways, it will allow
that fast moving average to catch up now.
Good. That is still good. You are still in.
Good. Still in? Now, this is an interesting
one. It opened and it opened down here
and this is where nerves, but you have got to
remember we are looking at the market just
before it closes. We let the market takes its
course. Now, we get out.
John:

Right.

David:

This is the day we get out. Unfortunately,

we could have gotten out there and saved a
bit but we have got to stick to our rules. Are
you happy? We still made a profit, a total of
$6,711.00 in 27 days. So far, John and folks,
22, 29, 27 days and the loses were out basically after a day. This is a bit different. This is
not a stock. What we are doing here is we are
actually going to trade a futures contract on
the futures market with exactly the same rule.
A different market, a different instrument but
the same rules. No change.
Let us have a look at it again. Have a look at
that first bar, John. Is it a Bullish up day? Yes,
it is. Happy with that. Is it above? Yes, it is
and have a look at the volume. Clear winner. We are in. What we are going to do here
is we are going to buy, to put in $10,000.00
we need to buy two contracts and for every
point. You see here the value that we are getting in at is around about 4,409 points is the
value of this instrument. For every one point
that it goes up, you are going to make $50.00.
For every one point it goes down, you are going to lose $50.00. But we are in the trade.
Let us have a look at the next day. Happy, you
better be. $50.00 of profit came down, so you

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Millionaire Phenomena - Stock Market: DAVID GALTIERI (continued)

lost it and got it back but you are still in. This
is going to flutter around with our ability to
sustain and endure pain. He might not be
going as much running on these next few days
because you need to watch this $50.00 a point
here. There is 50 points in between the grid.
So whatever profit we just made over the last
few days is just come back down to break
even. But we are still in. It has not closed
below it. I will let the suspension go. The
suspense will go. It has got to break away.
John:

Okay, we will get out.

David:

He says get out. Why are you getting out?

John:

Because it closed below.

David:

Because it closed below the fast moving average. If you had stayed in until the next day,
oohhhhh and the next day. They have just
repossessed you Bentley and the kids do not
go to school anymore. Let us have a look at
the results if you had gotten out on the day
that you said you wanted to.
It is at that last trade. It is called a spy. The
futures contract. $50.00 per point. You
put in $10,000.00, you were controlling
$230,000.00 but you put in $10,000.00. You
made $7,390.00 on that trade. In 116 days,
just about three or four months, you made
$23,000.00 including the losses. Happy with
that?

John:

Yes, I am very happy.

David:

John, thank you very much. Give John a

fantastic round of applause. Well done. So I
have lived up to the expectation that I was going to take someone out of the audience that
had never met me before and never heard me
speak before, never traded before, and shown
a simple system and John was able to do that
and you seem quite at ease doing it yes?

Let us move on. Let us see how we get started with

this. You have got the rules. You have seen the evidence
up on stage. All we need to do is follow a step by step

plan to get started. You do not take my work for it. You
need to back test this strategy yourself. The first thing
you do is get your free trial of the Bourse Data software,
install it on your computer at home, bring up a stock,
scroll back in time, just close your eyes and then just go
one day at a time because you get 10 years of data right?
You can scroll back, three, four, five years, and just one
day at a time, ask yourself is that a bullish up day. Does it
meet the rules? Yes. Let us see what happens. Okay, get
out. That is back testing.
Let us wait for the next bullish up day. There is
another bullish up day. Does it meet the rules, yes or
no? Let us see what happens, get out. Let us wait for the
next bullish up day, that is how we back test. That is step
number one, back test.
Step number two and while you are back testing, you
would have a trading register, maybe a spreadsheet in an
Excel program or just an exercise book and you would
write down the days when you get in the stock, whether
you are buying or selling and you just keep records of
your back testing and after you have done two, three, four
years of back testing, which would only take you about
four hours to do, you get the results and you can see if it
works for you.
Next, you go small live trades. I would never expect
John or any of you to go and open up a CDF account
and start placing $10,000.00 or $100,000.00 position.
That would be ridiculous but maybe over the next six to
12 or 18 months, you build up that. You start off with
one share, one $30.00 share which will cost you $3.00
but it will control that one share. You then make it 10,
then you make it 20, then you make it 100 shares and in
three months time make it 1000 shares and in 10 or 12
months time, as you feel more confident, you make it
3,000, 4,000, 5,000 shares and you control larger positions.
This is where I wanted to get to because if in 12 to 24
months from today, you are controlling $100,000.00 positions on the market by only risking somewhere between
$3,000.00 to $5,000.00, I would not say risk because
that is the wrong word. You are risking more than that.
You are risking that but not if you adhere to a stoploss. If you set your stop-loss and adhere to it, could the
Commonwealth Bank of Australia go broke tomorrow?
Possibility but likely, no. That is the only way you would
lose all of that but there is a risk so you get there slowly.

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Millionaire Phenomena - Stock Market: DAVID GALTIERI (continued)

12 to 24 months it might take you. It might take you six
years. It does not really matter as long as you are doing
something each day towards it.
If you are controlling $100,000.00, and we said 1.5 to
2% profit per trade, what is 2% of 100,000? $2,000.00.
Good try. One trade per week. Who would like an extra
$2,000.00 per week in cash flow? Absolutely. But most
of the trades that John took before were 5, 6, 7, 10%
trades and they went for a lot longer but who would be
happy with an extra $10,000.00 a month or $6,000.00 a
month. Absolutely. Doing it slowly, managing the risks.
Starting small and then while you are starting, you use a
trading checklist to check off all the rules. Each one of
these things here is a check box that you are ticking them
off. Does it meet the rules?
Placing a picture of your chart when you get in, a
picture of your chart when you get out and then finally,
when you have built up the confidence, you go full size
positions increasing those positions as you are making a
profit. Stick to your trading plan, cut your loses short
and make money. Make profits because that is what it is
about.
Youre probably wondering to yourself, surely trading
has to be more complicated than that... Well Im here to
tell you its not. You just need to have a simple trading
plan and disciplined money-management skills. Thats it.
Whilst Ive given you my formula today, I really dont
know how you will react when you put real money in to
the market. If you follow my system, you wont have a
problem... Itll tell you when to get out.
However, most people find it hard to accept a loss. Get
used to it, its inevitable in the stock market. My recommendation is that you start with 1 contract, get used to
trading, placing orders and taking profits.
Once youve done that, simply go to the amount of
contracts that your wealth psychology allows you to.
Thats it. Once you find a system that works for you,
and why not start with mine? Its simple, easy to follow
and more importantly, it works... THEN trade with 10
contracts or 20. Thats how the big money is made in the
market.
You CAN make an extra $5,000.00 a month? It is
achievable. On that I would like to say thank you so
much for being such a great audience.

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Futures Trader Reveals His Own HighProfit, Low-Risk Trading Strategies.

Easy and Simple to Implement Once You
Know How...
Part of the Millionaire Phenomena Series

ood afternoon everybody. Can I see the hands of

the futures traders again? We were having a talk
before. Im particularly after Jeff.

Let me tell you a story about Jeff. Jeff and I were having a talk before. Jeff is a client and is an active options
trader, very good options trader. And he said, What are
you going to be talking about today, Steve? I said, Well
look, Jeff, Ill tell you what Ill do. Today Im going to
introduce you to the man that took a million dollars out
of the market on the day of the 1929 stock market crash,
the great crash. And he looked at me and he said, Was
that you?
So hes my target all afternoon, right. I know Ive got
grey hair. Im a futures trader but Im really only 25 years
of age. Thanks, Jeff. Um, before we go too much further
I need to make a couple of things, what Im saying to you
today is not personal advice. The licenses under which we
operate now determine that I, you know, Im offering you
no advice at all. Its general information that Im giving
you today. So we just need to get that out of the way
right from the start.
I started trading futures in the late 80s. Whos done
the Safety in the Market trading course? Who survived? No hands. One survived. Are you still trading
the same strategy? I think in those days we all started
with the Safety in the Marking course. It was a very, very
good course. It was very, very well put together. David
Bowden did a very, very good job on it and Neil Costa
did a very good job on it as well.
It was an introduction to futures that people otherwise
hadnt been involved in. Weve matured and weve grown
a lot since those days, and if youve studied the futures
markets anybody were all familiar with them, Ill
show you some of them later they offer fantastic opportunities for making money.

Meet Stephen Jennings

Stephen will de mystify the often
misunderstood futures market
for you and will teach you how
to incorporate a rational, logical,
common-sense approach to your
trading.
Trading is a science that has rules
and Stephen will show you how
to create a higher probability trading plan focusing on better results
rather than wasting time!
Stephen has over 15 years hands-on experience in the futures markets and is a private trader, Fund Manager and dedicated researcher
of trading systems and strategies.
He believes that success for you in trading will be a direct result of
good research... and good research is all about knowing where to
look, and what to look for.

But when we start trading futures, it seems to be a

habit of learning that we make all the bad decisions to
start with and we never, ever start with all the good decisions because we dont know enough. You have to survive
long enough to get to the stage where you make the right
decisions and you understand these markets and thats
what Im going to show you today.
Around about the early 90s I had the wobblies in
these markets and the wobblies are things like, you just
make the wrong decisions. You know, wrong place at
the wrong time. Didnt understand the markets. I
then thought at that time and some of you will identify
with this, I thought, Well, okay, the way Im trading is
wrong so what Ill do is Ill trade intraday. So we tend to
shorten the time frame that we trade.
So I traded the intraday market. I did a lot more

Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

activity. My broker made a lot more money, right, but I
didnt. So then I started trading one minute charts. And
he made a lot more money and I didnt until I realised
that it wasnt in the shortening of the time-frame.
So I went through day trading and you read all the
time about people that make money in these markets. If
somebodys making money they have a method of doing
it. What were going to do today is go through some of
these markets, but were first of all going to do the bad
things. Were going to have a look at some of the bad
things that happened in these markets and explain to you
why thats a good thing.
These markets are zero sum markets. Does everybody
understand what a zero sum market is? Zero sum market
is a market where for every winner theres a loser. And for
every loser theres a winner. So if we find a loser theres
also a winner. Would you like to know who the winners
were on the other side of most of the financial disasters
that youve read about in the last few years? And if we
can find those winners, what are the questions we need
to ask them. How did they do it? That seems obvious,
doesnt it?
If we find out how they can do it, do you think that
might be interesting information? Of course. And if its
interesting information and you can use it, would that
be of interest to you? Yes, of course. Of course, because
thats the way we should be trading and thats what Ill
show you. Lets first of all have a look at some of the
facts about the market. The SFE is the Sydney Futures
Exchange.
The Sydney Futures Exchange on the 14th of December registered nearly a million contracts traded in one
session. Now a session goes from 8.30 to 4.30 in a day.
Nearly a million contracts traded in one session. Did you
realise there was that much activity on these markets?
The Chicago Mercantile Exchange last year increased
its interest rate futures volume, which is activity, by 33
percent and its foreign currency volume by 60 percent.
Thats a massive increase in activity in these markets.
Why do you think this happens? The reason it happens
is because theres opportunity here. People are starting to
become aware of the opportunities in these markets. And
if theres opportunity you should be in there, shouldnt
you?
Chicago Board of Trade generally across all its prod-

ucts 9.6 nearly ten percent increase in activity last year.

Chicago Board of Trade is one of the, is probably the
largest commodity exchange in the world. Ten percent
is a huge increase in activity through these markets. This
is opportunity for you. So the opportunities are there.
People are finding it and people are trading it. Lets first
of all explain what a future is.

My Simple Explanation of Futures

Look, Ill do this very simply. Its an agreement to
deliver or receive something at some stage in the future.
Futures were traded two hundred years ago on the Osaka
Rice Exchange where farmers used to sell their crop
before it was harvested on the market. So they would get
paid now, pay for the running of their farm, and have to
deliver at some stage in the future which is why it was
called the future. Does that make sense to everybody?
Its simple. Lets have a look at this diagram. Lets
say its January and you want to buy $100,000 worth of
shares and you have a March contract and a June contract
but we want a six months horizon so we dont have to
deliver those shares until June.
For $2,250 you can control a $100,000 position on
the Share Price Index on the SFE and hold it and benefit
from the price fluctuations in that market during that
time without ever having to go into the market and physically buy the shares. So you buy one contract, represents
at the moment around about $100,000 worth of shares,
$106,000 in actual fact, and you control a $106,000 position for $2,000, just over $2,000 and benefit from the
price fluctuation.
Whos not interested in doing that? At any time during that period of time you can sell out to take your profit
if youve got profits, or you can sell out if youre not making any money or youre losing money. And theyre very,
very fluid liquid markets.

How You Can Access $100,000 Worth of

Shares for Just $2,250
The Share Price Index is one of the most traded
futures contracts in Australia. It represents a basket of
shares, it represents the top 200 stocks in the Australian
market. Who was aware of that before? If you had to go
and buy $100,000 worth of shares, would you go to the

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

market and buy $100,000 worth or would you go to the
Share Price Index and buy $100,000 worth for a margin
of $2,250? Its interesting, isnt it? You can take that sort
of position on that sort of margin.
We trade the Dow Jones, the S&P 500, we trade the
Nasdaq, the FTSE, the Dax, the CAC, we can trade in
India. If its out there you can trade it. If you have an
opinion about these markets you can trade it. Weve just
got through a bull market in the last two years. How
much money have you made in the last two years out of
the Australian bull market? Im not asking for anybody
to tell me, but let me ask for a show of hands for those
who are prepared to tell me, that weve had a bull market
for two years and Ive made no money out of it? So, yep,
theres a few people around. So everybody else has made
some money out of this money in the last two years, is
that right? Not so sure?
My question to you, you can answer to yourself, how
much have you made out of that bull market? Ill show
you how much people have made out of that bull market later. Currencies. We trade currencies through the
futures exchange. We trade Swiss Franc, we trade Canadian dollars, US dollar, Australian dollar, we trade Euro
currencies, we trade all those markets. Bond market.

The Markets I Love To Trade

The bond markets are your interest rate markets. So
in America youve got your 30 year bond, your ten year
T note, your five year T note, in London youve got bond
market, in Australia youve got the ten year bond, three
year bond and the 90 day bank bills. All interest rate
markets.
Now bonds perform inversely to interest rates. If interest rates are rising, then bonds fall. Its an inverted relationship. If interest rates are falling in an economy then
bonds rise. At the moment in Australia, are we in a rate
rising or a rate falling declining environment? Rising. So
what should your position be in the bond market?
You should be taking advantage of falling bond prices
right now in the market. And its there. Ill give you
another example lately of crude oil. Crude oil is a terrific
commodity to trade. Get to him in a minute. Precious
metals. Gold, copper, silver, um, where is gold at the
moment? Gold is traded as a US dollar currency hedge.
So if the US dollar is falling, then we trade long positions

in gold. I mean, its almost a no-brainer trade, isnt it,

because its a currency hedge?
If you have that sort of information available then
you take a position to trade gold on the long side as a
hedge. Meat. You know, we trade live cattle, lean hogs,
the famous pork bellies. Whos heard of pork bellies? Do
you know what pork bellies are? Its bacon. Its simply
bacon. It was made famous by Eddy Murphy in the
movie, I know.
We trade grains a lot because grains have a particular
function, which Ill show you later, in the market that
makes them very easy to analyse. I dont want to make
it sound as if its easy to make money out of them. But
theyre easy to analyse because of the structural nature of
these markets. If I cant get your interest raised particularly in the grain markets then Im probably not going to
do very well with you at all. And the softs.
Well, thats the little group of things where everything
is grouped into it. Thats cocoa, coffee, sugar, those types
of commodities that cant be itemised in any of the other
markets. All of these markets we trade. We try and diversify across these markets and employ diversification to
control risk. So we dont load up in any of these markets,
we try to spread our positions across all of these markets
to take advantage of diversification. Is everybody aware of
the structure of diversification in a portfolio?
The more youre diversified across diverse non-related
markets the less risk your portfolio has. Its as simple as
that. We dont have the time today to do that in detail,
but lets just say its like having a trade in indices, a trade
in currencies, a trade in grains, a trade in the softs, a trade
in the meats, a trade in the precious metals. At somewhere along there your overall position in your portfolio
is going to be affected by the movement of all of these
markets which means you cant be knocked out by the
movement of one particular trade.
So we try and build diversified positions in our portfolios to take advantage of it, of diversification and reducing
risk. In the Sydney Futures Exchange you have the Share
Price Index, as Ive said, that represents the top 200 stocks
in Australia. The ten year bond, the three year bond, and
the 90 day bank bill are the interest rate markets that we
trade in Australia. They are the four most actively traded
commodities in the Sydney Futures Exchange.
We have positions in short, short positions in all of the

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

interest rates at the moment and were long on the Share
Price Index because the economys still doing pretty well
and generally we think that theres more up-side in the
market so we trade to the up-side.
Does anybody disagree with that? So if you agree with
that, why dont you have the position in the market? If
you already have congratulations. Its okay knowing
this stuff, but unless youre actually prepared to do something to take advantage of it, its all just a waste of time,
isnt it?
Indecisiveness in these markets can be deadly. However, lets have a look. The way we decide how to trade,
its called the modelling technique. We model the trading
of the most successful traders or funds. Now the most
successful funds, does anybody have any idea how much
money or what percentage return the most successful
funds deliver every year?

What Are Realistic Profits For Traders?

Or the last year? Lets have a look at Morningstar
Ratings. What does a professional managed futures fund
return a year?
200 percent? Well have a bid here. 200 percent? No,
not that much. How much? Forty? Little bit more. 45?
Little bit more. Maybe about 60. 60 percent is what the
very, very best fund did last year in these markets. Now
thats extraordinary. Ill tell you why because they are
trading billions of dollars.
We need to be realistic about the sort of return. Im
not going to stand here and tell you that you can do 100
percent in a year, because thats probably unlikely. Probably unlikely to beginner traders. But as an individual
trader, can you do better than bank interest? Probably.
Can you do better than the indices? Probably, and Ill
show you some of those returns that funds are delivering
shortly. So how do the most successful traders do it? This
really is the burning question when you go to the markets. How do the most successful traders do it? Would
anybody like to know the answer to that question? If I
told you the answer to that question, would you be interested enough to do anything about it?
Lets have a look at some of these things. Futures trading is a zero sum game. For every winner there is a loser.
Thats the generally accepted premise of futures. So if

you take a position in the futures market its a good thing

you cant see the eyes of the other person because youll
know who youre taking money from, or youll know who
is taking money from you. Its an enormous market, the
volumes are extraordinary.
These markets are so liquid you would not believe the
amount of money that moves through these markets on
a day-to-day basis. And theyre being traded every day
and every night. If youre on the right side and you know
how to trade them you can probably do really well. This
is the 1929 crash. Thats the chart of the 1929 crash. The
week, the major week there that comes off the peak. That
day was the 24th, Black Thursday, the 24th of October,
1929, was the first day of the major 1929 crash. I will
later introduce you to the man that made a million dollars on that day because he was trading on the right side
of the market. Somebody loses, somebody wins. Ill tell
you who won that day, and its not me, Jeff.
Well talk about short side, long side later, but if you
had sold into that market off that peak then you would
have made a lot of money in that fall. Now who has a
problem making money which ever direction that you
trade? Who just wants to make money by going, by buying and selling in an up-market. Who just wants to make
money in an up-market? Who wants to make money in
both an up-market and a down-market? Yeah, if I can
show you how to do that, would that really be of interest
to you? The tech wreck, the stock market bubble.
The blue line is the Nasdaq, the red line is the S&P.
The blue line crashed round about 2000, 2001 or thereabouts. That was the Nasdaq. People who were holding
long technology stocks that had no intrinsic value but it
was a really good bubble. Do you see the pattern in that
blue line compared to the 1929 crash? They look very,
very similar. When the markets rising you need to be
buying that market, and when the markets falling you
need to be selling that market. The fall of Enron, does
it look remotely like the 1929 crash and the tech wreck?
Enron was an energy company.
They started out as energy producers. They became
energy traders and they eventually matured into an energy
bank. And they were the largest energy bank in America.
They were the largest energy market maker across the
energy commodities. The problem was not with their
ability to trade these markets or supply these markets,
the problem with Enron occurred to what they call their

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

partnership program, and partnership program is Enronspeak for hiding debt on the balance sheet, off the balance
sheet. Right? So they used to create partnership programs to shift debt off the balance sheet.
Thats where they came undone. But, we have a rally,
we have a strong side rally and we have a strong downside correction, crash if you like, call it a crash. In these
markets theres a winner and theres a loser to every trade.
Would you like to know who made money in these
markets and how they did it? Anybody heard of Long
Term Capital Management? Long Term Capital Management was a derivatives fund in the States. It was the
largest fund. It left a trillion dollar hole in the market. It
boasted on its board of directors two Nobel prize winning
mathematicians.
One of whom is named on the Black-Scholes model
of options pricing. This was an organisation that you
couldnt get into unless you had an IQ that qualified for
MENSA. And they still crashed. If they crashed, would
you like to know who was on the other side of those
trades? Right. Of course we would.

When Markets Go Crazy, Someone

Makes A Killing... Do You Want To Know
Who?
I mean, thats really the interest. The press will tell you
of the great crashes. Theyll tell you all this information
about the things that have gone wrong but they never say
to you, Yeah, but look, these people lost that money and
this is who made the money. Well have a look at who
made this money, the funds that made money out of this.
The Asian crisis, the stock market crash in Asia. Does
that chart look remotely like a crash chart? They all look
the same. Strong run up, and then a big fall.
They often say you go up by the stairs and down in
the elevator. When that happened in 1929 there were
stories about brokers jumping out of windows. The facts
of the matter are that there was one broker jumped out
of a window, out of JP Morgan offices on the corner of
in Wall Street and its still not really known whether he
jumped or fell. What he was doing out there. The hot
tip was that he was out there looking at the crowd in the
street and just over-balanced. Shouldnt say that.
It was only three floors and he didnt die. Still, the

crash caused a lot of heart-ache. The Nikkei crash was the

crash that hurt Victor Niederhoffer. Anybody heard of
Victor Niederhoffer? Victor Niederhoffer was a very, very
aggressive trader in the Asian markets during the late 80s,
early 90s, and he was on the losing side of those trades.
Would you like to know who was on the winning side of
those trades? Of course. And our old friend Nick.
Right, the famous 88888 account, the error account
that he used to run off the Singapore Exchange. We actually still talk to the desk that Nick used to trade out of.
That was the famous breaking the bank of Barings, the
Queens bank, because of unauthorized trading on an errors account. We think of two people who made money
out of Nick when Nick was trading because when he was
trading, he was trading Nikkei and Japanese Government
bonds and there were funds taking the other sides of his
trades. One of those funds was a fund called John W
Henry fund and the other guy that was taking his trades
was a fellow called Pierre Bonnefoy who lives in the Caribbean. They made all the money. They have the banks
money, so to speak.
Um, wouldnt you like to know how they did it? Well,
its a really interesting story, isnt it? For those that are interested, Nick eventually did his time in jail and survived
cancer. And the 1987 crash which happened shortly after
I started trading. Um, it certainly woke me up in the
middle of the night and made me open my eyes. Our 87
crash, nobody really knows why it happened. There are a
lot of theories as to why the 87 crash occurred.
Some say it was because of computerised trading program, program trading, those types of things. Really, its
immaterial. It happened, and if youre on the right side
of that trade you made a lot of money and if you were on
the wrong side you lost a considerable amount of money
and well talk about who made money in these trades.
Just out of interest, does everybody remember September
11? On the night that the planes flew into the World
Trade Centre? Right, we just happened to wake up that
night. I woke up between planes. And its funny how
these things happen. You just wake up. Something happens in your head and you know immediately what you
have to do at that time.

How Long Did It Take For The Market To

Recover After 911..?

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

There was a correction in the market as a result of that.
four days and Wall Street was closed. How long did it
take for the market to recover the ground that it lost after
September 11? Does anybody know?

saw that in a market after how we show you how, and you
dont trade it, then you dont like money because this is
a very, very tradeable pattern. Let me give you another
pattern.

It took one month. It only took one month to recover from that price retracement caused by those planes,
to recover and make new highs. Now thats a strong
market. And if you werent buying that market, you dont
like money. Who here likes money? What about all
these people that kept their hands down? I know you like
money, Jeff, from 1929. Right. But were here to learn
about money and how to make money, arent we? Futures
traders are really black and white, you know, we know
why were here. Were here to make money.

We tend to keep away from patterns like this. Thats

not good for us because its not going anywhere. We need
a trend. What were saying is that if you have a trend following strategy you can make money and Dunn Capital
Management prove it. John W Henry, I think he owns
the St Louis Cardinals baseball team. Since 2001, he has
very aggressively out performed the S&P. John W Henry
was on the other side of Nick Gleesons trades a lot of the
time. Whats his philosophy? He says, If trends are not
the under lying nature of the markets then our type of
trading would quickly go out of business. He looks for
trends. He goes to the commodity markets looking for
trends.

Where there are no excuses in our world. We make

decisions and if you make the wrong decision you get out
quickly and if you make the right decision you milk it
to death. If I can teach you how to milk a good thing to
death, how are we going? Would you like to know?
Would you like to know how much money milking to
death can create? Well show you shortly. Lets go back
to the crash of 87. It took a little while for that recovery
to take place but once it started to recover, it was a buying
opportunity and you got to buy in quite cheap into that
market. Okay, the other side. The media concentrates on
the losers. Well, Im going to show you who were winners
and theyre mainly funds.
These are people that know what theyre doing. These
are people who manage lots and lots of money. Dunn
Capital Management since the early 90s has out-performed the S&P 500 quite aggressively. This is quite an
aggressive trading fund. Dunn Capital Management was,
in part, on the other side of all those trades that Ive just
shown you. And they admit it. They were taking those
trades. So what is the philosophy of Dunn Capital Management? Trend following strategy.

What Do Professional Traders Look For?

They follow price trends. Now price trend is, looks
like this, lets have a look here. That market is going
up. Thats what a price trend looks like. It makes higher
highs and higher lows. Thats what we call it in technical
analysis. Theres lots of background research that goes
into this, but thats a trend. If you see this, you trade it,
and Ill show you how to trade it, thats a trend. If you

So, trend following markets. Campbell & Company.

Outperformed the S&P quite aggressively since 1991,
very aggressively since 2000. Extraordinary return. How
does he do it? Our trend following methods do not pretend to determine the value, but they do produce absolute
returns fairly consistently. A trend following method.
Ill give you another one. Chesapeake Capital. Interesting story. Have a look at that. Since 1990, he has out
performed the S&P very aggressively. Very aggressively.
How does he do it? I participated in the Richard Dennis
Turtle program. Whod heard of the turtles? Quite a
few. 1973, Richard Dennis and his partner Big Bill Eckhardt had an argument. It was the basis of a movie called
Trading Places, I believe.
Wanted: Trader With Experience To Turn In To
Multi-Millionaire...

Is It Possible?
Anyway they placed an ad in The Wall Street Journal
and the ad said something like We want traders with no
experience. Were going to teach you how to trade. And
they received thousands of applications from all walks
of life. And they took a very, very diversified group of
people into their company and they taught them how
to trade, gave them money to trade, and said, Go and
trade what weve just taught you. Now Bill Eckhardt and
Richard Dennis were having a little side bet here.
One of those guys said, Well, I think its something

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that people can learn, we can teach this and we can teach
people how to trade the markets. Bill Eckhardt said,
No, I think its intrinsic. Youve either got it or you dont
have it. And so they had this little side bet which was
the purpose of the exercise. Theres a degree of arrogance
in it. But it is a very, very good story and it indicates a
number of things. It indicates, the main thing is that you
can do this stuff.
Because all barring one of those Turtles at the moment is still managing a fund in their own right and
making money because of that system that they were
taught. And Richard Dennis in a later slide is on record
as saying, Teaching people to trade was much easier than
I thought. It was a humbling experience. And what hes
saying there is that he thought It was really special when
they were trading. But if you can teach people the rules
of trading, they can go into the market and trade on their
own.
It was called The Turtle, they called them Turtles, it
was The Turtle Program. So what he said is, The most
important experience that led me to use technical approach was the amount of success that I experienced
trading Richs system. Now when they became Turtles
they signed non-disclosure agreements and those disclosure agreements were 20 year disclosure agreements, so in
1993 those disclosure agreements became null and void
and it took another nine years for those rules to come out
into the market place.
Would you like to know what the rules of trading of
Turtle trading is? Its been an extraordinarily successful
program. And I teach that in the course that I run, is that
Turtle approach.
Its one of the things we teach. Abraham Trading
Company. Have a look at that return compared to the
S&P. How does he do it? The underlying premise is that
there are periods of major price change to higher or lower
levels and these major price changes are known as trends.
Salem Abraham was a Turtle, he was part of the original
Turtle Program.

The Man That Made $1,000,000 In The

Market In Just 24 Hours Back In 1929
The man who made a million dollars October 24,
1929, by trading short the market on Wall Street, his
name is Jesse Livermore. Whos heard of Jesse Livermore?

He was called the Boy Bear, the Great Bear.

How did Livermore do it? I love that top quote.
Thats really for everybodys interest. There is only one
side of the market and it is neither the bull side or the
bear side, its the right side. How obvious is that? He
talked in riddles. Anybody thats read his book Reminiscences of a Stock Operator would probably need to read
it three or four times to understand what he was saying.
But he talked about, two thirds of the way down, along
with the tide. Livermore called the trends of the market
the tide of the market.
You know, we know that prices move up and down.
We know that the theory behind these major movements of irresistible force and you take advantage of it by
steering your speculative ship along with the tide. Thats
the trend of the market. Livermore made and lost vast
fortunes during his lifetime. Right, he was either dead
broke or filthy rich. He owned his own boat, he used to
go fishing. He owned his own railway carriage which was
equivalent to having a Lear jet in those days.
His offices were on the top of the Heckscher Building
which is now the National Library of Art, I think, or the
National Art Library in New York. He didnt trade on
Wall Street because he wanted to separate himself from
the activity on the street because he found that it clouded
his thinking.
He was an extraordinary, probably one of the great
traders of all time, was Livermore, and he traded the
trends. And the way he used to trade, just quickly, was
that if the market, if he had an opinion that the market
was going to go up or down based on his analysis of the
market then he would give the market a little bit of money and in his words, he would say, If the market did the
right thing by me I would give it a little bit more money,
and if the market continued to do the right thing by me
Id give it a little bit more money, until he had what he
called his full line which means the amount of money
that he was prepared to commit to that trade.
And then he would just sit on it because another ones
of his quotes which is not up there is, Livermore said, I
always lost money when I was too active in the market
place and the most money I made was on the big moves
and when I was sitting on my hands. So once you have
your position in the market place you then look for
reasons to stay in that trade, to stay on that trend. You
always trade for the big trend. Yes, we are active in moni-

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

toring our position but were not active in the market
place all the time. So were not buying or selling, getting
in and getting out, and doing all that. We look for major
trades, major trends, and we look to trade those trends.
Just like he did in 1929. Theres been three major crashes
in the last 100 or so years. October 19, 1907. October
24, 1929.

When Should You Go Long or Short in

The Market?

of television and when the Indians were quiet, which is

where Wall Street came from, by the way. Wall Street is
named Wall Street because thats where the wall was built
to keep the Indians away, and thats a true story. What
they used to do, was they used to build big pits about the
size of this room in the ground and they would throw a
bull and a bear into this pit and they would bet on who
would win the fight. And the bull and bear terminology
came from how they fight.

Lets go through the concept of being long in the

market and being short in the market. A bull market is a
rising market. In Australia were currently experiencing a
bull market. A falling market is called a bear market and
Ill tell you how that term came about later.

A bull fights by using its horns to throw its prey in the

air, doesnt it? And a bear fights by using its claws to drag
its prey down. So a down market is a bear pulling down
its prey and a bull market is a bull throwing its prey in
the air. Thats where you get the term a bull and a bear
market. Lets go back to our little chart. To take advantage of a trade in these markets you need to buy and sell
but the order in which you do that is up to you. You still
have to have a buy and a sell for the transaction, but you
dont have to buy and sell them in that order.

In a bull market we look to get what we call get long.

Whos heard the term get long? Get long in the market
means that we buy first and we sell higher and we take
the profit. Everybody happy? Thats how we do it in
the market. How do we make money in a bear market?
Well, we sell first and then we by it back cheaper. And
the first concept you have to get used to is that you dont
have to own something to be able to sell it. Remember
these markets, theres always a winner and a loser in these
markets?

You sell them and then buy them depending on what

your view of the market is. Does that understand Is
that clearly explained? I mean its about the best I can
do as far as explaining. If you want to get short, you
sell first, if you want to get long, you buy first. A long
market is a bull market. Let me explain it this way, just
so that we can a picture tells a thousand words. If were
long in the market and that line continues to get long,
thats a bull market. As long as that line gets longer, were
making money, correct?

What was the date of the 1987 crash? October 20.

Spooky isnt it?

Theres always a buyer and a seller in the market. For

every transaction in the futures markets theres always a
buyer and a seller. The markets are guaranteed by the
exchanges. Its a process called novation. The exchanges
guarantee the market. So if you want to sell you will have
a buyer on the other side of the market. You dont have
to own the commodity to sell it. So in a bear market we
sell high and we by low. And in a bull market we buy low
and we sell high depending on your view of the market.
If you think the market is going down, then youll ring
your broker and sell into that market, wont you? If you
think the market is going up, youll ring your broker and
youll by into that market. In futures markets it doesnt
matter. Futures market dont care whether you want to go
long or short you can do either. How valuable has that
been to you over the last couple of years? Where does the
term bull and bear come from?
Well, in the early days in New York in the absence

Dont Whinge About Petrol Prices - Profit

From Them
Crude oil. Is that a bull or a bear market? Ranging?
Well at the moment its ranging but lets take the bottom
left-hand-side to the top right-hand-side, is that a bull
market or a bear market? Its an overall a bull market,
isnt it? You need to be long, crude oil, over that period
of time. Whos paying $1.04 or something or other at the
bowser now?
Everybodys paying. Are you happy about it? No?
Well, we were just having this discussion and Ill introduce you to one of my traders later in the session, he
laughs every time he goes and fills his car up. He says, I
dont care. When is it going to be $1.10? Im happy to
pay $1.10 because if Im paying $1.10 then my futures

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

contracts are going up. Because hes long crude oil and
in futures its been the single biggest signal for you in the
last six months as in the world is every time you go to the
bowser youre paying more to fill your car up.
What does that tell you about crude oil prices? It
means crude oil prices are rising. How many people
here went and bought crude oil contracts? One over
here. Well done, sir. He doesnt care what he pays at
the bowser. He just smiles at the attendant and says, You
beauty. Heres another one. Gold. Is that a bull or a
bear market?
Its essentially a bull market and if I overlay that with
the US dollar youd find that the US dollar is a bear market. Gold is traded as a US dollar hedge and you need to
be buying into those retracements in gold. Is that a bull
or a bear market? Its a bear market. Thats the 90 day
bank bill contract on the Sydney Futures Exchange.
Were in a rate-rising environment which means that
we need to be short bonds. If youd sold that contract at
94.70, its now trading at around about, what is it, 94.05
or 94.10 or something or other? Thats a very, very big
profit. And you dont need to be a whiz kid to figure it
out. You can all see which direction that market is. If
you saw that, why wouldnt you sell into it? And if you
believe that were still going to have rate rises over the
next six months you would hold your position short in
that market. In fact youd look for opportunities to sell
more into that market.
And Ill show you how that affects your outcome very
shortly. Coffee, another market we trade. Is that a bull
or a bear market? Its a bull market. If I could show you
how to trade these markets, would you be interested? You
dont need a lot of money to get in. Okay, the goal of
trend following systems is to profit from a price distribution of all the price from going low to high and price
going from a high price to a lower price. Thats the goal.
Its a very, very simple goal of a trend following system. Most of the successful funds in individual traders
over the last ten to 20 years that have made money even
in the face of disasters have been trend following strategies, trend following philosophies. So we accept the trend
following philosophies make money in these markets and
it really works out to be if you can find a trend, then there
is an opportunity for you.
My Thoughts On Technical & Research Based System

It starts with research. Technical based systems. Who

here trades technical based systems? Weve done it for
years. The problem with technical based systems is that
you have to take every trade. Would everybody agree
with that? And what you do with every trade, is say, okay,
if my system generates a signal to trade then Ive got to
take that trade or somehow we try and talk ourselves out
of it.
There are three different things that you need to do
when youre trading in these markets, particularly if youre
looking to trade the major trends and Ill show you them
later. Theyre called the power triptych. Theres three
parts of your analysis in these markets which help you to
identify really, really good opportunities but it all starts
from research. Even Richard Dennis in his Turtle Program said, It all begins with research.
Bill Dunn from Dunn Capital Management in one
of his papers that he wrote for one of the trading magazines, he said, It all starts with research. It all starts with
where you get your information from and the research
that you do. Its critical. Commodities display seasonal
behaviour. Now, there are two types of commodities.
There are annual production cycle commodities and there
are perpetual cycle commodities.

Secrets To Picking Highs and Lows With

Amazing Accuracy in Certain Commodity
Markets
The ones that provide the strongest signals in terms
of seasonal behaviour are the ones that we plant in the
ground. Now let me just explain this for just a little
bit. The pattern with grains particularly, with commodities that we plant, is that we only get to replenish supply
in that commodity once a year, dont we? Okay, so what
does that mean? For the remainder of the year those
supplies dwindle, dont they, as they get used up? Does
that make sense to everybody? So as supplies get less, less
supply means what? Higher prices. When Is the time
that the market turns around?
Planting time. Planting time signals the time when
the market then reverses its attitude, it reverses its mindset, it says, well okay, the crop is planted, in six months
time were going to have product replenishment so the
risk of no supply gets less and less as the crop matures,
doesnt it? So we have a cycle where the markets fall.

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Lets have a look at it. Lets have a look at soybeans.
Soybeans are the second most important food source for
humans other than meat. Why? Its the second highest
protein source other than meat. Soybeans are planted
around May/June which signals the seasonal high which
signals a high generally. It will have its low around about
October which is harvest time.
Between June and October we look to get short in
these markets and between October and February, just
prior to the February break, we look to get long and thats
a seasonal pattern that we look for every year, year in and
year out in these markets. I cant tell you how far that
price moves. I can tell you that those price moves are a
hundred basis points.
I can tell you, though, that most years soybeans will
have a seasonal high mid-year and a seasonal low around
about October. Being a trader, how important that the
information? Hugely important. Hugely important
because we now know what our research has to show us.
This is the pattern of wheat. Wheat is planted around
December/January. And its harvested at around about
the middle of the year. From planting to harvest we generally have a decline in wheat prices so were what? Long
or short in the market? Were short.
Were looking to sell into this market. From mid-year
after harvest which is the period of time when supplies are
replenished, right, the only thing that can happen once
those supplies are set, what can only happen? Supplies
dwindle which puts rising price pressure on the market.
We look to get long during that ascent phase before
the next crop is planted and thats the seasonal cycle in
wheat. Cotton is another commodity thats planted. It
has its seasonal highs around May/June and its lows
around September/October/November. Guess what
May/June is? Its planting time. Guess what September/
October/November is?
Harvest time. I mean, take this down. Go and check
it in your own time. Trading systems employed by consistently profitable traders are trend following. Well, Ive
just shown you three commodities that produce trends
every year. Theyre trading opportunities. Theyre the
sorts of trading opportunities that we look for in these
markets. If you could find a trend, whod be prepared to
trade it? Who has difficulty finding trends in the market?
Who doesnt know anything about these markets? Everybody puts their hand up, right. Thats the purpose of it.

Well, let me ask you this question this way:

If you accept the premise, this premise that you can
be shown and taught how to trade this I mean, if the
Turtles can be taught, then you can be taught if you can
be shown how to trade this, would you do it? Would it
be something else that you would be prepared to add to
your wealth creation program? Im not saying just do this
all on its own, thats not the essence of diversification, I
mean, have a bit in everything, but dont deny yourself
access to these markets.

Why Most Traders Dont Follow A Proven

Path To Success
Ill give you reasons why. Theres Richard Dennis,
Wall Street, Teaching was even more teachable than
I imagined, it was a humbling experience. What hes
saying there is there is nothing special in learning how
to trade these markets. We can show you how to trade
these markets. The question is really whether youd do it?
Whats youre objective?
Whos heard of day traders? Whats a day traders
objective? Make money? Short term quick cash? Cash
flow? Yep, absolutely. Not how I like to use these markets. These markets certainly are available for that, however I do know from personal experience that the biggest
money is made by staying in the big trends. Thats where
you will make the biggest money and Ill show you that
shortly. Good results are the result of good research. So
you need research, good research.
Youve got a high quality opportunities which means
youve got to be a buyer at the right time and a seller at
the right time. Weve got to be a seller into a down-trend,
a buyer into a rising-trend and we need to produce a
consistent low volatility rate of return. I dont like high
volatility rates of return, you know, up in one month
down in another month. Thats when you wake up in the
middle of the night and worry about how youre going to
pay your bills next month.
Thats called a sleep stop. If you wake up at 2 oclock
in the morning because youre worried about your positions, youre carrying too many positions or youre carrying too much risk. So low volatility rate of return. I
like my traders to be calm and collected and know exactly
what theyre doing. Right? Your trading should be boring. If youre in trading for excitement, youre in it for a

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different reason than I am.
And dont forget, if youre in it for entertainment,
you generally pay for entertainment. It comes out of
your pocket. Nice and calm, analyse situations, take the
research that we can provide you. Take the information,
make your own decisions and manage your own entry
and exit into these trades. Nice and calmly and then go
and do something else.
The other thing that causes traders to have problems is
that they sit in front of a screen all day. You know sitting
in front of a screen is a hell of a lot of fun, right, but its
antisocial, its really antisocial. I did it for a long time.
The live data, on the phone, buy, sell, buy, sell. Get up
in the morning and at four oclock when my wife would
come home from work Id still be in my pyjamas.
And time gets away from you and you burn out in
three months time and youre just not capable of making decisions. I mean 24 hours around the clock youre
up and youre in the middle of the night. And whos got
those little pagers? I know you have, Jeff, from 1929.
Right. Its on old one, its a digital one. Who sleeps with
it beside their bed? Jeff. Hes got a bit of a problem.
How many times do we wake up in the middle of
the night and we turn the little light on in the pager so
we can see where the Dow Jones is overnight, right, and
thats a real problem, Ive got to tell you. Youre in real
trouble when you do that. Youve got to take these positions, particularly in these commodities markets youre
going to make the most money the opportunity to make
this money if you can stay in and find a reason to stay
in the good trades. And a lot of the time, a lot of the
mentoring I do with traders is helping them stay in trades
because theyre scared of taking, of giving back any profit
that theyve gained.
Ill give you an example. When youre an early trader,
as a trader in the market place. There are two examples,
these are two lessons. Lets say you buy in at the market
here and the market goes up. We have a facility in these
markets called a stop loss strategy which means that we
have an order in the market place to stop any loss, okay,
so we measure what were prepared to lose but the market
goes up and were all happy, .
We get a bit of a swagger about us when weve got a
winning trade going. And then the market falls and our
stop loss is positioned here which means that is if the

market trades here Im going to sell out and limit my loss

to that price difference. Is everybody happy with that
understanding?
Okay, but no, were too smart for that. We dont want
to take a loss, right, so the market will rally a little bit.
The market rallies a little bit and we think, Gee, Im back
on a winner, So we move our stop a lot further away
because we really dont want to close our losing trade.
So well move our stop loss and the market falls fast and
through that stop less level.
This is when we start playing tricks with our head
and were very clever at doing this. We say, oh, look, Im
down here again, how can I explain to my partner that
Ive just dusted a couple of grand, you know. So you say,
well, what Ill do is if the market goes back to where I
should have got out in the first place, Ill get out. So if
the market comes back to here, Ill get out and take the
loss that I should have taken in the first place. There are
some chuckles. I mean, these guys have done this.
So what does the market do, it falls even further?
And youre forced to get out now because the pain is too
much. You cant wear this any more. So you say, look,
Im going to get out, Im going to cop the loss and then
the market goes like that. Its almost like the market can
read your mind. But thats how we try and con ourselves.
I mean if the market goes back to where I should have
got out in the first place, Ill get out. Lets have a look at
what happens.
What makes the swings in the markets? So we need
trends. We need to be buying in. Lets say we buy in
every time it breaks a new high. Whats the problem with
that strategy? This is a very, very successful strategy by the
way. Very, very successful. This is the basis of the Turtle
Strategy. There it is, Richard Dennis strategy right there
before your eyes. Whats the one problem that we as human beings have in trading that sort of strategy?
Thats right. Were always second guessing. Is it going to keep going? But let me offer, let me ask you this.
Heres one for you. Market goes up, comes down as it
always does, then it goes up again. When it gets to there,
whos a buyer? Every time, every time without a shadow
of a doubt. Dont even think about it. Just get on the
phone and buy it. Why wont you buy it here? I once
knew a trader who wouldnt buy at that level because it
was near the top of the screen and he couldnt see where it
was going.

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

And thats a true story. He said, Well look, its too
high. We suffer altitude sickness, dont we? It just looks
too high, doesnt it? What should a market do in a rising
trend? Make new highs. Yeah, yeah, its true. If the markets making new highs in a rising trend, is it doing the
right thing or the wrong thing? Its got to be doing the
right thing. And if its doing the right thing youve got to
buy it, dont you?
Dont think about it, just buy it. We get fancy. What
happens is we get fancy is we say, oh look, Id like to buy
it down here. And I can teach you strategies to buy it
there as well, all right, but you must always take that one
and if you take this one and that one youre better off,
arent you? Okay, but you always take that one there.
You always take that one there. In a rising market, the
market must make new highs. If the markets not making
new highs its not in a rising market, is it? So you dont
even ask, dont even ask a question. Whos now going to
buy it at those levels?
Yeah, of course we are. Be a buyer when you should
be a buyer and we a seller when you should be a seller.
You be a buyer when the market is making higher highs
and higher lows and be a seller when the market is making lower highs and lower lows. Its that simple. You be
a buyer after harvest and you be a seller after planting in
some of the grains. You be a seller in a market where you
have a rate rising environment as we have in most economies in the world at the moment.
Youd be a buyer in a crude oil market where the Chinese are jumping off their bikes and into their cars and
there is untold growth in demand and probably a hard
time with the producers of crude oil being able to produce much more than what theyre actually producing.
So weve got to be a buyer in those markets, you know,
you be a buyer in crude oil because youre paying more
every time you go to fill up your car youre paying more
to fill up your car. Thats because crude oil is so much
more expensive every time they go to replenish their supplies.

More Proof That Cycle Analysis Systems

Work Over and Over Again
Lets have a look at heating oil. Traded in the northern hemisphere. Heating oil is used to heat houses during
winter. It has a recurring cycle which indicates a seasonal

low in the market place. The industry anticipates demand. Were a futures industry.
We anticipate the futures so we anticipate future demand. Refineries gear up to meet retail demand well before the retail demand hits the market. The retail demand
hits the market when its cold, doesnt it, in winter? But
when are the producers, the refineries gearing up their
stock levels, building their inventories? During summer.
As they prepare for the retail demand. The heating oil
cycle. February/March, maybe April, we have the lows.
Thats the end of winter. So, your supplies are at their
lowest levels.
Between now and October/November we have a, what
we call an inventory build in the market. Were looking
now to only take long positions in the heating oil market.
How much money have we made over the last five years
trading heating oil? In the year 2000, I think that one is,
US$8,000 trading that leg from April through to October. Whos be happy with US$8,000? Were only talking
one trade. We follow all the markets. The next year, we
were $1,700. The year after that $6,900.
The year after that, US$2,000. Last year, US$11,000
trading just alongside heating oil once a year. Thats
a total of US$30,000 over that period of time. Who
couldnt do with $30,000. So whats happened this year?
This year weve had two trades in heating oil. We bought
March lows, were anticipating, were buying after March.
We bought in at 1.34, we sold out on a trade exit at 1.54.
We re-entered at 1.56 and on Friday night or Saturday
morning the close was 1.66. So what does that mean?
The first trade has netted us $8,500 and the second trade
is currently holding $4,000 profit.
Who wants a bit of that action? Yeah. Its not rocket
science, ladies and gentlemen, we simply know that there
is an inventory build after winter in the northern hemisphere that generally signals the low in the market. Now
I cant tell you how much youre going to make every year.
Look at the difference in the profits in those trades,
$1,000, a couple of grand to six grand. Right. But its
not easy you have to have a system, you have to know
how to hold on to those trends. You make the most
money when the market moves the most, but also when
you can hang on. Now, thats one trade.

My Simple Breakout Trading System That

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

Could Have Turned $2,250 into $186,000
in 24 Months
Is everybody familiar with the Australian Share Price
Index? Well, you are now because it represents the top
200 stocks in the Australian Share Price Index. The last
time this is, this chart represents the Share Price Index,
this is a day chart. It had a break out of 3,500 down there
on the bottom left-hand corner. If youd bought one
contract for $2,250 when it broke out of the 3,500 level
youd now be holding $16,000 profit. Who wouldnt be
happy with that? Yeah? Whos happy with that? Just put
your hand up. Youre happy with $16,000.
Before it broke out of that 3,500 level it broke out at
the 2,800 level. Now if you have a look at the swings of
the market there, both sides I hope you can see it. You
see how the market is making higher highs on the swings
and higher lows on the swings.
Theres no reason to sell this. From 2,800, the first
trade was the 3,500 trade. The one before that was when
it broke out of the 2,800 level. Thats 1350 points at $25
a point. Thats $33,000 on that trade.
Simply by hanging on long term and not fiddling
with your trade. Whos happier with $33,000 rather
than $16,000? Yes of course we are. How much money
do you think real traders make out of this market? How
much money potentially on a simple strategy could you
turn the 16 into 33? How much could you turn the 33
into?
Let me show you a strategy. And its funny, these
signals come in round numbers, but anyway. Lets say
our first trade ended this market at 2,800 on a break out
of 2,800 on the Share Price Index. The market went up,
came back a little bit, and we bought the next high at
3,000.
Well, the number where it says buy more, thats buying one more contract. How much more does that cost
us? Lets have a look at this. Our initial entry costs us
$2,250 Australian dollars. Thats the get in on the break
out of 2,800 on that chart. The next entry $3,000, it
doesnt cost us because were putting profits back, arent
we? Were compounding. Were buying another contract
but were using part of the profits that weve made on that
trade to buy that contract.

Does that make you happy? Okay, same thing happens at 3100. Now, the 1,150 where it says buy more,
the 1,150 is $3,000 from $4,150. Okay, so were always
measuring back from $4,150 where the market was when
this chart was printed. From $3,000 its $1,150. The
next entry was 3,100, there was a bit of a break out there.
Were carrying 1,050 points profit in that trade. The
next entry was 3200, the next entry was 3300, the next
entry was 3400, the last entry was 3500 and we havent
had a new entry in that market since because it just hasnt
come back to give us an entry. Its just kept going.
First trade was buy and hold one contract from 35
out, that was worth 16. The second trade was buy and
hold from 2,800, thats two years so thats April two years
ago. That was $33,000. What is this trade worth? This
trade is worth $186,000 over two years. What would you
prefer? $16,000, $33,000 or $186,000?
Now, lets talk about your outlay. This is called margin. When you have a futures account you put money in.
Generally, you start with about $10,000 in futures when
you want to trade like markets.
Margin is what we call a performance bond. Thats
what you pay the Exchange for the right to hold a position. When you close out your position you get your
margin back plus or minus your profit or loss. So its sort
of like you pay a fee to play or to hold that position. You
dont lose that, you still own that, you still have rights
over that, its still yours and at the end of the trade you
get your profit plus your margin back.
Does that make sense to you? If you trade wheat its
$800 margin. So you pay a $800 margin to hold a position in wheat. When you close out your trade you get
your margin back. Plus or minus your profit. So yes, you
put $2,250 margin in, but it hasnt turned out too badly,
has it? Eh? Not too bad at all. And over two years weve
done something. Weve rolled the contracts at the end of
each quarter.
Ive done all those sorts of things. Your execution
costs are very, very low and youve stayed in a long trend.
And this is the point of this market is youve stayed in a
trend for two years. Remember what the big traders say,
you make the big money out of the big trends. All right?
If youre trading the small trends, what are you going to
make? Small money. Well, whos in it for small money?

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

Supply and demand research and technical analysis.
Weve just done a little bit of that in actual fact. We look
at the research side to identify structure within these
markets that allows us to form an opinion, an educated
opinion about these markets. And if we form an opinion we will then turn on the technicals which we use to
enter, manage the position and exit the trades. And were
looking for those markets that are going to produce major
trends. This is a very, very conservative strategy, it is not a
speculative scalping strategy.
Were not going to be buying and selling during the
day and jumping up and down and doing cartwheels.
This is not exciting stuff. This is simply finding those
good old reliable trends that occur in the market and
trading them, and trading them well. You only need a
couple of good trends a year to make decent money. You
dont need 100 trades.

My Cycle Analysis System Is Now Your

New Best Friend
Lets have a look at corn. Corn sets its high around
about May/June, it sets its lows around August/September/October, that generally equates with planting and
harvesting. Were short in the market after planting, its
generally quite an aggressive pull back in corn into harvest
and its a long time between harvest and planting so its a
very, very short, short crop. Were long after harvest and
were short. Lets look at a 15 year seasonal chart.
Thats a 15 year seasonal chart. Its one of the things
I look at in the research that we do. This is 15 years of
corn price action. And what does it show us? It shows us
that it makes its highs around March/April and it makes
its lows around about August/September/October. Over
15 years. Theres a pattern. So how have we traded it?
Weve traded that seasonal pattern. We bought in at
224, 260, 280 and at 300 ($3).
Weve reversed at 290. What I mean by reversed is
weve sold out of those positions and weve reversed our
position after the planting season. Weve sold at 280,
weve sold again at 230 and we bought it back around
about October because thats about at low as its going to
get this year at $2. Weve made $5,000 on the up-side
and weve made $10,000 on the down-side. By simply
following the structure of the market. By simply trading
the plant high and the harvest low. Now, I stress, this is

in annual production cycle markets.

When I talk of cycles, I mean, its really hard to say
to you that things happen at the same time every year in
markets that arent annually produced. If youre going
to produce something, a replenished supply once a year
then you can get some fairly reliable patterns. In other
markets, perpetual production markets like currencies and
interest rates and gold and silver and all those, it tends
to do a little bit more work in different areas to get the
benefit of it because that can change. They can produce
those things any time. But in these markets and this is
where I like beginning traders to start in these markets
there is some credibility to the production cycle.
Its not a guarantee, but whats the alternative?
Take every technical signal? I would suggest not because in that particular market youd be chopped around,
particularly on the whip saws. So we try and eliminate a
lot of the whip saw trades by identifying structure in the
market thats pretty reliable.
Heres another analysis I do. This is sort of a little bit
look of the window of the room I live in on a day to day
basis. This is called a correlation analysis. And this is this
June contract Share Price Index. The black lines are the
price action.
The green line that you see there is the correlation of
this years price action to three previous years and those
three previous years are listed at the top there, where the
correlation to that action is very, very similar to 97, 94,
and 86, the correlations are above 84 percent. In fact we
have one year of 87 which is, at 84 percent correlation,
so we overlay that. Now what this market is telling us is
that if this market behaves like previous years, were going
to have a fairly significant pull back but then were going
to move on to newer highs.
This sort of analysis is to be used with other analysis,
right, in drawing a whole picture so that you get a whole
picture, but it is interesting how reliable some of this can
be. Its simply saying that at this particular stage in the
market it is possible that we will get a pull back. That we
will now go to the price action in these markets to determine whether or not that pull back is going to occur. We
dont take it as gospel but we certainly have it in mind.
A stop loss strategy like I was saying before is an order
in the market place which protects your profits but it

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

stops your loss. Its particularly important at the initial
outset of a trade because you cant go into a trade with
an unlimited loss potential because the market can read
your mind and it will take it from you. No, Im joking,
it doesnt read your mind. But youve got to have an
idea where your pain threshold is. If youre going to go
into a market and youre going to trade it, at least have a
structured limit. If youre going to place a stop loss in the
market, some simple strategies are moving averages.
A basic one just to give people an idea is every time
the market makes a new high, put your stop loss under
the last low. When the market makes a new high move
your stop loss there because the essence of this structure
is as soon as the market makes a new low, lower than the
previous one, then the trend has changed. So it protects
you. What youre saying is Im protecting profit, but Im
giving the market room to move.
Im protecting my profit and if the market changes
its mind, if it turns from a bull market to a bear market I
want to be out, and I want to be short and I dont want to
be long.

3 Simple and Easy To Follow Triggers To

Enter A Trade
A trader looks for three signals to trigger a trade. The
first is a rational signal, the second is a seasonal signal,
if it exists, and then he looks for a technical signal. The
rational signal is simply logic and Ill give you an example
of logic. Ill reiterate these examples. First is, are we in an
interest rate rising environment or an interest rate cutting
environment?
Logically were in an interest rate rising environment
across the western world which means theres pressure on
bonds. Thats logical to me. Is that logical to you? If you
know that, you have an opinion about which way bond
markets are moving. Is our economy doing really well?
We have an indicator that we use, we call it the misery
index, okay, and the misery index is structured this way.
You add the prime interest rate, the Federal, the Reserve
Bank interest rate, you add unemployment and you add
the inflation rate together and you get a number and you
graph that number over the last ten years and you can
see where, when the misery index readings are high, what
have you got? Youve got high inflation, high unemployment and high interest rates. How miserable are you?

Pretty miserable arent you? Thats got to be what? Thats

got to be a bear market, doesnt it?
How do we make money in a bear market. We sell it.
Yeah. Lets say your misery index reads low inflation, low
interest rates and low unemployment. How miserable
are we? Doesnt even register on the Richter Sale, does it?
Doesnt even register.
Youre as happy as you can ever be. What sort of
environment do we have right now? The last two years
which is why the Share Price Index has behaved that way.
Low inflation, low interest rates, low unemployment.
You know, it gives you a logical outlook. You can read the
press if you like, and the press will say, oh, its a new high,
the S&P is trading at all time highs. Thats fantastic.
You know, if the S&P is trading at all time highs and the
Share Price Index is trading at all time highs, you know
which way the market is going.
But whats our normal response to that? Ooh, its just
before a crash. You know, Im going to sell the new highs
because its going to crash. Let me tell you a story about
HIH. HIH fell from $3.50 to 18 cents over a three year
period. Every time it made a new low, people were buying it. Why? Because its going back to $3.50. Imagine
the guy and I hope hes not here imagine the guy who
bought $10,000 worth of HIH at 18 cents, the trade of
the century. $10,000 at 18 cents, the last trade on HIH.
Thats what you call a good bye. Thats good bye house,
good bye wife, good bye boat.

How To Put All The Pieces Of The Trading

Puzzle Together
Whos aware of The Pioneers by Frederick McCubbin? Has anybody seen it as the gallery? This is an
interesting analogy into the power triptych, because we
use rational analysis which is logical. There must be a
logical reason why prices move up and down. If theres a
seasonal pattern it simply corroborates or endorses your
opinion and helps you to decide what you should be
doing. And if the technicals, which is the price action,
confirms your other analysis then you have a trade.
And if you have a trade youve only got one choice,
one decision to make. Do you take it or dont you? And
dont fool yourself with it. I mean, youll find all the
reasons in the world not to take these trades. We can be
very, very clever with ourselves when we dont want to do

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

something, right? The facts are you can be taught how to
do it, it is being done by other traders.
If somebody can do it, then you can all do it. Even
Richard Dennis the great trader himself said, he was
humbled by how easy it was to teach people how to do
this. The question is, if you are just trading technically I
can understand how you can be a little bit hoppy sometimes because of the whip saw trades and you get five
losses in a row, it sometimes really, really hard to jump
back on, on the sixth trade. So you need some other sort
of analysis which helps you to support your decision in
your trade. So you need rational, you need signals.
Now, McCubbins painting. If youre familiar with it,
it comes in three panels and theres a story to every panel.
But does anybody know the story of the whole painting?
The left panel of McCubbins Pioneers are when theyre
free settlers, free settlers in early Australia were those
people that were given land rights if they were prepared to
go out into the bush and establish themselves and settle
in the bush. And the left panel shows a woman sitting
rather dejected, I dont know that she was too happy
about being there.
No running water, no electricity, right. And her husband is in the background cutting down a tree.
Now she is sitting on a log in that left panel. That log
reappears in the middle panel and he is sitting on the log,
she is standing there holding a baby. So things are going
along pretty well. If you have a look in the background of
the middle panel, theres a house being built. Hes cleared
some land behind there and theres been a house built. So
hes cleared some land, built a house, made a home. They
had a family.
The same log appears in the panel on the right-hand
side and theres a cross. A grave there. Now McCubbin
never told us whether that was the baby, his wife, the family, or whether that was a stranger that simply came across
the grave. He never ever said what that last panel represented. But what he did say was that in the background
through the clearing on that right hand panel, thats the
township of Melbourne being built and grown out of free
settling.
And thats the story of McCubbins The Pioneers.
Each panel is a story but the whole picture is a bigger
story. And thats what youve got to do when youre
trading. When youre trading you have to have a logical

reason for the trade to occur.

If the trade has some seasonal justification to it that
adds more to your picture and if the price action confirms
what you have been able to find out about these commodities then you have a trade. If you have a trade and
if turns into a trend then you know how to trade it and
you only need to find a couple of decent trends a year.
Everybody happy with that? Is it logical? Havent lost
anybody? It is important, its critical to trade in these
markets, to have a trend following plan.
Particularly when you start out in these markets because as I said before I dont want you too active in these
markets, I just want you to know that these opportunities
exist in the market, that these trends exist in the market
and when you find one there is an opportunity for you
to trade it. How much money can we make out of this
market, I have no idea.
I cant say to you that were going to make X amount
of dollars out of a trade. As you can see from the heating oil example. We made $1,000 one year and we made
$8,000 another year. I dont know. But, you know, if
youre not trading it, guess what, youre not going to make
anything. So what do you need in a plan, in a trading
plan? You need to know how and when to enter. Well,
thats the triptych.
Thats having a seasonal and having a logical reason for
these markets to move and have the price action confirm
it. How many contracts are we going to trade? Well, at
the start well trade one contract and well pyramid one
contract in by re-investing and compounding the profits
on these trades. How much risk?
We have an idea of how much were prepared to risk
at the initial stage of these markets. And weve got to
have two exits. Weve got to have an exit in case things
go wrong and weve got to have an exit to take money out
of the market when its the right time to do so. Okay,
lets have a look at wheat. Wheat makes its highs around
about planting time, December/January, and it makes its
lows around about the middle of the year at harvest time.
After planting we look to take short positions or sell
into this market and after harvest we look to take long
positions or buy into this market. Theres wheat over the
last five years. Funny thing about this chart, the highs are
always higher than the lows in that chart,. The highs occur, guess when? Round about December/January, round

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

about planting time, and the lows occur, guess when?
Around about harvest time.
Single contract trades produced $1,200, $1,700,
$6,000, $6,000 and nothing this year. Why havent we
taken any trades this year? Because we havent got any
price signals yet this year.
We have over-supply in wheat at the moment and our
logical reasoning in that justifies our opinion there. For
instance, we have what we call the stocks in use ratio in
grains, in commodities, and that simply says how much
we carry over from last year that was unsold or unused
from last year.
How much are we carrying over into this year to add
to the new crop? Weve got a lot of wheat left over from
last year around the world. So whats that going to do to
prices? Keep prices suppressed, right?
So, knowing that, were not really looking very aggressively at wheat for a position. We probably wouldnt take
at this stage any buy signals in wheat because theyd be
very strong unless our logic behind the trade had changed
and they havent been able to unload the 40 percent carry
over stocks from last year yet.
So weve got 40 percent carry over from last year, add
that to this years harvest, what are we going to have? Too
much supply, absolutely correct. So thats an example of
what I mean by logical trading. The Australian economy
over the last couple of years has been very, very strong, its
been driven by what they call a resource boom. Whats
the one stock in our market that would benefit from a
resource boom? Try BHP. Whats the one stock in our
market that would benefit from rising oil prices? BHP.
BHP is the largest producer of oil in the world. BHP
is going to benefit from resources and its going to benefit
from oil. So what are we looking to do with BHP? Were
looking to buy it. Does that make everybody happy?
Whos got BHP in their portfolio? Okay, good. Jeff has,
1929 crash man. Right. Yeah. So there was a signal in
BHP when it broke out of $9. Now its that stage, lets
use the example youre going to buy 1,000 BHP at $9.
You spend $9,000 to carry that position.
Youre in, youre right, its logical, you know. Is it seasonal? Well, maybe not but let me give you this example.
Whenever theres a resource boom, does BHP benefit? I
cant tell you that the seasonal is every seven years you

have a seasonal resource boom, but what I can say is that

if theres a resource boom, then the chances are that BHP
is going to benefit from it. So we buy it at $9.00 and
trade it to $19. Youre $10,000 up on a $9,000 outlay.
Youre not out of it yet because it still hasnt given you
a signal to get out. Let me show you another way of trading it. You can trade it with what we call an individual
share future.
The top 50 stocks on the Australian Stock Exchange
have associated with them what they call an individual
share future. It is a future on the BHP stock. It costs
you $550 in margin to trade BHP on the Sydney futures
exchange. Thats a significantly less amount than $9,000,
isnt it?
You still control 1,000 shares. But for $550 you can
control 1,000 shares and trade exactly the same price action. Thats leverage $550 to control $9,000. For every
cent, we call it a tick or a point, for every cent that the
share moves or the share future moves you make $10.
Think about it. Youve got 1,000, $10 a point, so you
make $10 a cent in price movement.
Weve held that share future for say a year. So every
quarter we roll it into the next contract. We sell the future at $19. Weve paid $150 in commissions compared
to about $420 if you paid it through your stock broker.
You profit at $10,000 and youve tied up $550 for two
years which you get back at the end of the trade. Whos
not happy? Thats what we call leverage. For $550 you
can control 1,000 shares of BHP and benefit exactly the
same as if youd bought the stock.
Why wouldnt you trade that way? Sorry? If the
stock goes down you lose money. No, okay, thats a good
question. The lady asked sorry, I didnt get you name.
Gwen. If it goes down, do you lose money? Yes, you
lose money at the rate of what? $10 a point. Right. This
is where we put the first risk level in. How much are you
prepared to risk when you enter into that trade.
Lets say youre prepared to risk $500. Youre giving
the market 50 cent range. Well, youd get $50 back out
of your margin. Youve lost $500. Whats the difference
between that and you buy it at $9, $9,000 at $9, youre
prepared to sell out if you lose $500 so you get $8,500
back. Its the same, isnt it?. Except in this instance your
leverage, youre controlling the position, by employing
less capital which frees up other capital to take other

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Millionaire Phenomena - Stock Market: STEPHEN JENNINGS (cont.)

opportunities. Particularly for people that have limited
availability of stock. This is not a bad way to trade.
Does everybody get that? Good.
Folks, I hope today I have opened up your mind to
the possibilities. Every day there are opportunities in the
market, and were currently in a super-boom the likes of
which none of us have ever experienced before.
Can the market go down?
Sure it can, but when you have a trading plan that can
profit from both directions - do you really care? I think
not.
What you have to understand is all the components
that influence a highly-profitable trade. Once you get it,
youll look at the markets in a completely new light. Youll
see more opportunities than youve ever seen before and
most importantly, have the confidence to trade the big
trends.
Thats where the big money is made... Big trends.
My final closing thoughts are, were in a massive commodity boom... Are you taking advantage of it? I hope
you are, because if youre not, youll look back in 3 - 5
years time and kick yourself for not getting off of your
bum and doing something about it.
My name is Stephen Jennings and its a pleasure to
bring this break-through information to you here today.
Thank you.

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Amazing Secret Weapon Hoarded

By Business Leaders, Celebrities, and
Politicians Skyrockets Your Income,
Transforms Your Credibility, And
Commands Instant Respect From The
People You Meet!
Part of the Millionaire Phenomena Series

o you know, every eight minutes another person

becomes a millionaire, every eight minutes, yet
the average person, the average person sits on
the sidelines and watches as all these opportunities just
sort of float around them. Can we all agree that theres
the same opportunities around you right now. Can we all
agree to that?
So the average person sits around and watches opportunities and they say things like well, thats a great idea
but I wish my husband or my wife was here to do that,
because that would be great for them to do. Or they say
things like well that would be great if I just had a little bit
more time, but I dont have that much time because on
the weekends I like to relax and sit around and watch the
ballgame or whatever.
The average person has a net worth of less than
$30,000. Less than $30,000. Put your finger out like
this for one second. Touch your chest and say thats not
me. Its time to stop doing what average people do. I
want you to take out a piece of paper and I want you to
write three words down real quick. The first word is wait,
W-A-I-T. The second word is watch, W-A-T-C-H. And
the third word is wish, W-I-S-H. Average people wait for
the perfect opportunity and they watch as other people
prosper, and they wish that they were lucky. But successful people, millionaires and multi-millionaires, never
wait for the perfect opportunity, because they know that
theres the seeds of greatness in every single opportunity if
they just take action on it.
And they never watch other people prosper, because

Meet Christopher Guerriero

Christopher Guerriero, hes now
an international best selling author,
whos about to spill the beans and
let you in on all the insider secrets
that helped him sell more than
319,000 copies of his first book in
less than a year.
Chris started with no book writing
or marketing experience, yet built
a system that helped him sell more
books in 60 days than most authors sell in a lifetime and since
then he and his clients have used that exact system to build an
army of book empires.
In the process, Chris has also become a recognised Internet expert.
His catch-cry is that a book in the bookstore will give you credibility and a simple little e-book can make you rich.

theyre too darn busy enjoying life, because they took a

little bit of action on something that was going to make a
difference in their lives, and now theyre enjoying all the
fruits of that labour. And they certainly never wished that
they were lucky, because luck has nothing to do with it.

Stop Focussing On The Money. Heres

What You Need To Focus On...
So you have to ask yourself a question. If I show you

Millionaire Phenomena - Internet: CHRISTOPHER GUERRIERO (cont.)

a system, the exact same system that my clients and I use
on a regular basis to make millions of dollars, if I show
you a system thats been proven time and time again to
improve your income no matter what you do for a living,
are you going to take action or are you going to sit on the
sidelines and just watch?
Heres a fact; true wealth, true abundance in life comes
only after you stop focusing on the money and you start
focusing on doing something thats going to improve you
personally. When you stop focusing on the money and
you start focusing on doing something thats going to
build credibility for you. Not one of these get rich quick
kind of schemes that you have to hide in your closet and
do, because youre afraid that your neighbours are going to find out that youre doing it. But something that
actually gives you credibility, something that makes you
proud, something that youre proud to tell your family
about and your friends about. Thats when the money
really flows in. When you start doing something that
builds credibility for you, you will be amazed at how fast
money starts to flow into your life. And youre going to
wonder where the heck has all this money been through
all those lean years.
Now, let me give you an example. No matter what
you do for a living, I dont care if you are an electrician or
a politician, or a mathematician or a magician, it doesnt
make a difference what you do for a living as far as this
example goes. No matter what you do for a living, you
could immediately begin making substantially more
money if you had a book with your name on it. And its a
simple, simple process. A simple process that I will show
you how to do in 30 or 60 days, depending on how much
time you want to put into it. Its not something you have
to stop your job for, something you can only do a couple
of hours a day at the most and really come out with
something that you are proud of.
And when you do that, when you stop focusing on the
money and you start focusing on something thats going
to build credibility for you, when you build a book or
an audio or something like that, then the credibility that
that gives you, opens up doors that you may have never
dreamed could have been opened for you.
In my wildest dreams I would have never imagined
that I would live in the home that I live in right now. I
would have never imagined that I could own the things
that I own right now and I do the things with my family

that I do right now. I would have never ever imagined in

my wildest dreams that I would have my own television
show, but everything thats happened to me over the last
several years has come from the foundation of the credibility that my books or my audios have given to me.

Imagine This For A Moment...

Im going to tell you a little story before we rocking
and rolling here. I want you to picture yourself in this
situation. Lets say for example you take, I dont know, 30
or whatever days and you do what Im going to show you
to do and you come out with a product, a product that
you create. Not something that you have ghost written
or anything crazy like that. A product that you create,
and you market it the way Im going to show you how
to market it, which is simple to do, Ill show you exactly
how to do it. Lets say you do that and youre sitting in
your home office and you get this phone call. And this
guy says to you something like well you know Gary, I got
your book, I listened to your audio. Id like to fly you
down and Id like to talk to you about maybe having your
own television show. Would you like that? How many
people would like that?
So Im sitting in my office one day and I get this
phone call from this guy who is now a very good friend
of mine. And he says man, I would love to get you down
here and talk to you, because were building this new
network, this new success network with all these success
speakers. People like Brian Tracy does anybody know
Brian Tracy or Zig Zigler, who knows Zig Zigler? Like
Bob Proctor, does everybody know Bob Proctor? And
Mark Victor Hansen, the guy who wrote all the Chicken
Soup for the Soul books?
All these guys have shows, success shows on this
network, and hes calling me up now saying Id really love
it if you would fly down and maybe talk to me about if
you would like to have a health show on this. So Im
going to show you a real quick clip from that show, and
while youre watching this, I want you to put yourself in
this position. You get this call and now youre sitting in
this guys office, and he asks you what would your show
be about? And youve got to think, because youve got to
come up with a really good idea of what the show is going
to be about.
So were going to cover a whole bunch of stuff today,
and what were really going to focus on is doing things

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that are going to give you credibility. Because when you
build credibility for yourself so many great things happen for you, things that you would honestly think right
now, wow, that would just be crazy. Theres no way that
I could do something like that. Im not quote unquote
worthy of something like that. So were going to cover a
lot of things and I want you to just write this down real
quick. Im from New Jersey. For those of you who dont
know anybody from New Jersey, I will tell you that we
speak fast. There is no need for coffee or caffeine in our
lives. We just sort of go like this all day long, and if I had
a cup of coffee I may explode. So if I go too fast, youre
more than welcome to yell out and just slow me down.
However, weve got a lot of stuff to cover.

world will pay you at least $29 to learn the lesson, so that
they dont have to go through it and go through all the
same hardship that youve been through.

So when I first start working with people, one of the

first things that I hear is that I just dont have the time.
That sounds like a really great idea. Id love to have a
book or Id love to have an audio programme, or Id love
to have something. Everything that youre saying sounds
really cool, but its really not for me because I dont
have the time. I dont know if I could fit that into my
schedule. Or they say things like Ive got no experience.
Theres no way I could write a book. I have no experience.

8 Steps To Creating A Book In Just 30

Days...

Let me ask you a question. How many people in here

have ever been through any kind of a tragedy in their life,
or maybe a tough situation in business like a bad business partner or been through a bankruptcy or a divorce.
How many people have been through anything like that
in their lives? Now, did you learn a lesson when you went
through that? You learned a lesson? Okay, just about
everybody learned a lesson when they went through that.
What if I came to you before you went into that situation, and I said you know what, if you give me $29 I will
teach you the lesson before you go into that situation. So
you before you go through bankruptcy or before you go
through a divorce, whatever, for $29 Ill show you how to
get through it faster and easier. Would you pay $29 for
that? Raise your hand if you would. So almost everybody
in here would do it.
So if you went through those situations and you
already learned a lesson, what makes you think that you
dont have experience to write a book because all you have
to do is sort of regurgitate that information on audio,
have it transcribed, put into a book format and youre
done. Now you have something that people around the

But the only thing that I hear a lot is that theres no

way that I could write a book. How many people in here,
just real quick, Ive never done this before how many
people in here believe that writing a book would just be
too much of something to think that they could do in
their life; any in here? Its too big of a thing. Its not. Ive
thought that. So many people come to me and think
that, and Ill prove to you over the next I dont know,
five minutes that youll be able to do it really supersimple.

The way I created these slides, is I took case studies

from clients of mine so that you could actually see how a
client walked through the process, and I thought it would
be easier for you to understand that way. So heres to
write a best selling book in 30 days or less. The clients
name is Tony Betman. So he came to us and he said you
know what, Ive got no experience, Ive got no clue where
to begin, I have no contacts, and youre telling me if I
want to make money Ive got to stop focusing on money
and Im best to start focusing on something thats going
to give me credibility. Ive got to do something like write
a book or an audio or something.
He said I just dont think I could do it. So I said okay.
I just want you to commit to doing eight things for me
over the next 30 days, just eight little things. First, I want
you to choose your subject. So if you were to write a
book, what subject would you write about. What are you
passionate about? What do you really love to do? And I
want you to honestly spend a whole day thinking about
this. If you already have a book done or if you already
have a book idea in your head and you think its complete
up here still, spend a whole day going through it. Make
sure your subject is fine tuned and focused for a good
audience. Its that important, that you have to spend a
whole day on it.
But the second thing is after youre done youve got
your subject, then you write out the main topics that you
want to cover. You make them in little bullet point format, sort of like the table of contents for a book maybe.

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And try to come up with 8-10 topics that you would
want to cover, and that whole process is going to be a very
quick process for you. A half a day maximum its going
to take. The hardest part is figuring out what your subject
is going to be. Once you do that the rest is really simple.

topic and then Ill move over to the second page and Ill
teach them everything I know about that second topic.
And Ill record everything that I know about the third
topic, and Ill just keeping doing that after page after page
after page.

The third thing is you have to gather information for

each one of those topics, so heres exactly how I do it. Ill
get my subject and then Ill take one plain white piece
of paper and I will write one of the topics that I want to
cover. Youve got to figure Im going to do 8-10 different topics in this book, like 8-10 chapters, so Ill put one
chapter title and one subject on an 8.5 x 11 piece of paper
and Ill tape it to my wall. And then Ill tape another
piece of paper to my wall right next to it, and that will be
the second topic that I want to cover. And then Ill tape
another 8.5 x 11 piece of paper to the wall and Ill put my
third topic, and Ill do that for every one of my topics,
so that I have each one of the topics on a separate piece
of paper. And that whole thing takes me about 2-3 days
maximum to gather the content.

So Im making a little audio of everything I know

about each one of those topics, and that whole thing, if
you really go slow is going to take you a whole day to
do. Maybe youll come out with a two hour audio of that
whole process, and then you transcribe it. So my little
recorder has a little cord that hooks up to my computer,
and I could download that audio back to my computer
and I e-mail it to somebody who transcribes it for me.
And that transcription process takes about 48 hours for
a two hour audio. It costs me about $120 or so, $60 per
hour to transcribe it.

For example, I may come across a topic that I know

would really fit well in my book but Im not an expert
in it and let me see if I could pull something out. For
my first book, maximise your metabolism, that book was
all about health, and one of the subjects in there was on
supplements. And I dont consider myself, at least at that
point, I didnt consider myself an expert on supplements,
vitamin supplements, vitamin supplements.
So when I got to that chapter, and this is exactly what
you could do if you have a chapter in your book that
you dont think you know a lot about, you simply Google
it online or you do whatever kind of search you do online. And you read a whole bunch of the best articles out
there and then you turn your computer off and all that
informations that locked in your head now about that
subject is now yours. As long as youre not plagiarising it,
youll now know it. You just like went to mini college to
learn about that lesson.
And then you record everything about each one of
those topics. I have a little handheld recorder. It cost me
about $40, and I stand in front of my first piece of paper
with my first topic written on it and I will stand there and
Ill make believe that I am teaching somebody in front
of me. Ill teach one of my clients one of my pretend
clients Ill make believe theyre standing in front of me
and Ill teach them everything I know about that one

Now, if I personally tried to do that transcription

myself, it would probably take me weeks to do, because
Ive no desire to transcribe word for word anything that
I say. But you send it to somebody whos an expert at
that. It doesnt cost much money. Theyll transcribe all
your thoughts on that book, and theyll send it to you in a
word document, just a regular word document. And after
you get that, you simply clean it up a bit.
Youre going to pull that out, and then youre also
going to find that theres a couple of areas that you might
want to add a little bit more to, so you add a little bit
more to so you add just a little bit more content to those
areas. And it may take you two days to do that, and then
you send it to somebody who is going to make you sound
like you know what the heck youre talking about. You
have this great knowledge in your head that you just took
out of your head and you put into an audio, and its great
quality stuff, stuff that could change peoples lives.
Next, you send it to somebody who is going to make
you sound professional. An editor to edit your book is
probably going to take about seven days, and it may cost
you about $250, and then youre done. You have this
thing that sounds like a book, makes you sound really
professional with all of your personal content in it. All
thats left now is that it has to look like a book, so you
send it to a typesetter, whos going to put the margins in
the right spot for you. Theyre going to put the headlines
on each one of the pages, the chapter titles, the page
numbers on each one of the pages. All those cool things
that make things look like a book.

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All you did so far is you recorded everything that you
know about your subject, and then you let everybody else
do the rest. The typesetting usually takes about five days,
and thats being really generous. Typesetters usually go
very quickly. It may cost you $300 at the most, so the
whole process now has cost you well under $1,000 and
you have a book done. Do you think you could do it if
you follow this basic process?
Back to Tonys story. I had no experience, I had no
context, no clue where to begin. He whined and he
complained and I would hate I wish I had the phone
conversation of him telling me how he cant do it. And
then after a little more than 30 days he not only has a
book but he was able to turn it into an amazon.com best
seller. He had a book in 34 days, and he says after failing
high school English and never taking a single writing
course in his life, even while I was working 50 hours each
week at my normal job, he wrote his first book. Making
money from it even before it was done, and by using just
one technique, he made it a bestseller in 34 days.
Do you think that changed Tonys income, being a
bestseller? Heres a question. How many people in here
live in a house? Okay. How many people in here have
grass outside their house? Now lets say youre trying to
get somebody to come and cut your grass, so you interview a couple of landscapers, and two people come to
you. One person comes to you and they say Ill cut your
grass. Its going to cost you $50 a week. And the other
person says Ill cut your grass, its going to cost you $50
a week, but before you hire anybody heres my book. I
would like you to read this. This book will show you
exactly how to make sure that you have the greenest lawn,
so green that all your neighbours environmentally you.
$50, the same exact thing, their lawnmowers look the
same, theyre going to come the same amount of times.
Who are you going to hire, person A or person B? Its a
no brainer, right.
Lets say you go get your haircut and this is a new
person, youve never gotten your haircut there before, but
youre real picky about how your hair looks, you go to
this one person and they say Ill cut your hair, its going
to cost $25. This other person says Im going to cut your
hair, its going to cost you $25, but Im also going to give
you a copy of my books which shows you how to have the
healthiest hair ever, shiny and healthy and manageable,
because Im an amazon.com bestseller or on Im a New
York Times bestseller. Heres my book. Who are you go-

ing to go with? It just makes sense.

The person who has more credibility is going to seem
like the better choice no matter what. Now, picture those
two hair dresser shops. One is on one side of the block,
the other is on the other side of the block. Hairdresser
A, who does not have a book struggles to make money.
Struggles so much that they keep dropping their rates,
thinking that its price that people are making their decision on.
I dont want just anybody cutting my hair. If its going to cost me a couple of bucks more, Im going to go
someplace else. If I think somebody else is going to do
a better job, Im going to go some place else. Person B
has the same type of hairdresser shop, but shes an author,
just a regular author. Shes got a line of people outside
of her shop all the time and she can raise her rates every
single year, and she can get that money every single year.
And in whatever business youre in, you can never have to
worry about price war with your competition ever again,
because youll have the credibility, because youll be seen
as the expert in your field.

Now That Youve Written Your Book, How

Do You Sell It And Make Money
Okay, so I guess I could write a book. It doesnt seem
all that hard. I guess I could do it if I just do that eight
things, but who the heck would buy it. I mean, its me.
Im a nobody. Im not Stephen King. Im not one of
these guys, John Grisham who has a great name. Who
the heck is going to buy my book?
When I first wrote my first book I had no e-mail list, I
had nobody to really sell it too. I just had a strong desire
to write a book and to get that credibility, hoping that
it was going to build my business. Within a short time,
within 60 days, the first 60 days, we sold over 60,000
copies. Within 60 days of the book coming out. And
can I maybe make some money while I write it. Now
one of the things that we teach our clients, is that its very
helpful if instead of having to take your credit card out
and pay for your editor or pay for the typesetter or pay
for any of that stuff, you learn how to make money before
you even write your book. So that whatever money you
make can fund any expenses that you may have, plus add
some money to your bank account. It always makes me
feel all warm and cuddly inside when I make money.

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How To Develop A Hungry Audience For
Your Book
So heres case study number two, Len Bradley, how to
develop a hungry audience for your product. An audience that is going to be waiting for your book to come
out, and ready to buy your book as soon as it does come
out. Now when we do this, we create now, what we
did for Len, is we took heres two ways you could do it,
before I tell you what we did Len. First we need an audio, because we want to generate traffic for your website.
So how are we going to get that audio? Does anybody
want to take a guess how were going to get an audio for
you? You could record something in the computer. How
about we already just went through how youre going
to write your book. You already just recorded something.
How about we promise people that if you go to this
website, were going to give you the unedited version, the
thoughts that were going through the authors mind. The
behind the scenes thoughts that went into creating this
book and we give it to you for free if you just go to this
website and you take a survey. Theres your audio. Its
already done. You dont have to do anything else.
Len wanted something a little bit more powerful, so
what we did was we called Len up and we recorded an
interview for him. And we talked to him for 60 minutes
on the phone and we recorded that whole thing, and we
used that little audio. It cost neither one of us anything
to produce, and we created an audio. And now were
creating a website for him. And the first page of that
website is were sending people there. Were saying listen,
Im creating a book and I would love for you to go to this
website and Id love for you to just spend 30 seconds and
fill out this one quick survey. And if you do that, what
youre going to do is youre going to help me to gather
contents for my book, so that the book that I come out
with is exactly what you want.
Heres what I go so far. This is the general idea, and
if you go to this website and you fill this one little quick
survey out, well give you a $49 value, which is this interview that I just did and it tells you three ways to whatever
you do in your industry. And Len is an expert at helping
people to look and feel years younger, so thats what this
whole thing is.
So the first page of his website is just a survey page.
People go there just to help Len out. Now Len didnt

have an e-mail list. He had about 100 people that were

family, friends and co-workers on his list. And he sent
them that e-mail asking them to go to his website. And
the second thing is, as soon as they filled out that survey,
we gave them a page that said hey wait a second, before
you go any further, Id like to give you a one time opportunity. Id like to give you the chance to get 50 per cent
off of a product, and I know that you like to look years
younger because thats why youre here. Youre here to answer this question. Youre here to get a copy of this audio
thats all about how to look years younger. So Id like to
give you 50 per cent off of a product that helps you to live
life in the body of your dreams.
Now Len didnt have a product so we searched out
affiliates and we found one of my personal affiliates who
had a product that was willing to give it to Len. And now
Lens making a little bit of money each time people go
through this. Now people dont have to buy this. They
went to the survey page, then they go to this page and
they can say no I dont want that.
And then they go to a page which is all about how
to build Lens list. He only has 100 people. We want to
make sure that theres a hungry group of people waiting
for his book to come out, once hes done writing it. So
what we do is, we say hey, before you listen to this audio
I mean, its really jam packed with information, and its
a $49 value. And its never going to be offered for free
again, and Len will never offer this audio for free again.
The only way people will ever be able to get this audio
is if they buy his book, or if they pay $49 for the audio.
But please take a moment and tell a few friends about it
so that they could get it for free now, before we take this
offer down.
And what we found is that on Lens site he got a 23
per cent conversion on this page. That means that for
every single person who came here, at least one new name
was added to his list. So if 100 people came then at the
end of the day, Len had 200 people on his list. Because
some people filled out one name to send a friend that email, some people sent out two names, some people gave
him three names, some people gave him no names. Some
people cheated and came back and gave him an extra
name.
But on average, after those e-mails were sent out and
we didnt grab any of those e-mail addresses, they were
sent an e-mail inviting them to come and get a free audio

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so they had to actually come back and get the free audio
before they were put on Lens list. So thats a double opt
in. And they had to go through that whole process, so
that they had to go through the one time offer and then
they had to go to the page that asked for friends names to
get that free audio. In the end, every time he ran this he
doubled his list size. And in the final page is where Lens
friends and family get a copy of that free audio that he
promised them.
This is how Len made money, before he even wrote
his book. And theres three parts to this page thats real
important for you to understand. First, theres the actual
audio. On his audio he mentions a coaching programme.
Now Len didnt have a coaching programme at the time.
He said you know what, I really want to make some
money with this and I need to start generating some
money, because Ive invested so much money in all these
other programmes. I need to start seeing some good
return. How can I make some money on this?
So I said at the end of your audio, put a little commercial about a coaching programme. He says, but I dont
have a coaching programme. I said well let me ask you
a question. If you were to get a call from somebody and
they asked if I gave you a $1,000, would you coach me,
would you mentor me, would you say yes? And he said
of course Id say yes. Well how many times, how many
phone calls would you give them for $1,000? And he
said well, Id probably give them about 10. I said okay, so
now you have a coaching programme. For $1,000 they
get 10 personal one on one calls with you and thats the
end of it. Just try it out. Just throw it out there and see
what happens. You have nothing to lose.
So we put a little commercial on his audio, and then
we put a little link on the bottom of the page. And that
link is because a lot of people are going to listen to his
audio right on the web page, and while theyre there they
may click that link and shop a little bit. People love to
shop. So that link goes to a page which describes this
coaching programme, which he doesnt really have yet but
that hes going to sell. And then theres a third part. I
said Len, can you please write some cheat sheets, or write
a little workbook, so that people could get more out of
your audio. And he spent about 30 minutes and he wrote
a little workbook for this audio, this free audio.
Does anybody know what Wal-Mart is? Do you guys
have Wal-Mart in Australia? Okay, so Wal-Marts like K-

Mart. Wal-Marts a huge chain of stores, discount stores

in America, 40 per cent of Wal-Marts profit happens in
the last 20 feet before the people check out. And youre
going to find the exact same thing in your business. A lot
of your profit is going to come right before the people are
done. So they listen to your audio, they clicked on your
link, they didnt go to the commercial in the audio. They
figured nah, I dont want to do that. They clicked the link
and they read your sales page and they say I dont know if
want to do that.
Now theyve got your workbook. Theyre at the last
20 feet before check out, and the commercial that we put
in the workbook is where the majority of his conversion
happened.
So Len had one website with four basic pages. He
had a 60 minute interview to create an audio. That was
it. He paid nothing for the audio. It was a free recording that we did. He sold 12 coaching packages in two
weeks for $997. He made almost $12,000 profit, and he
didnt write his book yet and he didnt have a coaching
programme to start. Does anybody think thats pretty
cool? Would anybody like to have a coaching programme
like that?
Okay. But wait a second, because now Len does go
and write his book, because he says wow Chris, this is
really cool stuff. Do you think I could make more money
if I actually had my book done? So I said well yeah, get
your book done. Its only going to take you a little while
longer. Youve got the transcripts. Youve got everything
else. So this is what happened.
Three months ago I didnt know anything about writing
a book or marketing, or really what I had to do to change my
luck in business. But as I write this, my new book is selling
about five copies every day. Thats like $4,300 every month
and I never have to work on it ever again. I also got my
first paid speaking gig here at a local corporation, and they
already said theyd go ahead and buy 500 copies of my book
before I even show up. I mean this stuff is just plain fantastic, and really I feel privileged just to be a part of those that
Christopher is personally coaching.
Okay, so Len, what did we learn from Len. Within 30
days of doing that little coaching sale that he did, he now
has a book with his name on it, something that he created. And hes got it posted online and its averaging five
copies every day and hes doing nothing else to market it.
Its all set up on auto-pilot for him.

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And now his new credibility. What did I say before?
The money flows when you stop focusing on the money,
and you start focusing on doing things that are going to
build you personally and that are going to build credibility for you. He got paid for his first speaking gig
$5,000. He went in for an entire day to a corporation.
Personally I thought that was a lot for the corporation to
pay him, but I was very proud of him for negotiating it.
And through a couple of techniques that we talked about,
he simply asked them to buy a certain number of books
before he showed up and they sent him a cheque before
he even showed up for a box load of books. So now hes
selling books to corporations by the box load.
Okay. So I guess I could write and sell a book, but I
wouldnt do it unless I knew for a fact that I could sell a
lot of books. You guys are so greedy. I cant believe you
would even say that to me. 90 per cent of most books
will never sell more than 50,000 copies ever in their
entire lifetime, and thats e-book sales and bookstore sales
combined. So we want to learn how to sell an outrageous
number of books, right. Say yes. We want to sell an
outrageous number of books. Right.

I say wow, Im in the health industry. Theres got to be

some way I could write a press release about this. So I sit
down and I write about and it took me about 20 minutes
and I belt out this press release, and I upload it to a company called prweb.com. Prweb.com, for those of you that
dont know its a place that will submit your press release
all around the world to all these different newspapers and
everything else, and I press submit. And the next morning I got into my office and I pull up my PR Web account
because theyll tell you how many people actually pick up
your press release. The next morning over 200,000 people
picked up that press release. That means its being used
all around the Internet on websites for content, on blogs
for content, in newspapers, in newsletters. How cool is
that? Thats just press releases.
Now, if you could that and have that kind of an impact, how many people would do that at least once a year?
How many people would write a press release if they
could get that amount of impact at least once a month?
How many people in here would do it more than once a
month? Now youre starting to think like me, and Im a
greedy son of a gun.

How I Sold 60,000 Copies in 60 Days

Sell Them Direct To Major Corporations

My first book was called maximise your metabolism.

I told you within 60 days we sold over 60,000 copies.
Within the first year we sold over 319,000 copies, and it
gave birth to a really cool business, and it also gave birth
to a second book called the two day workout, which took
about 17 days to write. And the two day workout is not a
hard book. Its just a digital book, but it sells online every
day for $29 and weve sold over 117,000 copies of that,
just within the first year. You do the maths on that.

Now were not going to go through all these. Corporate sales. I have a good friend. His name is Gary Blair.
Gary, I was on the phone with him the other day and
we did this interview and I said Gary, how many books
do you sell on average to corporations? He says well so
far Ive sold five million copies of books to corporations.
Five million copies. And theres a little secret. And the
secret is, is that corporations, most large corporations will
buy box loads of books from you if you keep the price
down under $10 each. So $9.97, make it easily affordable to them and theyll buy box loads of books from
you, if that book will provide content for them to either
give away to their staff or to their managers, or to their
customers. Five million copies.

But this is what we did. Boom! We did a lot of different cool marketing ideas. Press releases, we did press
releases. Heres an idea. So I get an e-mail from somebody and Im on their list. I dont even know who this
person was. I got an e-mail a while back and it was about
Atkins going bankrupt. Does everybody know who
Atkins is, the diet company? Okay.

The Press Release That Created A Traffic

Stampede
So I get this e-mail about them going bankrupt and

Non-Competitive Joint-Ventures Created

A Truck Load of Sales
And joint ventures, heres an example of one of my
joint ventures. Again, the majority of my books are in
the health industry. So I went out and I did some really
hard work to find some equipment manufacturers, some

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weight lifting equipment manufacturers who sell equipment online. And I did some research on some supplement companies, vitamin supplement companies who sell
supplements online. And we created a joint venture with
them, and now every single time anybody goes to their
website and buys a piece of equipment or buys a supplement, they go to the checkout and in their shopping cart
is maximise your metabolism checked off. They have to
uncheck my book before they finish if they dont wasnt a
copy of my book. How cool is that?
Does anybody think that increases my income just a
smidgen, just a smidgen? Heres the books that I created
using this process already, and this is about nine books
but it doesnt include maximise your metabolism, which
was our flagship book and it doesnt include the two day
workout.

How To Become A Million-Dollar Author

and Live The Life Of Your Dreams...
The goal is to stop doing things that average people
do to get average results, and to start doing things that
people who get extraordinary results do. Its to stop waiting and to stop watching and to stop wishing for things
to get better, and to start doing one little thing thats going to add credibility to you personally. One little thing
thats going to make you proud from this point forward.
One little thing that is going to make your family proud
of you, from this point forward. One little thing thats
going to create a product thats going to live on after
youre gone, so that future generations will know who the
heck you were.
And whats really cool is that if you do this properly,
youll make some money. And what I always tell my clients is I want you to set up three bank accounts. The first
bank account, its where all the money goes. So when you
sell your books or your audios, its where the money goes.
And then your second bank account, which is automatic
the first bank account immediately, as soon as lets say
$1,000 comes in, 10 per cent of that goes into your second bank account, and thats your salary. So thats what
you can dip into to.
And the third bank account is the bank account for
your dream, whatever the big reason, the big hairy audacious reason for you doing this is Ill give you an example. One of my clients called me up the other day and

he said listen, Chris I just had to tell you that I went into
my office the other day and I pulled out my computer.
And the very first thing that I do every single morning is
I look at my bank account to see if Ive reached my goal,
and I just the other day reached my goal where enough
money had filtered into my dream account, where I could
literally pay for my daughters entire four years of college,
and shes only eight years old. How cool is this?
So heres how to become a million dollar author. I
learned a lesson from a mentor of mine a long time ago.
And that was that why would you make $29 from selling
a book, when you could sell the exact same book and
make $1,000, because that book gives you credibility that
allows you to create other products.
So heres a couple of examples, and Im going to shoot
through this but youll get the slide. Coaching programmes. If you only sell 25 people into your coaching
programme, if you take an entire year and you only sell
25 people at $2,500, then thats an additional $62,000 a
year.

Audio Programs
Audios, every single book you have should be created
into an audio. In fact, if you do it this way, you should
create your audio before you even create your book so
that you can start making money.

E-Classes
E-classes, this is not something that we covered. However, creating an e-class and some of these other products
that Im going to talk about, takes about a day to do after
you do that one first audio. If you sell only 25 people
into a short little e-class that you do, which is simply a
way for you to coach people via e-mail without any phone
interaction, without any face to face via e-mail. If you
sell only 25 people into your e-class and you only do four
of those classes per year, which is going to take you, I
promise you, less than three hours to help those people
for every single class, three hours total.
So every time you send that class out and you sell 25
people into it, youll probably only work three or four
hours. Youre going to make another $29,000.

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Workbooks
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Workbooks, did you know every single book out
there, and I laughed, because I think gosh, I see all these
authors creating how to books, and theyre not creating
workbooks.
But what we found is that 35 per cent of the people
who buy your book will upgrade to a workbook. So right
before they check out, you say okay, well you know what,
youre ready to pay your $39 or youre ready to pay $39
for the book. Wait a second, weve got this workbook and
weve found that people who have a workbook along with
the book, get faster results, because it actually gives me as
the author a chance to show you how to implement each
one of those techniques into your life. $10 buck more
and Ill give you the workbook. 35 per cent of the people
in my industry at least, will jump on that offer. So its
money youre leaving on the table, if you dont create a
quick little workbook.

Affiliate Products
Affiliate products. To sell somebodys affiliate product
takes you zero work. For example, I showed you Lens
website, it was four pages long. The second page was a
one time offer. Len didnt have a product, so he used an
affiliates product. He went to an affiliate and he said
can I have one of your products. Id like to sell it at 50
per cent discount, but its a digital product anyway so as
long as people buy this, youll still be getting something.
Plus, people are going to love you so much because they
get sucked into that product that they just bought, that
theyre probably going to come back to your website over
and over again. And theyre going to keep buying more
and more stuff from you. I promise you, if you go to an
affiliate, a good strong affiliate with that kind of a pitch,
theyre almost always going to say yeah sure, lets try it.

Teleseminars and Product Launches

Teleseminars, product launches. Heres a quick idea of
a product launch that we did about eight months ago. I
created a product and I did not have a list for this product, but I had a passion for this product so I had to create
it. And then I went to friends of mine who were affiliates
of mine, and I said I dont have a list, but you guys have a
list that really would benefit from this. My health list will
not benefit from this product. So would you please send
out this series of e-mails to help me market it? And if you

do, Ill give you 40 per cent of all the sales.

So we got 15 people to say yes to that crazy idea, and
in three weeks we sold 1,000 copies of a $697 product.
And immediately after those three weeks was over with,
we rolled into another launch, which lasted for one
week. And we sold 100 copies of something that cost the
customers $2,997 US, and we immediately rolled into
another launch, where we sold 25 of an $18,500 product.
It was a coaching programme. You do the math. In a few
weeks, six weeks, we made a tonne of money just because
we did a product launch. And theres a very systematic
way to do product launches, but the goal for you right
now is to know that thats going to be one of your profit
centres. Youve got to have multiple streams of income
coming from different areas, using the same contents that
youre creating for your book.

What about offline book sales?

Your book, eventually, hopefully youre going to print
it, and youre going to put it into bookstores, because
thats when the credibility part really begins. You never
saw anybody on Oprah getting interviewed because they
had a digital book. But Oprah brings a bunch of people
on who have physical books, books that she believes are
going to change peoples lives. Bookstores, catalogue
sales, corporate sales, they all go under offline book sales.

Bootcamps & Seminars

Boot camps, if youve got a book and you really give
people a lot of information in there and you can talk, if
you can literally just stand up here and talk, then you
could sell people into a private boot camp. And go to
a hotel and rent a little office space in a hotel and sell
maybe ten people high priced tickets to spend three days
locked in that room. Where they can pick your brain and
network amongst each other and really get all of the contents that youve got in your head downloaded into them
and personalised for them. Thats called a boot camp,
and if you only do two of those a year, thats an additional
$20,000.
You dont have to do all of these. All of you have to do
is pick one or two and test it out. Throw it out there and
see how many people will get into it. You will be surprised that if you can create changes in peoples lives, they
will come to you and theyll come to you over and over

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Millionaire Phenomena - Internet: CHRISTOPHER GUERRIERO (cont.)

again. But youve got to be able to give them good stuff.
Seminars, live seminars like this one. If you could
talk to a room of people, how many people would like
to give seminars? If you only do six of these a year, and
this doesnt have to be a profit centre for you I love this
profit centre, because Im a ham. If you turn a camera on
or you put somebody in front of me whos going to listen
to me, Ill just go all day long until you guys get bored
and start to walk out. Ill just keep talking. And if youve
got that same personality, you can make a lot of money if
you could deliver good content to people. If you only do
six of these per year, and you only charge $2,500 books,
remember Len never did one before in his life. Len, the
guy who we were talking about before, he sold one corporation for $5,000 for one day. So Im saying only $2,500
each, thats another $15,000 in your pocket.
Online book sales. If you only have one book or audio, if you just do one, and if you only have two sales per
day remember Len, the example that we used before,
hes selling five per day automatically. And if you only sell
for $29 each, then thats another $2,100 automatically.

Membership Programs
Membership sites. If it takes you a whole year to fill
up your membership site, meaning youre helping people
on a monthly basis. You give them access to you monthly. If you sell only 500 people, which is a conservative
number there is a guy in my industry. He did a launch
for his membership site. He never had a membership
site before. He sold it for $9.97 per person per month.
He sold over 1,000 people into that within three weeks.
Thats how long his launch was. He filled up a 1,000
seats. Now, if it takes you a whole year to sell half of that,
because you dont think youre worth it, because you dont
have a name in the industry, because you dont have the
time to put towards it. Whatever, if you only sell 500
people thats $5,000 per month that gets filtered into your
pocket per month.
So heres another case study. His name is Peter Walters. Peter came to us and he said I dont think I could
do this. I dont think I could do a book but I am desperate and I need to change something, because Ive been
funding my business with credit cards for the last several
years. And I know what that feels like, because personally thats how I funded my businesses for several years in
the beginning. And I know the hardship and Ive felt for

him. And I just said please, just do one thing thats going
to give you credibility. Thats it. Just try it. Trust me for
a couple of months.
This programme just plains work. Now, we started a
couple of months ago with just an idea for a book. Now we
have a full book, an audio programme, a home study course,
and were almost ready to launch our membership site and
our coaching programme, and thats really saying something.
Im still working 50 hours a week at my job, while Im trying
to build my business. But for the first time I feel totally in
control of my finances. I mean, I love it. I can taste success
when I look at my computer and see people from all over the
world are buying my books. This course has long since paid
for itself. I usually dont recommend many products, many
people as a rule. However, I can easily give Christopher and
his programme my full endorsement. The techniques you
learn over the next few months are terrific, and Ill actually
recommend it to all of my clients as the definitive guide for
building an online business in the shortest time with the biggest bang for your buck, all while boosting your personal
through the roof .
You got the good part out of it already. What did we
learn from Peter? He is now an author after coming to us
and saying I just cant do that. I cant do it. I just need
the money. Tell me how to make money fast. Now hes
an online entrepreneur and hes in control of his finances
for the first time ever. He thought he couldnt write a
book but now hes got a book and multiple streams of
income. Look, hes got a full book, hes got an audio
programme, hes got a home study course. Hes got a
membership site or hes about ready to launch his membership site and his coaching programme. This came in
months ago. Now hes got these things done already.

Automatic 12 Month Marketing Plan

But I want something thats automatic. You guys are
so lazy. How many people want something automatic?
You guys are lazy. So I could set it up then forget it.
Okay. Every single business absolutely needs a 12 month
marketing plan. This technique transformed my company and it will transform yours and it transforms all of
our clients, because it sets everything up on automatic
for you. Here is a sample. In fact, let me just show you.
This is Tracey Praegar. Shes an amazing individual. Just
a brilliant, brilliant mother of three who never worked
a day in her life. She came to us and said Im getting a

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Millionaire Phenomena - Internet: CHRISTOPHER GUERRIERO (cont.)

divorce. I need to make some money.
So I said the first thing you need to do is to do what
is the first thing she needs to do? Do something that is
going to give her credibility. Stop thinking about the
money. I know and thats so hard to get through. Its
so hard for me to get through my skull. Its so hard for
everybody to. Because when youve got bills to pay and
youve got debt and youve got house payments and youve
got a family to support, its tough to stop focusing on
the money, but that aggressive focus on money is what
limits the money coming into your life. Youve got to do
something thats going to build you personally, and then
youve got to have a 12 month marketing plan and heres
an example.
Every single month you need to have a promotion
thats being run, and you need to know how youre going
to run that promotion. What kind of techniques are you
going to use to get that promotion out there? And then
every month you should at the last column there it says
total sales. You should mark down how much money
you made that month from that promotion, so that next
year you pretty much know if you send out those same
e-mails, the same press releases, the same articles, that
youre going to make about that amount of money or
more. Because now your list has grown, because you did
a few referral friend kind of things. And each time you
did that your list doubled. Is everybody seeing how this
could work for you?
So heres an example. June, in Traceys life, Tracey lives
in the United States, and in June in the United States
thats summer time. So she does either a summer sale or
an anniversary sale, and she uses auto-responders. Shes
got a series of seven auto-responders, seven e-mails in that
auto-responder series that gets triggered on June 1st. The
first e-mail gets triggered and goes out to her list and it
starts selling her products at a discount. And then three
days later another e-mail goes out and then three days
later another e-mail. Thats what an auto-responder is.
You write it once, you set it up, you forget it. You never
think about it again.
And she also does joint ventures. So she has another
auto-responder series. Does everybody know what an
auto-responder series is? Does anybody not know? Okay.
An auto-responder series. You write a couple of e-mails.
Lets say you write four e-mails or five e-mails, and you
take those e-mails and you load them up into an auto-

responder software, which is super simple and theres a lot

of free ones out there.
So every single time you trigger that, if you put somebodys name in that list, they will immediately get the
first one, three days later or whatever amount of time you
want, theyll get the second one, then the third one, then
the fourth one. So they think youre writing to them every couple of days, but really youre on the beach or youre
shopping some place or youre working on something else
to build your business. So she does joint ventures. And
she has another auto-responder series that immediately
gets triggered on June 1st, that goes out to people who
will sell her product for her for a percentage.
So she gives people 50 per cent of anything that gets
sold if the person sells it to her list for her. And she sends
press releases out, and her press releases are on auto-pilot.
And she uses as company called PR Web and a company
called PR Wire, and every June 1st three press releases get
triggered. One gets triggered on June 1st, the other one
gets triggered seven days later and the other one gets triggered seven days later. And Tracey doesnt even remember that these things are happening. She also does some
paper click and some other things.
So she knows every June shes going to make a certain amount of money, and each year that she runs this,
she tweaks it a little bit but she doesnt have to recreate
the campaign every single year. Thats what a 12 month
marketing campaign is.
Lets hear from Tracy...
This is the third time your advice has doubled my business in less than eight months. Im retiring this month from
my rat race job as a teacher at 32 years old, and although I
never saw myself as an author, I plan to really enjoy my life
and my family using your bestseller business model.
Okay, so what did we learn from Tracey? Every month
Traceys business grows, because she stopped focusing on
temporary techniques. She stopped focusing on things
like just generating web traffic or just creating a niche,
trying to find another new niche out there. Or any of
these other things that just dont build credibility for you.
Theyre temporary incomes that you have to fight to keep
up in your life. Shes stopped doing those things and shes
started doing something that was going to build credibility for her. And then she built a 12 month marketing plan
to automate her business like a real entrepreneur.

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Millionaire Phenomena - Internet: CHRISTOPHER GUERRIERO (cont.)

Stop Making Money From A Job and
Start Getting Paid BIG BUCKS For Your
Ideas
Youve got to stop thinking of yourselves as a mother
or a father or a business person or an online marketer.
Youve got to start thinking of yourself like an entrepreneur, somebody who creates wealth from their ideas.
Stop trying to get paid on the amount of time that you
work. Start getting paid on your ideas. Create an idea.
Get that idea into book form or audio form, and let that
create wealth for you from this point forward. And its
how to stop working like an average person, and begin
doing things like an entrepreneur so you can build a powerful future for yourself and your family.
Heres all you need. Number one, you need something that gives you credibility. You need something like
a book, something that makes you proud, something
that takes something out of your head and puts it down
into writing or into an audio format, so that it could
then reach out and tell other people. And also, in your
book or your audio programme, it should up sell them to
another product, like a coaching programme.

week.
The question I have for you is... When are YOU going
to get your slice of the action? Its so simple. Today Ive
laid out a plan that I know every single person in the
room can follow.
Heres what I think...
Anybody can do this, most wont. I dont know why
that is, all I know is that those who do will be rewarded
big time.
I started with just a book idea and a vision of building
a publishing empire for myself. Did I know how I was
going to do it? Absolutely not, the how was none of my
business - I just knew that this was what I wanted to do. I
took consistent action, that is the key, and doors opened
up for me as I went along.
You my friend, dont have to take the uncertain, slow,
school of hard knocks road. Just use a proven formula
that has proven results and fast-track your way to success.
Youve been a great audience, thanks for having me
and I look forward to seeing your name up in lights
sometime soon.

The second thing you need is a system that can

transform your new credibility into multiple long-term
income streams, like coaching and home study courses
and seminars and memberships and e-classes and all these
other things that we were talking about, and so much
more. Any way that you could touch people, you should
be able to do it just from the same contents but in a different format.
And you need a 12 month marketing plan set up for
your business. No matter what business youre in, you
need a 12 month marketing plan set up so that it will
automatically trigger your auto responders or your press
releases or anything else. So you set it and you forget it.
Heres my vision.
One of my income sources is a television show now. I
would have never dreamed that could have happened, and
I would have never dreamed that that slide would have
broken so I couldnt show you. Heres Elayna. Elayna
made an additional $55,000 extra income in seven days
from one technique. She ran a promotion for one week
and made an extra thats over and above what she normally makes in her business an extra $55,000. In one

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How I Went From Corporate Slave To

Over $4,000,000 in Online Revenue in
Just 36 Months
Part of the Millionaire Phenomena Series

o what were going to learn today number one, the

10 foundational principles of an online business
that makes six figures per year.

Were going to learn the Hedgehog Concept this is a

concept by Jim Collins from Good to Great. Thats a good
book, its a good recommended reading for you Good to
Great by Jim Collins. Its probably one of my favourite
books and when I read the Hedgehog Concept everything
in my business changed, everything became so clear and
I think when I share that with you today, youll feel the
same way.
Were going to talk about up-sells, down-sells and
more. Okay, well get to the more in just a little while.
Were going to talk about the marketing funnel, I think
this was a crucial turning point for me in my business
when I went from just regular $19 products and $47
products, thats when I went from making money to making some real money.
And if you truly, truly want to create wealth on the
internet you really need to understand the marketing
funnel. You also need to understand your metrics. Okay,
we know that we can only measure that which we test, so
if were not testing then we cant improve it unless were
really measuring it.
And finally were going to go over Butterfly Marketing. This is probably 70 per cent of my sites - Ill show
you some on the screen in just a little while. 70 per cent
of my sites actually use this concept. Its based around
a free offer, its based around list building and its based
around viral marketing and relationship marketing. So
were going to go into detail on that, okay.

Who The Hell is Mike Filsaime And Why

Should You Listen To Me?

Meet Mike Filsaime

MIKE FILSAIME turned the internet world on its head when he gave
away his products for FREE instead of charging for them. Sounds
stupid, right? Wrong. Because this
former general sales manager of the
4th largest volume Hyundai Dealership in the US generates over
$100,000 a year with web sites
which take as long as 3 weeks to
put into place.
Everybody sat up and took notice in January 2006 when he publicly launched his Butterfly Marketing Secrets to the world and
raked in $1,459,000.00 in just 23 days and continues to make a
lazy $200,000 per month working from home. Since then, hes
assisted other famous marketers including Jeff Walker, John Reese
and Brad Fallon.
These are extremely advanced, proven strategies for promotions
that thousands of people have used to instantly flood their bank
account with cash literally overnight. IF YOU WANT TO MAKE
MONEY ON THE INTERNET SO FAST YOUR PARTNER
WILL FALL OF THEIR CHAIR this is the guy you gotta see,
this is the place you gotta be!

So for those of you that dont know who I am, let me

tell you who Mike Filsaime is and why you would want
to listen to me. I started marketing in 2003. I actually
purchased my first product October of 2002 but when I
say effectively marketing it was in March of 2003, thats
when I got my first auto responder.
And I went from selling products to driving traffic to a
page where I was collecting a name and email address for
exchange for a free report or a free product thinking that
now, if I had their name and their email address, I dont
have to worry about selling them right away, I can build
a relationship and sell them over and over and over and

Millionaire Phenomena - Internet: MIKE FILSAIME (continued)

over again.
Thats one of the key points of this entire presentation today. And were going to get to that stop selling
up front and start list building. You start building a true
asset in your business.
I operate over 25 profitable websites and what I mean
by profitable websites is I have over 25 sites that will
generate some will generate me up to five to 10 sales
per day or more and a minimum of two to three sales per
week. This is some of the websites, pretty much in order
of the way that they came about on the internet.
Let me tell you about some of my sites.
paydotcom is a nine letter domain, p-a-y-d-o-t-c-o-m
thats probably my second most profitable that I own.
instantbuzz.com this is one of my very profitable
websites. The Butterfly Marketing manuscript is probably
the lead-in product in my marketing funnel. One of the
first products I start focusing people on selling and then it
back ends some of the other products and well talk about
that.
Other sites that I own and are hugely profitable are
firesalesecrets.com, powerlinkgenerator.com and viralfriendgenerator.com.
I created the renowned Butterfly Marketing its become a term now that people that are familiar with the
site will say, Im going to create a butterfly site or Ill
butterfly it out. Its a process that were going to go into
in just a little bit.
There are many, many of the top internet marketers
today, bar- none, that are using this software and using
these concepts because they work.
Since March of 2003 I have over 500,000 unique and
active new opt-in members on my list and we grow at
the rate of about 1,000 new members every single day.
So what that means is I dont know how many people
are in this room but I would probably venture to say that
every single day about somewhere around two to three
times the size of this room is added to my opt-in list every
single day, automatically. And because Im a big believer
in automation and viral marketing and scalability and all
those types of things.
So just imagine being able to create a relationship with

people that somehow they got on your program for free

but youre able to build a relationship with them that they
want to do business with you.

A Common Mistake That 90% Of

Websites Make Is...
So its not about the product its about the relationship
with the list. Thats the most important thing I can tell
you and Ill probably say it over and over throughout this
presentation.
If youre driving traffic to a sales page and your trying
to make a sale youre doing it wrong. You want to have
your main call to action first be trying to get a give
them a free report or a free trial software or something
where you get their name and their email address. We can
build a relationship and market to them later.
So when I send out an email Ill send out if I do an
entire broadcast it goes out to about 500,000 people, so
almost half a million people will get an email from me
and because of that its allowed me to become a top affiliate for people.
In 2006 we did $4.4 million in sales and were currently doing right now about $350,000 per month online
and growing every month and that breaks down to about
$11,000 per day. And that happens even as we travel, you
know and we just got back from Fiji with the Tony Robbins Platinum Partners and we flew to Singapore and we
just got here a few days ago in Melbourne and then from
there we go to Sydney and Brisbane and then finally back
home.
So well be away for five weeks but because the way
the business is set up to work in an automated process the
sales just keep coming in, we dont have to do you know
daily marketing and too much managing of our campaigns.
Heres some recent PayPal screen shots this was February of 2007 - 230,000, in March 261,000, April 208,000.
So thats the money that comes into PayPal from our
product sales and other sources of revenue include things
like ClickBank we have some of our major products and
one time offers go through ClickBank.
We do affiliate marketing, email marketing and of
course speaking and we have our mentoring program.

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I speak probably on average of about 25 times per year.
It seems recently, Im doing a lot more in the Asia Pacific area. The market is just booming out here and its a
testament as I remember when I was in Australia last year
when I asked, how many people had a website. Probably
only about 10 or 15 per cent of the room and now we can
were at 50 per cent of the room.
I produce my own seminars; we do them now twice a
year. Theyre called they were called the Internet Marketing Main Event. Weve teamed up with Brett McFall
and Tom Hua in the States were going to be calling that
the World Internet Main Event and that will be going on
every September and every April.

Building Face-to-Face Relationships Has

Been Crucial To My Internet Success
I have strong key relationships. If you want to put
down another important thing thats important in your
business, and you guys already get it because youre getting out of behind your screen, youre getting out of your
office, youre taking action, building relationships is key.
I have incredible relationships with the elite marketers on
the internet. I dont try to force it to happen. But I put
myself in a position where I have an opportunity to meet
the people.
Here are some of the people that I have some relationships with. Steven Pearce up at the top left thats Arman
Moran on the bottom left you see Richard Schefren here,
thats Jim Edwards, thats Dr Mannie if you know Dr
Mannie if you know Dr Mannie.
Heres David Cavanagh, Ken McArthur, Joel Carne,
Stirling Valentine. Theres some pictures there with Dr
Ivan Misner, Dr Robert OYoung, Sean Casey, Craig
Porine. Heres a person hes a television star in the United
States his name is Armando Montelongo from A & Es
Flip this House. Tony Robbins here. Top left this was a
gathering that we did in San Diego some of the top internet marketers are there. You have Jeff Mulligan, Andy
Jenkins, Jeff Walker, Yanik Silver, thats me there in the
middle.
This guy here that looks like the uni-bomber thats
John Reese, next to me over here thats Brad Fallen, Rich
Schefren, worlds best copywriter probably, John Carlton,
Jeff Johnson, Ryan and hidden picture there - have you
guys ever of the Rich Jerk. Have you guys ever heard of

the Rich Jerk. Thats actually what he looks like there, hes
a walking cartoon.
So creating relationships with these marketers was key
to a lot of different things online, positioning and jointventures and being able to help them and when its time
they want to help you just because they enjoy working
with you, not because they feel that they you know its
a back-scratching game. And I run one of the premier
coaching programs on the internet. So other than that
we have one more there we have 100 successful protgs
plus and growing that came from our coaching program.

Perfect Example Of Why Most People

Fail Initially... Until They Find Out The
Missing Link
Im going to give you a couple of success stories from
that coaching program. One is a person by the name of
Keith Wellman, anybody ever heard of Keith Wellman?
Okay.
Keith was a person that was on a tele seminar, if you
saw a picture there of Sean Casey, Sean Casey and myself
were doing a tele seminar and Sean was talking about how
he makes several hundred thousand dollars a year in the
niche markets or as you say, in the niche markets. Kind
of like Andrew and Daryl were telling you about how you
can go into all different types of niche markets, whether
its you know, golf or hair loss or acne or whatever the
case is.
So Sean had many different websites in the niche
markets and he was making several hundred thousand
per year and he created a product on this. And were doing a tele seminar and at the end of the call he offers his
product for $1,497. And the call went pretty well and
we hung up and a few hours later I look on my blog and
I see a remark that says, Im sick and tired of all of you
marketers making money by selling how-to-make-moneyproducts and the only way you make money is by selling
how-to-make-money products.
So it was very intriguing to me of all products that he
decided to pick was this product which was a product on
how he makes several hundred thousand dollars in different niches that have nothing to do with making money.
So I broke down his reply, I took his name and his
email out and I sent it to my list and I think the subject

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Millionaire Phenomena - Internet: MIKE FILSAIME (continued)

line of the email was some people just dont get it and I
went to explain why his thinking you know the negative thinking and taking it out on the blog like that for
so many different readers, it was just bad and it was the
wrong mindset to have.

sion I want you to send an email for me, not that type of
connection but get to know them, find out where theyre
eating dinner or where theyre having their coffee break or
if theyre hanging out in the bar at the end of the night or
maybe having a drink.

And he emails me back after he sees the broadcast

go to my members, of course as I said his name wasnt
mentioned or anything like that, and he says Mike I want
to apologise. He says youre absolutely right I made you
know I made a big mistake. It comes out of frustration.
Im working at a dead-end job Im making about $28,000
per year, Im in debt, my wife is pregnant and Im about
to lose everything and I really wanted this course but
when I realised that the price was out of my price range
which is really my problem, I took it out on you and your
readers, so I apologise.

And I told him to get to know every single one of the

speakers and he did. And I said and after that Keith what
youll notice is theyll say is there anything that I can help
you with, what do you have working? And when that opportunity came he asked them all to do an interview.

So it kind of touched me so I said Keith do me a

favour, I emailed him back and I said heres my number,
heres my home number, give me a call. And within about
two minutes the phone rings. A couple of interesting
things I realised, number one; he had been online longer
than I had been online. Number two; I asked him how
many people are you in opt-in list.
He stumbled with, well you mean like my email list,
I said yeah just your regular opt-in list and well I guess
zero. So hed been online now for probably about three
years and never focused on list building. Didnt have a
single person that he could market to.
So, I said Keith well heres what you need to do and I
gave him different steps that he needed to do and I said
the first thing that you need to do is I said have you
ever been to an offline event? And he says no. I said
Im going to speaking at a seminar in Denver you need
to come to this seminar. And he says well I cant afford
it. I said well Ill help you get there, Ill talk to the event
promoter, Ill get you a VIP pass, Ill get you to stay with
somebody in a hotel room, Ill pay for your round trip
ticket, I think it was like 25 bucks and I said but youre
going to pay me back. And he said, deal.
So he gets there and I said what you want to do from
this point now - Ive seen some of you guys doing this already, and so youre doing the right thing, I said you want
to connect with the speakers.
You dont want to run up and say heres my business
card I have a website and it pays 50 per cent commis-

Once He Got It He Went From 0 To

$50,000 Per Month In A Flash!
He created his first product called Viral FX I think its
at viralFx.com and if you go there youll see that he interviewed every single one of the speakers and he used the
free lead-in giveaway Butterfly Marketing style and from
there he was able to go fulltime. And he left Oregon and
he left his dead-end job and he now lives in Atlanta and
he bought a new home and hes got you know, a new car
and you know hes making over $50,000 per month last I
spoke to him about three months ago on that topic.
And when he launched the second site here he made
$103,000 in just seven days with his second site. And
as I said hes doing over $50,000 per month. Recently,
because of his success a product was just launched two
weeks ago by his father Jeff Wellman. His father was laid
off from Corporate America. They just gave him the pink
slip and after 15 years or whatever it was they said, thank
you but your services are no longer required and just cut
off just like that.
So Keith worked with his father and they created a
product, I cant tell you the statistics because I just dont
know, but based on the sales that I did for them, promoting the product for them, I would probably say that the
product did probably over 50,000 in sales in its first week
for his father.

Follow A Proven Game Plan

The next one here, this is Jason Dinner. Jason is a kid
that lives in Long Island and he sent me a message, he saw
me on a leader board one day and it said Mike Filsaime
Hulbert New York and he realised he lived one town over
from where I lived.

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Millionaire Phenomena - Internet: MIKE FILSAIME (continued)

So he went to my help desk and he said, hey Mike Id
love to meet you and maybe take you out for a cup of coffee. So I said alright lets get together and we actually met
a pizza place which is like coffee in the United States or
especially in New York.
He shows up in this beat up Chevy Chevrolet Blazer.
It was blowing black smoke out the back and were sitting
down and were talking and hes now on line for about six
or seven months and hes chasing opportunity after opportunity after opportunity after opportunity.
I asked him what hes in and hes in all of these different - I dont want to mention the names because this
is being recorded, but all these different sites where you
know you recruit other people, it could be considered
multi level marketing and things like that and just driving
all traffic to build other peoples businesses.
So I gave him a game plan I said Jason heres what I
need you to do, I want you to do this, this, this, this and
this. Read this product, take these action steps. And I said
I dont want to hear from you until everyone of these action steps are done. I said, point blank. And he says okay
Mike Ill do that. About six weeks later he has everything
all set up and hes starting to make some money and we
went onto the next step and the next step.
Long story short Jason is now doing hes doing
about $7,000 to $10,000 per month. He was working
part time as a waiter in an Italian restaurant, probably
making somewhere around $15,000 to $20,000 per year.
Now hes on pace to do over six figures per year. He
just had a little baby there. He doesnt have his wife working any more. Shes pregnant again and theyre on their
way to having their second kid and he works in my office
for free.
He basically comes in my office and he has an opportunity to learn around my business and he does a lot for
me. He does a lot of things for me while Im away. But he
basically runs his business out of my office and now hes
got four profitable websites and hes now going onto his
fifth website.
And finally here is this is David Watson hes from
the UK. David is a person that saw me speak in Orlando
Florida about a year and a half ago. And hes a brilliant
guy, hes a programmer and he had never made any money online. He was buying products and studying products

but didnt really know the proper action steps. He didnt

know how to sort through all the clutter.
David started working with me started working with
us I should say and our team. And we put him on a fast
track program and this slide here says he went from zero
to $65,000 in a few short months.
The interesting thing about David Watson is he has
since had three months that bought in over $250,000,
three separate times at three separate product launches
that hes done. So in just about a year hes been able to
produce over a millions dollars so probably at this point a
million dollars in sales.
He had all the right ingredients, it was just putting
everything together that took him awhile to start to really,
really kick it in. Now he knows it and hes got it down pat
and hes on fire. Now its your tune. Would you guys like
to learn how to do the same?

My Step-By-Step System That Ive Used

To Make A Fortune Online
I told you we were going to learn the 10 foundational
principles for running a six figure business, right. Stephen
Covey Seven Habits of Highly Effective People begin with
the end in mind. Sounds so logical but I dont know that
we really understand how powerful that is to know what
it is we want and where were going.
If we were charting a course we wouldnt just get in a
boat and just say well I will just put my sails up and see
whats the first island that Im going to hit, okay because
chances are we might not get anywhere and well perish.
So we want to begin with the end in mind. Okay, we
want to have a clear vision of what it is that were after.
We want to know what type of business we want to be
running, what type of money we want to be making and
even more than money. Well get into that.
Number two: know what it is that you want. And
Number three: know why you want it. Alright so Ive seen
sometimes when people say when people point to the
audience and say You sir what is it that you want in the
next six months? And the person will say something like
in the next six months I want to have $100,000.
Is that what they really want, no right. We say what
does this $100,000 give you and then theyll say some-

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thing you know something like, financial freedom, we
have to really dig deeper. Well what does financial freedom mean to you? Well financial freedom means I get to
spend more time with my family.
So now we know what you really want. What does
spending more time with your family mean? Well that
means that I can go up to the Gold Coast I can take them
to Orlando I can take my wife on a vacation to Fiji or
Tahiti or the Caribbean or Hawaii or Las Vegas.
Now youre starting to envision what you really want;
now you know why you wake up every morning and do
what you do. If you just say $100,000 its so arbitrary.
And its so hard to really connect with that and say you
know, I want $100,000 its a figure, its tough to really set
that as a goal.
When you know what it is that you really want, if its a
certain car that you want to drive, remember in the movie
The Secret, clip it out put it next to your desk, create a
vision board know what it is that you want and why you
want it.
Speaking of The Secret number four: you The Secret is
a tremendous phenomenon and everybodys talking about
The Secret you know lets do it, whos heard of The Secret
and what it okay. but 80 per cent of the room. we recommend it is at thesecret.tv.
You know I think The Secret is not telling the entire
story, okay and they tell you, its been around forever its
called The Secret is the law of attraction. You know you
can attract anything that you want if you simply declare
it.
But theres a couple of things that you really need to
do that arent covered or arent covered in detail in The
Secret. Declaring what you want is one thing. You need
to focus, proper focus is key, you need the right tools and
you need to take massive action.
Theres a story of a man hes 18 years old and he gets
down on his knees and he says, Dear God please let me
win the lottery. The next day he wakes up doesnt win
the lottery, hes doing this for years, hes now 25 years old
and he gets on his knees, Dear God please let me win
the lottery, I promise to do great things with the money.
Doesnt win the lottery.
Hes now 50 years old he gets down on his knees
before he goes to bed, Dear God please let me win the

lottery let me show you what good I can do in this world

with the money. And hes sincere about it. And he doesnt
win the lottery.
Hes 80 years old hes an old man at this point. He gets
down, God please let me win the lottery I promise I dont
have much time left on this earth. I promise I can do
things with this money for charity Ill show you and the
clouds spread and the sun shines through and a big voice
comes down from heaven and says, Saul buy the ticket.
So the moral of that story is its okay to declare
something and say Im going to attract a million dollars
or whatever the case is. We need to focus, we need to
have the right tools and we need to take action. Does that
make sense? Okay. So I dont want you to think that Im
against The Secret I think its the first step but there are
some other things that need to be done.
And then finally, dont be a perfectionist dont be a
perfectionist. Theres a very funny story about this slide.
I had this presentation in Singapore last week and I said
dont be a perfectionist and somebody came up to me
after and said Mike I thought that was brilliant on your
PowerPoint presentation how you misspelled perfectionist.
And I said, oh thank you. I didnt even know that I
had misspelt it. So now Im just leaving it in my PowerPoint presentation. You dont have to be a perfectionist to
get things going.
I think we get too caught up sometimes in our projects and you know will ask people sometimes, you know
how come you havent gotten it out there. Well Im not
really comfortable with the sales copy. Well get it out
there start making some sales today and improve the sales
copy and start testing it from there.
Alright, so stop feeling that you have to wait for everything to be perfect before you take action. So rule number
five dont be a perfectionist.
Number six: always think in automation. Remember
the word I say before leverage and scalability. Okay, everything that we do in our business we look to automate
it and we say can we automate this process so that we can
set it up once and it pretty much takes care of itself with
minimal staff help, minimal employees, minimal resources, is it scaleable? Will it allow us to go from $3,000
a month to $30,000 a month or one day $300,000 a

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month or $3 million a month, will it scale?

Grow Rich. You know the importance of a mastermind.

Sometimes if youre dealing with telemarketers, you

can have a business thats doing $15,000 per month right,
but as soon as you start advertising, lets say youre in the
United States and you start advertising in Philadelphia
and Atlanta and Orlando and Dallas Texas and now the
calls start coming in and theyre flooding your call centre
and you cant take enough calls, your business isnt scaling
well, so now you have to start hiring more people and
then your getting into hiring and firing and whose quitting, whose not showing up.

I dont necessarily want to tell you that you have to get

with exactly eight people and get together every Thursday
night at 5 oclock and you know, have an agenda, if you
can do something like that thats great, but you do want
to have people that your telling are in your mastermind
and they know that your in their mastermind.

And youd be able to really blow this thing out if you

could advertise all over the country, but its very difficult
to scale that type of business for massive growth. And
sometimes if youre ever in a position where you cant
control the growth because the marketing just takes on its
own lets say your into search engines which has nothing to do with your advertising but you just happen to do
everything right, but maybe you set up your business in a
way where your dealing with physical products and your
producing them.
Maybe your in the business where people are sending
you a photo and your doing sketches of them and mailing
them and now you get such high rankings in the search
engine, your getting 45 orders per day and you realise you
cant keep up and the only other option here is the most
terrible thing in the world and thats to take the website
down until you can hire more people to help you.
So always think in scalability, ask yourself this question. What would happen what would it look like today
in my business if my business was doing 100 times more
business than it is right now? Ask yourself that question.
It will become so obvious. Wow, I need to start outsourcing this product with a filming company or whatever the
case is.
And leverage leverage is key. Leverage means in
internet marketing is using joint-ventures setting up an
affiliate program; viral marketing all those different things
you want to make sure are in your process. Okay. 75 per
cent of my sales that come in are not generated by my
own actions. 75 per cent of the sales that are made at every one of my websites comes from an affiliate promoting
my product. So thats leverage, thats incredible.
Number seven: Form a mastermind. Weve heard it a
thousand times right, Napoleon Napoleon Think And

For me you know, theres people like Stephen Pearce

and Brad Fallin and Andy Jenkins and Richard Schefren
and John Reece and Gary Ambrose, Tom Beale. These are
people that are in my mastermind.
And what I mean by that, we will sometimes gather
on a telephone call with at least three or four of us at a
time. But more importantly when I have something I
need to talk about, I give them a call. When I released my
software Viral Friend Generator. I contacted about four
people from my mastermind group about the name of the
group.
The name came out of that, I had a completely different for it before that. in fact many of the names for my
websites came out of talking with a mastermind. To me
I think the domain name was one of the most important
things of the product.
Sometimes it will take me three, four, five days to get a
domain name. and I think heres something thats not on
the slide. I think if you can have your USP or your niche
selling position, in your domain name it says it all.
If you can tell people what your product does in the
domain name it says it all. Alright sometimes Rich Schefren will give me a call and it will be 2.00 oclock in the
morning or 2.30 in the morning and Im working late at
my office and he gets me at midnight and at 2.00 oclock
in the morning hes saying alright Mike what do you
think about this should I go with a dollar trial or should
I make it a $97 trial and then $2.97 per month. And
should I pay my joint-venture partners on the back end or
more on the front-end and nothing on the back end.
And he just keeps working and working and hell say
then he starts this thing where he says, give me a great
idea Mike. And Ill think and Ill say well you know what
you should do for your pre-launch Rich, you should do
X, Y and Z.
And hes like wow thats a great one and Im like ready
to get off the phone because Im exhausted and he says

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give me something else. And Ill give him something else
and Im like alright Rich I gotta go.
And he says before you go give me one more great
idea. I say alright the day before your launch and then
Ill give him a strategy, something that he should do. And
he pulled stuff out of me that I wouldnt even do for my
own launch.
Hell pull things out of me that I start writing down
and say I need to do this next time. And then when its
my turn when I have a big launch coming out I contact
my JV partners and try to brainstorm some ideas. We try
to keep things fresh in the marketplace. We dont want to
just keep doing what we always do.
Number eight: Find a Mentor. For me it was immediately in the early days it was Frank Kearn and then
after Frank Kearn, Mark Joyner, Steven Pearce, Richard
Schefren, John Childers and Tony Robbins. Those are my
mentors. I have multiple mentors.
I think having a mentor is so important. You know
they tell you you have to learn from your mistakes. I
think you know thats a load of garbage. I would rather
learn from other peoples success. I dont want to know a
big encyclopaedia of all of your mistakes. I want to know
the short abridged version of what works. Just tell me
what works. Im not even really always concerned why it
works; Ill figure that out along the way. Just tell me what
works and then Im just going to duplicate the process.
And when you have a mentor they keep you accountable, theyve done it before, they can see your mistakes
before you do and they can help you out, okay.
In fact every single person that I know that is successful every single person that I know that is successful has
a mentor. So I dont know if thats a qualification that you
need to be successful but it sure doesnt hurt.
Number nine: Do what you do best outsource. You
probably heard about that this week. Outsource and Outtask the rest okay. in the beginning alright, if youre just
getting started, many of you are just getting started, at
that point you want to learn everything that you can.
Alright, you want to learn copywriting at the beginning. You want to learn how to do graphics if you can.
You want to learn of course html and how to design a
web page and how to make a sales letter look good. Okay,
you want to learn how to post a project on Elance and

different things like that.

But as your business starts to grow and you start making money you want to start taking that money and reinvesting it into the business and you focus on the things
that you do best and you outsource and out-task the rest.
If youre a mediocre copywriter well what you want to
do at this point you want to start outsourcing your sales
copy. In the beginning you definitely want to learn sales
copy your self. One of the guys here David Watson, the
guy that was making made $65,000 in his first month,
David was a guy that when we went over his website, this
guy is a brilliant programmer, seriously one of the best
programmers for software and web development that Ive
ever met. He was a horrible copywriter and horrible with
making images.
You know what one of his biggest problems was, he
wanted to do everything himself. He wrote this disgusting
sales letter that I wouldnt send to my worst enemy and he
had one of these cartoon graphics that you know look like
he made it with an upgraded version of Microsoft Paint.
It was so obvious what his problems were with the
sales. So what we did we hooked him up with another
copywriter and he said Mike I dont have the money right
now. And I said well you have to think what is it that you
can do, how can you leverage this. maybe you can pay
for 20 per cent of it now and then give him more money.
Maybe the copies going to cost you three grand pay him
4,500 but pay him after the profits, doesnt that make
sense?
Tell them, well I dont have the $3,000. Ill pay you
$500 now but after I launch the site and you have your
$8,000, $10,000 day or more or less whatever the case is
but your making a point to pay the people after the job is
done. Youd be surprised how many people would be willing to help you with such things like that.
And finally habit number seven of Stephen Covey
Seven Habits of Highly Effective People sharpen the
Saw.
Sharpen the saw always sharpen the saw. What does
that mean? That means if you have you know the best saw
thats out there, the big muscles everything like that and
you have the best saw and youre out there and nobody
can compete with you. After several months and several
years whats going to happen to that saw, its going to get

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blunt right.
So you can find somebody thats maybe not as strong
as you and maybe not as experienced as you and comes
over with the latest greatest saw and theyre going to be
able to go right through something in half the time that
you do. So you want to sharpen the saw.
What that means is always be learning. Okay, in the
beginning you know, its kind of like the reverse 80-20
rule, you want to spend 20 per cent of your time taking
massive action and 80 per cent of your time learning.

Okay, thats having a goal is one thing but being

able to enjoy the process is really where the true happiness
comes in. Because what youll find is that if your not living in the moment at all times and your just waiting for
a big launch to come through you going to maybe have
youll have pleasure for a day but your not going to have
true happiness.

The Hedgehog Concept That Catypulted

My Business Into Multi-Million Dollar
Turnover

But there is a difference between knowledge and learning. Knowledge is information without action. Learning
comes from implementation. When you start to implement everything that youve learned everything that
youve been reading, thats when you start to learn it and
you can duplicate it.

Youre Hedgehog Concept this is a very abridged

version of it okay. It should be a crystalline concept that
comes from a deep understanding about the intersection
of the three circles. And these are the three circles and you
can see where they intersect right here in the middle.

As you start to have more success your probably going

to get more focused 80 per cent of the time and taking
action and 20 per cent of the time in learning, but youll
always be learning. You always want to stay up on whats
going on in the industry.

You want to hone in, right in the middle of these

following three circles. Circle number one, What you
can be in the best in the world at. And I dont mean the
single best in the world at but I mean that if you were a
basketball player you would want to play in the MBA.

You know things have really changed in the industry

in the last year, Web 2.0s is something that you know we
were hearing all the time, search engine has completely
changed. Search engine optimisation used to be about
optimising your sites for the search engines. Search engine
optimisation now is about leveraging other Web 2.0 sites
like Digg and Technorati and del.icio.us and YouTube and
using tags at these sites.

I would consider any person playing in the MBA to be

among the best in the world. Okay, and that comes from
facing the brutal facts.

Like if you put a video up on YouTube and you tag

it with the word Mike Filsaime Melbourne Australia or
Internet Mastery Secrets or Knowledge Source and that
way when people say hey I wonder if Mikes presentation
is up online, maybe somebody had maybe you could
use his video to start building relationships with people.

I have a very logical mind, Ive always excelled in math

and programming and things like that but when it came
to reading comprehension and things like that I always
suffered. My SAT scores which is an aptitude test in the
US was very high on the science and math and not so
high on the reading comprehension. Understanding what
you can be the best in the world at is knowing what your
core competencies are.

Heres a bonus principle, The end goal is not where

happiness lies. Happiness comes from the means and the
action of the activity as a whole.
A lot of times we talk with people, friends of mine,
theyre either in a state of depression or just not you know
they dont have the energy level that they should and
theyll say things like as soon as I launch the site I can get
it all over with and then I can finally be happy.

Number One: You need to know what you cannot

be the best in the world at. Some of us are good at math
and terrible with reading comprehension and writing and
things like that.

There are things that you know that excel in and there
re things that you know that you struggle with.

Passion Can Equal Profit On The Internet

Circle number two, just as important, What you
are deeply passionate about. Okay imagine, you know a

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kid that loves to play video games. Recently I found out
about this game called World of Warcraft I found out how
addicted some of these people are to this game. I dont
even want to get anybody in here to admit that they play
it, thats addictive Ive heard this game is.
But imagine being able to make a million dollars a
year playing that game. There are some people that make
a lot of money playing that game in tournaments and
things like that. But if you ask that person there going
to you know you ask Michael Jordan or Tiger Woods
or Derek Jeter on the New York Yankees, they are deeply
passionate about what they do. They probably wake up
every morning say I cant believe that theyre paying me to
play baseball or theyre paying me to play golf, I would do
it even if they didnt pay me.
So you need to ask yourself that question, when your
involved in a project or youre evaluating an opportunity,
you know sometimes are we just looking at the screenshots are we just looking at the income or are we just
looking at the words make 10,000 a month.
Are we looking at that opportunity and saying, am I
deeply passionate about running a business like that? in
some cases yes and some cases no. Its different for everyone. Some people like to create sites and make money
with adSense.
For me thats not necessarily what I like to do because
Im not the type of person that likes to write three articles
a day and post articles to different directories and things
like that. but if your good at writing articles then creating
content site that brings in natural traffic and pays you one
adSense is probably the way to go.
Okay but the bottom line is, you want to be in a business where people say to you wow your working again
and you say to yourself, you call this work, theres no
other place Id rather be. Im in my element. You want to
wake up every single morning and say how blessed you
are to be able to do what you do and make money at the
same time.
If youre waking up in the morning and youre putting
youre feet down and youre saying oh - youve got this
knot in your stomach and your driving to whatever it is
that you do and you just despise what you do, it doesnt
matter if youre the best in the world at it and people say
to you wow youre really good at this. If your not passionate about what you do, you shouldnt be doing it.

Are You An Opportunity Seeker Or A

Business Builder?
And finally, the third circle is what drives your economic engine. Okay you need to know how the money
is made in this market place. And it needs to be able to
come to you like that.
Sometimes youll talk with a real estate investor and
its just so easy for them. They can go to a house and they
can look right at the property and they know the area,
they know its a $250,000 house, they know theyd like to
buy it for $180,000 its going to cost them $14,500 to fix
the roof and the windows, theyre going to be able to flip
the house in 60 days and sell it for $275,000 when its all
refurbished and you know and they know their net profit
and just by driving up to the house they can see this. And
other people struggle with those things.
Alright, so you need to know how the money is made
in that marketplace. When you have all three of these
circles working together it is impossible for you not to
have everything you want out of life and be truly happy.
The big problem comes when we chase opportunities
and were not focused right here. And we wonder why
were constantly chasing opportunity after opportunities
and we never blame anyone, we dont blame the person
that sold it to us, we dont blame the magazine that we
purchased it from. In fact we enjoy the process. If youre
like me I enjoy buying things.
But what we find out is we tend to blame ourselves.
Hey, did you ever open up that course that you purchased
from that infomercial? No I didnt I didnt get a chance to
do it. You know why, because we identify with the money
on the commercial. Well when the product came we
realised we dont want to be placing tiny classified ads all
over the United States and all over Australia and all over
Europe or whatever the case is.
You could have saved yourself a lot of time and money
just by asking yourself, am I going to be deeply passionate
about that type of business, do I feel I could be the best in
the world at it and I do know what drives the economic
engine of that marketplace?

Maximise Profits With Up-Sells, DownSells, Cross-Sells and Bumps

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Okay so you guys have McDonalds here, Ive eaten it.
You go to McDonalds you will see a classic up-sell, crosssell and bump. And I dont know if theyre doing it as
much any more with the super-size after super sizing but
this is how it would it go.
You would go through the drive through and you
would order your Big Mac and you would order that in
a Combo Meal. So you say I have a number one and immediately the clerk behind the counter says to you would
you like to super size that?
Okay, thats an up-sell. What that means is theyve
already have a customer taking action and they realise
theres a small little action that they can do to increase
the profits. And probably 30 per cent of the people that
are made that offer will take the up-sell just by asking a
simple question.
And we need to recognise where can we put this process into our sales process? Where can we have an up-sell
in our sales process? And Im going to show you that.
Then they give you the cross-sell and they say to you,
you say yeah Ill super-size that. And they say would you
like and apple pie with that? And you say, okay yeah Ill
have a dessert yeah give me the apple pie. And then here
comes the bump, especially in the States.
They say to you would you like two for a dollar and
youre by yourself and your thinking youve got this Big
Mac and this large fries now and this super size diet coke
of course and you already have your apple pie, and they
say would you like two for a dollar and you say, well how
much is it for just one and they say 95 cents. And you say
well Im not going to let you get away with selling me another apple pie so give me the extra calories for five cents
and then we wonder why everyone in the United States
has a weight problem.
What you are seeing right there is a classic up-sell,
cross-sell and bump. And we want to see how we can put
those types of things into our marketing. So heres a quick
flowchart for you. you can try to take notes but remember
your going to get youll be getting this as well.

Your First Step Is Not To Sell Anything

So what you want to do is always start in with a free
offer, remember we said that earlier? We dont always want
to be trying to sell something when were driving traffic to

a sales page. After we capture their name and their email

address we want to present them with an offer. If we can
you see the word OTO there that stands for one time
offer.
A one time offer is where you make an offer to someone but it uses a strategy called urgency. Okay there area
a lit of different triggers that we want to have in our sales
processes. Theres urgency, theres scarcity, theres social
proof which are testimonials, there reciprocity, theres
bonuses but urgency gets people to buy now.
Its very important if youre going a one time offer to
have a reason why its a one time offer. It doesnt really
matter how important the reason is but you always want
to address the reason why and you always want to use the
word because. Theres been studies shown where Ill
give you a quick example. In the book Influence The Psychology of Persuasion by Robert Cialdini there was a study
that showed where someone walked up to a line of like
20 people that were waiting to use a copy machine and
they walked up to the fourth person inline and they said,
Excuse me would it be okay if I made a photocopy? And
only 18 per cent of the time were they allowed to make a
photocopy.
So then they said well lets see if we give a really good
reason, lets see how that affects it. So now the person goes
up to the fourth person on a line of 20 and says, Excuse
me would I be able to cut in front and make a photocopy
Im late for a final exam? And what they found was that
91 per cent of the people were allowed to cut the line and
make a photocopy.
So then they said I wonder how important it was to
have such a good reason or was it just the fact that they
had a reason. Lets make the most absurd reason and see
what happens with the study.
So now the person approaches the line goes to the
fourth person and says, Excuse me would it be okay if I
cut the line I need to make a photocopy? Thats an absurd
reason but what they found was that 88 per cent of the
time they were allowed to cut the line.
They went from 18 per cent to 88 per cent because
they used the word because and had any arbitrary
reason. Okay so if youre having a one time offer, you
want to address it, the reason why can only purchase this
right now is because and then give a reason. Were doing
a market test or were hoping that you like the product so

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much that youll give us a testimonial. And as soon as we
have enough testimonials well pull this offer down and it
will be selling for the normal price.
With a reason why you can buy this now for 3.97
instead of 1.97 and then you know give whatever that reason right there is. And tell them you know that we cant
let the reason why you cant buy this later is we cant
make this price available to the general public. It will ruin
the perceived value of our product. So you can only buy
this product right now at this one time offer.
But either way you want to make an offer but if you
make it a one time offer your conversion rates will go
from probably two per cent to two and a half per cent up
to anywhere from three and a half per cent up to seven,
10 or 11 per cent. And in some cases we have some one
time offers that are converting at 21 per cent.
So they come to our site, we ask them for their name
and their email address and we present them with a one
time offer and they buy it, what should we do right now?

Increase Your Sales By Up To 50% With

This Cool Strategy
Up-sell right, offer an up-sell and normally, just for
this sake here were going to call this person a platinum
member. Normally 50 per cent of your buys that take you
up on the original offer will take your up-sell, 50 per cent
of the people that buy your original offer will take you
up on your up-sell, if your up-sell is half the price and of
good value.
So if your selling something for 100 bucks what
should your up-sell price be, $50 right. And if youre selling 50 a month at $100 and you put in an up-sell youll
sell and additional 25 sales per month. Right, if they dont
buy it theyve made one purchase from you, thats for this
sake of the discussion here, well call that member a gold
member.
Okay if the dont buy some of you got that. if they
dont buy what do we want to offer them now? A downsell right. So in my sites I give a person an option to say
no. A lot of times people will just put an order button
and the only way to say no is to hit that button in the top
right corner of the page where they x out the page.
I like to give people an option that says no thanks.

Okay and if they hit the no thanks I give them a downsell and in this case well call this a silver member okay
the number here, 50 per cent of your buyers will purchase
your down-sell if your down-sell is half the price of your
original offer.
So what that means, is if youre currently making 100
sales per month and you give them a no thanks option
you can pick up another 50 sales per month by just offering a down-sell at half the price.
Ill give you an example. When I purchased my Mac
computer in my office I was installing the operating system you know when you first get it and its asking whats
your name and all this type of stuff and Im hitting next,
next and somewhere in the process it said would you like
to join Mac.net for $19 a month. And I looked at it and I
said I dont even know what Mac.net is right now I dont
even have the time to research it. So I said, no thanks and
I hit the no thanks button.
Instead of sending me to the next process they gave
me a wait before you go why dont you try it free for 90
days you can cancel at any time after 90 days but its free
for the first 90 days. So I said okay for free Ill try it for 90
days so I gave my name and all my information, hit the
next button it asked me for my credit card details I gave
the credit card details and now its been about a year now
that Ive been a member of Mac.net for $19 a month and
I still dont have any idea what it is. Thats the truth.
Ill give you another example, lets say you were offering your original offer, you were offering an eBook and
three bonus products for $197. Well what you can do is
lets say each of the bonus products had a value of $50
each so you had an eBook with three bonus products for
the down-sell you say, I tell you what Ill still give you the
eBook and Ill give you bonus number one but Im going
to take out bonus number two and bonus number three.
Each of those bonuses were of $50 value. So Im going to
take $100 off the price.
So instead of pay 197 you Ill pay just $97 and youll
still get the main product and this free bonus. Does that
make sense there, how a down-sell can work? So we justified the price drop by taking out two bonuses, making the
offer a little bit less. By lowering the price in half and offering them a down-sell youll notice that if youre making
as I said, 100 sales per month for whatever product youll
now pick up another 50 sales per month at half price.

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And by putting the up-sell and the down-sell together
just whatever process you currently have you just increased your profits by 50 per cent per month.

What If They Buy Nothing?

But the nice thing about this free offer is that they
came in for free they saw the one time offer they didnt
buy. Then you offered the down-sell they didnt buy, now
theyre a free member. Is all lost? No, right because we
have a free member, we have that free member is now a
new opt-in prospect and now we can follow up and we
can build a relationship with those people.
And we know how important that is. The people that
raised their hand, there was probably about 50 people
in this room that raised their hand, theyre in this room
because most likely they went to one of my sites and
signed up for a free offer and then I built a relationship
with them.
You know theres one example I wanted to give you
about up-sells and cross-sells that I didnt. has anybody
here ever registered a domain with GoDaddy. Right.
When you go to GoDaddy and you find a domain thats
available and you hit check out, how many years did they
ask you to register that domain for?
2 years. Thats a classic bump right there. if you go to
some other websites like Namecheap they set you up at
one for whatever reason. GoDaddy theyre brilliant they
set it up for two years its a classic bump. When you register a domain name it should be just one.
They get you for two years, do you know why they
dont do it for three because they probably tested that, for
three years it gets you to think too much, well do I really
need to spend $21 just to get this domain and then you
hit the drop down button and then you drop back down
to one.
So theyve realised that their sweet-spot is offering two
years. If they could get you for three they would do three,
if they could get you five they would do five. But they can
get you for two more often just by offering that bump
right there.
Alright and so thats the bump and then they try to
up-sell you. Now they want to up-sell you with hosting.
Okay so as soon as you you know your checking out
they say do you want to host your websites for $9.00 a

month now how much more important was that bump

when they got you for two year domain registration.
Now theyre taking their $9.00 a month hosting out
24 months instead of 12 months. And then you say yes or
no to that. And then they start offering you the cross-sells
and the cross-sells are would you like to get index in five
major search engines for $49.95. Would you like the Traffic Blazer package. I have no idea what that is and thats
$39.95.
So the truth is GoDaddy their prices are so low and
were going to get into that in the next section, their prices
are so low that they can compete in the marketplace with
prices where nobody else can compete, where most likely
theyre losing money on what theyre selling the domain
name for, especially with their expenses in their office, its
a loss leader.
But because they have their up-sells and their bumps
and their cross-sells in order theyre maximising, theyre
making all their money on the backend.
So in that example, as you can see there are four possibilities platinum, gold, silver and free for when somebody
comes to our website when we lead them in with a free
offer.

Understanding How The Marketing

Funnel Works
Setting up your marketing funnel, okay were going
to get into the marketing funnel here. Your front-end
office drive your back end profits. Okay, see that example
that we just gave with GoDaddy when you have a lead in
front-end product it drives the backend.
All your money is generally going to be made in the
backend. Your front-end you could lose money or even
break even on the front-end and when you do that you
can really start to dominate your market place.
Heres an example of what your product funnel, your
marketing funnel, your services funnel may look like.
Okay, remember start in by opting in the prospect, it
doesnt start in at $19 or $47 it starts in with opting in
the prospect with free or better. Whats better than free,
even additional bonuses that were unadvertised, really
start building relationship with people.
Next after that your eBooks, your eBooks are gener-

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ally priced between $19 and $47. Sometimes a little less
sometimes a little more but on the internet the going
price for an eBook is generally $19 and $47.
If were talking about doing an up-sell if you have
an eBook what could your up-sell be? Well your up-sell
could be, they have the sales letter they see your $47
eBook, they click the buy button, they go to PayPal and
they purchase and now they land on whats called a thank
you page where it says thank you, you were just $47
download your project.
But if we up-sell them we could move that page over
and insert an up-sell and the up-sell could be something
like would you like to buy the deluxe spiral bound edition
for only $19 more simply click here for an additional $19
well ship you the deluxe spiral bound version.
And what we just said before is that 50 per cent of the
people that buy the eBook will by this product. And its
very easy you get hooked up with somebody like Speaker
Fulfilment Services.com you send them your eBook and
theyll turn it into a nice spiral bound edition for you for
about $2 with the spiral, theyll ship it anywhere around
the world between $3 and $6. So your total cost is about
$700. and you can set your shopping cart up to send
them an email every single time you make a sale for that
spiral bound book.
And thats found money if your not doing that right
now with your eBooks. speakerfulfilmentservices.com they
will ship it out for you so while you literally at the beach
or while your sleeping and somebody buys your digital
book because we love digital products then they buy your
physical product you dont even have to know about it.
The email is sent to the fulfilment company by the end of
business day theyre sending it out, within two days the
customer gets their deluxe spiral bound version.
So thats a typical up-sell for an eBook okay. A $97
product that could be used for an up-sell could be a CD
where you have audio and where you know maybe its an
interview or something like that. maybe youre offering
the transcripts. Transcripts guys you can go to eScriptionist.com.
You can give these people a one hour conversation of
two people. Its going to cost you about $100 and they
will get you back in about 48 hours a Microsoft word
document of Mike said Tom said Mike said Tom
said. Now you have an instant eBook that you can have

graphics made and you can either give it away for free or
use it as a bonus or sell it or use it as an up-sell.
Okay its an instant eBook just by going to eScriptionist.com and giving them any recording that you have.
Its about $100 per hour when two people are talking.
Alright, if your doing a DVD course $197 to $297 thats
generally the price for a DVD course.
A home study course, now were getting into it like a
multimedia course where maybe you have DVDs and you
have screen recording where you use Camtasia and your
recording step-by- step how to do things on the screen.
Maybe it comes with bonus software and it comes with
printed materials, like a printed eBook and everything
like that.
A typical home study course will normally sell between $497 and $997. Now your starting to establish
yourself as an expert in your industry and if your industry and your niche gathers in offline events, where its
personal development or its health or its Forex its stock
trading or its real estate or its golf, whatever the case is,
in most cases there are offline gatherings.
You want to start finding out how you can speak at
these events. And if youre speaking at these seminars generally you can have one of your packages that you can sell
and those prices normally go between $997 and $5,000.
Right and as we said before $47 products are important the front-end is what drives the back end. Its what
makes the backend possible. But if you wanted to make a
million dollars how many sales of $5,000 would you have
to make in a year 200.
So if you broke that down per month, that would be
roughly 20 sales roughly 20 sales per month if youre a
speaker and youve really, truly established yourself as an
expert in the field.
So you know 10 months out of the year you could
travel speak in front of a room with 300, 400 people, sell
a package at $5,000 and if 20 people are buying 10 times
throughout the year, youve made a million dollars just on
your backend products okay. I mean to make a million
dollars selling $47.00 eBooks what is that 20,000? Is that
the math about 20,000 sales thats a lot of sales.
Alright and then finally at the bottom of the funnel, if
you choose, theres group coaching, inner circle programs,
workshops, boot camps, one-on-one coaching, these

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prices generally go between $2,500 and $20,000 whether
its group coaching or one-on-one coaching or an inner
circle program.
If you take a look at like Mark Victor Hansen and
Robert Allen they have an elite inner circle program. It
cost $37,500 a year to be in. If you look at Tony Robbins
he has a platinum program that cost $65,000 per year to
be in. When youre a true expert in your field, if your at
the top level you can command these prices because you
have the value that goes along with it.

My Million Dollar System Summarised

Heres a quick recap. I said this at the beginning of
the presentation stop selling up front. Alright we want
to opt-in our prospects, we want to drive all of our traffic
sources to a page that has a free offer.
We want to convert those prospects to customers. So
after we get them into our marketing funnel we want to
build a relationship and by building a relationship we
can endorse other products, we can review products and
we can make sales by endorsing and reviewing quality
products that we feel and we know can help people along
their journey.
And we want to drive our customers and our prospects
through our marketing funnel. What that means is simply
this, when we go back to this slide here, okay we dont
want to think that somebody has to buy the $47 eBook
before we can offer them the $97 CD and then before we
send the home study course, they have to buy the home
study course before we offer them coaching.
We can have somebody thats a free member that
comes in we may follow up with them on the eBook for
$47 three times and they dont buy and then we offer
them the home study course for 997 and that free lead
now buys the home study course without buying the
eBook.
Many times thats exactly what they were looking for
in the first place. And if youre not offering it to them
theyll get it from someone else. What they saw was your
eBook and they said you know thats a basic version on
real estate, Im really looking for the step-by-step guide. I
want the big box sent to me. I want the accelerated learning program. The eBook was more of a how to course I
want the what to do course.

So going back here we want to drive our customers

and our prospects through our entire marketing funnel and finally, okay knowing your metrics. Before we
were talking about GoDaddy how its very obvious that
GoDaddy completely dominates the marketplace because
they know the exact metrics, they know the life value of
each customer.
If you were to talk to GoDaddy they will tell you that
for every person that buys a domain they make $71.62
over 4.5 years or over five years. Theyll tell you that the
average person keeps a domain for this long, they know
the exact metrics.
So what that means is if I was to ask Keith Wellman or
one of my friends, how much is an opt-in prospect worth
to you? Theyll tell me Mike for every opt-in prospect I
get I make $5.63 in my business.
So now that they know this, and its very simple, you
look at how much money youre making every month and
then you look at how many opt-in leads your getting and
then you divide the two and now you see that for every
opt-in thats coming into your site your make $5.00 at the
end of the month.
So you can start doing simple things like, well if thats
the case I can go out and I can start spending $3.00 to get
an opt-in prospect and if your spending $6.00 to get an
opt-in prospect you know that the campaign is losing you
money and your not guessing.
You can pay your affiliates a commission higher than
the price of your product. You can completely dominate
your market place when you start doing these strategies
and what that means is, you can pay your affiliates 100
per cent commission on your front-end product.
Whose product are you going to promote? Are you
going to promote the real estate eBook thats pay 50 per
cent of $47 or are you going to promote the real estate
book thats paying 100 percent of $47? The 100 per cent
right? if Im signing up for an affiliate program and all
things are equal Im going to promote the one thats giving the higher percentage.
So remember we said before that 75 per cent of my
sales come from my affiliates. Well if thats the case the
person that is competing in a marketplace and hes giving
people 100 per cent commission, the other person thats
paying 50 per cent commission is going to say hows he

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doing that, hes got 6,000 affiliates and Ive got 12 affiliates hes making 400 sales a month and Im making four
sales per month and hes not making any money because
hes giving away 100 per cent commission. I dont know
what in the world hes doing.
That person has a backend strategy. They know for
every single person that buys the eBook for $47 they get
put into an auto responder and they get followed up with
for a $497 home study multimedia course on real estate
investing. And they know for one out of every 10 people
that buys the eBook, one out of every 10 of those people
are going to buy the $497 course, they know those metrics all the way down.
You could lose money on your front-end product if
youre dealing with physical products. Lets say youve
done all the research in the world and you can get this
particular widget only made in china for $50. Alright
and everybody else knows that the cheapest you can get
this widget is in China for $50 so its a real commodity
everybodys selling the product for $59 - $56 - $54, some
people for $53 and theyre making $3.00 per sale. And
then you go into the marketplace and you sell the product
for $49 whose going to dominate the marketplace?
You, youre doing it at $39 your buying it for 50 all
your competitors are going to say, I dont understand how
this persons selling this product, Ive looked at the product, I even purchased it from him, says made in China
and it comes from the same production warehouse Im
getting them. They call the warehouse are you selling it to
them for cheaper no we sell it to everybody for $50.
They say to themselves how in the world is this person
selling 10,000 of these a month at $39? Nobody wants
to come to my site. Im making 10 sales a month for $53
because that person has a backend. They know that for
every single person that buys the widget may also want
the lighting kit and you know the accessories and everything like that.
I see it all the time guys on eBay, sometimes maybe
Im looking for a high production digital camera or something like that. And theres one guy with a buy it now
price thats selling it cheaper than anybody else. It recently
happened to us. after we purchased it they contacted us
and offered us this complete up-sell package with a green
screen and microphones and everything like that. So
theyre dominating the marketplace, probably breaking
even on the front-end and making their money on their

after sell packages.

The best example I can give you is when I was a
general manager in the automobile business I was general
manager for the second largest Hyundai dealership in the
United States and the ninth largest Toyota dealership in
the United States.
And the average Toyota dealership in our area was doing about 125 to 150 Toyotas per month. We were doing
between 400 and 600 Toyotas per month. Almost four to
five times as many Toyotas as the next leading competitor and the reason was the Toyota Camry would probably
have a dealer invoice of $17,400. We were selling it for
$16,999.
Where everybody else was trying to sell it for 17,999
and make a 400 or $500.00 profit. We were losing $400
on every sale because we knew our metrics, we knew the
backend, we knew that for every customer that bought
the Camry we were going to introduce them to our business manager or our finance manager.
The finance manager would offer financing and they
would offer Credit Life and Credit Disability. They would
offer an extended warranty and they would offer and
alarm system and tinted windows and a pinstripe. And
they would put together an entire package for this person
and we averaged $1,500 profit on the backend for every
single customer that bought a car.
So we knew I mean how often would be willing to lose
$400 on the front-end, all the time. We would lose $400
on the front-end if we could sell 1,000 cars per month
because we would net $1,000 when it was all said and
done. When all the other dealers were so focused on the
front-end that they were making 100 and 150 sales per
month and we were completely dominating the marketplace. And it built momentum because it brought more
referrals.
And then finally you can loose money on your frontend advertising. I wont get into this in too much detail
because it can be a little complicated but just to make it
very simple for you. lets say that before you knew your
backend, you were using Google AdWords.
So youre paying 20 cents per click and when your
paying 20 cents per click your spending 1,000 and your
making 1,500 so youre making a $500 profit. So now
you want to see well let me see if I can generate even more

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traffic.
So now you go up to 30 cents per click but now you
find out when you go to 30 cents per click youre spending 2,000 a month but your only making 1,900 in sales.
So by raising your price youre actually losing $100 and
your competitor knows that. so your competitor is paying
20 cents per click and you and your competitor are down
here on the right side of the Google search engine. But
now you put into place a backend and youre now selling
a $497 course after they buy your $47eBook.
So you say, you know what let me do that as an up-sell
as soon as they buy and Ill sell it as a one time offer for
$297 instead of $497. As soon as they make that purchase
for the eBook Ill walk out on video and Ill do a little
demonstration and Ill show the product and Ill give it to
them for 297 as a one time offer.
So let me see what happens now. Instead of paying 20
cents per click Im going to bid 60 cents per click and you
shoot up all the way to the number one slot. And now
you find out at the end of the month you spent $10,000
in Google AdWords and you bought in 7,500 in sales, so
youve lost 2,500 but now your backend product you find
is converting at 20 per cent and Im just going to make
up a number here, but now you are seeing that you made
$22,000 in all profit on the backend.
Does that make sense here, how you completely
dominating the marketplace. This competitor is getting five clicks a day and your getting 100 clicks per day.
Youre getting all the traffic to your website. He doesnt
understand whats going on. He or she is saying I dont
understand according to my calculations this person paying 50 60 cents per lick. They try it they lose money.
They go back down to 20 cents per click. Your spending
more money per lick your losing money on the advertising campaign because its a front-end offer that drives the
backend products. So did that make sense for everyone?
Okay remember, begin with the end in mind. Okay
Im going into a lot of maybe above strategies that are a
little bit more than newbie strategies but its so important for you to know this as youre starting to build your
company now so that you can take advantage of every
opportunity instead of doing what I did, figuring this out
two years later and then putting in a process and seeing
that it brings in additional $2,000 per day and then you
pick up the calculator

What Is Butterfly Marketing?

Im going to pick up pace a just a little bit here. Im
going to go over Butterfly Marketing with you remember
I said this is how I run 70 to 80 percent of my websites
and will continue to do so. These sites are very easy to
create. After awhile you can create a site like this in about
five to seven days, everything, graphics, copy, everything
and go straight to launch with it.
Alright its a passive list builder, remember the real important asset in your business is your opt-in list, your subscribers and your customers, not how many sales youre
currently making. When people evaluate your business
they want to know the assets and your assets are your
opt-in list, its a passive money maker, it means that it will
automatically bring in money for you every single day.
And I mean this and Im not trying to use those words
that we see in Get Rich Quick it brings in the money for
you on virtual autopilot.
I dont want to say total autopilot because that would
be misleading. There are people that lose their passwords
and you do need a help desk to help people that you
know, I dont know how to download a zip file. But for
the most part with the exception of the person in the help
desk, its total autopilot.
It creates backend sales alright, so you can a frontend offer and Im going to show you how you can make
big commissions on the backend. It can be used in any
market or any niche. Alright and when youre creating a
site like this you always want to make sure that whatever
niche you have you try to get the domain with or without the hyphens in these examples niche secrets.com
or niche secrets revealed.com and if thats taken find
whatever niche that your in or niche that your in and get
niche secrets exposed.com with or without the hyphens.
Whose got a particular niche that theyre in right now?
What niche are you in madam?
Womens empowerment.
Womens empowerment secrets would be an example.
Okay the word secret is so strong it implies that theres
something that the reader doesnt know on the other side.
And the other important thing about the word secret
why its in every single one of these domain names is if
you look in the thesaurus for the word secret there is no
other word that really compares with it, there is no other

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word that can be used in place of the word secret.
And thats why you see it on so many different
products. Mastery secrets, everybody uses the word
secret because its powerful and it can never be overused,
psychologically it tells the person that this is the key to
something that they dont know that its going to unlock
for them
And to create a very quick product with Butterfly
Marketing using these principles what you can you do
if you dont have your own product, or if your not yet
the expert in your industry, alright as John Childers calls
this, becoming the reporter. What you can do is you can
interview an expert on his or her backend product.
So lets say you went up to Chris Guerriero and you
said Chris, you know I found your presentation mind
blowing I absolutely loved it. I think we can help a lot
more people with this type of product that you have.
Would you be interested when you get back home, sometime when your not busy do you think that we could
maybe do a one hour telephone conversation. And we can
record it and Ill do all the marketing Im going to make
it viral and the audio is going up-sell your product in the
backend. Do you think Chris would say yes or no to that?
You know hell spend an hour with you, youll do
the marketing and youre going to have this audio that
promotes his product on the backend. So what type of
domain would we get for Chris product with the secrets
in it?
Chris Guerriero Secrets Revealed.
What type of niche was he in?
Best selling books secrets.com, well thats taken. Best
selling books secrets revealed .com, best selling books
secrets exposed.com. Something along those lines you get
that domain and then you create a site that looks like the
following.

Heres an example of something that we call
the thank you page concept. There are two pages in a
marketing process. Theres the sales page and then theres
the thank you page. Right, the sales page is headlined,
This is what youre going to get, these are your bonuses,
buy now. They go to PayPal and then they land on the
thankyou page, right.
And the thankyou page says congratulations right,

download here. The process that were doing here is

were making our sales page a thank you page. And were
assuming that everybody that comes - and Im going to
show you on the next slides everybody that comes to
this website, is bought to this website by invitation
Theyre sent an email by their friend that says something along the lines of Hey Bob I just want to let you
know I just got a hold of Best Selling Book secrets.com
by Chris Corriero its a $97 value and its very easy to say
that information has value, right. even if its free. So we
say its a $97 value but Chris has allowed me to share it
with some people so you can bypass the sales page and go
directly to the thank you page and download the product.
So now the conversion rate on a page like this, if you
notice the URL at the top it says Firesalesecrets.com/
thankyou page. Dont worry about the Fire Sale Secrets
basically this was an interview that I did with four other
marketers that all made over $35,000 in four days doing
what was called a fire sale but basically what I did is I
turned into those interviews into a free lead offer.
So people come here theyre invited by someone
else. They dont very rarely do the find these pages
organically. Most of this is all viral marketing, somebody
coming to the site and Ill show you in the process, they
go through the process and then they later invite their
friends. And their friend thinks that theyre coming to
get this $97 value product where they dont have to go
to the sales page theyre right at the thank you page and
they follow the download instructions which are enter
your name and your email address. So the conversion
rate on a page like this goes from like 30 per cent up to
about 60 per cent. Because people think 60 or even 70
percent. People think theyre not entering their name and
email address for more information they think theyre just
registering the product.
Now you guys remember the flowchart we had before
right. There was start there was free offer and then there
was one time offer. Right. So then what we do is now we
give them a one time offer. And if we can we keep this
offer related to the framing of the website. And what I
mean if theyre at a website about how to cure their golf
swing you know with six easy steps, a free report well
maybe the one time offer is going to be six DVDs streaming videos for example.
We dont want to give them a one time offer to get a
free iPod. Right everybody wants a free iPod or whatever

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or a discount on an iPod but it doesnt make sense on a
golf website right. Alright so we want to keep our offer
congruent with why theyre at our website.
Now theyre inside the members area here is an audio
example of me and Jeremy Burns and what we did its a
one hour call or a one hour and 15 minutes talking about
how we ran these fire sales, great information by the way.
I mean Ive had people even Willy Crawford listen to this
call and he went out and he did a sale that raised over
$100,000 for his daughters wedding.
But I gave it away for free. And over here you see it
says download the text eBook of the call eScriptionist I
gave them the call and they sent me an eBook and I was
able to give that away as a free bonus.
The call is great content. Everybody that hears the
call loves it. but also, its a soft sell infomercial. So while
theyre listening to this call we constantly say, you know
Jeremy thats great information and thanks for sharing
that and if your listening to this call and your wondering the type of software that we used to run this sale to
automate this process, theres a link right underneath the
audio button that you can click and you can get your
hands on this software. But Jeremy I have another question for you and we get back into the interview.
Alright, so if this was with Chris Guerriero Chris
would be giving great content right and then on the call
you could say, thanks for sharing that Chris. If you guys
would like to learn more about what Chris Corriero has
to offer right underneath this audio button is a link where
you can get started with Chriss home study course which
normally sells 1497 and hes agreed to give it to you for
just 997 and this is your affiliate link.
And with viral marketing that Im going to show you
you can get 30, 40, 50 people listening to this audio every
single day and some of them are buying your one time
offer, thats the passive backend sales that I passive sales
and then I said, you make money on the backend, people
click on this link and they buy whether its a $97 product
or a $400 product or whatever the case is.
Its an automatic process its an infomercial, giving
great content driving people every single day making you
if its a $500 product, theyre making you $250 in sales
every time somebody buys from that okay.
Notice the affiliate URL here. the one that we use is

firesalessecrets.com/thankyou page. So the affiliate is using a

URL and this is all created with the butterfly marketing
software. We can make this say anything that we want.
Ill show you another example that we did in the resource
report recently.
We provide them with copy paste tools. Its a little
difficult to see but basically it says as I said as soon as they
get into the members area their name is automatically
added for them, their affiliate link is automatically added,
they can just copy and paste us or use our tell-a-friend
and start inviting people.
And it says something along the lines of, Just got a
hold of this great product by so and so its a $97 value I
was told I can share it with you. You can bypass the sales
page go directly to the thank you page, click on this link,
The person thinks theyre going straight to a thank
you page. That member grabs their affiliate link and now
tells five of their friends and these five new members now
arrive at the website and the process repeats.
They arrive at the website, they see the one time offer,
they listen to the call, they get their affiliate links, they tell
their five friends those people tell their five friends, those
people tell their five friends, those people tell their five
friends and the site now has just gone completely viral.
I launched this site Ill give you a case study in just
a quick second. Heres a screen shot nine months after
we launched the site, the sites over two years old now. As
you see all these people came in all on the same day nine
months later.
These are the people that joined the site. What your
seeing right here this is the affiliate ID of the person that
referred the member. As you can see all different people
are referring. Member number 613 this person referred
here again 613 - 613 this person was probably a member
for gosh at least seven months if their number was 613
still promoting people to that day.
Then you have new members like 7120 who had just
joined the site recently and was starting to promote. You
have member 6140 number 29 471 all these different
members on any given day are promoting the site because
we give them tools to put on their website and its just
virtual autopilot.
I launched this site in February of 2005 I to this day
I have never even told my own list about the site. Heres

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a case study. I launched it with 12 JV partners. I simply
sent instant messages to a couple of friends like Russel
Brunsen and Telmen and Mike Rasmussen and I said hey
guys I got this site called firesalesecrets. If you go promote
it to your list theyll see it as a $97 value. Theres a one
time offer for 100 bucks you get $50 if anybody buys it.
So they promoted it for me.
As I said to this day the only way my list ever found
out about it or my members is that its at Mike Filsaime.
com but I never sent an email out to my own list for it.
In one year we had 14,416 total members come into
the site. 3.5 per cent one time offer conversion was our
one year statistic that gave us 519 sales at $97 that bought
in $51,000 in sales and still counting to this day over two
years later and still to this day brings me in over 40 plus
new members per day.
To some of you that is very impressive. To others your
saying well $50,000 you know thats good but you know
I was really looking for something more. Keep in mind,
this process was nothing more than a phone interview
that I turned into this process.
What if you were to create two of these sites per
year, youd have your six figure code right there. What
if you were to do four of these sites per year, thats your
$200,000 per year US and an opt-in list and pack back
end sales and an email list that you can use to endorse
products in your marketplace.

The Challenge: Make Money Online

From A Standing Start In Front of 500
People LIVE
Heres a recent example. At World Internet Summit in
Melbourne here in March, 2007 just a couple of months
ago Brett McFall calls me up two weeks before the event
and he says, Mike we do this thing on Thursday called
Newbies Day. We do the internet challenge. Wed like for
you to launch a product on that day. I said well I dont
have anything I could launch.
He says is there anything that youre working on? This
is like the middle of March I said well the only thing that
I have is something but its not going to be ready for like
two weeks I can mock up something and try to get it
ready.

He says great, lets do it. so basically what I did the

reason for creating this report called the Resource Report
was to create a viral report that would showcase quality
software products and my own products. I have such a
suite of products as you saw.
It was very difficult for me to get somebody into my
marketing funnel and then promote 25 different websites.
So I created something called the Resource Report and
I said here all the tools eScriptionist, Speak Fulfilment
Services all those types every single resource that I knew
I made it a free report and I said these are the tools that
I use to learn my business. And then in there I included
my software and wrote reviews about them
And it was a way that I could bring somebody into my
marketing funnel at one site and give them all the information about my products.
The offer, what was I going to make as a one time
offer? I called it a kitchen-sink-sale. Im going to give you
every single one of my products almost, every single one
of my products, an incredible value at one low price, everything but the kitchen sink. That was the hook of that
offer. The whats in it for me WIIFM means why would
somebody want to promote this site for me is because
when they come to the site after they get the eBook they
can share this free report with people and I pay them 50
per cent if somebody buys the one time offer.
So just by promoting this free report for me, they help
me build my list and get the word out and they make 100
bucks if somebody buys the offer. So heres what happened. We launched the site, our one time offer wasnt
that good on day one, it was around two per cent I think.
So right there in the lobby in Melbourne at the Hyatt
Hotel, Tom Hua took the camcorder and he recorded me
and I did a video one time offer. So we added video to the
sales pages. Our conversion rate went from two per cent
to four per cent overnight just by adding this video about
the sales page of the one time offer.
We offered a down-sell, very similar package for $97 if
they didnt purchase that. we offered the promotion tools
inside, all these different types of tools that people can
copy and paste and we empowered our affiliates, hey you
have a website put this banner on your website. Whatever
the case is show them little places they can advertise, tell a
friend, whatever the case was.

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Gave them little copy paste code they could put this
on their website. We put all these little butterfly viral marketing affects out there. The Resource Report instead of
saying thank you page I told we could make this anything
we wanted. I called the Resource Report.com/newest version.
So when they promote it the people think theyre always
clicking on the newest version. Heres the case study
results in six days of launching this at the World Internet
Summit.
It launched without me emailing my list. Because it
was very important for me to show people that I didnt
want to come up the next day and show all this income
and all these new members on the list and somebody say
Mike, yeah but thats because you mailed your list, what
about us, what does that really show?
So the challenge here was, I was not allowed to tell my
list. I asked every single in the person in the audience, just
like you, I said go to the Resource report.com and you
guys are going to launch this site for me.
So the next day Brett called me up on stage he said
Mike where are we I said Im not sure, logged into our
computer and what we saw was 13,955 members had
come in, well this was after six days 13,955 members. I
think the first day was like 5,400 members.

$8,700 In 6 Days
So after the sixth day of this case study, these were
the sales. On March 8th it brought in $8,700, the next
day $2,700, 1,100, 1,900, 2,00, 1,400, 2,000 in sales it
bought in over 20,000 sales at the World Internet Summit just launching with the JV partners in the room.
Two months later it brings in over $450 in sales per
day plus all the other affiliate links that are inside that
report. It brings me in 85 new members every single day
on autopilot and total sales to date in just two and a half
months, about 10 weeks total sales today, over $45,000 in
sales in under three months. Creating a free report with
an offer tied into it and letting it go viral.
Does everybody understand what Im doing here?
Does this sound complicated? Create a free report, put
it out there, create an offer that ties in and let the viral
marketing take its place.

Butterfly Examples:

$500,000 in Sales in Just 5 Months

Two other quick examples. My friend Michael Rasmussen had a site called Email Promos Exposed. He
was going to sell this as an eBook. I said Mike you really
should consider the Butterfly Marketing he said you
know let me try that I have the software let me do something with it.
In five months hes had over 45,000 opt-in members
added to his list and over $500,000 in sales by giving
away part of the course for free as a lead in and then upselling people for the rest of the course. So he gives away
a light version or a couple of chapters and the up-sell was
the entire course.
Recently Hosting Secrets Revealed Joel Tieran my web
host at the kiosk says to me Mike I want to do a site like
this, what do you suggest? I said Ill interview you on why
your such a great web host and well talk about the pitfalls
of web hosting and what people should be concerned
about in web hosting. And well give that call away for
free and well call it Hosting Secrets Revealed.

Butterfly Examples:
$100,000 in Just 6 Weeks
So we did the call, took as an hour to do the call, I
recorded it in my hotel room, you can actually hear somebody knocking on the door saying room service while I
was in LA. In six weeks we had over 3040 customers that
he got paying $297 a year for a dedicated server. So that
they pay every single year. So just in the first six weeks
my web host picked up an additional $100,000 a year in
annual revenue and the site is still going.
Okay so heres what we learned. The 10 foundational
principles for a six figure internet business your Hedgehog
Concept and why thats so important. We spoke about
up-sells down-sells cross-sells and bumps, developing your
marketing funnel. How you can dominate your marketplace when you know your metrics and youre setting up
your backend and powerful Butterfly Marketing results.
So were going to look at these following results here.
lets try to see if we can pick out what these people have in
common? Here is Fabio Marciano Fabio started working with us, another person was online for about a year
and a half. When he started working with us he launched

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his first site he made $12,668 and 5,400 opt-ins in his fist
10 days. Fabio has since gone fulltime online.

Butterfly Examples:
$12,251 In Just 7 Days
Dan Kelly left his fulltime job. Dan Kelly launched
his site called Many Site Secrets Revealed. He bought in
$12,251 and 3,000 members in just seven days. Dan is
making he was at a seminar recently in the audience I
asked him how you doing currently at this time Dan. He
says between 300 and $400 per day with that site and
hes working on his other site right now. I think its even
launched already.

Butterfly Examples:
$41,000 and 8,800 Members
in First 20 Days
This gentleman, his name is Jordan Hall launched the
site, made $41,000 and 8,800 opt-in members in his first
20 days. Jordan was sitting in the audience in Seattle.
At that time I did a raffle I said if anybody could tell me
what the seventh habit of Highly Effective People were was
it on the slide. He jumped up and said Sharpen the Saw.
I saw great come on up and he got a free cop of our Butterfly Marketing software. He used it to launch that site.
These folks here, theyre in a niche market in personal
development and they say they werent sure if it would
work in their niche. Alright they launched they made of
$10,100 in sales in just four days.
Mike Ambrosio just went fulltime a couple of weeks
ago. This is an old slide says hes making $5,000 every
month. Mike is now making about $9,000 every single
month online.
Brian Edmondson was our very, very first protg.
Brian saw me in Orlando. He was the very first person to
start working with us and Brian, this slide is about four or
five months old. Brian says hes averaging about 2,000 a
week. Hes probably closer to about $4,000 per week right
now. Multiple projects.
James Grandstaff launched his site just over three
months, 109 days after launching he generated over
$80,000 in sales in just over three months. James Grandstaff now working fulltime online and left his job where

hes making $18,000 a year.

Eric Rockefeller, this was a kid that was just all over
the place. He was he started working with us he was
all desperate and I need to do this and you know Ive got
2,000 left on my credit cards Im working on my credit
cards and we put together an action plan for him.
Hes currently earning $25,000 per month now in
is one of the top affiliate marketers in the with email
marketing nearly overnight. Launched three projects so
far this year and hes making about $25,000 per month.
So the successful case studies. What did they all have in
common?
You might be thinking, Mike Filsaime... Well yes,
youd be right, but I was leaning towards they all had a
mentor.
Whilst in this case it was me, you rarely find a successful person who doesnt have a mentor. Ive personally had
5 or 6 that Ive employed to guide me along the way. Not
all have been in the internet marketing area, some have
been on business-building and personal development.
Ill say this, and I know that you may hear this from
others, that the greatest return on investment that Ive
ever had has been my own education.
What Ive shared with you today is a guaranteed way
to get started online, build a bit of experience, have some
fun and make your first dollar.
I want to reinforce and stress to you the importance of
building a list first. That has been my secret to success and
Ive observed that the largest internet players in my area
have all done the same.
With that said, the internet has provided me with
an amazing lifestyle. In the last 3 years, Ive travelled the
world without my business missing a beat. Not many
traditional business-owners would be able to say that.
Is it going to be tough starting out? Sure, everything
is at the beginning but hopefully youll look back in 12
months and be in complete awe as to the progress you
have made.
On that note, let me leave you with a famous Chinese
proverb, the journey of a thousand miles always starts
with you taking the first step.

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How This Chinese Immigrant Went

From $300 In His Pocket Sleeping On
Newspapers In A Tiny Apartment For
Months To Self Made Millionaire
Part of the Millionaire Phenomena Series

ood afternoon. Ladies and gentlemen, it is my

absolute pleasure and privilege to be able to
speak to you this afternoon; to be able to share
my personal experience and powerful knowledge of doing
business on the internet successfully, with you. Now, I
would like to ask how many of you already have a website? Wow, quite a few of you. Congratulations. Thank
you. Now, how many of you havent got a website yet?
Thank you too.
Regardless of which hand you have raised, every single
one of you, all of you, are in the right room at the right
time. Beginning with the information Im going to share
with you in the next hour and a half, its going to help
you take your business to the next level if you already
have a website. Or it will help you to set up your online
business in the right direction, without any confusion
whatsoever.
Before I get started, I have to confess that I am not
one of those professionally trained public speakers at all.
I did not have to speak until 2004, as John said. The
only reason my partner asked me to come to the stage, is
because I was making more money on the internet than
any other individual in this country.
So lets get into it. Today, what youre going to discover first of all, were going to discuss the principle of
internet business. I understand you have experienced a
jam-packed weekend. You have been hearing from speakers, speakers, and more speakers. Sometimes you think
internet business is kind of complicated.
My job in this section here is to discuss the principle
of internet business. Regardless of what website, regardless of what business you do on the internet, they all come
down to this principle. The good news is the principle
is not complicated at all. It is no more complicated than

Meet Tom Hua

TOM HUA is one of the most famous guys on the internet. Want
proof? Next time youre tapping
away on Google enter the name
Tom Hua. And youll find at least
400,000 web pages.
Do you think youd be making
more sales if you got 400,000 web
pages linking back to your web
site? How did he do it? How much
does he make? He lays it all out on the table.
Tom is a grandfather of ebook publications with over 150 ebooks
in circulation. Hes a master at viral marketing and to be frank,
Tom makes money from projects that he has stopped marketing,
and even if he wanted to - he couldnt turn them off.
Tom literally started from ground zero emigrating from China
with $300 in his back pocket and sleeping on newspapers in tiny
apartments for months.

one, two, three. So for this weekend, if you take nothing home but this principle, then your time, your money,
your effort is worthwhile. This principle, I sometimes
refer to it at a simple system, is really quite underestimated. However, it is simple, but it is so powerful. It can
guarantee your success on the internet. Would you like
that?
So if you understand the principle, you know where
to start, and also, you can plug-in all the valuable knowledge, valuable skills, valuable techniques that other speaks
have been sharing with you into those areas; apply them
to the principles. On top of that, Im going to teach you
the most powerful traffic-generating technique. That can
help you to speed up your online business by ten times.
Would you like that as well?
You see, its important to understand the basics of the

Millionaire Phenomena - Internet: TOM HUA (continued)

basic. It is also important to understand the most powerful technique that you can apply. So this way, you secure
the bottom, and also, you have something that can take
your business really to the next level. On top of that, Im
going to give you a lot of tools and resources to help you
to put everything together into the right place, so that
you know your online machine will be completed. Okay,
thank you.
Now, Id like to show you some of my work, so you
know what can be done and what I have achieved, and
also you can understand what you can do. Back in 2000,
I released a little booklet called Working With ClickBank. ClickBank is one of those payment processing
companies in the world. They are one of the most popular ones. They simply provide a solution so that everyone
can accept credit card payments on the internet.
Back then they had 110,000 affiliates. They wanted us
to go out and promote services for ClickBank. They had
a reseller contest, and invited all of us, 110,000 people, to
go out and promote ClickBank. Now, I did not simply
send a broadcast through my newsletter, did not simply
have a banner on my website. Instead, I put this booklet
together called Working With ClickBank, taking people
through the entire process of how to set up an account
with ClickBank. Lets take a look at it today.
I put something that is quite interesting, called a viral
marketing device, in this booklet. Lets take a look at it
today, at Yahoo!. Do it, search at Yahoo! live, while we
speak. As you can see, many people are still selling this
booklet today. At Yahoo!, we have 7,190 websites. And
at Google, you have 26,200 websites that are still selling this little booklet I released in 2000, today. This is
because I not only sold that booklet to others, but also I
allowed other people to sell it to others.
But guess what? The inside of that booklet has my
affiliate link to ClickBank, so as a result, I became the
winner of the ClickBank reseller contest.
And back then, we had every single internet marketer
out there promoting affiliate Clickbank services - 110,000
affiliates altogether worldwide. I mean, for a little Chinese guy, who didnt even want to put his name on the
internet, to me it was quite an extraordinary achievement.
The websites that youve seen indexed by Google and Yahoo! are really a very small percentage of people who had
access to this booklet.

Lets take a look at another example. Now this is an

excellent example of viral marketing, which Im going to
share with you today. Another example, also in 2000,
I put this e-book package together called Free To Sell.
That was the first e-book package on the internet, and
every single internet marketer back then had access to this
e-book package. What I did was, I put together about a
dozen e-books and software, which I purchased the resell
licence to, then I created an e-book package. But on
top of that I put on all the resources and all the website
addresses, and all the services that I was using to build
my online business, so in a sense I was sharing with other
people. On top of that, I allowed other people to sell this
package to others, so thats where the name of Free To Sell
comes from.
Today, lets take a look again at Yahoo!, and see how
many people are still selling this booklet today as we
speak. Yahoo!, we have 19,200 websites. Google, we
have 17,200 websites, still selling this very booklet today,
which I released back in 2000.
In that e-book, I recommended lots of services to
other people through my affiliate links. One of them
was a link to a project called Host For Profit. Back then,
again, every internet marketer was promoting Host For
Profit. Host For Profit is simply a website hosting service.
For the host customers website they charge $25 a month,
then they pay the resellers $10 each account, for the life
of the account. I became number one again - overperformed thousands, tens of thousands of internet marketers out there - back in 2000. Became the number one
reseller of Host For Profit. I used to receive over $5,000
every single month, as a result of referral to Host For a
Profit.
Later, I had my very own website hosting company. It
kind of became the direct competitor of Host For a Profit.
I did not want to promote Host For a Profit anymore.
But guess what? Even today, I still receive over a $1,000
a month, as commission from Host For a Profit. I mean,
speaking about passive income, how much more passive
can it become? Even if I wished; I couldnt take it off!
Do you understand? Can you imagine if you had tens of
thousands of websites featuring your name, your products, your services, what that could do to the bottom line
of your business?
Again, this is an example of viral marketing. I thought
I was smart. Back then we had a little service called Hu-

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Millionaire Phenomena - Internet: TOM HUA (continued)

manClick. What it does is, you can put that little code
on your website, so that each time someone visits your
website you will receive a signal. Like someone comes
to visit, it will give you a signal that sounds like Ding
Dong. So I thought I was smart. I put that device inside
of that e-book package. So as soon as someone opens that
package, and this person is online, and also Im online at
the same time, I will receive a notification. Obviously,
because this book had very wide distribution back then,
and I personally had sold 5,000 copies at $49.97 by the
end of 2000, before I stopped counting.
But you know what? One day I switched
on my PC and the notification went like
Ddddddddddddddddddding, because so many people
were reading that e-book package at the same time, I had
to disable that link.
As you can see, these websites that youve seen today 27,000 at Google, 27,000 at Yahoo! - they are only a very
small percentage of people who had access to that Free
to Sell package. In fact, there are hundreds of thousands
more people who had access to that e-book package.
Now, every move theyre going to make clicking on those
affiliate links, they are putting money into my pocket.
But also, Im delivering good value, because at the
same time they dont have to go through the entire process of research to find those payment processing companies, website hosting companies, and all kind of resources
and tools that they need to use. At the same time, the
website owners pay me commission as a result of my
referrals, as simple as that. If you like, you can go home
and type my name Google or Yahoo! - youll see more
than a million websites have my name listed.
This can happen to you if you know how to do it.
You can only imagine, if there are millions of websites
that have your name if front of them, youre going to be
famous. I didnt know I was that famous, until I checked.
Later, I established this e-book wholesaler network.
That was again, in 2000. We develop, we publish and we
sell more e-books than anywhere else on the internet, for
that many years. Were still going very strongly. Every
single month we publish two titles; every single month
for the last six years. Like a heartbeat, weve never missed
a single month.
Of course, I have this website, a hosting company
called Hostingbay.com.au. It is now one of the fastest

growing website hosting companies in Australia. I set up

a software company in China last year, because to me, I
understand that any healthy market will allow more than
one supplier. I dont see India to be the only software
export country in the world. China has what it takes to
become a healthy competitor.
With my long-term vision I set up this software
company. Of course we take on software development
projects, any web-based or desktop application, and
also at the same time, we offer professional translation
services between English and Chinese, both ways. So
we help people outside China get ready to tap into this
huge market of $1.3 billion. Watch this country. Theyll
become the third largest economy in the world very, very
soon. The United States is number one, Japan is number
two, Germany is number three, but China will become
number three very soon, and watch, its going to become
number one very soon in the near future. So whatever
you do offline or online, you need to take a serious look
at this huge emerging market.
Here are a couple of website addresses that you can use
to contact my company. We can help you with the software development at very, very competitive rates. And
also you know you are dealing with someone that you can
trust, and of course we provide translation services.
Brett McFall and myself have these world leading
internet marketing seminars, World Internet Summit.
Weve been to 14 different countries and regions, 24
times. The very last one was in Singapore. We had over
2,000 people. It was really only a few days ago. This is
the seminar that we go around the world with. Because
we think the internet is just too big, that not only can you
just make money on the internet, but also the internet
gives you a platform to share your idea with the rest of the
world.
I dont know if Brett has mentioned this, but $170
billion was sold last year, across the internet. Its easy to
say $170 billion. Do you really realise how big that is?
Lets do this exercise. What is one percent of $170 billion? $1.7 billion, right. $1.7 billion, thats one percent
of the internets wealth. What is one percent of that $1.7
billion? $17 million. Thats one percent of one percent of
the internets wealth. Lets take one more step. What is
one percent of $17 million? $170,000. Thats one percent
of the one percent of the one percent. Thats one out of a
million, if Im not wrong.

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Millionaire Phenomena - Internet: TOM HUA (continued)

Are you with me ladies and gentlemen? We are not
here to teach you to become the next Google or the next
Yahoo!. We are here to teach you how to find a tiny slice
of this huge pie. One out of a million. Can you imagine
if you had one million people standing in front of you,
can you find one thing that you can sell to one person?
Absolutely. Thats your chance.
We go around the world and we teach people how to
share their idea with the rest of the world, because you
dont want to take your idea to the heavens. You have to
share your idea, thats your responsibility - to share your
idea with the rest of the world. This way you create value
at the same time, and we know how to share ideas, and
were going to teach you how to use our technique to
share your idea. Thats why we go around the world, and
teach people how to use the power of the internet.
I did it. Many of my friends and students are doing
it every single day. You can do it too. The only thing
between you, where you are and where you want to be is
one thing, one thing only, that is knowledge. You dont
need a university degree, you dont have to be a programmer, you dont have to have a huge investment. To
become successful on the internet requires only one thing,
thats knowledge, and thats what were here for today.
Now lets get into it.

The 3-Step System That Lay The

Foundations to A Successful Internet
Business
The principle of internet business. You take a look at
any successful website - they all come down to this principle. The good news is, its no more complicated than
one, two, three. It is very simple, yet it is so powerful.
First of all you need a product, as simple as that.
You have to have something that you can sell to the
other people before you can have a business, regardless
of whether its online or offline. Doesnt it make sense?
You have to have something other people are willing to
pay money for, before you can have a business. Thats a
product. You need to have something that you can sell to
the other people before you can have a business.
Second thing, you need a website. Websites are where
your online businesses live. This is what allows you to
make money while you sleep. Websites are where your

product gets to meet the market. Its like a shopfront. Of

course, its much simpler than your conventional shopfront. Theyre the two things you need.
The last thing is traffic. Thats the only thing you
need. Traffic means a constant flow of visitors come to
your website to take a look at what you have to offer. You
see, I dont like to make things more complicated than
they absolutely have to be. If you ask me the core formula of internet business, that is it! No more than that. Can
you imagine ladies and gentlemen, if you had a product
that people are willing to pay money for, and you had a
website simply explaining the benefit of that product, and
on top of that you have a constant flow of visitors coming to your website to discover what you have to offer.
Your business on the internet has to be successful! Do you
agree with me? I want more than that, say yes!
Thank you. Now for those who raised their hand, you
agree with me, you say that you already have a website
and if you are not making money or if you are not making enough money, take a look at one of those things. Im
sure one of those things is not working, or one of those
things is not working as efficiently as its supposed to. If
you had a good product people want to buy, if you had
a website, that can convert your visitors to actual buyers
and on top of that you bring visitors, constant flow of
qualified visitors to that website, your business has to be
successful as simple as that. Now lets take a deep look at
each one of those elements. Product. There are millions
of ways of gaining product. Here Im going to discover
three most common ways of getting products.

How To Find Ready-Made Products That

You Can Sell Instantly
First of all you can join other peoples agreed programmes. Now this way you are going to send the visitors
to a website that is owned by other people and as a result
of sales of these people you send to that website you get
a paid commission. This you can start immediately. But
you have very little control over it because this is other
peoples product, this is their website and you dont really
have a lot of control at all. But you can start this immediately. It gets better. The second way of getting product is
to purchase resell licenses. There are resell licenses available out there. You can buy resell licenses so you can sell
the products and keep the money. Now you have better
control because often you can download a product, often

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Millionaire Phenomena - Internet: TOM HUA (continued)

they supply a website that is already made and you can
approach your own server and start to sell from your own
website. You process the payment; you deliver the product
and provide customer services.
This way you have much better control of the entire
process. May I ask if you have any idea of how much
normally a piece of software, an e-book, will be sold
on average? How much normally? $29, is it fair to say
anyway between $10 - $100, e-books would be sold for
that kind of price. Do you know how much a decent
resell license to those quality information products would
cost you? Perhaps a few hundred, a few thousand dollars
right. As soon as you buy the resell license you will be
able to sell those e-books at $27, $29, or $97 for as many
copies as you want and keep all the money. Obviously
those resell licenses wont be cheap. The problem is it can
be expensive. How many of you like to know how to get
those quality resell licenses to these good products for less
than $20 each. Thats great. Im going to show you how
you can get that later.
Thats resell license. Now you have much better control, you choose what product to resell and you keep all
the money, you process the payment, everything is under
your control. Your own product. Thats a big product.
Your own product is what makes you totally unique. You
see I dont know what other speakers have been promoting but one thing we cannot ever change because we cannot sell you something or give you something in a box,
you open up with your personality, with your individuality. Do you understand, we can give you a programme,
but you still have to participate so that they become a
better you. Dont think developing your own product is
difficult. I do it every single month. Two at least minimum, every single month.
Now you have full control. You decide what product
youre going to develop, you decide how much youre going to sell it for. You decide how you want your website
to look like and you can also have your own affiliate programme so that thousands of people will sell the product
for you.

What Ive Found To Be The Best Products

To Sell On The Internet And How To
Create Them
Lets take a very deep look at how you can develop

your very own product. I want you to follow me very

very closely from here on. You ask yourself an important
question. What can you sell on the internet?
Lets start from here. What are you currently doing?
Do you have a business, do you have a job. Is it possible
for you to sell what you are already selling over the internet? Ladies and gentleman remember internet is designed
for information exchange only. You can sell a piece of
information, a digital file to one place to another on the
internet, regardless where they are in the world, as long as
both of the parties have an internet connection. But you
can never send a pizza over the internet, can you? Thats
not what internet is designed for. However you can use
the internet as a powerful promotional tool to promote
whatever you sell. Only towards the very end, do you
have to add one more step, that is go to post office or a
delivery company to deliver that physical product.
But why do you stop there? Ask yourself can you
develop some information product based on what you
are doing? Let me give you an example. If you are a real
estate agent, you cannot email a house from one place
to another, can you. Also consumers are not quite ready
yet to click a button, buy a house. To pay you over a
few hundred thousand dollars, or even a million dollars.
Consumers are not ready for that kind of transacting yet.
But how about if you write an e-book, lets say call it 137
Secrets, Real Estate Agents hate you to know and you
can even have a subtitle, read this report before you lose
thousands of dollars next time you buy or sell property.
You see your knowledge has value. If you are a real estate
agent, dont you think your knowledge about real estate
is worthwhile sharing. Because ordinary people dont buy
or sell houses every second week. They only do it a few
times in their lifetimes. They have no idea what they have
to look out for when they buy or sell their houses, and
your expertise, your knowledge has value.
On top of that, of course that e-book, towards the
very end or in the front, you can ask them to give you a
call, to give you business. Because now theyve learned
your knowledge. They think this guy knows what he is
talking about. I better let him sell or help me to buy a
house. Otherwise other people are going to trick me,
right. Play tricks on me.
So this way not only you can sell e-books for $97
every copy you sell, after, while you sleep, but also you
can use at the same time as a powerful promotional tool

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Millionaire Phenomena - Internet: TOM HUA (continued)

so that people come back to your website or pick up the
phone, give you a call and give you more business. Thats
another example. If you dont like your job or business,
you are only doing it for the sake of making money, then
internet gives you the opportunity to make a switch. Ask
yourself what you are good at. Where is your expertise,
where is your real passion, do you have any hobby. I made
that switch in my life, using the opportunity given by
internet. If you dont like your job or your business, make
a switch. We all have something that we are so passionate about. You see internet is designed for information
exchange. Information exchange is all about idea sharing.
Now you can have the best idea in the world, if you only
share with your wife or husband or kids, or close friend,
its not worth much value at all commercially.

Sharing Your Ideas Can Make You Rich

If you are able to use the power of the internet and
share the idea with millions of people in the world, then
you are actually creating value. The value of an idea has
got nothing to do with the idea itself. Its got everything
to do with how many people you can share the idea with.
Speaking about making money, on the internet. Who is
the richest man in the world? What does he sell? Information, software, isnt it. Thats how he became so rich. The
internet created more billionaires than any other media.
Internet is the biggest market place human history has
ever created. At the same time it is the fastest media human history has ever seen. You have to share your ideas.
It is your responsibility. Dont take it to the heaven, share
it while you can. So that it can benefit millions of people.
Before we had internet, it was almost impossible for us to
share our ideas because it cost too much money to print
the books for advertising in front of people, ordinary people just wouldnt be able to do it. But now internet gives
us that opportunity. And I believe every single one of us,
we all have something that is so valuable, so unique, that
we can share with the rest of the world. Internet not only
made it possible, but also made it an opportunity so that
you can become really wealthy. If you do what you love
to do, I can promise you you will be successful. Making
money is no longer the only driving force behind you.
You work, work, work and you also enjoy it. When you
see millions of people buying your product, buying your
e-book from you and they all benefit from your idea, you
would be a very happy person and at the same time you
will be very wealthy. If you havent identified that very

unique idea inside of you, dont let it stop your business.

Take a look at your close friends, your family members.
They might have something that is worthwhile sharing.
Take a look. Some of them have really good ideas but
they have no idea how to share their ideas. Now because
you attended this seminar you have very powerful knowledge how you can help them to share their ideas to as
many people as possible, so this way you both create value
and you can become joint venture partners. They can become the provider of the content and you can become the
market of their idea. I will give you some more product
ideas.
What do we believe popular these days. What do we
believe will become popular very soon? You pay attention to the television. Whats hot in the TV, newspaper,
magazines? What people are talking about over dinner
parties, corporate functions, family gatherings, if you have
the ability to get to where the mass of the market is going
to then you will be in a very good position of making a
lot of money.

The Most Popular Search Term Online

Is...
Do we have anyone that is under 18 here? Let me see
if I can say it without saying it. People are looking for all
kinds of things on the internet. Two most popular key
words. One starts with f and the other one starts with s.
People type in those keywords and look for information.
Now the one starting with f, Im sorry its not what you
think. Its free. Free. People looking for all kind of free
information on the net. Now the one that started with
s, yes, thats what you think. If you put these two words
together, the f word in the front, and the s word behind,
that becomes one of the most frequently searched key
phrases on the internet but those are not your type of
market. But guess what there is also another type of key
phrase, starting with s word, a position behind, lots of
searches for that key phrase. I was making over $5,000
every single month before my wife told me not to do
projects like that. People type in those key phrases. I have
200 of them, positions. I had a ghost writer, okay. People
type in that key phrase, they are in the mood to look for
something that can improve their lifestyle, something that
is educational, that is informative. Are we getting somewhere? Internet is huge.

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Millionaire Phenomena - Internet: TOM HUA (continued)

How To Find Out What People Are
Looking For Online
We had over 250 billion searches over the internet
in the last year. You can give away 99%, 170 billion,
how big that is. All you need is to have a niche market.
I will give you another example. There is a website that
Im going to refer to, share with you very soon. You can
type in a key word so that people, so that the website will
give you a report of how many searches were performed
across their network for the current month and a list of
related key words with the search volumes of the current month. We did this exercise in Singapore last year.
We put a key word called dog, millions of people search
for key words called dog or key phrases related to dog.
What surprised us is we had over 15,000 searches for that
particular current month. People looked for a key phrase
called dog food recipe. I dont know about you but I was
lucky enough, I always had someone cook for me, but I
would never imagine people would go onto internet to
find some information so that they can cook a nice dinner
for their dog.
People are looking for all kinds of weird information
on the internet. Do you have a hobby, I can promise you
many others will have that same hobby too and if you are
good at it, you can share that idea, share that knowledge
with everyone else in the world who has the same interest. Interests can be overlapping. Im an internet marketer
but at the same time Im interested in lots of other things.
People have different hobbies, different passions, different interests. The internet is forming communities. You
take like a youtube. Look at My Space. Its all about idea
sharing, all about creating a community of your interest.
Thats what you are here for, to learn the knowledge so
that you can share your idea within your community, the
community has the same interest.

The One Critical Thing You Must Do

Before You Develop Your Product
So before you go ahead and develop your product, you
do your market research. This will guarantee your success,
because you know people are going to buy your product.
I dont want you to spend any money any time before you
do your marketing research.
Dont develop the product yet. You have to do your

marketing research. I tell you but I have to tell you we all

think we are the centre of the universe because our body
and mind is the only thing we can feel and control. Its
not true. Sometimes we know its not true but its very
hard to give up, you dont want to simply sell something
that you feel like to sell, you have to sell something that
the market wants to buy. So this is how you do your marketing research. You need to find out the potential of your
product before you go ahead and develop. You need to
know how many people are searching for the topics that
are related to your product. You need to know how much
competition the market place already has before you get
into it. You need to know how many websites offer free
content, you go to Google and Yahoo and find out how
many websites are listed, on the left hand side, and also
you need to know how many websites are selling similar products. Type in those key words so that you know
how many potential competitors you will have, and you
need to know how many websites are bidding at a pay
per click, search programmes, like Ad words and Yahoo,
or Overture, now they call them Yahoo search marketing. You need to understand the market place before you
get into that, so that you can position yourself into the
right place. You have enough room to grow. I give you
another example, weight loss. Weight loss is a huge topic.
Millions of searches every single month. Huge market,
but also theres lots of competition. So I wouldnt advise
that you go into sell information products about weight
loss itself. But how about if you, because the principle of
weight loss, I guess, you know, I dont understand really
the industry but I guess most of the principle would be
very much the same, right. Instead of selling weight loss
information in general, why cant you narrow it down.
As I said you dont need a big chunk of the internet. All
you need is 1% of the 1% of the 1%. How about this.
You sell programmes for weight loss for 60 plus. Weight
loss for aging man weight loss for babies, weight loss for
teenagers. This way you narrow down your market so you
have less competition, but at the same time you still have
a decent market you can sell to. Here are some more of
the websites you can go to to do your marketing research.
Google.com, of course, overture.com, Inventory.overture.
com, this is a very useful website address. This is where
you type in the key word, it will give you a report of how
much search volume they have received across their network for the last current month. They cover about 30 per
cent of the market, while Google cover about 70 per cent
of the marketplace.

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With Yahoo!.com, of course you type in your keyword
at Yahoo! or Google and see how many websites are listed.
See what they are doing. Now dont really feel bad if you
have one million websites offering free content, because
to me, information - you dont really invent information. Information is a result of research and information
overload is one of the biggest problems of the internet.
Spam is another shape of information overloading isnt it?
People get onto the internet, they try to find something
and its just too much so they dont know where to go.

How To Make Money From FREE

Information
You just go through your research and then you come
up with a really, really good report as the result of your
research. So people dont have to go through millions of
websites to find what they want. You make sure you take
the best, the most updated, most related information, and
then you write it in the e-book. So even though there are
millions of websites offering free content, you can still sell
something to that market as long as you have good quality, as long as it is the result of your research.
Because you dont invent information; information is
the result of research. Now you spend hours and hours
and weeks to research this topic that presents information
to the other people so that they dont have to go through
those weeks to find that information. You can present
it in a way so that they can absorb the information and
obtain the information in the most sufficient way. This is
again what you can do with a huge market with a lot of
competition.
There are lots and lots of other techniques that you
can use so that you can find a market and you can have
ample room to grow. Wouldnt that be wonderful if you
had a piece of software that could help you to do all this
market research? All you have to do is brainstorm your
product ideas, list them down, save them in a word file or
a text file. Then put that list of the keywords into a piece
of software and let the software to do all the research.
You can go have dinner - it might take a little while but when you come back all the results are there for you,
telling you exactly about dog food recipes, how many
websites are listed free at Yahoo!. How many websites
are listed free at Google. How many websites are buying
pay per click programs and how much theyre paying.

Wouldnt that be wonderful? How many of you would

be interested in a piece of software like that? Thats great.
Youll have access to this unique piece of software towards
the end of my presentation.

After Youve Done Your Market Research,

What Is NEXT?
Ok, so youve done your market research. You know
theres a good market for you to sell to. Now, positioning
yourself into the marketplace is very important; let me
emphasise that again. For any market that is normally
shaped or formally shaped like that, at the bottom of
the market you have more customers but you have more
competition, as the example that we just covered. At the
top you have fewer customers, less competition. But at
the same time, because at the bottom of the market you
have more people and more competition, of course you
can potentially sell more copies of your product.
At the same time you might have to sell at a lower
price. But at the top, you have a smaller market, but now
because its narrowed down and its more specific, you can
normally sell at a higher price. Thats how you need to
take a look at your marketplace and position yourself in
the right place.
Now is the time to develop your product. An information product can take many different shapes and
forms. It can be in a written format; often we call it
e-book. An e-book is really an electronic book. Instead
of you reading the paper, you just download it from the
internet and then you read it from your PC. Of course
you can print it then read it, just like your normal book.
Of course you can have it as an audio recording.

How To Create A Product Without Being

An Expert
An excellent example is if you identify a hot market, but you know nothing about it. How about if you
interviewed some expert in this area, so you could become
a joint venture partner? You could tell him that this is going to create you a lot of publicity. And towards the end,
or in the beginning, of course this expert could quote his
website address or his telephone number so that it could
generate some leads for him. Interviewing these experts is
a very easy way to develop your product.

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Of course it can be a video recording, or it can be
a software program, or it can be a password-protected
membership website that you only allow people to access
after theyve paid you a membership fee. Or it can also
be a paid, fee-based electronic newsletter that you send
to people through e-mail, so that you only send to the
people who paid you a subscription.
Anything that you can save on your PC or on your
laptop is called a digital product. Its also called an information product. So this is where you make most of your
money. Here is how youre going to develop your product. Of course if its your own passion, if its something
that is based on your own idea and your own expertise,
you write it in your own in word format, then you can
go to this website so that you can convert it into PDF
format. PDF format is the industry standard for e-books.
This is so that both PC and Macintosh users can read
your e-book.
And you dont have to buy expensive software - you
can upload your word file and itll come back in a PDF
format. Or you can use some existing materials public
domain. Heres a unique website address so you can go
to. There are thousands of publications. It no longer has
copyright - even music and graphics. You can use this
material as the base of your own product.
Of course you can go and collect all those articles.
There are some websites that you can go to and find all
the articles. For example, if you are writing just about
anything, you type in the keyword in those article websites, and then it will give you a list of hundreds of articles
about that topic. So all you have to do is go through the
articles, select the best ones and then compile them all
together and it can become your own product. This is
because all of the authors give you the permission to use
those articles.
You see, again, you dont invent information. You do
your research and then you present information in a way
that other people can easily access that information. How
long does it take for you to collect a bunch of good articles when you have all of them in front of you? Cut and
paste, cut and paste. Thats all you do. You dont want to
be just the author when you can simply become the publisher. Why do you have to write everything? You think I
write two books every single month? Come on! Right?

How Do I Get Other People To Create My

Product For Me?

Then of course you can hire someone that you dont
know to develop your product for you. Elance.com is a
good ghostwriting website. RentACoder.com is a software development website that you can go to. All you
have to do - there are a couple more that Im not going to
read out but you can download the entire PowerPoint so
that you can click to those websites.
Let me tell you how Elance works. Elance is very simple - its like a reverse-auction website. All you have to do
is post your project. Say I want an e-book written about
weight loss for babies. Those people, there are thousands,
tens of thousands of people - their passion is simply to
write. They will come and bid on your project. The first
guy says Ill do it for $1000. The next guy says Ill do it
for $700. And the third guy says Ill do it for $500.
Now Im not necessarily going to pick the cheapest
one, because each one will have a track record for you to
check, and you want to give your project to someone who
knows what theyre doing, right? So you check it out and
you just give your project to those who you can trust.
When the project is done and the e-book is written,
theyll send it to you. In the beginning you may pay 50
per cent. Only after you receive everything and you are
happy with it, then you pay the rest. If anything goes
wrong, Elance will act like an agent, make sure both of
you do the right thing. So its very safe and very costeffective - ghostwriting.
So you see, ladies and gentlemen, you think - you
know there are many, many bestsellers in history, including those from the most famous political figures. Theyre
not written by themselves. You think that those presidents and all those people know how to write books professionally? No. All they did was tell other people what
they wanted them to write. I mean, honestly, even before
they go and give a speech, they have to have someone to
write the speech for them, right?
And you can tell them what you want them to write.
Those people simply listen to what they want them to
write. They took all the time to write a book about their
life, or just about anything they want them to cover - on
behalf of them. Thats why we call them ghostwriters. Now if you use a ghostwriter, its your copyrighted
material. Its yours - you will be the author of it. They

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are ghostwriters - thats why we call them ghostwriters,
because theyre not even allowed to appear, right? And
this is how you get your product, your very own product
developed. You can outsource just about everything you
do to other people.

Research Done and Product Written...

Whats NEXT?
Now while your product is being developed, dont
wait. Take a look at websites, put this together. Again,
I dont like to make things more complicated than they
have to be, so Ill give you three things that you absolutely
need for your website.
First of all you need a domain name and a hosting.
A domain name is like Google.com. Yahoo.com is a
domain name. A domain name is what people type in
the address bar of their browser to find your website. You
need a domain name. Domain names are kind of cheap
these days.
Go Daddy is the biggest domain registration service
in the world. They used to be the cheapest, until this ikeys.net. Thats my very own. Because we had hundreds
of thousands of customers registering domain names,
I had buying power, so I negotiated a good deal. Now
this way, you register a domain name every time at our
website and you save a couple of dollars. Why not? Id
simply pass on the savings to my customers.
Of course, hosting is also important because your
website is not going to be on your PC. After youve done
everything, you need to upload it to a big computer in
one of those data centres, we call them servers. Of course
I highly recommend my very own company.
Theres no shame about it. Because I work with hundreds of thousands of website owners around the world,
I know exactly what we want and we have the financial
strength and buying power to offer the best website hosting service. I made it as good as it can be. The good
news is we have an office in Melbourne. My office is
based in Melbourne, so that you can simply pick up the
phone and call.
The website hosting industry is very, very competitive. You can sometimes even have three website hosting
services. But the key here is that you want your website
hosting service to be reliable. Thats very, very important.

Because the last thing you want to find is, as soon as you
launch your main campaign is that your website goes
down, right? So people click the link and hit a 404, and
a page cannot be found. Thats the worst thing that can
happen to your business - its like you are dead. People
wont even go back to your website if they find your
webpage cannot be found. So thats the key. You need to
speak to someone that already has a website - that have
already hosted with someone reliable so that you know
you can use those services. It will not necessarily be the
cheapest one. Thats the first thing you need for your
website.
The second thing is a sales copy, if you are sending
something that is based on your expertise. Im pretty
sure that you can write a sales copy by yourself. Simply
explain the benefit of your product or service. Of course
here I highly recommend, developed by my business partner Brett McFall. It is a very nice piece of software where
you can simply fill in the blanks and your sales copy will
be generated based on Bretts winning formula.
Of course you can hire other people - ghostwriters - to
write your sales copy for you. Here are some websites
you can visit and ask them to simply write a sales copy for
you. There are professional copywriters out there that can
write a sales copy for you that are top form.
Then the last thing is you may think that sometimes
e-commerce is kind of complicated. Really, the only
thing that makes an e-commerce website work is the way
to accept payment online. You have a domain name
people can type in and visit your website, you have a
domain name that you can send to your affiliate, send to
your joint venture partners so that people can visit your
website. When they come to the website you have a sales
page explaining the benefit of your product.
Then towards the very end you have a button called
Click Here and Buy or Click Here Buy Now to accept payment. PayPal.com is one of the three services I
highly recommend. Its free for you to join. Also clickbank.com and checkout.com, plus worldinternetpay.com.
You can choose any one of those or all of them. Its good
to have options so that your buyers can have, for example,
PayPal as an option. They have 100 million users registered at PayPal. So its handy to have PayPal as a payment
option so that for many people that already have money
in a PayPal account, its much easier for them to spend
with you.

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Really, this is all it is. You can make your website as
interactive as you want, as complicated as you want, but
really, the absolutely necessary things that you need to
have for your website to be able to do business on the internet are only those three things. Have a domain name,
have a sales copy, and have a way of accepting payment.
As simple as that.
Of course, on top of that, you can apply all the rest of
your knowledge and skills to increase the performance,
to enhance the performance of your website. But that
can come later. I dont want you to try to get everything
perfect. I want you to put everything together, then you
can come back and fine tune. So then you can increase
the performance of your online business. Thats about the
website.

The Life-Line of Your Internet Empire is...

TRAFFIC
The third and last thing you need for your online
business is traffic. Traffic is the most important element
of your online business. I dont care if you have the best
product in the world. I dont care if you have the most
beautiful website in the world. If no one ever comes to
visit that website, you will still not have a business. So
traffic is the bloodstream of your online business. You
will not be able to survive unless you have traffic. There
are millions of ways of getting traffic to your website.
Here again, Im only going to cover three. Three most
effective ways of generating traffic to your website.

the things that need to be done to your website so that

it will be listed high at those general search engines, like
Google or Yahoo!. But unfortunately, they are not interested in promoting your website at all. So to achieve long
term success of search engine optimisation, that is to be
listed high at Google, what do you have to do? You have
to provide most accurate, most relevant, most updated
information towards those keywords that you are working
on.
You can have some software, and you can have all the
secrets and play all the tricks. You are only stealing traffic from search engines. Google wouldnt like it if they
realised its another form of spamming search engines and
if they realised you are only simply stealing traffic from
them. Theyll penalise you - they can ban you for life. So
if you are only starting your online business, I wouldnt
recommend you do search engine optimisation yourself.
You have to have to the professionals of the professionals to do this for you, and even before you give them any
job, you have to ask them what their website address is.
Where are they ranking at Google? If they cant even have
their own website optimised, how could they optimise
yours? Naturally, isnt that common sense?
The professionals of the professionals will teach you
how to construct your website in a way that certainly can
find those most accurate, most updated, most related information from your website, so that your website can be
listed naturally high at Google or Yahoo! for many, many
years to come. That will give you a tremendous amount
of free traffic and you dont have to pay a thing.

First of all, lets take a look at search engines. Search

engines are where most internet users start their online
activity, am I correct? They normally go to Yahoo! or
Google or their favourite search engine to find what
they want to look for. Or they go to one of those bookmarks, which are really the result of their previous search.
Theyve saved the website address and then they go back
to find what theyre looking for, right?

Of course you can choose to buy traffic from search

engines. Again the principle does not change. Google
said okay you are a newcomer you have a website, it
might be very good but you have no idea how to do
search engine optimisation. So we cant find you, so how
about if you pay for it and every time we send you a visitor you pay ten cents or whatever you choose to bid on.
But the principle doesnt change, can you see that?

Searching is designed, unfortunately, for internet

users. They are not designed for website owners like us.
Why is Google successful do you think? For one reason,
one reason only - because they provide accurate search
results. Thats why people like to go back to Google to do
more research, am I right? They are not designed and not
interested in promoting your website.

Because only you would do the things, only if those

visitors that Google sent to your website do the things
that you want them to do then youll be able to keep bidding. Every visitor you buy from Google has to be worth
ten cents or whatever you picked. So you have to show
them what they wanted to see and take action in what
you want them to take, thats how pay per click search
engines work, as simple as that.

Search engine optimisation. This means that you do

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So they give you a faster track so that you can pay for
the traffic every time they send someone to your website
and they say you make sure you do the right things so
that they will take the action. You give them the information that they are looking for and then you also ask them
to take the action you want them to take. This way you
are in profit and Google also makes money and the visitors they do find the information that they are looking for
quickly.

mulatively you can have about $10,000 of free advertising

money. Is that useful for your online business when you
just start?

That information is listed on the right hand side when

you go to Google and of course Overture.com, thats the
second largest pay per click search engine on the internet.
Yes, nowadays they call themself Yahoo! Search Marketing. And theres a third one: FindWhat.com. I forgot to
update my slides; now they have changed their name to
Miva.com but if you go to FindWhat.com its the same
thing and you hit the new website. This is the third largest pay per click search engine on the internet.

If you do have to compete in the marketplace for some

key words, the key here is to find those golden key words.
As in the example that I gave to you in the beginning of
my presentation, there are first category keywords with
millions of searches. Why do you have to have those keywords? You dont, all you have to do is have perhaps two
worded phrases, three worded phrases. The more words
you have in the phrase the more targeted it is and often
they will still have a huge volume of searches and with
less competition. So here the key is to find those golden
keywords. When I say golden keywords I mean those
keywords that have a lot less competition but still have a
good search volume.

People normally dont even mention it but to me it

is important, why? Because Google is great but Google
is not God; you dont have to have Google to become
successful on the internet. As we said one per cent of the
one per cent of the one per cent perhaps, is all you need.
Why do you have to have Google? You can become
successful without Google. You can become successful
without even Overture.com.
FindWhat.com is the third largest pay per click search
engine on the internet and here is a very, very unique
website called Payperclickprofits.com. In fact there are
thousands of pay per click search engines on the internet.
If you go to this website they recommend many, many
smaller pay per click search engines and often most of
them are industry related. That gives you much cheaper
rates and also much better qualified visitors because they
are already narrowed into a niche market for you.

That search engine will give you instant traffic and the
problem here is that you may face some competition. But
if you did your marketing research properly in the beginning before you developed your product you shouldnt
really face tough competition to start with.

The number two powerful way of generating traffic to

your website is joint venture. That will give you almost
instant traffic and it is free because you only pay your
joint venture partners after they generate sales for you.
You ask yourself who has got your potential customers
and a large list, a large customer database.

How To Generate Large Volumes of

Traffic Without Having To Pay For It UpFront

Lets go back to that example. If you are going to sell

an e-book about dog food recipes wouldnt that make
sense for you to go to those big dog training websites or
dog breeding website owners and tell them I like your
website, its great and you have a lot of customers that
have dogs. Guess what? According to our research we
had 15,000 searches of people who were looking for dog
food recipes. Here I am. I have a brand new e-book
about dog food recipes; how about you let your customer
know. Im sure that a certain percentage of them would
be interested in that brand new e-book and Ill give you a
commission for every single sale you make for me.

The good news is that if you go through the list of the

pay per click search engines that they are recommending
accumulatively, if you are running with a tight budget but
you have enough time, you go through the list and you
sign up an account. Because most of them will give you
$20, $50 credit as soon as you open your account. Accu-

You see the beautiful thing about internet information

products is that it does not cost you anything additional
to produce as many additional units as you like. All you
have to do is have a download link after the payment
is processed, say thank you very much your payment is
processed, click here to download the e-book, as simple as
that. You wouldnt even have to raise your finger.

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So now you can afford to give them not only 50 per
cent even sometimes 60 per cent, 70 per cent, 80 per cent
even 90 per cent of your sales price as commission. You
give them an offer that is irresistible; its too good to refuse. You tell them look I want you to make more money
than I make.

where my expertise comes in. Lets take a good look at

viral marketing. You see we all receive viruses dont we?
Unfortunately thats what the internet is capable of doing,
spreading viruses, but we can turn the viral power of the
internet into a benefit of our businesses and this is how
you do it.

Ive been in the marketing and internet industry. If

you develop some product that is targeted to the internet
marketing industry, you can come to me and say Tom
I want to do a joint venture with you. Unfortunately
I dont know who you are and also I receive those joint
venture proposals, hundreds of them every single week.
I dont even have time to read it; I have to simply delete
them. Now if you come to me and say Tom can you
promote this new product through your list and Ill give
you 90 per cent of the profit, I might think twice. Wow
its kind of like a good deal so then Ill do it for you.

Again you have to have three things. First of all

you need to create an information product with value.
A piece of virus is also information. Now you create
information with value, no not a virus anymore but with
something that can benefit people. Then you distribute it
to as many people as you possibly can and on top of that
you share the back end so others will distribute to others
as well.

After that you can go to Brett McFall and you give

him only 80 per cent or maybe 60 per cent and thatll still
do it for him. Ask yourself who has got your potential
customers and also have a large list. Open your mind;
open your heart. If you have to give 80 per cent of your
sales volume as commission, guess what? If you had 20
joint venture partners over the entire year you are still the
biggest winner, am I right? Because now you can afford,
you dont care. Every additional sale these people make
for you is going to put additional profit to your business so you can afford to give them a lot more. This is
not possible with conventional business models; only the
internet made it possible.
You will be hearing about those phenomenon - people
who made a million dollars in five days. A good friend
of mine in Singapore [Yuan Chan] made $1.497 million
in 48 hours. All these phenomenon. You know what,
they have one thing in common, that is they have powerful joint venture partners. This made it happen. Joint
venture is the fastest way to generate sales for you. All
you have to do is to find people who have your potential
customers and also have a large customer database. The
sales can happen overnight. Youll be amazed how easy it
is if you know how to form joint venture partners.

Viral Marketing Secrets

Now the third way of generating traffic is viral marketing, viral traffic. This will give you non-stop quality
traffic. You can even get paid for doing so. Now thats

When I share back end, say for example if you are

going to write a dog food recipe book, why dont you slim
it down and make another smaller product and use it as
a viral device. Quote the best dog food recipe or 20 best
dog food recipes. Then you give it away or you sell it at
a very, very low price from your website and at the same
time of course you will invite your readers to come back
to your website and say hey did you like the dog food
recipe? Did your dog like the dinner last night? So come
back to my website and visit my website to see what else
Im going to offer. Thats what you do and in there you
can share this back end with your distributors.
Now heres how you do it, the power of duplicating
over the internet. The internet has this viral power where
it can duplicate things from one to one million almost
overnight. You can choose it to give away as a free product and then allow other people to give it away, or you
can choose to sell it at a low price and allow other people
to sell it but at the same time you let them keep all the
money.
Now heres the key, let them keep all the money. Im
always going to ask when people say I want to do business
on the internet but I dont have a product. Now provide
something that it can sell and it can keep all the money
itself is a very good solution. This is how you make everyone want to go out and sell your products for you. You
need to put the viral power inside of your marketing campaign and make it as powerful as you can so that people
will rush out and sell your product to the others.
You provide value in the products. Value is important.
You cant give away rubbish. You have to provide some
time or money solutions so that people can benefit from

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Millionaire Phenomena - Internet: TOM HUA (continued)

it. It doesnt have to be something revolutionary as long
as it is something that will provide a tiny little solution,
thats all it takes.

money to buy that license and at the same time they can
sell to others. So everyone buys from your website and
then they brand their link.

Then at the same time you give them resell rights so

they can sell and keep all the money and at the same
time you share your back end. Not only are they able
to keep all the profit by selling your product for you but
also because there is an affiliated link inside that book
that allows them to participate. So not only do they keep
all the money for now, upfront cash but also if anyone
clicks on that link and comes back to your website over
anything else this person will get paid commission at the
same time.

You tell them hey hold on a minute. Before you sell

this e-book, brand your affiliate link inside of it so that
every time you sell the book you keep all the money. And
also every move your purchasers are going to make after
they read the e-book to click on the link to visit my website, you get paid commission. Thats how they will be really, really encouraged to go out and sell your product for
you, so everyone sells again to others and everyone comes
back to your website and everyone gets commission if you
make any sales. Are we learning something so far?

This is how you put more viral power into it. You
offer a brandable affiliated link in the product. What is
a brandable link? A brandable link means it will look
like or say did you enjoy my e-book? If you did, please
click on this link and come back to my website and visit
my website to see what else I have to offer. Now that
link, you can have an affiliate link attached to it and also
on top of that you can make it brandable. When I say
brandable it means it can be changed by your resellers so
that each one of them can have their very own affiliate
link attached to the copy before they sell it. So each one
of them can participate in your affiliate program.

Ill try again. Viral marketing is kind of a little complicated, but if you understand the principle it is not hard
to implement. But here again I try to describe it. You
develop the viral product with a brandable link so you sell
from your website. Then you have more viral products
out there, each one of them coming and branding a copy
of their own. Then they will sell to others. Then you will
have many more viral products out there and everyone
will again brand their link and sell to others.

Remember joint venture is powerful. Now imagine if

you can have your affiliate program that will have thousands of people join and promote your product for you.
And also you offer them master resell licenses so not only
can they sell the product and keep all the money but also
they can sell the license for selling those products. So
while all of your direct contacts come to your website or
have the license to sell those products but also their buyers of their buyers of their buyers, each one of them during the process, they all have the rights to sell that e-book.
Ill give you an example. Here is your viral e-book.
Now you put your quality content in there, of course you
know you have to provide some value and with a brandable link. A brandable link is what makes a viral campaign live. A brandable link is very, very important. Your
readers dont have to see it. Now from your website you
say today you buy this e-book for only $9.97 or whatever
low price that is and at the same time you can sell it and
keep all the money. You see yourself that it is a very good
offer so not only are they spending the money to buy
this from you but at the same time they are spending the

We have a lot more viral product out there like the

example that you have seen at the beginning of my
presentation. Remember how many copies of free to
sell e-book are out there. Each one of them is branded
by a reseller so that they sell to others. And at the same
time I kept some of the most profitable affiliated links to
myself, but at the same time I allow them to brand many,
many affiliated links to their self. Thats why each one of
them were going crazy to sell those. Not only do they sell
the product and keep all the money but also every move
their customers are going to make is going to make them
money.
Now over the entire process all of these people are going to come back to your website of course and on top of
that of course you sell your back end product. It doesnt
have to be just one; you can have multiple back end products that you can sell to others and at the same time you
can build your database or you can invite them to join
your list so that you have a list built. Imagine if you have
this system built up and then release another viral device
through the system. Thats why people hardly see me
doing any promotion because every single thing I did out
there is generating a constant flow of qualified traffic to
my website. Now if you are selling an eBook, at $20, and

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Millionaire Phenomena - Internet: TOM HUA (continued)

you have to buy from google, ten cents for each visitor.
You have to make how many sales, 100 people you spend
$10, 200 people you spend $20. Out of 200 people, you
have to make a sale to breakeven. Now if your eBook is
a viral eBook, now you dont really care because this viral
eBook is not your profit generating device. It is going
to generate a loss, a loss of traffic to your website. And
after the wider distribution of your viral eBook as I said
you cant even turn off. Make sure the links and everything you put there is working. People are going to come
back to your multiple website and you can recommend
multiple websites to your eBook. Now you dont even
have to make a profit when you bid at pay-for-click search
engines. You dont even care if you have to lose a little bit
because you know there is a huge potential to generate
lots of profit for many, many years to come.
Regardless what you do on internet, I can tell you
one thing. All top internet marketers, they all used viral
marketing techniques. Whatever you are going to sell,
you have to apply viral marketing technique, otherwise
you are not even scratching the surface of the power of
the internet. That is what internet can do for you. Dont
just stop there buying pay-for-click, selling $20 eBook
and you spend $10 so you make $10 profit. Dont settle
for that, you can do much much more.

Your Job As An Internet Marketer Is To

Get A Pay Rise Every Day. Heres How...
I will teach you some more tips and secrets that you
can apply instantly to your online business, and all this I
use personally. I only teach the things that I do personally
and I do everything that I teach. Lets start with this one.
Test your price. You have to test your price, because with
conventional business model, even click, you have cost,
you have the warehousing, distribution and also your
expectation of the profit margin. The price is fixed. You
cant have flexibility in pricing, but with internet digital
product, you could. When you have your e-book developed, how do you know how much you can sell it for?
Do you know? You dont, you can only guess. Everyone is
selling for $29 so I sell for $29.
You can do your testing to find the maximum profitable price point. This is what you do. You have two
websites, selling the exact same product. Everything is
identical. The only thing different is the price. You cant
test too many things at any given time. You have to test

one thing; otherwise you wouldnt know what made the

difference in the result. I give you the example; if you are
selling the e-book you have two websites exactly the same.
The only thing different is the price. You sell from one of
your websites for $10 each copy. From the other website
you sell for $100 a copy. You bring the same amount
of traffic from the same source for these two websites.
For example if you are selling 10 copies from your $10
website, how much does it give you, $100? From your
$100 website you sold two copies. How much does it
give you? $200. So obviously $100 is a more profitable
selling price, am I right? So what you do next is you lift
the $10 to $20 or $30. That is closer to the winning price
point. The next time you realise $100 is a little too high
then you reduce it. So you take two extreme price points
within reason, start your testing. We call it split testing,
and here is the facility what internet offers, you can do
this split testing scientifically, you dont have to guess
anymore. So you merge those two extreme price points by
moving the loser closer to the winner until you merge a
maximum price point. You have to do this if you are selling anything that is information product. Otherwise you
might leave a lot of money on the table for a reason that
you never imagined existed.
Sometimes with an unprofitable online business, all it
takes to turn the price from $27 to $97 and that is all you
have to do to make it profitable. So please do your price
testing. Did you like that? Cool.
Offer bonuses as I said, the value of information
product or the idea, hardly has anything to do with the
information itself but has a lot to do with how many
people you share it with, so when you can, why dont you
offer bonuses and a bonus and a bonus. If you have those
bonuses you can offer to customers, you are not going to
spend any money offering additional bonuses, but at the
same time your customer will receive a lot more value.
Thats how you build up an irresistible offer. The point is
not only I want you to give them a lot of bonuses, lot of
bonuses, but also I want you to leave one of those bonuses out of the list and give it to them as a surprise bonus
because there are many psychological triggers that you
can pull to close a sell, and it is a big one. People simply
like to know what they dont know. So you tell them if
you buy today, I give you bonus one, two, three, four,
five, hold on a minute, if you buy today, I am also going
to give you a surprise bonus, I wont tell you what that is
until you buy. Thats how you apply those psychological
principles in your sales copy and it is one big trigger that

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Millionaire Phenomena - Internet: TOM HUA (continued)

you can work on to improve your sales. Did you like that
one as well? Great.
You see, internet business has given me great wealth,
freedom and endless happiness. You can have them all.
You need the knowledge, that is what you are here for.
You also need the tools, the resources so that you can
get there much faster. Believe me or not, it took me 17
months before I made my first sell on the internet. I
wouldnt be here speaking to you if Id given up at any
time during that period. Why did it take me 17 months?
Because back then we didnt have any seminars, we didnt
have any programme that I could follow, I wish someone
was there holding my hand so I didnt have to spend 17
months, ladies and gentlemen. If you think internet is
powerful, if you think what it takes just to achieve, maybe
only 10% of what I achieved you have to take action
today, because if you dont do that today you will never
do it honestly. You need to do it now to fully take the full
advantage of what the Internet has to offer.
Not only has it provided me with financial freedom,
its given me the opportunity to buy a house for $1.7 million in one of the best streets in Melbourne that I bought
for my beautiful wife, for her 30th birthday.
Money is only a measurement. You are not going to
make money just for yourself. You make money, you work
hard, you catch the opportunity because you want to give
the ones that you love, and you want to give back to the
ones who love you.
So ladies and gentlemen, you need to give yourself an
opportunity. Because you are not only doing it for you,
you are doing for the ones you love. The internet business
has changed my life, has changed thousands of peoples
lives, around the world and I believe wholeheartedly from
the bottom of my heart it can change yours. I wish you
every success and happiness. My name is Tom Hua.

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How To Convert Web Traffic Into A

Virtual Cash Register The Secrets
Behind Online Copy
Part of the Millionaire Phenomena Series

n the next 90 minutes folks, I want you to remember

every single thing I say. Its very very important. It
changed my life. I want to congratulate you for being
here today. There are obviously people who didnt choose
to come and you chose to be here when you could have
been doing something else, true? Yeah, so Im going to
make it worth your while. Much more worth your while.
What I want to show you today folks is the inside
secrets of making money while you sleep.
Folks, I just want to let you know that Im not a
genius, I am not a guru. I am 36 years of age and I failed
English when I left school. Oh, I think thats funny. I
went to do my high school exam and I wanted to become
a psychologist, and you need to be very good at English to become a psychologist. And I failed my English
exam. So I had about three months there over Christmas
wondering what I would do and a job came up through
a friend of a friend in the advertising department of Dick
Smith Electronics. I worked at their head office in Sydney and I was a gofer. Which means it was Brett go for
this, Brett go for that.
But I got to see how the advertising department
worked. I got to see print buying, media buying, design
and I got to see copy writing. Now copy writing simply
is the art or the skill of writing the words on the page.
Copywriting, word writing, text writing, same thing okay.
And basically you have to write the ads to the words. It
really took my fancy. So I asked the copywriters can I
maybe do what you do. Maybe you can train me, would
that be okay? He said no problem at all. He said in fact
heres an ad that you can try out on the way home tonight
on the train.
So I get on the train home, its a two hour train ride
to where I live, and Im writing and writing. I get home,
have a really quick dinner. Into my room. Writing, writing, writing, and I think this is brilliant you know. So I
walk in the next day and I put the ad on his desk and Im

Meet Brett McFall

BRETT MCFALL is widely regarded as Australias best sales letter writer, Brett McFall has written
over 9,000 ads and sales letters for
153 different industries, creating
million dollar marketing over and
over again.
Hes the creator of the super-easy
B.U.R.P.I.E.S. copywriting formula and top-selling software
which helps you write powerful sales letters in just 30 minutes.
Hes also an in-demand teacher of internet marketing in the UK,
Australia, Singapore and here in the USA.
Whether youre in business ... or want to be able to produce your
own income at the drop of a hat while still working at a job ... Brett
will show you the magic keys to create massive income using the
internet. Good news is ... you dont have to have a technical bone
in your body.

half an hour early. I leave it there and I walk back to my

desk. And he comes in and he grabs the ad and he puts it
on my desk with a big red X through it, and he says forget
it, Ill write it. Ill show you how to really write advertising.
So I had no skills. A said it just to let you know that I
had no extra skills, or I had to start from the very bottom.
And so around about six weeks later a job came up for
Tandy Electronics. In their advertising department and I
went for it. It was a job for a copywriter, and I went for
the job and they said are you a copywriter, and I said yes I
am, yes I am. Im working here with Dick Smith Electronics, right. He said fantastic, youre hired.
So over the next seven years you know sometimes
when youre up against it youve got to back yourself dont
you? Youve got to step up and say yeah, Ill take that on.
So for the next seven years I wrote for Tandy Electron-

Millionaire Phenomena - Internet: BRETT McFALL (continued)

ics. I worked really hard, wrote for about 3,000 different
products from computers to scanner to multimeters to
light emitting diodes. Yeah, if you can write copy for an
LED, youre a better copywriter than me, thats for sure.
So I did that, but it really built my skills, thats where I
really learnt my trade.
So seven years in I said its time for a change. So I
went for another job. And this time its for McGrath
Partners in Paddington. Who knows McGrath Partners?
Real estate agency in Sydney. John McGrath, very famous real estate agent. I know nothing about real estate.
So I go for the job anyway. And its to write the copy to
sell their houses this time. And so I would have to walk
through the mansions, you know all in Double Bay, Rose
Bay, all that sort of stuff and I would write the copy. I
didnt know anything from anything right. This is a big
a room over here, and then thats a kitchen and this is a
dining room. El fresco dining and Im going what the
hells that. Ill go home and get the dictionary tonight
and have a look.
So, when Im in the interview I didnt know who John
was, and Ive got the person interviewing me and Johns
sitting over there, and were talking, talking, talking, then
suddenly John gets up. And he walks over and says Brett,
how much money would you like us to pay you. And I
said and Im like on $23,000 a year right, at the other
job. I said well John, I would like $35,000 and a mobile
phone please. Sometimes youve got to back yourself true?
And he says deal. $35,000, you get the phone. I say yes,
Im in. Alright. And back then the phones were like you
know the old the brick. And anyway I was going great,
I loved the job, they loved me.
Anyway, six weeks later after they sacked me - Yes,
they sacked me. In fact, heres the deal. I walked in
Friday night, 7p.m. Im still in my chair working. Well
Im trying to make the best go of this I possibly can. 7
p.m. on a Friday night dont you love it? They call you
in, and Brett, were letting you go. Isnt that nice? Were
letting you go. Oh, thanks very much. Anyway it really
annoyed me, it really upset me. And Im driving home.
And Ive got about an hour and a half drive home.
And I remember like driving and I just feel like saying to myself, I never want to feel this way again. It was
at that moment I thought you know, something has to
change. I need to do something so I dont have to feel
this bad again.

Why they sacked me, simply there was 14 sales agents

and I could write for nine of them but I couldnt write
for 14. Well they each had their own style of copy, what
they liked and copy what they didnt. I couldnt hack it. I
could do it for nine, I couldnt do it or 14.
So when I got out the very next day I walked into an
advertising agency in Penrith in Western Sydney, and I
said this is where I lived and I said hi, Im Brett McFall. Im a copywriter, Ive just been sacked and I think
you should probably hire me. Whos impressed so far? So
thats when I said I said Ive got a deal for you. I said
how about I do this? How about I work for you for four
days, dont pay me a thing. And if after four days you like
me, then we talk, if you dont I will go on my merry way,
no hard feelings. They said hey, sounds like a good idea.
Two days they say youre hired. They give me the
job. They sacked the other copywriter. Im feeling terrible. I see him walking out the door. See ya, Im sorry, I
didnt mean it. I forgot to tell him that all you have to do
is go to another advertising agency, tell them youll work
for four days on your own for free, youll get the job, oh
dont worry, it worked. Trust me. I forgot to tell him,
right. So I stayed there for another seven years. Folks I
built up. I wrote over 10,000 sales messages, adverts, TV
ads, radio ads, magazines, just getting my experience. So
you know. Again, I wasnt a genius. I had to work really
hard at it.
So it came to a time when I thought you know, I
want to have my own business. And I sat down and I
said heres what I want. I want a business where I have
no staff, where I can work from home, raking in a lot of
money, have a great lifestyle and really do some good,
affective marketing for companies so that they actually
win. So they win more than I win. That was my criteria. And I said I dont know how Im going to do that,
but thats what I want. And folks, it takes courage to do
that doesnt it? It takes a lot of courage and it takes a lot
of faith, and it doesnt come easily, but I did it. And I
started reading books. I started reading Tony Robbins.
Anybody read Tony Robbins book? Stephen Covey.
Absolutely brilliant. Those two books changed my life
forever. Got my mind in the right spot.
It doesnt matter what I teach you today folks, if youre
brain isnt functioning effectively it will go over your head
or you just wont use what I teach you. Got to get your
brain in the right space and thats what I need you to do

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Millionaire Phenomena - Internet: BRETT McFALL (continued)

as well. I was always fairly optimistic, but that wasnt
enough. You know youve got to have some skills and
some right ways of thinking and hopefully I can share
some of those with you today, but its certainly helped me.
So I started a newsletter. While I was working at the
agency I started my own newsletter. Once a month and
I would write eight pages and I called it the Brett McFall
advertising ladder. And so I advertised in the magazine
called Australian Money Making and Business Opportunities and it was a full page and it cost me $450. And
it basically offered a subscription to my newsletter, 12
issues, $127 was my price. Three weeks in a get a fax to
my home and its an order for my newsletter for $127.
And Im thinking holy crap, I have to write it! Someones
actually paying to hear my advice.
So I procrastinated for a few days and I went and
wrote the newsletter and got it out, and for the next 12
months I got every issue out. And I only ended up getting about 19 subscribers that whole year. I didnt mind.
I just wanted an excuse to write the newsletter. Heres
why. I hope you folks are picking up tips here for getting
out of a job. This is the safest way to get out of a job. I
had 19 subscribers, 12 issues, which those 12 issues became 12 chapters. One newsletter a month, eight pages
long, 12 chapters right. So instead of me going hell for
leather and getting you know doing all this crazy work
at once I simply spread it out over the year.
That book became The Inside Secrets of Advertising.
And it made me over $400,000 over the next 18 months.
So you know, it didnt just all happen overnight. It
happened because I applied some principles and stuff
that I learnt. I mean Americans are in the league when it
comes to marketing. They are right now, they will be for
a very long time. They are the best at marketing. They
have some great ideas. So I learnt from modern Americans, wasnt too many Australians to learn from.
And so what happened then was that it gave me
money in the bank to be able to leave my job nice and
easily. And so I was able to cover my mortgage easily. If
I never got a job for the next 12 months my mortgage
was covered. That really worked for me. So it allowed me
to go full time. When I went full time folks, heres what
I did. Because of the newsletter right, I did a website.
Now the newsletter was for free. And the more I taught
people what I knew, as in the more I taught you how to
do what I did, as in right advertising, create headline,

create ads to make you money, the more people wanted

to pay me to do it for them. And I kept on showing you
more and you kept on wanting to pay me more. I had
clients demanding to put $10,000 in my bank account
every week, just for me to write for them. Now it didnt
happen by chance. It happened because I taught people
freely. I gave freely and then they came to me. Do not
be afraid to give away your intellect folks. The more you
give out, the more youll get. And it absolutely works.
So then I flew myself off to Phoenix Arizona for a
Copywriting Seminar by a guy called Gary Halbert.
Thank you.I believe he is he was, he died just about 2
months ago he was the best copywriter in the world.
When he wrote stuff you couldnt take your eyes off the
page. So I flew over to see him. I did what you guys are
doing here. This sort of seminar wasnt available for me,
so I flew to America to get it. So the fact that youre here,
very, very smart. When I was there for three days I took
note after note after note. At least 27 pages worth of
notes.
But Im at a seminar right. Morning tea, have a break
just like you guys were at then. Im standing outside in
the sun, there was a guy standing there. Everyone else
around us was having a smoke. I dont smoke, he doesnt
smoke either. I walked over and I shake his hand. I say
hey, how are you doing, Im Brett. He says hi, Im Ted. I
said what do you do Ted. He said well Im getting into
internet marketing seminars and we actually do a seminar
for four days and show people how to build a business on
the net. I said really, wow. I said that sounds like a great
idea. Have you ever thought about bringing that to Australia? There was no seminars on here at all. And he says,
well no I aint. I said really? Do you think that maybe
you should? Well maybe I oughta....
And I said yeah, you probably should and I can probably help you. We shook hands folks. And that moment
the World Internet Summit was started. Its now the
worlds biggest internet business event. In a matter of
minutes. Five minutes, at a seminar like this. Sometimes
the most valuable people will be the person beside you.
Once you have initiative everything changes. Okay,
you agree with me dont you? It all happens. Until today
I live on the Gold Coast in an apartment. I took up
surfing this year. Im really bad at it so far. I plan to get
better using my initiative. And I get to travel the world.
I have this most amazing lifestyle, I love it to death. I can

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Millionaire Phenomena - Internet: BRETT McFALL (continued)

fly anywhere I want. I can do what I what.
And look when I was working at the advertising agency I used to sit there and Id be like day dreaming, thinking to myself, this is so boring. Wouldnt it be good to
be able to go to the movies during the day? So I used to
day dream about going to the movies. Lofty goals I know,
high achiever right! But when I was day dreaming it was
like thatd be so great to be able to go and do that. And
now I can do it anytime I like, simple pleasures, but I like
that right. And to me that just represents freedom. To
be able to have that choice of doing it. Yes or no, do you
agree with me? Yes or no. Yeah. Who would like more
freedom in their life? I mean you are here for a reason
arent you? You are here because you are dissatisfied with
something in your life. Or perhaps youre a very curious
person. I would suggest that most of you are dissatisfied
in some way. You want more, you want to do more, you
want to experience more.
And thats why its a smart decision to be here. I was
exactly like you and hopefully what I can show you today
Ill be able to change that for you okay?
So Ill have to tell you why I think you should listen to
me. Its not to impress you folks well hopefully it does,
but its not to do that. I want you to know that once I
show you these things then you obviously will hopefully
realise that I know what Im talking about, and that if I
suggest you do something then you go and do it. Just
based on credibility alone. Thats the only reason why Im
showing you this.
Ive created over 10,000 sales ads, advertisements,
websites, sales messages. In fact its closer to 13,000
now. So has anybody been doing something for 10 years?
Youve been doing something for 10 years maybe watching TV. Wasting time. How good are you now at it
compared to when you first started? Whatever it is youve
been doing for 10 years. Are you better? Course you
are right. Well thats the only reason Im good at what I
do, because Ive been doing it for so long. Thats the only
reason. So dont please dont make any excuses as to
why I might be so good, its just because Ive been doing
it so long.
I create websites that make as much as $400,000 inside eight weeks. Whod like to be able to do that? Who
wouldnt right. And its amazing. When it happens it
blows you away. I couldnt believe it. You know, I was on
a job there where I wasnt earning more than $35,000 for

at least five or six years when I was still employed. And

to be able to do that just blows my mind today even still.
And its a fantastic process and very very exciting.
I charge $25,000 to write a sales letter. Isnt that a
ridiculous amount? Stupid. Like what do you do for the
rest of the week after I do that? You know what I mean?
Its a ridiculous amount of money to charge to write a letter. Why would someone pay me that amount of money?
Results is the exact answer. I promise youll make 10
times whatever you pay me or Ill give you your money
back. And by being able to step up and do that means
people can have confidence in me. It means I can charge
a very high rate, but when I can charge that high rate I
can spend enough time, do a fantastic job so the client
wins massively. I get paid I charge $2,500 an hour to
consult.
Ridiculous. Why would I get paid $2,500 an hour to
consult? Results. When someone pays me $2,500 what
do I promise they will make? $10,000 or you dont pay
me. Simple as that. And so the information I share with
you today is based on results folks. Please dont take it
lightly.
I teach people how to market online all over the
world. Singapore, America, USA, UK, Dubai, India,
Indonesia, Japan and Australia and New Zealand. Guess
what? Youre exactly the same as the rest of the audiences that I speak to. Do you believe that? Yeah. Youre
virtually exactly the same. Maybe a few different cultural
values change between each country, but every single
person that comes to a seminar which I am speaking at
wants exactly the same thing. They want to get more
from their life. So every one I teach the great think I find
is that everybodys the same. So the people in India want
the same as you. Thats what I find. The people we do
business with in India or Indonesia or Japan, its so easy
to work with them because they all want the same thing.
So please dont think Australia is different or were on our
own. Its a global community and we are so similar its
not funny.
Little improvements I make to websites can improve
the response overnight by at least 700 per cent, often over
700 per cent. So I look at your website, I make a simple
change, bang. Up to and over 700 per cent increase in
sales overnight. Thats the only difference between you
and me right now. You probably have more hair on your
head, but I have a little bit more information in mine on

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this chosen subject. Thats the difference folks. That is it.
Whatever you do in your job or at home looking after
kids, whatever it is you know more about that than I do.
Thats the truth. But in this one area I know a little bit
more. Im very specialised in this.
Heres what you are going to learn from me today. 7
reasons why the internet lifestyle is better that working
for a living. That is true. Im going to show you how
beginners can make a success of the internet.

Whats The Best Product To Sell On The

Internet?
Number one, is this product to sell online? This is absolute truth and it is fantastic. Three beliefs of a successful internet market. Once you have these beliefs youre
lives change forever. Who believes that youre beliefs
change your life? Hopefully I can give you some really
effective beliefs that will help you do this. And Im going
to show you seven steps to a profitable internet business.
Two choices. You can either take five years to do this
on your own or you can just listen to my seven steps and
take around about 15 minutes. What would you rather?
The 15 minutes or five years? Im going to give you a
shortcut. I did it the long way. I didnt have enough
mentors, I didnt take enough programmes, I didnt invest
in myself and I wasted at least 12 years of my life doing
that. Its frustrating, thats what I did. I dont want you
to do the same.
By taking information that I have Ive condensed it so
that you can take a short cut.
Three really important statistics to remember. In 2006
folks more that 250 billion searches were done on the
internet. So does that tell you that maybe the internet is
becoming very very popular. Extremely popular. In fact
a lot of the big companies these days are shifting their
money from TV advertising and newspaper advertising
and putting it into the internet, because thats where the
people are going.
Can I ask who actually here has broadband at home,
broadband access? Brilliant. And thats a really important
statistic because people are starting to go towards broadband and its very good for you as a marketer. Because
why would that be good? People can see your website.

You can do more graphics. Its easy to download. Very

good that so many get on broadband.
Total online sales accounted for $170 billion last year.
Does anybody perhaps still have a suspicion that maybe
people are not using credit cards on line, theyre a little bit
scared to use credit cards? Does anybody have that suspicion? $170 billion says that its not true and its changing
very rapidly. It is more secure. Safer to use your credit
card on the internet that it is to use your credit card in a
restaurant, do you realise that? Let me explain for those
of you who may not know. You go to a restaurant. You
take your credit card and you leave it one the table or you
leave it in the booklet and the waiter comes and picks it
up, takes it to the cash register to process your payment.
On the way there they have a little black box. They zip
the card through it, black box goes in the pocket, then
theyll go and charge your credit card as per normal.
Bring your credit card back, see you later.
On that little black box are you what? Credit card
details. This is credit card fraud right. Theres no security
in restaurants at all. You should always try and keep track
of your credit card but it just doesnt seem to happen.
Youre in a restaurant, you hand it over, go and pay for it
you know and it just happens. But thats the truth.
Online you have secure service which is encrypted
and protected and the fraud online is very very miniscule
compared to how many people are actually spending their
money online. So please dont let that stop you. Dont
let the fear of fraud or anything like that stop you from
succeeding because everyone else is making money while
youre sitting their waiting.
Two billion people will be online by 2010. Thats like
nine zeros behind the two. How much of that market
would you like to sell to? All of it. You greedy people! I
mean Ive heard about Melbournites being greedy, but
this is ridiculous. Yeah, but two billion people by 2010
folks. This is where your business needs to be at. If you
havent considered it up til now in fact let me ask you
this? Who has a regular offline business now? Thank
you. Almost half the audience has a business. Good for
you. And I would suspect that maybe youre wondering if
you can take that business online?
Heres what Im going to suggest folks. Everything
Im about to teach you will work for your regular business okay. I make that very clear. However Im going to
suggest that maybe youre in the wrong business. Would

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that be okay? Well then if thats okay I want you all to
actually do something for me. If I can ask you to stretch
your right arm out like this and make that index finger
if you can. Because if I say things which are a little bit
out there I want you to do this if its okay by you. Bend
at the elbow and bring it to the chin and say with me,
hmmm, isnt that interesting. Lets do it again just to
practice I dont think youre up to speed. Ready? One,
bend, chill, go hmmm isnt that interesting. And the
reason I want you to do that is to keep youre mind open.
Because if you come here and youre making decisions
before youve tried it, you can be costing yourself a lot of
money. Its very important to keep your mind open to
what Im suggesting.

Eight reasons why the internet lifestyle

is better than working for a living.
You can work where you want. Hands up if you
are living in a location that is fairly close to your work.
Hmmm, isnt that interesting. So I found that to and I
thought hold on, is this really where I want to live. I was
living in the Blue Mountains in Sydney. And I though
no, its not. Ive always wanted to live on the beach.
That to me would really be exciting. So what did I do?
I packed up and moved to the Gold Coast. Yeah, thats
right. Because my business allows me to do that. I could
be anywhere in the world. In fact while Im travelling the
world doing seminars and teaching people my business
still runs. And so I can work anywhere I want. In fact Ill
see myself with a little bag, its just over there, and I pull
it behind me, and its got my computer in it, and that is
my business.
That is it. Long as I have that and I can get internet
access I am in business. Who would like that lifestyle? To
at least have the freedom. You dont have to move anywhere but to at least have the choice. Who here would
actually like to maybe okay, who here goes on holidays
maybe two or three weeks a year? Most of you, okay.
Well how about this. What if you can actually live where
you holiday? Hmmm, how would that be? So instead of
hanging out for those three weeks of the year on I cant
wait to go to the Gold Coast how about living there, or
some where that is really good for you? How about living
there and having your business work, no matter what. At
least having the choice right, thats why I want to show
you this sort of stuff. You can work when you want.

How To Live The Perfect Lifestyle AND

Make Money
So for the morning people, wouldnt be great to get all
your work done by about two oclock in the afternoon.
You get up early, get stuck into it, and by about two
oclock in the afternoon youre set and read to go. Would
that be good? What about the evening people. Wouldnt
it be great to have a sleep in every day? Who would like
to be able to go and get a big sledge hammer and smash
the alarm clock? I havent had an alarm clock for five
years and its great. Now I dont actually sleep in these
days because Im so excited. Ive got so many ideas I dont
sleep in, but at least I have the choice and thats what I
want to give you as well.

No Staff, No Staff, No Staff

No staff to pay. Those business owners that are here,
that might resonate with you. Staff are the only way to
grow your business truly hugely. But if you dont want
staff I dont have any in terms of my own business
right but if you dont want staff you dont have to have
any. Dont have to pay superannuation, dont have to pay
holidays. And for employers this can be a really stressful
thing. For employers and if youre an employee maybe
this is new to you but if you are an employer theres a
lot of pressure with having employees. And when the
employer is taking a break sometimes they suspect you are
not working as you should. Sometimes they suspect you
around the water cooler talking about big brother, and
its a lot of pressure right. But for some business owners theyd like to get rid of that. Some people want more
staff. All Im saying is you dont have to have staff if you
dont want.

Work From Anywhere

Its also another reason why you will succeed because
theres less involved in getting started. You dont actually
have to hire people to have a business. No premises to
rent. If I was to rent a shop in Collins Street Melbourne,
what would I be up for? What would I be paying a week?
$2,000 or $3,000?
So before I even make a sale on Collins Street Ive
got to pay $3,000. Whod like to get rid of that? With
the internet theres no premises to rent, you just have a

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website. And we call it website hosting. Its basically
what renting is because in case you dont know we have
your computer and in order for us to see the webpage you
just created we have to load your page to a much, much
bigger computer called a server. That way the people on
the internet can see it. And to host your page on that
big computer called hosting, they might charge you up
to from $5 maybe up to $20 or $30 a month. That is
what the rent is right. Its equivalent to a rent on a shop
on Collins Street. And so theres no premises to rent and
instead its a really low fee for hosting your website. Who
likes this so far? Yes or no? Yeah, good job.

How To Create Cash Flow That Leads To

Freedom
Your business can be nearly 100 per cent automatable.
Software can take care of processing credit cards. So, if
you want to make money while you sleep, and I think
that a lot of you do, this is what I do and most of these
guys in the States do. Software process, you can come
to my site any time you like. You pay the money and it
goes in my bank account, and I dont even know about it.
It doesnt matter where I am in the world, thats what it
does. It sends out the emails for my customers to me. If
you buy something from me you get an instant welcome
email saying thank you very much for buying x, y, z product. Do I write it there on the spot or is it all automated?
I wrote it. I wrote it like ages ago. I did the work once
and it works forever. Very very exciting.
You can create as many businesses as you want. Lets
just take one example. Lets say we start a little cake
shop on Collins Street because we want to get free of our
employer, want to have a good business, want to have a
good lifestyle+` And so we have one business bringing
in what would be a target income for a cake shop on
Collins Street? $10,000 a week. Thank you very much.
Thats what well take. $10,000 a week. So if you want
to earn more than the $10,000 a week what would we be
tempted to do? Open another one. Okay. But hold on a
second. One of the things I think you are here for guys is
for more time. I think you want more time in your life.
Am I right? More freedom to do what you want.
So, weve got our little cake shop on Collins Street
and we say we want to earn more money because its just
not paying the bills the way I want it too. I want a big
house, bigger car, whatever. I want to give more money

to charities, whatever. So we start another business over

here. Now we have two businesses. Moneys good, hows
our time? Have I got more time or less time? So then we
think how about a third business? Thatd be a good idea.
Third business. Moneys good. Hows the time. Ive got
more time or less time? Less time unless youre a fantastic
manager. Can be done. If youre a really effective manager you can actually do that. Theyre seldom, like theyre
few and far between. Dont you agree with me?
People can manage that sort of stuff and not get
involved. People go to classes and schools to learn how to
manage that sort of thing. Its very hard to do. So, that
doesnt give you the freedom that you want. With the
internet you can create as many businesses and what Im
talking about here is websites. When you have a business its one website. When you create another website
its another business. And another website and another
business. It doesnt matter how many businesses you have
folks it doesnt take away from your time. Great idea
right.
Beginners can do it. So if you put your hand up as
a beginner, yes you can do this. Im going to show you
how. Im going to give you everything you need. Lots
of money to be made as I already told you. $170 billion
spent last year.

How beginners can make a success of

the internet.
Pay very close attention to what Im about to say.
Because this secret you must keep this with you forever.
Be the general of the army, not the soldier in the trenches.
Now what do I mean by that? If you are a soldier in the
army are you doing a lot of work? Youre digging holes,
youre putting stuff on your back and running. Every
now and then youre probably shooting a gun. And what
happens when youre a soldier? What tends to happen?
Sometimes you get shot at right. When youre the general
of the army you just control the pieces. You sit back in
your office and you have to control how the army operates.
So what I want you to take this concept away is like
with the internet you do not need to know everything.
So what we do is this. For instance I have no idea how to
create software. Right, I have zero idea. But yet I have
my own software programme. How did I do that? Heres

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an idea, and I want you to do it too. You go to people
who have the specialised knowledge and you say, you see
that webpage over there, I want mine to look like that
one. And see this one over here, I want it to read like that
one. And you see that product over there, I want mine
working like that but with these changes and that change.
Are you with me so far? And you pay people to do it for
you. Thats the smart way.
So instead of paying $3,000 a week in rent you start
and invest that money in stuff that actually produced
money for you. Thats the smart way to do it folks. You
be the general of the army moving all the pieces around
because you have the ideas, and let other people do the
work for you.
Here are two places that I recommend you check out.
They are eLance.com and rentacoder.com. You can get
virtually any technical job done starting from $50. This is
where I go and get most of my tricky technical jobs done.
So when you leave this seminar with all these ideas, all
you need is the ideas to make the business happen. Thats
all you need. So if youre worried that youre too old,
youre too dumb, youre too fat, youre too whatever, its
not an excuse. You simply need the ideas. Does anybody
here have a brain? Okay. Hopefully every arm is ready to
go up there. If you have a brain it means you have ideas.
And from this seminar youre going to get them and what
youre actually going to do is actually make other people
do those ideas based on what we teach you. Is that reassuring for some of you?
Okay, the rules have changed. The world is not the
same as it used to be and internet has changed the rules so
dramatically youve got to now be able to change with it.

Case Study: Patric Chan, Malaysia

Meet Patrick Chan from Penang Malaysia. 26 years
old, no college degree. In fact hes a failed greeting card
salesman. Now sells self help books and CDs on the
internet for $97 each. 78 per cent of his customers are in
the USA. So he is in Penang Malaysia, and nice holiday
spot for Australians, but not a very prosperous part of the
world would you agree? Okay. So most of his customers
are in America. Why is that a good idea? Credit cards.
Often three or four each. Lot of credit cards in America
and whats the number one way people will spend money
over the internet? Credit cards. Australians arent too bad

at spending the credit cards either Ill have you know, but
Americans are a huge market and Europeans as well.
Would you like to know how much he earns a week?
He makes $6,000 a week US in Penang, Malaysia. Where
living is cheap. And so would that be a good income for
him to earn. I mean this guy drives his own Mercedes
now, and weve actually had him speaking on our stage as
well. He is a very good marketer and now teaches it very
well too. What does Patrick sell? Thank you. Information. Now everybody, your next finger pointers. Everybody, come on. Hmmm, isnt that interesting.

Case Study: Jo Han Mok, Singapore

Meet Johan Mok, Singapore. 28 years old. Started his
part time internet business during college in 2001 with
his own e-book. And e-book just so you know is a regular
book but its electronic. Downloads to your computer.
You read it on your computer or you print it out. Partnered with big name experts in order to sell his book to
their lists. What does that mean? He writes the book and
he partners with other people who already have customers on their database. So he doesnt do any marketing or
selling. He has them. He has his e-book. Finds a joint
venture partner with maybe four, five or 10,000 people
on their database who they can email in a split second.
He says I tell you what. For every one you sell of my
book Ill give you 50%. Its called a joint venture. A JV.
He promotes through this database, they split the sales
50/50. Hed doing deals of four or five, six of the best in
America, thats how he made a really good income.
Could that be a way that you could start as well? If
you do not have a database of people, you can find them
where? Through JVs, joint venture partners folks, joint
venture partners.
Best month of sales, are you ready for this? In fact
hes done more than that now. I was talking to him just
last week. Hes now doing over $300,000 a month from
lovely old Singapore. Who likes Singapore? Fabulous
place. Travels the world, does what he wants, lives an absolute millionaires lifestyle. Fabulous. What does Johan
sell? Information. Hmmm, isnt that interesting, right.

Case Study: Chris Elmore, Australia

Meet Chris Elmore. Friends hes Australian actually.

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Found himself in a dead end job making just $9 an hour.
Anybody been stuck in one of those jobs? He was so frustrated that he decided to do something about it, and folks
thats the key. Getting frustrated enough to do something
about it. Because you can keep on going on, but until
you reach that point when you say Ive had enough, Im
not doing this any more, thats when things happen.
He took his passion for music right. Every night
at home he was playing his guitar and turning it into
something saleable on the internet. Hes told me, Im not
a very good guitar player, but I can get by. But he loves
music. Through his website now he teaches people how
to play guitar on line. In 2006 alone, heres his website
address, he made $327,957, basically $328,000 in sales.
Yet it just takes him two hours a day from his bedroom.
So what Im trying to say folks, is you have a talent, an
interest, a passion, a hobby, you can do this. And if you
dont have any of those you can find someone who does,
can you not? If you take what some of us are showing
you and you find someone who maybe knows how to
play the piano, guitar or accordion or whatever, could you
not maybe do a joint venture with them, and maybe be
successful together. Okay, have a look at it from all different angles folks. If you cant do it, maybe someone else
can and you joint venture with them. What does Chris
sell? Information.
Why is it so easy to sell? No cost. Value? Yep, you
can get good value. Yes indeed, we all love information. Were here today because you want information.
Anybody every bought a book before? You like information. Why else is it good? Instant download, they can
get instant gratification. They buy the book bang, its
there. Through their computer. Do the work once and
sell it forever. If youre still selling youre time in fact if
youre in a job youre selling your time. How many hours
are there in a week? 168 last time I checked. Can we get
any more hours? So once you start selling your time as in
what most employees do, you sell your time per day. You
cant do much about getting any more hours, but if you
sell products you can keep on selling as many products as
you want. So you must have a product folks. So powerful.
Information products are quick, easy and very profitable. How much does it cost to deliver an e-book?
Anybody know that? Zero. Nothing. But yet we might
charge $27, $30 for an e-book. Thats a pretty good mark
up, dont you agree? Yeah, very good mark up. And prof-

its that you would never have seen in the real world.

What Does The Richest Man On The

Planet Sell?
What about Bill Gates. Anybody heard of that guy
called Bill Gates. Hes an up and coming young man,
hes going to be very successful one day. What does he
sell? Software. Is that another form of information? So
when you buy Microsoft Office what would that generally
cost you? $600, pretty close. How much would it cost
him? Lucky if it cost him $10. You know a cardboard
box, graphics on the outside and a CD on the inside and
maybe an owners manual. $10 if were lucky. Is that a
good mark-up?

3 Powerful Belief Systems of Millionaire

Internet Business Owners
The first belief is this. Creating information products
is easy. Would you like me to prove it to you? Someone
who has not got an information product. I want to prove
a point. What about you sir? Thank you for offering.
Come on up.
Brett: Now, whats your name?
Caroline.
Brett: Welcome Caroline. Whats your business?
Caroline: Its actually my husbands business. He does
paint chip and stone chip repairs on cars.
Brett: Paint chip and stone chip repairs on cars. We
need you to face the audience so everyone can see you,
okay. So okay, heres the question. Why should we do
business with you over somebody else?
Caroline: The system he uses is unique.
Brett: In what way?
Caroline: In the way the application of the process.
Brett: I dont care how its applied, what does it do for
me.
Caroline: Makes the car look fantastic.
Brett: Hmm, my car looks pretty good right now.

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Caroline: Okay, you dont need our service. [Laughter].
Brett: Okay, Ill keep my wallet in my pocket.
Caroline: Do you have ugly stone chips on your car?
Brett: Maybe I do. So why should I come to you
rather than going to somebody else?

so you know Im just the guarantee is that if you

dont like it well then well work something out with
you
Brett: What are you going to work out?
Caroline: Well, what arent you going to like about the

Caroline: Some of the other processes that are out

there just fill in the stone chips with coloured polish.

Brett: I ask the questions, I ask the questions cause

Im the one spending the money. True or false, yes?
Okay.

Brett: Okay, sounds okay so far. Whats the problem

with that?

Caroline: Yeah well, wed offer a money back guarantee for sure.

Caroline: The problem with that is when you wash

it more than 10 or 15 times those stone chips reappear. The process that we use actually fills the stone
chips with the same paint and the same colour as your
vehicle.

Brett: Oh, so you going to throw that out there now

eh, here, have your money back. So why didnt you
tell me that when I first asked you?

Brett: Oh, so does anybody else do that? Can I get

this service anywhere else? Really, I cant?

Brett: Oh, so you must have a crap business then. It

must be a terrible business.

Caroline: Oh yeah, yeah you can.

Caroline: No, its a labour intensive business.

Brett: You just said I cant.

Brett: Oh really. But is it a good business? Is it the

best?

Caroline: Okay, well I suppose you could, yes.

Brett: Okay, so I can get it elsewhere. I might go and
see what those guys can do for me. So why should I
go to you rather than those guys?
Caroline: Well actually we go on site.
Brett: Okay. Do they go on site also?

Caroline: Oh, cause I dont like giving money back.

Caroline: Yes.
Brett: Or getting probably very close to being that
right you cant always know for sure. Okay. So why
are you worried about giving money back?
Caroline: I dont know. Im not now.

Brett: Okay, well then its no unique. So why focus.

Why should I come and see you before going to them?

Brett: Would you like her to give you your money

back if you go to her and for some reason it doesnt go
the way she promises? Would you like your money
back? Thats what they want. Thats what they want.

Caroline: My husbands a nice guy.

Caroline: Thats what theyre getting.

Caroline: Some of them do.

Brett: Oh, bumpah!

Caroline: But he is. [Laughter].
Brett: I dont care.
Caroline: Yes, we do guarantee our work.
Brett: Oh really, really. Whats the guarantee?
Caroline: The guarantee is that I dont do the work,

Brett: Yes. So when somebody so here is the lesson. I do this all over the world. Im the only person
who does this live on stage. I know nothing about the
person coming on stage. Every time I ask the question I
get crappy generic answers like you just gave me. With
respect. I get really crappy answers like were the best, oh
we give good value, give better service. BS. You do not.
That is not enough to get by these days. Youve got to
get specific. Youve got to be able to tell me exactly why I

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should spend my money with you rather than somebody
else. Okay. Its not about the product. Its all about the
marketing.
The marketing starts with making sure that we know
that makes you unique, and the one thing we will remember you, and the one reason why well come and see you.
So in your marketing every single time you run an add,
every time on your business card, on the side of your
promotional cards, whatever youve got alright, this USP,
your unique site proposition has to be there. Youll get a
perfect repair of the stone chip or your money back. Or
something like that okay?
Now Im sure your husband when you go home is
going to go I dont think so. [Laughter]. Well then say
to him well why should anybody do business with us, alright. And do what I just did to you. Dig deep, because
you actually have heres the thing. You have this hidden
benefit that were all wanting to hear about, but youre
keeping hidden from us and that was the reason that was
stopping us from actually spending any money. Make
sense? Good. Thank you very much indeed Caroline.
Well done. Please thank Caroline.
So, what did you learn from that? Why should I do
business with you, rather than someone else? That is the
question you need to be able to answer. If you cannot
answer it you have really bad marketing and chances are
youve got a very average business not making you the
money you want. Ive done this with 153 different industries. Thousands of clients. Everybody suffers from the
same problem. Being general. You cannot do that any
more folks. Youve got to be specific. Does that make my
point? This is the one reason I should do business with
you over any one else. You keep digging until you get it.
The last belief is this. You dont need to know everything in order to be successful. Remember, be the general
of the army. You dont need to know how to design web
pages. You dont need to know how to write copy. You
dont even need to know what hosting is. You dont need
to know everything, so do not make that excuse. Youve
got to now free yourself from those excuses that youd say,
oh I cant do it because I dont know every single piece.
Would you know how electricity works? Not really,
but you can use a switch cant you?

Brett McFalls 7 Step System to Amazing

Internet Success
What Im about to teach you here could literally
change your life. This is solid what Im about to show
you, my seven steps. Because it will take you two or three
years to learn it on your own, possibly five years, or you
can just take this short cut. This is truly powerful. Ive
used my whole system for starting a profitable online
business. Are you ready?

The first step is this.

Find a hot niche market first.
First. Theres a lot of people. Cause a lot of people
come to me in fact mostly everybody comes to me
and says Brett, Ive got a great product or a product
idea. Wrong statement! You should be coming to me
and saying Brett, Ive found a really hot market. But yet
everybody makes the same mistakes. Almost everyone.
Because we tend to think its the product that is fantastic,
but the product is not everything. Marketing is key, and
part of the marketing and doing the research is to find
the market in the first place. What you want to do folks
is find out where the people are and what they want to
know. Cause the internets all about information, its an
information medium. When you go online you search
for what? Information. Its an information medium so
youve got to give them what they want to know. A niche
is a group of people folks who are going online to find a
solution to their problem. For instance, who here plays
AFL? Anybody here play AFL or ever did play AFL?
Okay, alright, so theres a whole bunch of you, great,
thank you. Well that is not really a niche, its a whole
bunch of people who like the sport. But a niche might be
this folks. AFL players who are over 30, or over 40. Or
AFL players who play touch AFL.
What about this folks. Another niche. In fact, yell
out any subject, any niche you want to yell out. Fly
fishing. Yeah, very broad niche but fly fishers in North
America is a niche market. Fly fishers in Australia, niche
market. Does that make sense? Were talking to specific
people, in fact we can talk their language. Do we have
different fish here than we have in America? So we might
have different lures would we not? Different techniques.
So we want to go for a niche market. You might even be
able to niche that down to States. Fly fishermen in Melbourne. We want to get more exact because maybe we

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can just tailor to that market. What about if you wrote
an e-book that was tailored straight Victorian fly fishermen. The Inside Secrets of Fly Fishing in Melbourne,
Victoria. Does that make sense?

to the bigger companies in the world. Any less than

100,000 big companies arent interested because theres
not enough money in it right, but theres still enough
money in it for you. I did the same thing.

We tailor it just to them so that when they buy the

book they want specific answers, and thats why theyre
buying the book. Then when we ask the question why
should I do business with you over anyone else? Because
youve made it a niche product. Youre talking to me now.
In America what you can do is you have to get these lists
and you can tailor it down to like kids with red hair and
freckles. You can sell just to those kids. Sell them skin
care products or whatever you might want to sell them.
You might want to niche it down, cause youre not selling to everybody. Make that clear. Youre not selling to
everybody. Just a certain market.

Whos heard of scrap booking? Anybody heard of

scrap booking at all? Big female dominated activity this.
Females love this. And its where you take photo albums
to put photos in the album and make it really, really
pretty. Cards and ribbons and you really try and make
the photo stand out in a moment in time, really special.
And when you see a scrap book done it looks fabulous.
Well I found out that there were like around about
60,000 people a month searching for scrap booking every
month. I dont know a thing about scrap booking right.
And so then I created an e-book on it. I didnt write it. I
had someone from elance write it for me.

Do some simple research to find out what theyre

looking for. And Im going to show you a place to do
that. Three key words. Wordtracker.com. Ill show you
how it works. When we go there folks this allows us to
type in a word or two about a niche market and it tells us
if anyone is searching for it. So how about we just type in
fly fishing and press enter. Okay. Now this tells us folks,
and I dont know if anybodys shown you this already
or not, but Im certainly going to take you through the
process now. That last month, in the last 90 days rather,
2,663 people typed in the phrase fly fishing. Does that
make sense?

I created a webpage, cause the book is done in 14

days. I put a webpage up, its up now. Its called scrapbooking.com and it makes around about $30,000 a year
and I dont do anything to it.

As we go down we have all these different versions.

Look at this. Vermont fly fishing, which is a place in
America. Fly fishing equipment, Canada. Fly and fishing
trips. Thats a different concept. Montana fly fishing.
Alaska fly fishing. They would all be niche markets folks
and it tells you how many people are actually typing in
that phrase. Is that a good idea? Why is it a good idea?
Why? Because we can find out what these people are after. If youre selling an e-book on fly fishing do you really
want people going there who are interested in tennis?
No. You are only interested in people who are interested in fly fishing. Thats one really good site to use.
And that research just takes minutes. Thats all it takes,
just minutes for you to find out, gee, is anybody searching
for my subject. Heres a good rule of thumb. Between
30,000 and a 100,000 searches a month would be a good
rule of thumb. Any less than that may not be profitable
for you any more than 100,000 makes it to appealing

Let Me Detail My Research Process

I did a survey and people gave me the questions about
scrap booking. I said it was for a new book, I said give
me the most pressing questions about scrap booking, I
gave it to eLance, I sent the questions along, they researched it, they wrote the book, give me the book back
in 14 days, I sell it, done.
It is called scrapbookingprofits.com.
I dont touch it. I dont do anything with it folks. I
dont do a thing with it. It just sits there and makes
money year after year. I dont promote it. I have other
people who actually promote it for me. And thats it. I
cant tell you any more, thats it.
Heres another tool. Goodkeywords.com. This is
another free programme. Does pretty much what I just
showed you with that other programme but its probably a more in depth programme. You download it to
your computer. Its very very good. Id probably recommend that one more than the other one. Goodkeywords.
com. And it allows you to see what people are searching
for. Create a product which gives your market what they
want.

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Number 2: Give Them What They Want
Thats the second part. If the market tells us what they
want, whats our goal? To give it to them. Thats it. Now
were talking about the products right. So again what I
did I went to eLance and suggest you start off with an
information product like an e-book, an audio programme
or an online video is going to be the simplest for you.
That was the example I just showed you. And simply
answer the niche that your research revealed. Very very
simple folks, just give them what they want.
And its so tempting for you to get involved and do
what you think and give your tips. Just give them what
they want, yeah. Over deliver, surprise your customer
right. Give them what they want but plus so much more.
Thats a really good tip. Over deliver and make your
product unique. Its so important to have that one thing
that makes you king, make your product unique and have
plenty of links inside to where? To where? Other products okay.
Let me explain that. Inside your e-book, when
someone buys it they can enjoy the content, but its a very
good idea to have links, website links to other peoples
websites who are also selling products about say scrap
booking as an example, of which you will have then maybe joined their affiliate programme so that when people
buy it you actually earn money. Does that make sense?
Send it to other peoples website to buy products that are
related to yours so you make money from them buying
someone elses product. It can all be done very very easily.

Number 3: Create A Powerful and

Compelling Sales Message
Create a powerful compelling sales message. Marketing is king alright. So that the sales that are on the page
have to be very basic. Just words on a page but a really
compelling sales message folks. Without doubt this is
the most important part of your website. Dont worry
there is a formula. Has anybody here ever written a letter
before in their life?
You can do this. If you can write a letter thats all it
takes. We have found the best way to sell something is
by writing a letter. A letter to the customer. And theres
a formula of how to do it. Overall youre talking benefits,
which means whats in it for the customer. Constantly

talk about whats in it for them. Cause thats what your

customers asking. They sitting there going whats in it
this for me, whats in this for me. Just like we did with
Caroline on the stage Im constantly saying why should
I come. Im basically saying whats in it for me? And
thats what youre customer is saying as well. Youve got to
constantly let them know whats in it for them. You can
also search for copywriting software that will write the
letter for you. Do it all for you, or you can actually do it
yourself. You can also hire copywriters. Being the general
of the army. The software writer does it for you or the
copywriter does it for you. Unless you really want to do
it yourself. But Im suggesting you be the general of the
army.

Number 4: What Your Website Should

Look Like
Design a simple website that converts prospects into
buyers. Now were talking about the website now. Weve
done our research, created our product, created our sales,
now we need a website. Follows Googles lead and keep
it simple. When we go to Google, whats the background
colour. White. White. Not blue, not purple. If its
splashed with colour, do we have pop-ins do we have
all this other stuff at Google, no. No. Keep it simple
folks. Use a plain black text on a white background. I
will show you an example of one of my sites. In fact this
is the site of my copywriting software which does most
of it for you. As I scroll down folks just look at what Ive
got. Some of the text is actually colourful but most of the
text is black. Black on white. Ive got an e-cover that I
created. The actual product doesnt look like that, its just
the cover which represents what the software would look
like. I dont send it to you in a box or anything, you just
download it. So then some testimonials against this black
text and theres a couple of red headlines. Red is a better
colour for a headline, Ill let you know that right now.
Red is the best colour for a headline. Bullet points. Can
you see how simple this is folks. Very very simple. Very
very basic. What you want to do folks is you want to get
away from the technology if you can.
All the stuff that people see, youve got to have flash
presentations and pop-ins and all that stuff, they can actually take away from your sales. Would you agree with me
that this is a very simple site in terms of design? In fact
it might even be a little bit ugly. Thats possible too isnt
it? How does it rank in the searchings, a nice question.

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Ill get on to that in just a second. This website it actually
ranks pretty well with key words related to my name, but
we can actually make it rank much, much better with a
few little techniques.
Thats all it is folks. I need to say that so you realise
thats what Im using, what most of the marketers here
are using. So should you do it too? Simple as that.
Forget the technology. Alright folks, if you could actually make a sale by just using text, like go into Microsoft
Word, write in your letter, and upload into the internet,
you could actually make money just doing that alone. A
basic Microsoft Word document online. Or a PDF if
you know what that means right. Simple as that. It does
not take all this technology to make sales for you. Just a
compelling, convincing sales message which tells me why
I should buy from you.
Heres a little secret to increase your conversions. Ive
actually used audio on the page, and youve probably
seen I use it on the scrap booking page. It has actually
increased my sales by up to 300 per cent. Actually tripled
sales. Just by having a little welcome like that that you
saw on my scrap booking site. How do I do that? Good
question. There is software that does it all for you. In
fact I had my own software that does it for you. So just
type in website audio software into Google and youll find
a whole stack of them that come up. Please search them
out. It makes it very very simple. Some of them you just
copy, its in code, and paste it into the webpage. That is
it.
So you record it on your computer on your head
microphone, and you record your message saying hi,
welcome to my webpage. The reason why youre here
is because you want to do better fly fishing in Victoria.
Ive all the tips you need. Please read every word and Ill
look forward to helping you in the future. Something
like that. And then you upload that into your audio
file which you record on your computer with windows
software. You upload it to a site on the internet. Heres
one for you. Its called audiogenerator.com, and when
you upload it there it basically converts it, gives you back
a little bit of code.
And when you go and try it out folks itll make so
much more sense to you, but I can tell you you know
if Im using it, you can use it. I dont know a whole lot
about coding, programming or anything like that. I only
know how to use the very basics like this.

Keep photos small. Why would I suggest keep photos

small? Whys that? Because it makes the page load much
quicker. Theres actually a lag when you go to a webpage
and when you actually see it in full, theres a lag as the
page loads, and so you want to keep everything as small as
possible in size so that it loads very quickly. Youve maybe
got a split second, maybe two seconds if youre lucky to
grab someones attention. How you grab their attention
usually is with a headline at the very top. Anybody ever
read a headline before? Newspaper, anything. Youve
probably seen about 3 or 4,000 headlines every year when
you look at magazines. You know what headlines are,
and you just put a headline on the top and that stops
your customer in their tracks and gets them to read your
webpage.

A Simple Formula To Create A Killer

Headline
Would you like me to give you a headline you can
use? Okay, fine. Okay, write this down folks. First
word is Warning. Dont Visit Other Webpage on leave
a line, because in there we might write Fly Fishing, or
Scrap Booking or Baseball. You with me so far? You
write whatever your subject is right Until You Read
This. That is your headline. Its called a template headline. Its been used for at least 40, 50, 60 years. It can
work for you as well. One of the most successful headlines Ive ever used, I didnt even create it. I just used it
because someone else showed me how to do it. But I
constantly use it. Most of these marketers on stage have
probably used it. Warning, Dont Use Any Other Webpage on whatever your subject is, Until You Read this.
Thats how you get people focussing on your page for just
a second.
Your goal isnt to sell them in the headlines, just get
them to stay. Thats it. Just stay with me. Read what Ive
got have there. If youre smart youll give your customers
an opportunity to opt in. Opt in means give their name
and email so that you can contact them later. Thank you,
later. And so its very, very simple to do. You dont have
to know how to do it, someone else can do it for you,
but a little opt in box. And you might offer them a free
newsletter. A free report. Something for free in order to
get their name and email from them, and that way you
can communicate with them after.
Now if 100 people come to your website, not all 100

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people are going to buy. Its just the law of averages. But
they might they be ready to buy later on. At a time that
suits them. So we want to have them subscribe to us. A
report or a newsletter or something like that so that later
on we can remind them about my scrap booking book.
If fact if you subscribe to my scrap booking site I believe
youll get 19 messages - thats how many Ive written over the next 5-6 weeks. So that when youre ready to
buy youre all clear. Do I actually send those messages
out every time? No I have software which does it for me.
Thats what you need as well. Im going to show you what
that is in just a second.

Number 5: How To Generate Traffic To

Your Website
Over 90 per cent of internet uses start with three
search engines like Google, Yahoo, when theyre looking for information online. And theres two ways to use
search engines to bring traffic. Two ways. Pay-Per-Click
which is best for starters. Pay-Per-Click folks is this. If
we have and Im going to show you this just so I bring
everybody up to speed. If we have our Google search
engine. We go into Google.com. So we type in our term
that were searching for. On the left side we have whats
called organic results. And on the right side, we have
Pay-Per-Click. Anybody ever seen those small little four
line ads on the side there. Okay, this is called Google ads
and so thats one of the best methods. So heres what we
can do. Someone types in fly fishing, we can tell Google
yes please, put my ad up there. If someone types in tennis coaching, dont put my ad up.
We only advertise to people that matter. And we only
pay for the ad when someone clicks on the ad. I mean
can you do that in a newspaper. Can you go to the local
newspaper and say well, heres my ad, but I dont really
want to pay for it unless I get some calls, can you do that?
No. Internet you can. Thats whats so great about it.
And you can even tell Google heres how much Ill pay
you per clip. So you just tell them the budget and how
much money you want to spend a day. So you tell them
well Im going to offer you 30 cents every time someone
clicks on my webpage and when the clicks get to around
$30 a day, stop my ads. And the next day, well Ill maybe
have another $30.
Youre totally in control of your budget folks. You can
do it as fast or as slow as you like. I recommend to use

Google as you get traffic because you have traffic coming

to your webpage in the next five minutes. Nothing wrong
with paying for advertising. Yet when it comes to the
internet so many people want to get it all for free. Dont
you really want to know how to do it for free? Why is
that? Crazy. Just because the internet is free doesnt mean
you have to go the free way when it comes to advertising.
Its like why would you do that. If you can spend a dollar
but every time you spend a dollar you make 10, would
you not be crazy to spend that dollar like every day?
So with the techniques that I can teach you like how
to write a sales letter and stuff like that, like if we can get
three people out of 100 or maybe five people out of every
100 and we know that as a statistic, then we can work out
heres how much we make. We make you know for every
100 people that come we make about $200, then couldnt
we spend at least $50 on advertising to get them there?
Why wait for the search engines. Why do all the technical stuff, why pay so much attention to getting search
engine traffic when you can have traffic now.
Why would you not invest in yourself? Crazy. Youd
spend money in the real world anyway. Youd spend it
on newspaper ads, youd spend it on publicity, spend it
on whatever. Signage, all this stuff. Please folks. You
must get your brain in the right space. If you can pay for
advertising and turn it into a good equation, as in you
spend a dollar you make five or you make 10, then spend
the dollar. Are you with me? Very very important folks.
Google ad words, Yahoo search marketing, those
are the way to get paid traffic to your sites or you can
do organic. Now this is the free stuff. It can be done.
Wherever the search engines change the rules all the time.
There are ways to be consistently high in search engines
but youll spend a lot of focus, a lot of energy doing it, yet
the rules change all the time. It can be done. Itll take
a lot more skill, a lot more work and you have to be a
little bit of a geek to understand it. That is the truth. So
if youre going to do it, have someone else do it. Theres
plenty of people that will do it for you. Youll pay them
anyway. If youre going to pay them, why dont you just
pay for Google ads? But there are three really powerful
ways to bring traffic to your site for free. Would you like
to know them?

3 Ways To Generate FREE Traffic To Your

Site

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Articles. I was talking to a guy called Armand Morin
last week. Anybody know Armand Morin. Earns about
$10 million a year on the internet. I said Armand what
is the biggest source of traffic for you? Would you like to
know his answer? Articles. Heres the deal. What you do
is you write an article, maybe 300 words, well maybe 500
words, something like that that just picks a point about
what youre selling. If we take our fly fishing example
we might just say here are three simple tips for finding
the right lure for your fly fishing. And you write a little
article about it or you have someone else write the article
from eLance, and we publish it to these sites like Im
going to show you the sites up here. Articlecity.com. You
just load it to articlecity.com or you upload it to easyarticles.com. They publish the article and who knows what
happens with the article after that? Who can tell me what
happens to the article? Yell out nice and loud. Well, sort
of. Thank you for answering, but sort of like that.

fic.

Syndicate it, yes, sort of. Okay. Shall I tell you the
answer. Good answers folks. Youre sort of half right
with all of them. Heres the deal. There are newsletter
publishers on the internet who just have thousands and
thousands of people getting their newsletter. And so they
are always after content for their newsletter, otherwise no
one would pay for the newsletter right. So all of a sudden you get paid for the newsletter. Theyve got to have
articles or content for the newsletter. So it gets very busy.
It gets very lazy and they want articles that other people
have written so its all done for them. So they go to places
like easyarticles.com and they would search for articles of
fly fishing because theyve got a fly fishing newsletter
and they take the article, they copy it and paste it into
their newsletter. Their easy email newsletter. So say they
have 40,000 people that get the newsletter and they want
to quickly produce a newsletter theyd go to easy articles,
copy the newsletter, paste it in, send it out to their database. But guess whose link is at the very bottom of the
article? Yours. They can only use the article if they copy
and paste it all. And at the bottom of the article you have
a little tag line called about the author. About the author.

Now, is the rest of the world going to pick it up? I

doubt it, but maybe some media in Australia might okay.
But youve got to keep it newsy, theres got to be really a
good reason to actually create a story about it. There are
tips on the site about how to write good press releases.
Everything you need is there. It happens automatically
for just $80. Are you prepared to invest $80 to get on
thousands of sites?

There are places that you can go that will distribute

these articles to 3,000 article directories instantly. You
dont even know about them now, I just want you to write
the article for a start. Just write the article or articles, or
have someone else do it, and then these articles will get
used around the world for free publicising you. Youre
website. It that exciting or exciting? Yeah, its brilliant.
You wanted free traffic, thats the key way to get free traf-

Press releases. Go to prweb.com. Folks Im not sure

you understand, but whenever you see something on the
news, virtually every story you see on the news is there
because someone wrote a press release to the station.
Reporters dont do a whole lot of work these days. They
go by press releases. Theyre inundated with press releases
from all around the world and thats where they get the
news stories from. And so what you can do with this site
is actually have your story. You write a little article very
similar to the one you just wrote for easyarticles, you give
it to PRweb, you give them $80 and they will like send to
all these news media outlets round the world. Around the
world. So if you have some news to tell - like the car stone
repair system with a money back guarantee, that would be
newsworthy - and wrote a press release about it, we could
tell the world.

The third one is adding your comments to forums.

What are forums? Folks forums are this. They are places
where fly fisherman, fly fisher people, women whatever,
go to hang out and talk about their subject, their niche.
And so theyll go along there and theyll say you know
what? I found a brand new fishing rod and its called the
XY30 and it really cast the lure really far and its a fantastic rod. I really recommend it. Another person writes
gee, you know what I tried it too and its a fantastic rod,
but I didnt like the lure that you were talking about,
blah, blah, blah right. Lets talk about fly fishing the
whole day. They love fly fishing. And there are thousands
of groups, so whatever hobby you have, subject you like,
sport that you do, there is a forum for just about every
niche. Passion. Where people go and they talk. Now if
you go to these forums - why would that be a good idea
for us to look at the forums and look at what theyre talking about and look at the questions theyre asking? Why
would that be good?
We find out what they want. Thats the first reason
why we want to go there. What are they asking, what are

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they talking about? If theyre talking about lures thats
what we want to make our e-book about. If theyre talking about how hard it is to fish in Victoria, thats what we
want to talk to them about. How we can actually get over
that problem of fishing in Victoria. But heres the second
reason. By going to these forums, you can also leave your
own questions, your own thoughts. Then what would we
put at the end of our thoughts?
We put our own thoughts, comments on the forum
and lead them to your own website. Some forums allow
it, some dont. Find the ones that do and use them. Totally free advertising. Are those three ways to get traffic?
Are you going to use them? Yeah, go and check them out
tonight. Dont go to sleep tonight without checking out
at least one or two of those.

82 per cent of online buyers have made

at least one purchase in response to an
email promotion.
Thats a lot of people. So if youre thinking that people
dont buy through email or email doesnt work no more,
it works. And so we send your customers your prospects
in email, we mention about this fantastic new product on
fly fishing and its going to allow you to cast even further.
And then we recommend the website, and thats how you
can make some sales. Or you can even create the book
yourself. You can either recommend someone elses book
or create a second book yourself, thats what you can do.
Buying you know is all about trust. Dont you agree with
me? Buyings all about trust? You dont trust someone
youre not very likely to buy from them.
So you should use email to build up the trust account,
which is why I said have them opt in, create a newsletter
for them so they start to trust your information. When
you talk about fly fishing and how certain lures work
and how certain rods spin really easily you want to give
them good information. So that when you say you know
what, you should really buy this book, they what? They
trust you. They trust your advice. If Im doing my job
properly, yes, hopefully. Thats what you need to do too
folks. So how you do that folks is educating people to
your value. Telling them why youre informations so
good. Why you e-book makes sense. Why your research
is so extensive. Educate them to your and your products
value.

World Internet Office is the software that I use to do

all that. Itll send the email, send your newsletter, itll
even process credit cards for you. Send the welcome letters to your customers, saying thank you very much for
buying. Remember how I showed you my scrap booking site, and youre going to 19 emails over the next five
months? Guess which programme looks after that? I
do the work once and it keeps on repeating it forever.
Theres many other programmes out there, thats the one I
recommend.
Lets say were in the fly fishing category and weve
made our sale. Done all the work, making some money,
okay. You can actually increase that profit by selling
new products to existing customers. So that if we have
flyfishingsecrets.com, fly fishing secrets book, we can also
have fly fishing secrets number 2. With even more secrets
about fly fishing. But the good thing about that is that
statistics show that one third of the customers will buy
from you again if you just ask them.
So if youre not actually asking them to buy something
else youre losing money as youre actually letting down
a third of your customers. These are the statistics folks.
If youre not doing it youre actually letting them down
and losing money. The good part is there are no marketing costs involved in the second purchase. No marketing costs. Why is that? Its done already. Youve already
made the sale, youve got a 100 customers, we going to
send emails to them and say guess what, Ive got another
book for you. We sent an email, take a split second and it
doesnt cost us a cent.

What If You Dont Have Another Product?

Lets say you dont have a second product. You can sell
someone elses product that relates to what youre selling.
Shall I show you an example? ClickBank.com fantastic site. So, just stay with me for a second. Weve done
our research. Weve got a product now on fly fishing for
this example. Weve created a sales message. Created a
webpage. Now we will start to email our customers to see
if they want to buy something else. So we go along here
to ClickBank and these guys have thousands of products
ready for us to actually sell as well. They have thousands
of products ready for us to sell.
We click on market place, type in fly fishing, click on
go and see what theyve got available.

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Millionaire Phenomena - Internet: BRETT McFALL (continued)

We have better lovers guide, tropical fish secrets,
discuss fish secrets, trout fishing secrets. Might be getting
close. Carp fishing secrets, better fish secrets, fantastic
fish secrets, fantastic fish ponds, building an easy fish
pond. So we at least have three or four there that I
think sound like might be something that our fly fishing
customers would be interested in. Would you agree with
me? So if we click on it folks we will see what that products all about. Here is the sales letter that sells that trout
fishing product. And what do we see? Very basic black
type on white background yeah? Hmmm, how about
that. So I scroll down. Its all bullet points, its text, its
selling an e-book and there it is. Click here to order it,
there it is, $19.95.

that every two or three weeks? Youre going to find the

carp fishing secrets one, sign up for that one. So three
weeks later youre going to send them information about
another fishing book.

So let me tell you how this system works. Thats the

product. Youll simply register with ClickBank and they
will give us a little bit of code. What is code? Itll simply
say something like this. http..// and its like xyz blah,
blah, blah, 123 whatever. Doesnt matter what it actually
says, its just a little link right. And its called a hoplink
to be exact. And they give you this code and that is the
only thing they have to give you. Because when we email
out to our customers well simply put that link in the
email and say hey, I know youre a fly fishing nut right.
You love fly fishing, guess what? I just found a book that
shows you how to catch trout. Not just catch them, but
to catch big trout. Just click on this link and itll tell you
all about it. They click on the link and it takes them to
that sales page we just looked at.

Once you have a website thats working the smart

thing for you to do is grow it before you go on to another
project. So now, instead of you promoting other peoples
products they will actually promote yours. Launch your
own affiliate programme. Thats what I was talking about
when I went to ClickBank. Thats called an affiliate programme. So now people can actually sell your fly fishing
books to their customers. Im not going to tell you how
to do it right now. I dont want to confuse you. You just
need to know the steps for now. But affiliates are people
wholl promote your website on the internet and take a
commission on the products they sell. Thats all. Meaning
no upfront costs for you. Theyre going to promote your
products for you. And World Internet Office takes care
of that for you. Theyll actually tell you how much to
pay your affiliates, take away all the commissions, and at
the end of the month you write a cheque, thank you very
much indeed. Simple as that.

Heres the deal. When they go there, if they buy itll

be all coded in the background so that we know they
know who sent them the customer. So theyll pay their
$19.95 and ClickBank will pay you probably around 50
per cent. Whatever deal that persons got going for them
as book, anywhere for about 40 per cent up to 75 per
cent you just go in and find out what theyre offering
theyll give you that percentage of the sale.
Im going to say it again...
Were going to send people to that trout fishing site via
a special link that ClickBank gives us, and when people
click on it, it lets ClickBank know that we sent them and
if they buy ClickBank will send you a cheque for that 50
per cent or whatever deal that site has going. Between
30 to 75 per cent. That is it. You dont have to design
a website, you dont have to have a webpage. You just
send a link in email, that is it. And what if you could do

Folks, this is where we turn just a $27 sale into something like hundreds of dollars worth for each customer.
This is how we do it. Does that help you out?
it.

ClickBank will become your best resource. Youll love

Number 7: Have AN Army Of People Sell

Your Products For You

Heres a summary of the seven steps. Find a hot niche

market first. Create a product that gives your market
what it wants, create a powerful compelling sales message.
Design a simple website that converts prospects into buyers and will bring traffic to the site. Use email to obtain
more customers and have an army of people making
money for you.
Folks, I hope Ive given you what you came here today
to receive, and that is a way out of your current circumstances and a way into a new and exciting world. Embrace
it and your life will never be the same again. You really
have nothing to lose and an amazing new lifestyle to gain.
Thank you.

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The 11 Steps To Take You From Zero

Cash To Financial Independence And
Personal Freedom In Less than 24
Months.
Part of the Millionaire Phenomena Series

nlike winning the lottery, winning in business is

rarely a matter of luck. Its almost always a result
of working hard, working smart and being persistent. Once of the greatest myths is that money makes
money. Actually money doesnt make money...knowledge
does!
Knowledge on how to make money and how to develop a service or product that people are willing to pay
for, in large enough quantities, will make you wealthy.
80% of people who win a major lottery prize are broke
again within 24 months. Yet, the person who made it
in one business, and then lost it all, can usually (within a
couple of years) make a few million dollars again.

Meet Jon Giaan

Eight years ago, I was searching for
a fast way to create wealth. Whilst
I had some success with property
investing and shares, I quickly realised that I needed cash flow and
lots of it, to accelerate my wealth.
I discovered a unique way of doing business and since that day Ive
never had to worry about creating money ever again. Ive gone
from humble beginnings to running a consistent multi-million
dollar business for the last 5 years.
Im regarded by many as the #1 player in my industry and often
sought-after coach and mentor to many high-profile speakers and
presenters.

What To Do And How To Do It?

Its a matter of knowing what to do and how to do it.
Thats why I go to a lot of conferences. I want to know
how some people (lots of them) make over $50 million a
year with TV and print ads in the USA. Quite a few make
a lot more than that. And like most of us, the majority of
them started with nothing.
All they did was to learn, do the work, test and be
persistent. So, lets have a look at what you and I have to
do to get rich...even if were starting from zero. (Mind
you, a little start-up cash doesnt hurt either.) Here then
are my 11 steps to financial independence and personal
freedom...try them for yourself...

Freedom Step #1:

Decide That You Want To Do It
Quite frankly, some people dont want to be rich. For
whatever reason, they believe that money is bad, its the

cause of evil, etc. Actually, money in itself is not bad. Its a

form of energy and you get to choose how you use it.
Or do you use it to help yourself and others lead a
better, more harmonious life? Or do you let its power
destroy you ,and the people around you? Money can do
both. The choice is yours.
If youve decided that you could actually do a great
deal of good in the world if you had a lot of money, lets
go to the next step...

Freedom Step #2:

Believe That Wealth And Personal Freedom Is Possible And...That Its Possible
For You
In other words, take responsibility for your destiny

Millionaire Phenomena - Business: JON GIAAN (continued)

and look for the solutions rather than the problems and
obstacles in your life. In almost all cases, the people who
arent making it (financially, physically or in their relationships) are blaming the competition, its the economy,
its..., its..., its...anything but them!

Lets say you decide to build some muscles, get fit and
exercise your body. You go to a gym and you see all these
beautiful bodies and you get inspired. You start to exercise
just like them, but instead of instant muscles and beautiful body... all you get is instant pain.

On the other hand those who do make it, are always

looking at how they can do things better, how they can
reach their goals faster. They believe that they can get rich
fast, they just havent quite found how to do it.

Lots of it. And thats where most people quit. Right

there, at the first sign of pain.

By the way, as I said in Freedom Step # 1, once you

have the knowledge (and apply it) you can make a lot of
money very quickly. And its got nothing to do with any
get-rich-quick schemes and scams. Those people are trying to get rich without putting in the time to learn how
to do it.
For example, imagine youve been in business for 2
years, 4 years or whatever, and you are selling a good
product to retailers, wholesalers, at the weekend markets
and trade shows. (A lot of people make a heap of cash
doing just that.)
Now, if you take that same product and advertise it
nationally for sale by mail order, you can make millions
of dollars overnight. I saw at least 4 products at the last
Gold Coast Home Expo which are big sellers in the USA
(direct mail, magazine and TV advertising).
Actually, there are hundreds of products that can
make you rich, if you know what to do with them and
how to promote them.
A friend of mine took a basic, everyday product like
ordinary grass seed, and by promoting it differently and
better than anyone else, made as much as $100,000 in a
single week selling it.
Of course all this is totally irrelevant to you unless you
decide to believe that it is possible to get wealthy the easy
way. And the reality of that decision is that its not going
to be a picnic for you. At least not initially, because to
make a lot money, starting with little (or no) capital is a
challenge.
You are going to have to be very focussed, very committed and...youll even have to work very hard at times
- especially in the beginning.
Isnt it the same for anything in life?

However, if you persist and keep doing it, the pain

will sooner (or later, depending on where you are at)
disappear.
And sooner or later you too will be seen as one of
those body beautifuls wistfully admired by others and
being told Its easy for you, you have the body or talent
or whatever.
It works the same in business and building personal
wealth and freedom. Yes, its going to hurt. Yes, its going
to take persistence, effort and time. But eventually, you
will succeed.
Its only a matter of time, and how long itll take depends entirely on you.
Are you willing to learn to do what it takes to become
a master at business?
You are! Good, lets move on then.

Freedom Step #3:

Define Very Specifically Where You Want
To Be In 2 Years Time
Im sure youve heard of goal setting before, but are
you doing it and doing it consistently? I always carry my
4 most important goals with me and read them often.
They remind me of where I want to be. If you arent doing
this, its too easy to get off-track and be distracted from
your purpose.
So, what should you do?
Well, for a start, write down...
how you see yourself and your ideal business and
lifestyle in 2 years time
how you feel and look physically
how much money you have in your bank account

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Millionaire Phenomena - Business: JON GIAAN (continued)

the sort of house you live in
the location of the house
how many days a week will you work
how many hours per day, etc.
The more specific you are, the better it is. When my
wife and I set our goals we had no money, no house and
no idea how wed get what we wanted. That was 8 years
ago. Today almost every goal we set is a reality, or we are
very close to achieving it.
So do it. Set your goals and re-read them every day.
We do it and it works. Because if you do read them everyday, they are ingrained in your mind and youll eventually believe you can achieve them. Im not totally sure
why goal setting works so well. All I know is that it does
work...if you do it.
The great Indian statesman, Mahatma Gandhi, once
said:
Watch your thoughts because they become your
words. Watch your words because your words become
your actions. And watch your actions because your actions become your destiny.
What destiny are you heading towards?
Remember, it all starts with your thinking, and your
thinking will be influenced by writing (and reading ) your
goals often.

Freedom Step #4:

Use The Right Vehicle To Create Your
Wealth
Once youve made your decision to become wealthy,
use the right vehicle (or business). As the world and technology changes, new opportunities open up almost daily.
If youre in a business (or in a job) thats on a decline, you
may have to change w hat you do and learn some new
skills. You may have to change how you do your present
business, and one way is to deliver lots more value to lots
more people.
In almost every case, wealth is created either by doing something better than anyone else and getting more
customers and profitable sales, or by doing something

entirely new, something which no one else has thought

of before. Or you could take on existing products or old
ideas and find new opportunities for them.
For example, in Germany, a young lady founded a
Rent-A-Grandma baby-sitting service. She placed an ad
asking elderly woman who liked children to write to her
if they were prepared to look after them for free. A lot of
people, possibly retired, bored or doing little, replied!
She now has over 100 grandmas, pays them a small
fee and is able to provide a service normally performed by
young girls or women, at very affordable rates.
A fellow discovered an automotive product that was
added to an engine to improve mileage. Being an enthusiast, he liked the product so much he approached the
manufacturer to see if they were selling it outside of the
country. They werent, because they were too busy just
producing the product for the local market.
So our enterprising young man arranged to buy the
rights to market the product world-wide for $100,000.
But wait, listen to this - all he paid was $1,000 now and
an option to pay the balance of $99,000 in 6 months.
Then he quickly placed a small classified ads in the
business opportunity columns of newspapers around the
world, offering the local import and distribution rights
for $25,000 each and promptly sold 80 licences.
Thats a cool $1.5 million, plus he made a deal to get
5 cents a can from every sold overseas. Needless to say,
this would have made him a millionaire many times over,
and he did all that without any stock, any office or any
staff, and of course the manufacturer was thrilled to have
a worldwide distribution and lots of orders.
The facts are that less than 8% of popular US and
Australian products are ever exported. Where do you
find these new products? At trade shows, in the Business
Opportunity columns of newspapers and in trade and
opportunity magazines.

Freedom Step #5:

Create A System For Everything You Do
A business which is reliant on the founder to function and survive is not a wealth building machine...its a
trap, and it is not much better than a well paid job (and

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Millionaire Phenomena - Business: JON GIAAN (continued)

sometimes a lot worse).
According to Harv T. Eker (whos built several businesses from zero and sold them for millions of dollars)
a definition of a system is...a repeatable process that
produces a profit.
Once you have a repeatable process in place, you can
expand your business activity...and you wealth. The 3
areas you must systemise are...
Sales and marketing
Supply and production of products or services
Administration and accounts
In each of these areas you must create a repeatable
system which manages the operations of each of these 3
areas. Of course, the most important one to get right first
is sales and marketing.
How come? Well, simply because if you cant sell your
products or services at a nice profit - you wont need the
other 2 departments, will you?
The idea behind developing these systems is to create
a money making machine. A machine that just turns over
making you money whether you are there or not. No
matter how good you are, if the business is dependant on
your constant input, there is a limit to how much you can
do, and the profits you can make in that business.
Just like a coach in a football team, you cannot both
play and steer the team to victory. If you are playing,
you are not observing your teams (and your opponents)
performance. To coach your team to victory, you must be
the one directing your team - or your business.
Do it right and this system actually runs your business
for you, so that you can go on a holiday with the family,
take a day off to play golf, go fishing or whatever else you
like doing.
The system gives you freedom to do as you like, instead of letting the business run you.

Freedom Step #6:

Keep Doing What Works
Dont forget anything thats working for you until

youve got something better to replace it with. The way

you make money in business is to keep repeating the same
process over and over again according to the system you
have developed.
Because of my ability to write effective ads and market
just about anything, I often make the mistake of jumping
from one project to the next. What this does is create a lot
of work because each time you start something new, you
have to go through the whole process again.
You have set your goals, test your ideas, develop them,
market them and systemise the whole process for every
new project or business. This is a lot of work. .
What you want to do is duplicate what works. Duplicate what makes you a profit. If you send 100 letters and
get 10 sales, to make $1,000 sales you simply have to send
out 10,000 letters. If a restaurant makes a good profit in
one location, you simply have to find similar locations
and the restaurants there will also show a profit (a system
many franchises use.) If you make a profit with one salesperson selling your products, to make more, you need to
hire other sales people to get more sales. And so it goes.
Thats exactly what the McDonalds hamburger
chain did. They turned a single restaurant into a money
machine. It all started when a milk shake cup salesman
called Ray Kroc became fascinated by the fact that a small
restaurant owned by the McDonald brothers bought so
many shake cups and blenders. So he bought the rights
to duplicate their operation (money machine) in other
locations. His idea started a while new way of creating
wealth, called franchising. The same goes for many other
businesses and product distribution systems.
Even a home based entrepreneur who has a market
stall and makes $500 for 1-2 days work can duplicate the
same stall at other locations. Mail order, or direct response
marketing, works in the same way.
Once you have a successful ad you simply run it more
often and in more publications to make more money.
And why stop with Australia. You can do this in most
English speaking countries, the USA, England, India,
Canada, New Zealand. All itll take is one or two test ads
and if successful, you have a world wide operation.

Freedom Step #7:

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Millionaire Phenomena - Business: JON GIAAN (continued)

Get Other People To Sell Your Products
For You In Large Quantities

dont have to create products, just figure out ways of moving them, its far more profitable.

As I already mentioned, to make a lot of money really

fast, you must sell a lot of whatever you are selling at a
good profit...in a short a time as possible. One way to do
that is to find distributors or other people who have the
potential to buy a lot of your products at once.

Freedom Step #9:

Sell Out At The Top

For example, Ive approached (through an agent) a

major bank to purchase one of my products to give to
their customers as a gift for taking out a business loan,
and help their clients increase their sales to make sure the
loan gets paid back! They loved the idea. Now if they buy
just 3 copies for each branch (and they have over 1,500
branches) thats over 4,500 copies in the first order.
So, by talking to just one person we can make almost
5,000 sales at once. And of course, this idea can be taken
to many other companies that deal with business owners.

Freedom Step #8:

Work Smarter, Not Harder, By Using Leverage
Anyone not using leverage in their business is simply
working too hard for too little money. To get leverage, ask
yourself these questions...
How can I be making money - even when I am sleeping or not working in my business?
How can I make at least $500 or $2000 a day, even
when I am on vacation, taking a break, working on new
ideas or other projects?
When you can answer those questions, you are on the
way to financial independence and personal freedom. I
am sure youve heard of movie stars and pop stars receiving royalties on songs and movies they made years ago, or
inventors of certain products, such as ring pull cans, who
get 1/4 of a cent for each can sold. With billions of cans
being sold each year, this adds u to a sizeable fortune in
royalties alone.
Heres an example of leverage. I bought the rights to
a product that took someone 12 months to create and
simply started marketing it using the fax machine. I sold
5,135 copies at $74 in 10 months. Thats $379,916. You

All successful (and wealthy) business owners know

that, in most cases, you can make much more by selling
your business, rather than by running it. There are hundreds of people looking for businesses that are successfully
up and running. Everybody wants to buy a money making machine. Even small business operators can cash in
on this by selling out at the top.
A business broker once told me that out of the thousands of people he sees each year, there are only 20-30
very successful operators, most of whom make their
money by building up a successful business...and selling
it at a healthy profit. They keep doing this every couple of
years. In fact in one case, the same business was sold four
times by the same people. How come? Heres their story
as the broker told it to me.
The original owners would build the business up (it
was a delicatessen) and sell it for $400,000 or so. However, the new owners did not run it following the original
system. In a few years the business was almost worthless.
The original owners bought it back for a song and
built it up again. Then they sold it again. Over 20 years
they did this four times. Amazing but true!
You see, if a system works (as it did in the deli) you
mustnt change it. In all 4 cases the new owners thought
they knew better...and paid the price. Of course the original owners simply followed the fast wealth formula for
success. The point is, whether your money making machine is big or small, there are plenty of buyers out there.
Harv T. Eker, the USA entrepreneur who originally
came up with the 7 principles of Speed Wealth, started
a business with $2,000, built a money machine and sold
out in 2 1/2 years for two million dollars to a large corporation.

Freedom Step #10:

Plan To Sell Out When You Start To Plan

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Millionaire Phenomena - Business: JON GIAAN (continued)

Your Business

you...

If you plan to sell from the outset, then everything

you do will lead you to that goal. Many very wealthy
business owners do just that....start a business with the
goal of selling it in the future.

There was a young lad called Ted who wanted to start

his own confectionery shop. The problem was he had no
money. I mean no money. None. Zippo. Zilch. Just like
most other 20-year olds, fresh out of college.

If you use the steps Ive covered here you can cash out,
no matter what business youre in, even if you work from
home or are a professional. After all, if you have a business thats a money-making machine- a system that runs
it and keeps it going even if youre not there - that business is appealing and saleable.

Freedom Step #11:

Work Hard And Dont Give Up When Presented With Challenges
Event though this whole process is about working
smart, initially youll have to work hard at planning, developing the systems and testing your ideas. However, the
more you follow this system, the easier it becomes.
All you have to do is focus and believe that you can do
it. Keep your focus on the final goal you want to achieve.
Now what I want to do is give you 5 business-acceleration principles that I consistently use to make millions of
dollars year-in, year-out.

How To Start A New Business Without

Capital...or Raise Cash To Expand An
Existing One Without Borrowing A Cent
The right attitude can help you overcome one of the
greatest obstacles to starting a business...or growing your
existing one.
I come into contact with a lot of people and the most
important reason why I feel some succeed and others fail
is their attitude, or how they handle the challenges of life
and especially what being in business throws them.
And one of the greatest challenges to overcome in
business is almost always a lack of capital...money to
start your business, or money to expand it, and money
to develop it once its going. You know what I am talking about, dont you? Well let me share a true story with

However, he did have two things going for him:

A burning desire to own his own business,
and...
A nothing to lose attitude.
But, unlike 99% of others who cry all t heir life that
money makes money, and how it is impossible to get
ahead, Ted had other ideas.
He knew he wanted his shop in an area that had a
lot of passing traffic, preferably on the main road, and
somewhere with a lot of parking spaces as well. So he used
to drive around looking at possible sites for his new shop.
All he had was a dream and the determination to make it
work.
One day he noticed a free-standing building which
had been leased a number of times. However, each successive business closed down, leaving it in a run-down state.
It was now either lease or sale.
Having nothing to lose, our young entrepreneur
made an appointment with the owner, and heres what he
proposed:
Mr Morris, I know youve been trying to lease or sell
this building for a long time and I would like to buy it from
you - At the price you are asking. The problem is... I have no
money for a deposit. However, what Ill do is this.
If you let me buy your building for no deposit, finance it
for 18 months, Ill repaint and renovate it. Ill pay you each
month, as repayments, an amount 20% greater than if you
were to rent it out, and at the end of 18 months Ill re-finance it with a bank or continue to pay you - at your choice
The owner said Now why should you do this?
Well because you are having trouble selling and Ill pay
you your price, and Ill renovate the building at my cost. So
that even if worst comes to worst, youll end up in the same
position as you are now, except your building will look much
better - And be easier to sell or rent.

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Millionaire Phenomena - Business: JON GIAAN (continued)

If All goes as I know it will, you will have got a very
good price for a building that is a hard one to sell - even at a
lower price.
So please, can I buy it from you to start my new confectionery business?
Well, Mr Morris was quite taken aback. Nobody had
ever approached him with an offer like that before. So he
told Ted hed have to think it over, and he would call him
in 3 days, after the weekend.
Needless to say, Ted was on tenter hooks all weekend.
On Monday the telephone rang - it was Mr Morris.
Well young man, he said. I like your attitude and even
though my accountant advised against it, Ill go ahead with
your proposal.
So Ted had his shop and now he needed some money
for the paint and fit out, so off he went again, and this
time he approached a bank.
Well I have this building, he said.
I need to paint it and fit it out for my new business.
Could you lend me $5,000?

fectionery shop in this city. However, I have no money left for

equipment, so what I would like you to do is put it into my
shop and Ill pay it off from the profits I make. After all, its
sitting here in your warehouse not being used, and in return,
Ill guarantee to buy all my equipment from you when I
expand in the future.
Well to cut a long story short, Ted got his equipment
from the supplier he approached...and he kept his word.
Over the next 5 years he bought may hundreds of thousands of dollars worth of equipment. But were jumping
ahead of ourselves here because he hasnt got any supplies
yet, has he?
By now you know what happens next. Once again, he
went to a confectionery supplier and said...
I have this building and this equipment to make confectionery. However, I havent got any money left for the supplies. Could you advance me 2 months credit, and in return
Ill stay loyal to you as I expand my business?
After a few tries, Ted got his supplies and was ready
to open this doors and sell lots of delicious confectionery, which he did. And over the next 5 years he opened
another 10 shops.

And although the bank would lend him $5,000 to

buy a car, unfortunately $5,000 for a business seemed an
impossibility. You see, banks have some very interesting
guidelines. I found this out myself recently when applying
for a loan to buy a house.

I guess you want to know the best strategy for getting

new customers for his confectionery?

Even though we owned a business making over a million dollars in sales (with a very healthy profit), I had a
much harder time getting a loan than my assistant. Isnt it
amazing! Work for yourself, employ others and you have
no problems...So much for the We are small business
friendly bank ads!

OK. Ill tell you...give it away FREE! Thats right. The

cost of the ingredients is quite low, so have free samples.
Give it to drivers sitting at traffic lights outside the shop,
and have other shops in your area giving coupons to their
customers for free serving. Give coupons to all the offices
and households within a 10-minute drive or walk to your
store.

Anyway, lets get back and see what Ted is up to. After
getting the big A from the bank, he did the rounds of
people he knew until he finally found a helping soul who
lent him the $5,000. He was ready to move on.
Next he needed the equipment for his confectionery
making and displays. At this time there were about 6
companies who supplied this sort of equipment in his
area. So once again, not to be deterred by his lack of cash,
he put this proposal to them.
I own this building where I want to start the best con-

Teds Winning Strategy

I am not sure what Ted did, but he grew his business,

and all the people who put their trust in him were repaid
as promised. Today Ted owns a multi-million dollar mail
order business and to date hes sold over 200 million dollars worth of books and tapes. Now all this happened over
20 years ago. Will it still work today?
You bet! One of my clients recently got his suppliers to
give him $2,000 worth of products to use as giveaways to
attract new customers. Of course, new customers for him
means more business for them.

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Also, remember that $10,000 worth of products
at retail may not only be $2,000 at cost, thus offering
freebies to get new customers is not as costly as it first
appears (and its a lot cheaper than running ads). It simply
means that you and suppliers give up your profit on the
initial products in order to get new customers trying your
products. The profits come from the repeat business and
the add-on sales.

A Loyalty Incentive
Lets say you owned a hardware store and wanted to
attract new builders to do business with you. What if you
got the suppliers to give you some supplies free (or at a
greatly reduced price) and offered the builders a $300
credit if they opened a new account in the month of July.
Once they are in your store theyll probably keep buying
every month. And the $300 may only cost you $100 in
the actual cost of the goods, after the suppliers chip in
with the freebies and discounts.
Easy, but very effective. Anyone who sells to repeat
account customers could use this.
A printer jokingly approached me the other day...
Would you like to invest in a printing business?
Well, we do a lot of printing, but I had a better idea
for him. I told him to ask all his customers to finance his
growth.
This is a chain of USA restaurants that was fully financed by its customers. Heres what they did. They wrote
a letter to all their customers.
Heres what they did.
Prepay $200 and save 12 1/2 %
Prepay $500 and save 20%
Prepay $1,000 and save 25%
This approach built a whole chain of restaurants, and
was a great loyalty builder.
After all, if the restaurant (or whatever business) is
good and youll be coming back, it makes sense to buy
one. A sample of the ad is shown below and it is good for
business as it hooks the customer into coming back.

Why marketing is the easiest way to

make more money in your business...
Consider this...
You can put your money in the bank, in shares or
buy some real estate. Youll get a return on investment of
10%, 20% or if your borrow money against the house
you may even get 30 or 40% return.
On the other hand, money invested in Marketing of
your business will without doubt give you - your biggest
single return on investment - greater than any other form
of financial investment.
How come?? Well, simply because a single advertisement, properly targeted, with the right headline and offer,
costing say $200, can bring returns of perhaps 1000% or
more within days.
Calculate that increase over a year. Can you see why
Marketing is the easiest way to make more money in your
business?
Let us say you are already running an advertisement
and getting 5 calls a week from it. You change a headline
and now you get 8 calls a week. What if you raise your
number of sales from two out of the five people who call,
by just one more sale. That is 52 more sales in one year.
Plus the extra sale from the other three calls and now you
have 104 more sales over a year. How much extra profit
did you just make with the same cash outlay?
Thats leverage and you can do it in your business...
All you have to do is experiment, test different offers, headlines and target the right groups of people. A
restaurant on the Gold Coast called The Elephant Rock
Cafe sent their customers a letter with the offer of a Free
dessert. Only three people out of one hundred came in on
that offer.
The next month they sent another letter offering new
customers $10 credit for the next month only. The Response - 18.8 % at an average sale of $52.20. Thats $991
for every 100 letters sent.
Better than leaving your money in the bank, isnt it?
In the early days of my marketing career I created a
promotion for a friend of mine and placed an advertisement with the headline Spa Bath under the For Sale

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column in the classifieds. The result was 2 calls and no
sale. The next week I tried the headline Sex is Free and
described the fun of having a spa with the ending...and
what you do in it is your business. The result - 11 calls
the same day and it sold at 8 a.m. the morning it ran.
Thats a 550% increase in response.
I am not saying to use sex is free in your advertising,
its just an example of what a difference in results you can
get with one approach over another.
Another advertiser running an advert for a Do-ItYourself hair treatment product headlined, New Home
Permanent - Conditions As It Curls received 100 replies.
The second headline was titled Girls...Want a Fast
Permanent. This one received nearly 300 replies. Thats
almost 200% more. This advertisement ran every month
for years. By changing the headline the business received
2400 more replies in a year.
And that was just in one magazine!
Can you use leverage in your business? Of course you
can. It works for every kind of product or service. All you
have to do is keep testing, experimenting, leveraging...
...And, banking more money everyday.
SEX IS FREE
I have a 1500 x 1500 corner spa in
mist grey and gold. It was once worth
$1700 and is still in its original
wrapping. I have moved it 3 times and
frankly I am sick of moving it. You
can use it for lots of things. Give me
$900 cash and its yours.
563330 a.h / 935450 b.h

AD 1- This little ad cost $30 and received 550% more

response than a conventional For Sale advert. 11 people
called and it sold at 8 a.m.

Ask your customers what they want

What need, want or desire are you filling in your
customers mind? Have you ever asked yourself what your
customers really want or need in the product or service
you offer?
Most businesses have no idea. When I ask them, in
90% of cases they say: All the customer wants is price and sometimes service. This is laughable. If people only

wanted the best price, there would be no Mercedes cars,

no better quality clothes or bigger houses.
As of service, most businesses cannot define what this
service they offer consists of.
How do you find out what your customers really want
and what is important to them?....ASK THEM!!
The answers may surprise you. For a supermarket
it may be home-delivery and easy parking rather than
price. A wholesale garden centres customers wanted delivery on time, plants that would last in the sun and availability. Price was the last thing on their list. Why is that?
Well, imagine this. You are a landscaper and you have five
men, two trucks and a crane on site. All you need is the
damn plants. Every hours delay costs you about $350.
Youre tearing your hair out.
Next time, whatll be more important, saving $50 on
your plants, or reliable delivery? And if the plants die in
two months time who is the customer going to blame?
Thats right. YOU!
Cheap plants? No thank you, I want plants that will
last.
In a Tile and Paint shop the customers wanted colour
coordination help for choosing the tiles and ease of application for the paint.
What do your customers really want from you? Why
dont you go and ask them. They would love to tell you.

Tell your customers the Reasons Why

Whenever you make an offer, ask for a sale, reduce
your price or make any other proposition to your customer - always tell them the reason why.
Why is your price cheaper than your competitors? Is it
because you have a lower overhead or because it is a line
you no longer carry. Will you still give me good service?
Is there something wrong the product? Your customers
want to know why. Tell them.
Why would I give you my business instead of your
competitor. Please tell me. I am a customer and I want to
know.
If your price is higher tell me why? Is your product
twice as strong, does your suit have triple the stitching, do

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Millionaire Phenomena - Business: JON GIAAN (continued)

your plants really last in the sun?
The more factual, credible and believable are the reasons you give me for dealing with you, the more likely I
am to give you my business.
Please, please tell me. I am a customer.

Mail your existing customers.

Most people make a sale to a customer and then go
out looking to find a new one.
It is 5 times, yes 5 times easier to sell something else to
an existing customer, than to convert a new one.

Testing - What can I test and how? (price, guarantee, headlines, etc)
Am I mailing my customers? If not, when can I
start and what offer can I make to them?
My Unique Selling Advantage is...(you can have
more than one)
Have I ever done a customer survey?

How you can be a top Marketer. The

Secret Method every successful
Marketing Expert uses...

The first sale is just a start. There is no business that

cannot benefit by direct mailing and making new offers to
their existing customers.

How did every Marketing expert start? In fact how

did anyone who becomes great in their chosen business or
personal field begin? What is their Secret?

What if you have a once only product?? Well for a

start not many products are once only. You will by 35-45
pairs of shoes, 6-7 car, 3-4 houses, and probably paint,
carpet and renovate another 5-6 times in your life.

Every successful Marketing Expert started by emulating someone else. Emulating is a fancy word for OBSERVE, STUDY and LEARN FROM.

How much does it cost to send a few letters to someone who has just spent a few thousand dollars with you?
If you dont have another product to sell, find another
business with a product or service that your customer
will want - a logical add-on if you like. For a 4WD car,
it could be a bullbar, a caravan or a camping gear. For a
house, it is carpets, curtains, alarm. For a dress shop, its
shoes, accessories, handbags etc.
If you have a repeat product such as shoes, why not
take the customers size, favourite colour and mail them
with an advance notice of new lines? Or with first notice
on specials in their size?
A mens-wear shop in Melbourne sells more in his
Customer Only four day sale than in a month of normal trading.
Every business can profit from add-on sales. If you do
it consistently and test a few approaches, you will make
more money with this method than in the original sale!!

Your Action Plan

Am I monitoring my marketing? If not, how am I
going to monitor it in the future?

You are surprised? We learn to walk, to talk, to write,

and even to love from the people around us. You started a
business because you saw others doing it. You learned to
drive a car by seeing someone else first and then doing it
yourself.
Even Michelangelo began by copying someones painting style.
You can become a marketing expert within 12 months
guaranteed. I had no idea how to start. Then I read
something very interesting written by Gary Halbert. He
is a Guru of Direct Mail and has probably written more
successful direct response advertisements and promotions
that anyone else living today.
Gary said that the way to write great letter and advertisements, was to sit down and copy out - in your own
handwriting - the best ads and letters you can find. The
ones that made the most money.
What happens is that the writers way of thinking actually imprints on your mind after you have done it a few
(hundred) times. Let me tell you - IT WORKS.
If you want to be good at anything, find the most successful people or business and learn from them....
Ask them how they got to be so successful. People

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Millionaire Phenomena - Business: JON GIAAN (continued)

love to talk about their successes. You can get 20 years of
experience in half an hour if you ask the right people the
right questions. Try the words.....
I have a problem and I need your help.
People want to help others. Remember when you were
lost and asked for directions? How helpful most people
are. You just have to ASK.....
Use this approach and remember....the way to repay
someone for helping you, is for you to help someone else
in the future. Make the good deeds go around and share
your knowledge to help others.
Start a marketing ideas file for your business. Everytime you see an advertisement, a direct mail letter, or a
letterbox pamphlet that attracts you, keep it. Record good
TV commercials. Ask yourself, what advertisement or
sales approach did I respond to. What business do I like
to go to, and why? Become a marketing Sleuth.
Observe others - when something irritates you - write
it down. I hate it when they ask me to open my bag
when I am walking out of a supermarket. Why? Probably
because on an unconscious level it seems as if they are
saying, We dont trust you. I have even avoided walking
into some stores for that reason.
They dont do it at Myers, or Grace Bros or in the successful franchise stores. Why do they have to do it at KMart? Why punish the 97 people who are honest, for the
3 who are not? That seems like bad business to me. What
would happen if they focused on giving better service
instead? Ill be their profits would increase.
Please DO IT - observe, learn and apply it in your
business.
Ask others in your business to come up with ideas and
reward them. People like to be acknowledge. That is the
reason for the success of some of the MLM companies.
Their Rah-Rah Meetings with their gold, silver and diamond pins being given to achievers are good examples of
people recognition that works.
Same thing in sport. People get excited when they
score a goal. Can you apply that knowledge in your business? Do you have goals for you and your team?
There is a new and very successful department store
called Nordstroms in the USA. In their shoe department,

the sales are up to nine times greater per square metre,

compared to shoe stores in Australia.
Why is that? Well, for a start, the staff always bring
back three pairs of shoes from the stock room when serving a customer.
The style and colour requested; a different colour of the
same style; and a selection made by the employee.
They also take note of your shoe size and they style
of shoe you like. They mail you with special offers. They
have special sales for your shoe size and customer only
previews of new styles. All this gives you the message - We
care about you - our customer.
How can you apply that to your business? In a video
store you could always bring another two selections with
each customer request. A fashion store can do the same
when you ask for a particular size. A car dealer can offer
to test drive two cars that he picks, based on your first selection. A restaurant can give you a sample-taste of other
dishes on their menu, and so on.....
Start asking yourself, if it works for them- why not
for me? Find out, test it. Do it for a week, a month what have you got to lose?
And, most importantly....
Talk with your customers. Ask them what they want
and give it to them.
Your customers will always tell you exactly what you
should be selling, how you should be selling it and how
much you should sell it for. They tell you by their willingness or failure to spend their money with you.
Start being a Marketing Expert, NOW. Its easier
than you think.

YOUR ACTION PLAN

1. Do I have a marketing ideas file or scrapbook?
2. What are my favourite businesses and why?
Business no. 1:
Business no. 2:
What is unique about their service or product??

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Millionaire Phenomena - Business: JON GIAAN (continued)

3. Have I ever asked my staff how can we improve
our business?
4. Do I know any other business with a great service,
excellent phone manner, or anything else my
business could use?

How to collect your customers names,

use them to make extra profits, and turn
them into a saleable asset...
It is five times easier to sell something to an existing
customer than to win a new customer. You must capture
all your customers names and details. Heres how to do
it...
The simplest way to capture all your customers names
is to ask them. You will be surprised how happy most
people are when you ask them to be on your Special
Customer List or on your Customer Club. You can have
a pad on your computer with something like this on top
of it.......

Special Customer Club

To receive first notice of new product arrivals, customer only sales, and product information please write your
name and details below.

them anyway. That way theyll look forward to it.

The third way to collect names is to have a section on
your warranty card or on your cashier dockets, Either you
or your customers can fill them in. Make sure you get all
the relevant details youll need - Their birthday, shoe size
if shoe store, hair type and colour if hairdresser, age of
child if childrens store - in fact anything you will need to
serve them better and make them feel more important.
Plus you may want to add a How can we improve our
service to you? with a space for their comments.
Now that you have collected all your customers names
I am going to tell you...

How to make extra profits with your own

customer list.
First thing you should do is thank your customers for
shopping with you. At the same time, this will reassure
them in their decision to shop with you.
This letter will be enough to send a large percentage of
them into shock and disbelief....
When is the last time YOU received a thank you letter
for spending your money with someone?

Would you like to go on your Special Customer

List? Theyll love you for it!

I DID! About 5 years ago I had some shirts and trousers made in Hong Kong. I got a HUGE surprise when
a Christmas Card arrived in my mailbox from the tailor.
Guess where I went to buy more shirts when I visited
Hong Kong some 2 years later? Thats right, the same
tailor.

I saw this method used at a market. The name collection pad was just lying on the table and the people were
lining up to put their name down.

I wonder how many tourist businesses in Australia

send Thank You notes and Christmas Cards to their
customers?

A health food store owner in Nowra, south of Sydney,

said his customers thank him and feel honoured for the
opportunity.

What else can you do with your customer list? Well,

you can ask them what you can do for them in the future,
and at the same time, how you can improve your service
to them. Just by asking you show your customers that you
care more about them than Jack does down the road.

Then you simply ask your customers....

Another way to collect names, is to make an offer on

a sign in the store. Something like, WIN $100 Worth
of Products, A $50 Wardrobe Consultation, A Subscription to a magazine, or anything else that your customer is
likely to find useful and attractive. Have a name collection slip on the counter for them to fill in. And always tell
your customer why you are collecting their name. They
probably know you are going to mail things to them. Tell

An accountant asked his clients what they wanted. He

discovered his clients needed help in Managing and Marketing their business. He was able to get business which
otherwise would have gone to someone else.
Even if you havent got what your customers want,

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you can always find someone who has and promote their
products for a percentage of the profits.
Once your customers tell you what they want, you can
start to make all sorts of offers based on that information.
You can have Customer only specials not available to
the general public. Give them first choice on new items.
You can even pre-sell products or services to them.
A childrens store owner calls her best 20 customers
when the new seasons clothes come in. Almost every customer comes in and buys something. If it works for the
top twenty customers, wouldnt it work for the others?
Its easy to test. You dont have to mail or phone all
your customers at once. Mail a 100, 500 or a 1000 and
see if they respond. If they do, then mail the others.
Another way to make extra sales is to keep educating
your customers about your products, your service, your
field of expertise and how they can benefit from them.
A builder in Clayton, Victoria , has a brochure called
A Survival Guide....How to avoid the pitfalls of extending your home. A furniture company sends a report on
15 things you must know about designing and decorating your office
A restaurant can send special cooking tips. An accountant can give 7 Little-Know secrets to reduce your tax
bill this year.

Now you have a SALEABLE ASSET. How come??

Well for a start - you can offer to do mailings for other
peoples products - for a share of the profits. You can rent
your customer list through a broker. Youll get anywhere
from $150 to $500 a thousand names every time someone rents your customer list. However...
The biggest benefit of having a mailing list of your
customers names come when you want to sell your business.
With your mailing list and proven results of mailings,
you can prove to any prospective purchaser the amount
of money they will continue to make. Mail order businesses are easy to sell because you can tell exactly what
the business is worth by the size of the customer list and
the response to past promotions. You now have the same
advantage.
Your goodwill is not longer some imaginary, intangible, airy-fairy figure. Its a proven and tested customer
base that you can show to purchasers. OR You can sell the
business and keep the rights to your customer list. Then
you can continue to find new products to mail to it.

Your Action Plan

5 ways I can collect my customers names and details
are....
1.

What can you offer? Find out and start

mailing NOW!!!

2.

How often?? Well, its highly unlikely that you will

mail your customers too much. Every three months
should be a Minimum. You should mail something every
two months or so. Again - TEST what will work for your
business.

4.

Let me review the benefits of having a list of your

customers...
You have collected your customer names, asked them
what they want, and designed all sorts of offers & information based on their feedback.
You have determined the mailing frequency that works
for you and you have monitored the results from each
mailing.

5.
Lets say you are selling tiles. To say you have good
service, great prices and largest range of tiles means nothing. Everybody makes those general claims. Give specific
information such as....
3456 different colours and styles to choose from.
Same day Free delivery and prices 24 % lower because
we import directly - saving you the agents commissions.
Or, if for any reason you are not satisfied well give you a
refund. Now thats specific.
Specific information simply gives a much stronger and

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Millionaire Phenomena - Business: JON GIAAN (continued)

believable reason to call your company.

is...

Another way that may increase the response to your

Yellow Pages advertisement is to put your picture in it.

Lifetime Value of a customer is the average purchase

value, multiplied by the number of times they buy from
you in a year, multiplied by the number of years they
remain your customer.

Photos catch the eye first. Newspaper stories always

have a picture of the people and we are attracted to looking at faces of people. Put a smile on your face and a caption under your photo! Captions get read almost as much
as headlines.
Go through the Yellow Pages and make note of the ads
with a benefit headline and lots of copy. Call them and
ask them if their advertisement is getting results for them.
Most will be happy to tell you if their advertisements
worked or not. Use these magic words...I have a problem
and I need your help. They work!
The basic principle in writing your ad is -- The more
information you give, the more you sell.
Use the principles Ive given you and make sure you
do get your Yellow Pages ad working as effectively as possible.
You must monitor all your phone-calls, and if your investment in the Yellow Pages is large - consider installing
a separate phone-line with only the Yellow Pages number.
This will tell you exactly how many calls you get from
your advertisement.
GO ON - put in the time and follow up tips I have
given you.
It will bring you results to make it worth your while.

How to make powerful offers to instantly

attract new customers to your business...
Would you like to start a new business or double your
existing one? If you know the Lifetime Value of your
customer - you can do it almost overnight. Its the Marketing Edge that will help your business skyrocket and
get lots of new customers coming through your door.
No matter how large or small your business, no matter what product or service you sell, you must know the
Lifetime Value of your customer. Once you know it, you
can decide exactly what you can afford to spend to bring
in a new customer.
Let me explain what the lifetime Value of a customer

For example: You own a restaurant and your regular

customer spends $30 on average, of which $20 is profit.
Lets say they come to eat 12 times per year and stay with
you for 2 years on average.
This makes your regular customer is worth $20 x 12 x
2= $480 in profit to your business.
Use the same method of calculation for a hairdresser, a
supermarket, a car service centre, an accountant, a doctor,
clothing and shoe stores...
It works the same for any business.
You may sell a high value item such as refrigerators,
cars, machinery, office furniture or other seemingly one
off sale items. You will have service contracts, other products and customer referrals. They all add up to extra sales
and profits over a period of time.
Even if you just approximate the extra sales, you will
start to get some idea of what every customer is really
worth to your business.
Why is it so important to know this? Well, knowing
the Lifetime Value of your customers gives you a HUGE
Marketing Edge and I am going to show you...
How to use Lifetime Value to instantly increase your
business.
Most business promotions consist of ads in the papers
and magazines, beautiful brochures, signs and mailouts
telling the world about their wonderful products, service
and themselves. Usually an opening-special discount is
offered. Something like 10%. Unless you have some
marvellous contraption that everybody wants, such as the
only water stand on the edge of the Sahara dessert, this
creates about as much excitement as a dead jelly fish.
Oh, sure. It will increase your business. However, it
will expand it v-e-r-y s-l-o-w-l-y. In the mean time, the
rent has to be paid, you have to live and the ads are costing you a fortune. In a year or two or three you may have
a business. or YOU ARE BROKE.

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Millionaire Phenomena - Business: JON GIAAN (continued)

There must be a better way...
And there is!
You are about to learn how to create a situation resembling a shark-feeding frenzy in your place of business.
Let me tell you about a friend of mine who built a
business from scratch using this approach. His name is
Warren Woodcock. He spent $1 million on building 3
tennis courts, swimming pools, games room and barbeque facilities. The place was magnificent. There was one
trouble: He had no customers.
Here is what he did.
For one month he advertised in the local newspapers:
Free Tennis Lessons, Free Court Hire, Free Barbeques and
Swimming Pool Parties.

The result? Out of 120 people, 100 accepted the

lunch. Half of them ordered another lunch at the same
time. Most of those people became steady - regular - customers. Norman Gordan said:
It would have taking me six months to bring in the
kind of business direct mail brought me in six days. I
couldnt afford to wait six months...
He tripled his business since using only similar direct
mail approaches to qualified prospects.
The letter was written by Murray Raphel, a famous
marketing and advertising expert. He also owns a very
successful shopping centre. (He promotes it only by direct
mail).
Are you excited by the possibilities of your business?
Wait. There is more.

Guess what happened? Thats right!! The place was

packed out from 7 a.m. till 10 p.m. everyday that month.
He gave away lots of tennis lessons, sausages and court
hire. It cost him a few thousand dollars. The interesting
part is that at the end of the month, he had a business.
The courts were booked solid and have been ever since.

Who is Australias best known hairdresser?? His name

is Stefan. His picture is in most shopping centres in the
form of a life size cut out next to the hairdressing salons
that bear his name.

Why is that? People get used to playing at his courts

instead of someone elses. His complex was magnificent
and he charged more than the others. But the customers
got extra value with the swimming pool and barbeque
facilities.

He knew the average person comes 10 times a year

and spends $30 giving him $300 in turnover and perhaps
$200 in profit in just one year. If his stylists do a great job
on the Free Haircut, which they do, over 50% of people
may become regulars. The costs in labour and products
for the Free Haircut? Around $8!! With the $200 in profit
at the end of the year, he knew he could give away the
$8 Stylecut to get a new customer. Is he the biggest in
Australia? Yes, he is!! Because he understands that to give
is to get.

Warren knew the Lifetime Value of a customer.

He knew a regular weekly booking of 2 hours means
$20 per week x 52 = $1, 040 per year. Plus coaching at
$25 per half hour each week, plus sales of tennis balls,
clothes, etc, etc. This means he could well afford to give
all those Free games, coaching and food to attract new
customers.
Another example is a restaurant called the Alley Deli.
The owner, Norman Gordan, sent a letter to all the V.I.P.s
in the community, to the main partners in law firms and
the executive heads of all the companies located in buildings just a few blocks away from his restaurant. Altogether
he mailed 100 letters. They were addressed by name to all
the people on his list and included a menu.
His offer was simple:
A Free Lunch!!

Stefan started out by offering Free Stylecuts.

You dont have a restaurant, hairdressing salon or tennis complex? Here are some examples of who else can do
exactly the same. Accountants, lawyers and doctors can
give away a free consultation with $150, bowling centres
- Free games, supermarkets - coupons for Free food items,
car service centres - Free first service or Free brake checks,
muffler shops - Free muffler checks, landscapers and nurseries - Free lawn reports...Any business such as clothing or
any retailer can simply have no strings attached Free gift
vouchers of $10, $20, $50 or whatever amount will work
for you.
What you are doing is buying a new customer. You
do it because you want to know how much a regular cus-

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Millionaire Phenomena - Business: JON GIAAN (continued)

tomer will spend with you over their lifetime.
Buying new customers with an irresistible offer really works, and it works amazingly well almost everytime.
It works because human beings are creatures of habit. We
keep doing the same old comfortable things weve always
done. To get a customer to break their habit of going
to another business, you must give them a very strong
reason to try you.
Because they dont know you, they will not be confident to try you and thats why a FREE offer is a risk free
way for them to get to know you.
There is one exception when this approach wont
work! It wont work, when your product and/or service
is lousy. When you dont follow up your customers with
Thank You notes, letters and other forms of personal
communication. And in that case you deserve it. Because
good business is about developing relationships with your
customers.
Turn your customers into friends by showing t hem
you care and keep in touch with them on a regular basis
by mail or phone.
Before you rush out and start making free offers to the
world...
Work out the Lifetime Value of YOUR customer and
test all your offers and ideas on a small scale.
Analyse the results, adjust your approach if needed,
and only then go all out.
YOU WILL knock the socks of your competitors
every single time with this approach because theyll still
be offering 10% off.
The Lifetime Profit Value of Your Regular Customer
Average Sale Per Customer ($)
LESS - Cost Of Sale ($)

Use this form to calculate the Lifetime Profit Value of

your customer. It will help you determine how much you
can spend up-front to buy a new customer.

Action Plan for my business

1. Based on the lifetime value of my customers (use
the form on the previous page to work out what it
is) what sort of offers can I test in my promotions
to attract new customers.
2. Why am I making this offer (remember you must
give the reasons why in all your ads)
3. What suppliers can I get to help me with making
these offers? See chapter 11 for approaching your
suppliers.
4. What sort of offers attract me to other businesses
and what have I responded to?
5. How will I monitor the response to my offers?
6. Other action and ideas from this chapter:
Are there more than 5 accelerators to a multi milliondollar business? Sure. Ive got 21 of them that I consistently use.
If youre not using this type of marketing in your
business, then I believe you have little chance of success.
I hear it all the time, people say that advertising doesnt
work for their business. Youve just got to laugh.
What theyre really saying is that they havent worked
out a way to make advertising work for them.
I want to leave you with this final thought: Youre not
in business, youre in marketing and sales. Get this and
youll never be broke again. Dismiss it and youll just
continue to live a life of what could have been.
Dont let that happen to you.

GIVES YOU - Profit Per Sale ($)

MULTIPLY BY- No. Of Sales Per Year:
GIVES YOU - Profit Per Year ($)
MULTIPLY BY - No. Of Years As Customer:
Lifetime Profit Per Customer ($):

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The End: For You, The Beginning

Part of the Millionaire Phenomena Series

his final chapter of the Millionaire Phenomena

may be the end of the book, but for you, the start
of a brand-new exciting future.

In the next 12 months, there will be another big group

of individuals who will join the exclusive millionaire club.
Some will come as a direct result of the secrets and strategies shared within these pages. Isnt about time that that
someone should be you?
Decide on a path and work like crazy to get there.
Imagine if you could go from a standing start to a millionaire within 12 months... Success like that is not rare,
if someone else has done it - all you need to do is believe
you can do it, model their system, follow their steps and
in all likelihood, youll get a similar result.
In any case, making a start is far better than sitting on
the couch and just dreaming about it.
So now that you have multiple wealth creation options, what should you do next?

Create A Plan
My path to success was business first and then property and shares. Yours may be different to that. You might
look to start on the Internet part-time, as well as look at
the opportunities within the real estate and stock market.
Whatever it is, decide and take action.
Heres what I think you should NOT do just yet. And
that is, leave your job. There are some gurus out there
that motivate you into a frenzy and you go to work on
Monday morning and sack your boss.
Youre so motivated and emotionally charged up that
you feel as though your job is only getting in the way of
your newly-found inspiration and plan.
Its been my experience that only very few people can
go cold turkey and jump on the wealth express with no
safety net and make a success of it.

Its not a sign of weakness if you stay on, and its wise
to become strategic in your exit plan.
Heres whats really exciting...
When you finally decide that youre going to become
rich not matter what, your work and your life take on a
whole new meaning, because your energy has shifted.
Youll have a spring in your step, your friends and
family will certainly see the difference. So use your job as
leverage and your evenings as your opportunity to build a
side-business using the internet, real estate or sharemarket
as your second stream of income.
Start part-time and then build until you have enough
cash flow and confidence to sack your boss forever.

Work Your Plan

Lets face it, your first million is going to be a challenge. With all the new knowledge and emotion youll
experience, you might at times doubt whether its possible
for you.
So, you have to devise ways to keep you on track to
achieve your end result. Youll need a written plan, specific steps and most importantly, self-imposed deadlines.
This may be the hardest thing for you to do, but its
the only way youll turn your dreams in to reality. Your
first action step may feel like youre stepping off a cliff,
but youre not.
Youre prepared, you know what you want and you
now have a plan and blue-print to get it. Remember, it
takes action to see results. If youre not doing something,
nothing will happen.
Dont think as much about what can go wrong, as you
do about what can go right. Sure, you need to do worsecase scenario analysis on your deals, but know that worsecase rarely happens.
Just remember, when youre good at making excuses,

Millionaire Phenomena: CONCLUSION (cont.)

its difficult to excel at anything else.
Never Stop Learning
Your foundation and platform from which your future
will be built is specific knowledge. There more specific
knowledge you have, the deeper your foundations, the
higher your ultimate reach.
One of the great things about having money, is that
you can leverage knowledge so much faster.
A little-known secret that not many people know
about is that the way to fast-track your success is to use
other peoples knowledge and experience.
Why learn through your own mistakes, when you can
learn other peoples successes? You can literally save years
of time, effort and frustration by following an already
existing system that works.

transmitted. The difference between successful people

and those that give up, is that successful people dont let
failure turn in to road blocks.
Successful people learn from their failures, make
changes in their strategy if they need to and keep moving
forward.
You know the definition of insanity, Doing the same
thing over and over and expecting different results. The
definition of success is that There is no failure, only
results.
People unknowingly and unwittingly restrict themselves, but trust me when I tell you that you dont have
a clue how high is high yet, if you just give yourself a
chance, you can accomplish so much more than you ever
though possible.

Find A Mentor
In fact, find several mentors. You may be surprised
to hear that I have 30 or 40 mentors. Some Ive never
actually met, and they wouldnt know me if I walked past
them in the street.
Ive experienced their guidance through books, CDs,
DVDs, home study courses and seminars. Only a handful
have I made one-on-one contact.
Heres a quick wealth secret. Find a mentor that has
achieved the type of success that you want, and seek them
out. Be creative in how you approach them, dont be dull
and boring.
If they have courses or material on their subject matter, invest in the knowledge, become a student and never
stop learning.
You may think successful people are too busy to
simply stop what theyre doing and talk to you, however
what I have found is that if youre persistent, show great
enthusiasm and continually follow through theyre more
than happy to share with you their million dollar secrets.

Closing Thought
I hope that as you read this book, youre able to feel
the passion and emotion that all our wealth experts

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