Book Review 005: Max Out your life - Ed Mylett

Max out your life by Ed Mylett is a short, no-nonsense, step-by-step strategy book aimed to help you #MAXOUT Your Life and become an elite performer. Ed is one of America’s top 50 wealthiest under the age of 50, and is acknowledged for building one of the largest financial organizations in America today. Ed has been sought after, and privately mentored many of the top professional athletes, entertainers and business executives in the world for over two decades helping them to perform at #MAXOUT levels of their lives.

Think about this, the average person lives for about 78 years. Of those years, 28 is spent sleeping, 15 years working and commuting, 7 years spent worrying about life, many years on mundane activities, eating, getting dressed, surfing the internet, etc. , which leaves you with approximately 8 years to life your life. If you were told you had 8 years to life your life, how would that change your perspective, would that ignite urgency in your day to day habits and allow you to take more action and less time thinking?

Ed shares this example to depict how each of us do not really know exactly how much time will be given to us. You often hear of people who are older speak of regrets, and the opportunities missed, and chances not taken. Whether this be a dream audition, interviewing for a new job position, or asking out someone on a date. You hear less from people who gave it their all trying out something that eventually may have not worked out, as they will have no regrets, and will have learned from their actions.

In his book, Ed shares his strategies for the following:

1. Creating Strong Habits and Rituals

Ed shares how we as humans, are what we do, and not who we say we are. Habits and rituals allow us to stay motivated when the going gets tough. When we are weak, tired, and under pressure, our mind and body goes into habit mode. That is why it is so important to create habits that serve us and keep us on track even when we aren’t “feeling it”. Some of Ed’s daily morning rituals include waking up before sun rise, taking a cold shower (waking up the body), quick breathing and stretching exercises, meditation, review of goals, eating well, and working out. Ed reminds us that the two most important questions you must ask yourself are 1) why are you doing the things that you do and 2) how you will reach your goals

2. What is the RAS & How to Program

The average person has 75,000 thoughts everyday and 91% are exactly the same as the day before. This is why it isn't hard to see why people plateau and are in the same situation that they were in regards to their relationships, career, finances, fitness, etc. Do you have stop to think about your thoughts? Your thoughts are like magnets and they attract/filter the world you see. There is a bundle of our nerves at our brainstem called the Reticular Activating System (RAS) and it acts as the gatekeeper, filtering out irrelevant information and allowing only relevant information to enter our awareness. Your RAS takes what you focus on and creates a filter for it. Then it takes all the data that is received through your brain and unconsciously filters only pertinent information to you. Have you ever thought about making a purchase (e.g. car, clothing, electronics), and afterwards, you keep seeing those items again and again? They have been there all along, but your RAS is now creating a filter allowing it to enter your awareness. By understanding this and using it in a positive way, you will be able to take control of your life by controlling your thoughts and believing that the outcomes you desire will happen.

3. Raising and Shifting Your Identity

Ed explains how our self-confidence, or what we believe we are worth, equals our identity. Our identity is how we see ourselves, and we can never succeed beyond our identity. So the most powerful force in the human spirit is to live in connection with the ideas and beliefs that we hold true. Identity is like a thermostat with a pre-set temperature. As you are the one who controls the temperature, this is an internal game, not external and how you react to those change to temperatures. As you are in control, regardless of the external elements that may temporarily drop the temperature, you will find a way to bring it back up. You may have heard the term, you are the average of the 5 people around you. As such, the people you associate yourself with may influence what temperature you decide to set your thermostat. Know that you can’t skip the work and be ready to roll up your sleeves and get your clothes dirty as you strive towards success.

4. Goal Setting Strategies

Ed shares how we should set goals as if we already have possession. Be very specific with your goals and remember the three main ingredients: specificity, accountability, and visualization. Being specific is important as saying “I want to be rich” is vague and not a real goal. By identifying the amount of wealth you want, when you will achieve it, and what it will look like, creates an actual target you can it. The clearer it is, the more likely that your mind, body, and soul, will go to work on creating those things in your life. The second part is accountability. There is a reason why people share their goals with people who hold you accountable. When you become distracted by happenings in your life, having another person outside of those distractions can help connect you back to those goals. Lastly, visualization of your goals is wildly important. By focusing on these goals repeatedly in your mind, your brain will become more familiar with it to help identify the paths, people, and tasks needed to achieve them. Your “why” is seventy times more powerful than your “how”.

5. Developing Your Will to Win

As you strive towards your goals, you want to ask yourself if you can be bought. Most people allow their will to win to have a set price. With enough rejection, pain, and setbacks, people will relent and sell their way to win. Most people are not willing to put in the extra work to better themselves. They fall into the pattern of working for a job they don’t like for just enough money to pay for a handful of bills and a modest lifestyle (A salary is nothing but a bribe a business owner has paid someone to work on his/her dream instead of their own). If you have truly committed to your dreams, there is no obstacle or price to high. Your will to win is not for sale. As you progress and achieve milestones, do not allow that progress to cloud the vision to your ultimate goal. Small wins create the illusion that you are successful and you may take the foot of the gas pedal. Eventually, you may start telling yourself, “this is good enough” and compromise. You settle for less than your goals and dreams. This is why your identity is important and making sure you don't re-set the thermostat to settle for short term success and accolades.

Favorite Book Quote: “The average person has 75,000 thoughts every day, and 91% are exactly the same as the day before. It isn't hard to see why so many people stay in the exact spot in life as it relates to relationships, careers, finance, fitness, etc. Do you ever think about what you think about? Thoughts are like magnets; they draw to you that which you think about regularly. They also create the filters you see the world through. If you want real change, you must first change what you are thinking about.”

Become the ultimate and best version of you. The YOU that you were BORN TO BE.

Good Luck!

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Book Review 003: Automatic Millionaire - David Bach

Be an Automatic Millionaire - if only it was that easy...right? When I first came across this book, I had just finished my Bachelors degree in Business Administration and was starting my first full time job at a Financial Services Company. I was gifted the book a couple months back from a friend, but pushed it aside until after graduation. This turned out to be perfect timing as this book covers some great basics for beginners.

Key Ideas:

1) Millionaire next door - The average American Millionaire couple earned a combined income of $55,000 (written 2005) during the course of their entire career! This was a big surprise for me as I assumed you needed at least a combined income of $150,000 or more to be able to save significantly. These Millionaires were able to save with a modest income by budgeting, paying themselves first (more details below), and automating their finances. This leads to the next key idea.

2) The "Latte Factor" - The term coined by David which is the idea that you can become a millionaire by changing financial habits that snowball and have an overall big impact to your savings. Being a millennial, I've seen countless articles on "Don't eat Avocado toast if you want to purchase a home", "Don't go to Starbucks and save those dollars". I think its loosely based on the same concept. While I disagree that Avocado toasts and Starbucks are the main reasons why people do not purchase their first homes (i.e. Market prices, Fear of the 2008 crash, prefer to be renters, etc.), I do agree that small habits can give you the option to make the big purchase such as a house, impact your finances greatly, but it is often missed because these expenses are not considered in the aggregate.

If you think about it, $3-5 dollars at Starbucks may not kill your budget, but if you have read other financial books such as Rich Dad Poor Dad (I love this book!), you will know that the rich focus on creating/purchasing assets as quickly as possible, that will continue to build them wealth in the long run. What I mean is, that $3-5 dollars a day, or $1450 a year (rough estimate) can go towards buying mutual funds at a modest 8-12% return, rental properties with $100-200 cash flow per door, or even towards getting that degree that may double your salary, etc. And that is just ONE habit. 

I personally view expenses now in terms of opportunity cost. For example, you might want to take a trip to Vegas with your friends after graduating, but with food, travel costs, and other expenses, you might be out of pocket $500 bucks over a weekend. Now some may argue that they do not want to deprive themselves of fun, and I totally understand, I am merely trying to prove a point and that change in "mindset" is most important.

3) Paying yourself first - This concept I was already familiar with from reading "the Richest Man in Babylon". A simple idea in which you always want to pay yourself first (legally of course), before anyone else - the government, landlord, utility company, and any other bills that may come your way.

Now, how can we do this? There are many different strategies and methods, but one is simply through 401Ks and IRAs. By automatically setting up money to go to your 401Ks and IRAs you are deferring your taxes and growth until retirement.

Simple example: Lets say John makes 50K a year and pays 25% in taxes. Without paying himself first, he will lose 12.5K to Uncle Sam and have $37,500/year or $3,125/month left over to pay the bills. Now lets say he decided to put 15% of his pre-tax income into a 401K (This is very achievable). Now, out of the 50K/year income, 7.5K is going into his 401K Tax free, and he is being taxed on $42.5K which amounts to $10.6K in taxes or overall savings of $1,875. Now this is a very simple illustration and everyone's tax deductions and credits will vary, however, there will be tax savings as  you are reducing your "taxable income" off the top. Note: 401K I used in this example is deferring of taxes, not eliminating it, however, it is taking into consideration that with compound interest (Warren Buffet), we will have a built a sizable portfolio from starting early and often.

4) Automate it, take action NOW - The most important part of this book is automation. Like the title says, these ideas are only good on paper unless you act on it. So David challenges the readers to take baby steps in making changes - 1) increase 401K contributions (Check) 2) automate paychecks to go to different accounts - 401K, checking, bill pay account, etc. (Check) 3) Create a rainy day savings account worth 6 months of expense (Check).

Once I decided to take action, I have to admit it took me less than 15 minutes to automate my expenses and also create a savings account to save up for a 6 month rainy day fund (This step is critical as I personally ran into Car issues couple months later and it wiped out my savings. Luckily, I was able to rebuild it and I didn't have to rely on loans, credit cards, or anything else due to my rainy day fund).

Overall, I think book provided a great basic foundation for my finances and helped me pay for my wedding all cash, save up for a downpayment on my house, payoff any loans all in the span of 4 years. Write down your thoughts below!

Good Luck!

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