GET RICH QUICK version 4.00 released 2004-02-26 REPLACEMENT ----------- Go to www.travismorien.com and ignore all the crap below. Click on the right hand picture. INTRODUCTION: ------------- This is a guide to getting incredibly rich, incredibly quick. This document was written by Paul Edwards, and is available from my web site, www.kerravon.w3.to. It is released to the public domain. DISCLAIMER: ----------- The information contained in this document is not guaranteed to be accurate, it is my understanding. Please inform me of any innaccuracies. I will not be held responsible for any financial loss, or rare diseases caught by you after reading this document. Stop reading now if that scares you! DO NOT READ THIS DOCUMENT - IT WILL MAKE YOU LOSE ALL YOUR MONEY!!! ASSUMPTIONS: ------------ You are highly disciplined, and able to save the bulk of your pay. You don't want investments designed with crappy hand-holding in mind. You are concerned about possible job loss. You are wanting to take a long term view to wealth accumulation, perhaps 20-25 years. STEP 1: ------- Make sure you really are capable of living hard. For 2 years, concentrate on building up a stake, something that you can fall back on if something goes wrong. Here is a diet containing what I believe to be the minimum requirements to sustain a healthy life: ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Diet (per day) 1 cup rice 1 spoon margarine 10 gr raw bran 1/2 cup soya bean 1 vitamin tablet prices from woolies on 1991-08-03 $1.94 2kg rice (home brand) = 8 cups = 24.25c/day $1.16 500g margarine (home brand) = 11.6c/day $0.36 500g bran (home brand) = 50 portions = 0.72c/day $1.69 500g soya bean (sanatarium) = 2.5 cups = 33.8c/day $5.78 100 multivitamins (cenovis) = 5.78c/day total = 76.15c/day = $5.33/week ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Now I don't expect you will actually be able to sustain this. I tried this once, but only lasted a few days. I tried it just when I was starting getting a cold, so that test is not accurate, as I stopped in case it was related (although of course the cold virus is in no way related to food intake). The guy that gave me this diet (Greg Medley), did so under much duress. He also added "don't blame me if you catch scurvey or something". It should be noted that Greg himself managed to live for $10/week in around 1988, for all expenses besides rent. His diet went something like: skip breakfast, skip lunch, a piece of fruit for dinner. Also soup (I think you can even go mad with the soup). Another point of interest is that those foods listed above came from Woolies. You can apparently buy these foods from different sources. E.g. Greg told me that good quality soya beans are sold in health food shops, lower quality is used to make soya bean oil, and lower than that it becomes pig food, but still safe for human consumption. Check with a few medical teams before experimenting with this. The idea is not to follow the above diet, but use it as the basis as minimum requirements, so that you can look at ways of reducing your probably massive food bill down to something far more reasonable. I personally had another goal in mind. I didn't want to do a scrap of cooking. The way I got around the problem was to eat weetbix + milk for breakfast (every single day) ($1/day?), and weekdays I would eat lunch in the staff canteen (for about $3/day?), and skip dinner. On weekends I would instead skip lunch, and go to a Chinese restaurant and get a takeaway large fried rice, for $2.70 (including 10% discount for takeaway). It was through this restaurant that I was to eventually meet my wife. Anyway, I certainly did keep this diet up for 2 years. And that's about $20/week. For you to keep your food budget to that figure, you either have to give up on variety (like I did), or actually do some cooking (shock, horror). Personally I lived for these two years with 1 spoon and 1 bowl. I didn't have a pot to boil an egg, and wouldn't have done so even if I did have one. STEP 2: ------- The next goal is to get into your own home. In Australia, we have the dole to fall back on. You know what your living expenses can be reduced to. The rest is what can be used to pay your mortgage, if the worst comes to the worst. With this in mind, you should try to get into your own home. This probably means buying the cheapest scummiest place you can find. I personally wasn't prepared to do that, and instead waited until I had a much bigger stake (a 6.5 year wait). There is a public domain program which I wrote called money.c, which is available in OZPD on my website. Use this program religiously, as it will tell you whether to keep renting or buy a house. The lower you set your sights, the more likely it is to tell you to buy. As soon as it told me to buy, I went and bought my house. The sooner you buy, the sooner you stop having to pay tax on your interest (I suggest you keep your money in the bank whilst saving up your stake). STEP 3: ------- Aim to get a large proportion of your house paid off (like 50%). This will then give you a stake with which you can use for other purposes. If you go to a decent bank, such as Citibank, they will let you borrow up to 80% of the value of the house without having to pay penalties. Let's say that your house cost $100,000. Then you have $30,000 to play around with. What you do with it, is start negative gearing. You ask Citibank to create another loan account for you, interest only, valued at $30,000. You should NEVER pay it off. You use this money to buy BLUE CHIP shares. You can then do internet trades to purchase your stocks, which makes it very cheap. So with $30,000 you could buy 5 blue chip stocks, around $6000 per stock. Now because Citibank don't have as flexible a product for margin lending as Bankers Trust, you need to get the share certificates for the shares you have bought, and lodge them with BT Margin Lending. You can then borrow more money (minimum of $50,000) from BT, which you can use to buy yet more shares. This "margin loan" is also interest-only, not only that but you can pay the interest for the whole year up-front! Note that since then Citibank have come up with a more competitive margin loan, and they even allow you to use your house directly as part of the security, so you can dispense with the need for stuffing around with two investment loans. Although they do charge a whopping 1% for this, last time I enquired, which is quite unreasonable (should be fixed fee). Check for latest info before doing anything. This now gives you two things: 1. A proportion of your before-tax income is spent on paying off the investment loans. 2. Your after-tax income is spent paying off your mortgage. STAGE 4: -------- Pay of your home loan, and then borrow it again as above. When your the total 70% of your house has gone into unit trusts, it is time to find a bigger house to live in. When you need some cash, you should be able to sell some of your shares, and the capital gains tax should be able to be offset by some of your franked dividends from your other investments. OTHER INFO: ----------- You might want to buy a book called "Making Money Made Simple" by Noel Whittaker. Unfortunately some of the stuff is oriented towards the average stumblebum dickhead, which is why I have written the above document. You might also want to buy a copy of the magazine called "Personal Investment". Also, you should seriously consider using managed funds rather than direct purchase, because: 1. If you're like me, I can send a stock bankrupt just by purchasing it. 2. The shares keep stuffing around with bonus issues and rights etc which require you to do extra paperwork and produce money on demand. Or buy an investment property instead, it's harder to go wrong. I guess the keyword here is diversification. I thought I had diversified already, bought Pacific Dunlop, Mayne Nickless, BHP, Email, Burns Philp, and now my portfolio is half what I paid for it! If I had my time again I would have purchased a share fund that tracks the All Ords with low management fees, or bought a couple of different managed funds. Oh, I caused the Asian financial crisis too in case you didn't know.