MONEY Master the Game: 7 Simple Steps to Financial Freedom (42 page)

There are plenty of schoolteachers who think, “I’ll never make enough money doing what I love.” There is broad agreement that we as society don’t value teachers in the way that we should. But as we now know, that limiting belief holds people back. Kim Ki-hoon is a teacher in South Korea who refused to buy into that story.

Unlike most teachers, Kim Ki-hoon is known as a “rock star” in South Korea. Kim is one of the most successful teachers in his country. How did he become so successful? He worked harder on himself, on his ability to teach, than he did on his job.

Sixty years ago, according to the
Wall Street Journal,
the majority of South Koreans were illiterate. The country realized it needed to take massive and dramatic action. Today teachers there are constantly encouraged to study, to innovate, to teach the same class in a new way every day. They’re taught to learn from one another, mentor one another—find the
best techniques to add more value. The result? Today 15-year-olds in South Korea rank second in reading, and with a 93% graduation rate—compared with just 77% in the United States.

Ki-hoon took that model and ran with it. He put enormous time into finding the best teachers, studying their patterns, learning how to create breakthroughs. He found a way to help his students learn faster, better, smarter—and not just his students but also students all across the country. Why focus on just helping 30 students? he thought, Why not help as many as I can? With the advent of technology, he realized he could put his classes online and make his passion for teaching and learning available to everyone.

Today Ki-hoon works about 60 hours a week, but only three hours of those are for giving lectures.
The other 57 hours are spent researching, innovating, developing curriculum, and responding to students.
“The harder I work, the more I make,” he says. And he works hardest to become better for the people he serves. Ki-hoon records his classes on video, and circulates them on the internet, where students log on at the rate of $4 an hour. How does he know it works? How does he know he’s adding more value than anyone else? The marketplace always tells you your true worth or value. Guess how many people buy his classes?
Last year, his annual earnings topped $4 million!
The more value Ki-hoon offers via online classes and tutorials, the more students sign up. And, it follows, more students means more money—in this case,
a lot more.

A teacher earning $4 million. How does that compare to the best schoolteacher you know? Ki-hoon’s story shatters the belief that our profession limits us. He’s part of the 1% not because he’s lucky, not because he was in the right place at the right time, not because he chose a lucrative profession. No, Ki-hoon is a wealthy man, part of the 1%, because he has never stopped learning, never stopped growing, never stopped investing in himself.

THE ULTIMATE MULTITASKER

But what if you’re not an entrepreneur? What if you have absolutely no interest in hanging up your own shingle? What if you work in corporate America or even for a small business? Can you still figure out a way to add more value and increase your earning potential? Let me tell you about a young woman. Daniela worked in a marketing department doing art design
and didn’t see any clear path toward moving up in her company. She was extremely talented, but more importantly, she was hungry. She was constantly looking to do more and give more; it was just her nature. And so she often helped her colleagues with visual arts. And then she wanted to learn about marketing, so she started studying marketing and offered to help. And then, of course, she realized she didn’t really know anything about social media—but the opportunities there seemed huge, so she decided to educate herself on social media as well.

After a few years, Daniela was doing many of the jobs of her coworkers. And they forgot that she was offering a gift, and they started to take her for granted. A new pattern emerged where, at five o’clock, when jobs with key deadlines were still not done, she worked alone at her desk as her associates slipped out the door. She didn’t want to stay late, but she wasn’t going to let the company and their clients down. When it was clear her colleagues were actually taking advantage of her drive and ambition, she reached her limit. “I’m doing three people’s jobs plus my own!” But instead of getting angry, Daniela decided it was an opportunity.

What did she do? Daniela approached her CEO and laid it on the line: “Right now I’m doing the work of four people. I’ve gone to courses, I’ve learned and taught myself about visual arts, marketing, and social media. I’m not here to throw anybody under the bus, but I can save you fifty percent of your marketing cost right now and eliminate three people by taking on their jobs myself. And I’ll do a better job, too. I don’t need you to trust me on this: let me prove myself to you. Let them keep doing their jobs for six months, and I’ll do my assignments
and
theirs, so you’ll have two different examples to pick from. You decide what’s best.”

All Daniela asked was that if she did a better job, after six months, her boss would give her more responsibility and double her pay. And guess what? She did it: she proved herself on the visual art and marketing fronts, with great copywriting and a successful social media campaign. Daniela showed that not only could she handle the extra work, but also she could run circles around the competition—she could outperform them all. She added enough value that the company realized it could pay one person twice as much money, and still cut its costs in half. The marketplace had spoken.

Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.

—FRANKLIN D. ROOSEVELT

OPPORTUNITY IS EVERYWHERE

How are you going to add more value to the world? How are you going to contribute more, earn more, and increase your impact? There are hundreds, if not thousands, of stories of average individuals who saw a problem, looked at things just a little bit differently, and went on to transform entire industries or create entirely new markets. They weren’t entrepreneurs; they were just people like you and me, people who wouldn’t settle. In the world we live in today, no industry or product is immune: the intersection of all things digital—the internet, social media, and technology—the interconnectedness of every person and everything on earth. That means that even the biggest companies and the most mature or stable businesses are ripe for disruption. Enter Nick Woodman.

RIDING THE WAVE

Who would have predicted that Kodak, the corporate titan that dominated the world of photography in the 20th century, would be caught flatfooted when digital imaging came on the scene? Kodak
invented
digital photography. And yet after 124 years in business, the company filed for bankruptcy in 2012—a move that had a disastrous ripple effect on the economy in and around Rochester, New York, where over 50,000 jobs were lost.

But those same massive technological and cultural changes that killed Kodak provided a huge opportunity for a California surfer named Nick Woodman. Woodman was obsessed with surfing. His absolute love of and devotion to the sport, along with his drive and his hunger, enabled him to find a way to add value.

Chances are you’ve never heard of Woodman, but he had the brilliant idea to strap a waterproof camera to his wrist while riding the waves. All Woodman set out to do was find a way to enjoy his surfing after it happened. With digital photography coming out, he started to tinker with cameras to see if he could make them more waterproof and capture better-quality
video. And as technology changed, he continued to tinker. And tinker. He ended up inventing the GoPro, a tiny, broadcast-quality, clip-on-and-take-anywhere digital camera.

This cool little device is now on the head of every extreme sports person in the world. Whether you’re riding a bike, paddling through rapids, snowboarding, or catching the waves, the GoPro allows you to capture the magic of your adrenaline rush and share it with everyone you love. Woodman’s timing couldn’t have been better: he began marketing the GoPro just as people started uploading their videos to YouTube and Facebook. He created a product
he
wanted to use and figured he couldn’t be the only guy needing one. Woodman figured out how to add value to millions of lives by making the new technology convenient, fun, and affordable. Ultimately, Woodman got in front of a trend. That trend was actively sharing digitally whatever was there.
One of the key secrets if you really want to become wealthy: get in front of a trend. Today the surfer from San Diego, California, is worth over $1 billion.

A NEW “CATEGORY” IS BORN

Back in 2010, Matt Lauer invited me to join him for a special roundtable discussion about where the economy was headed. I was joining Warren Buffett and the world’s youngest female self-made billionaire: a woman named
Sara Blakely.
Any opportunity to discuss the economy with Warren Buffett was a huge privilege, but what I didn’t bank on was being totally blown away by Sara’s story.

Blakely didn’t disrupt an industry so much as create an entirely new one. A former Walt Disney World employee, Sara was getting ready for a party when she realized she didn’t have the right underwear for a pair of fitted white pants. Rather than go commando, she decided to take matters into her own hands. Armed with nothing more than a pair of scissors and a whole lot of sass, she cut the feet off her control-top pantyhose, and, voila, a new industry was born.

Of course, it didn’t happen overnight, and it didn’t happen easily. Sara shared with me that one of the most important secrets to her success was that from an early age,
her father actually encouraged her to “fail!”
But he defined failure not as failure to achieve a result . . . but failure to try. Around
the dinner table, he would ask if she had failed today, and he was truly excited if she had—because he knew that meant she was on the path to success. “Tony, it just took away my fear of trying,” she told me.

Down and out in a dead-end office-products sales job, Blakely invested all the money she had in the world, $5,000, and set out to create body wear that would work for her. “I must have heard ‘no’ a thousand times,” she said. But she didn’t listen. In addition to the $5,000 she invested, she saved $3,000 (which she didn’t have) on legal fees by writing her own patent from a textbook.

Ultimately, the company she founded, Spanx, created an entirely new category of products called “shapewear” and has inspired a cultlike following among women worldwide. According to my wife, put on a pair to pull in all your “its and bits,” and you’ll take three inches off your waistline immediately.

With Oprah Winfrey’s blessing, Spanx turned from a small business into a worldwide sensation.
Today Spanx is worth over a billion dollars, and the brand now includes over 200 products
that help women look and feel great. Ever the optimist, Sara tried to work her magic on me: she tried to get me to wear a pair of her new Spanx for men when we were together on the
Today
show. I thanked her and mentioned gently that perhaps she didn’t understand the male market as well as the female market. But I remain inspired by her example. In the end, Spanx for men has also taken off—no thanks to me.
Today Blakely owns 100% of her company, has zero debt, and has never taken on outside investment. In 2012
Time
magazine named her one of its “100 Most Influential People in the World.”

Like Nick Woodman, she saw a need and moved to fill it. She refused to be limited by her own story and found a way to add value.

You can too! You don’t have to start a billion-dollar company, disrupt an entire category, or make $4 million as a teacher online. You don’t even have to take on four jobs at once. But if these people are capable of doing that, couldn’t you find a way to make an extra $500 or $1,000 a month? Or maybe even an extra $20,000, $50,000, or even $100,000 or more a year? Couldn’t
you figure out how to unleash
your own
creativity, contribution, and focus to add more value to the marketplace and put that money in your Freedom Fund? You can. The time to begin is now. . . .

Find a way to earn or save an extra $500 per month, or $6,000 a year. If it is invested at an 8% return over 40 years, it is worth $1.5 million—remember our pizza example. If you find a way to earn $1,000 per month, or $12,000 a year, that’s worth $3 million in your nest egg. If you find a way to earn $3,000 per month, or $36,000 a year, that’s worth $9 million in your nest egg. What’s the lesson? Go add value, earn more, and invest your earnings, and you can create any level of financial freedom you truly desire.

9
. “Instead, whoever wants to become great among you, must be your servant,” Matthew 20:26, New International Version.

CHAPTER 3.5

SPEED IT UP: 3. REDUCE FEES AND TAXES (AND INVEST THE DIFFERENCE)

We have what it takes to take what you have.

—SUGGESTED IRS MOTTO

“You must pay taxes. But there’s no law that says you gotta leave a tip.”

—MORGAN STANLEY ADVERTISEMENT

So now you’re rocking and rolling—you’re speeding up your path to financial freedom by
saving
more and
earning
more! What’s left? Doesn’t that cover it? Actually, no. You now know as an insider that
it’s not what you earn that matters, it’s what you keep.
Our third strategy for speeding things up is to get more money out of your investments by reducing your fees and taxes, and reinvesting the difference.

Remember our three childhood friends from chapter 2.2, “Myth 2: ‘Our Fees? They’re a Small Price to Pay!’ ”? They all invested $100,000 at the age of 35 and earned a 7% return on their investment. But each one was subject to a different set of fees—and the difference between the 1%, 2%, and 3% fees came out to hundreds of thousands of dollars.
Taylor, who paid just 1% in fees, accumulated almost
twice as much
money as her friend Jason, who paid 3% in fees.
Her investment grew to $574,349, while he was left with only $324,340!