The Law of Accumulation: Every great financial achievement is an accumulation of hundreds of small efforts and sacrifices that no one ever sees or appreciates.

DEVELOP DISCIPLINE
The achievement of financial independence will require a tremendous number of small efforts on your part. To begin the process of accumulation, you must be disciplined and persistent.

You must keep at it for a long, long time. Initially, you will see very little change or difference but gradually, your efforts will begin to bear fruit. You will begin to pull ahead of your peers. Your finances will improve and your debts will disappear. Your bank account will grow and your whole life will improve.

BUILD UP MOMENTUM
The first corollary of the Law of Accumulation says: “As your savings accumulate, you develop a momentum that moves you more rapidly toward your financial goals.”

It is hard to get started on a program of financial accumulation, but once you do get started, you find it easier and easier to keep at it. The “momentum principle” is one of the great success secrets.

This principle says that it takes tremendous energy to overcome the initial inertia and resistance to financial accumulation and get started, but once started, it take much less energy to keep moving.

START SLOW, FINISH FAST
The second corollary of the Law of Accumulation says: “By the yard it’s hard, but inch by inch, anything's a cinch.”

When you begin thinking about saving ten or twenty percent of your income, you will immediately think of all kinds of reasons why it is not possible. You may be up to your neck in debt. You may be spending every single penny that you earn today just to keep afloat.

If you do find yourself in this situation, instead of saving 10 percent, begin saving just 1 percent of your income in a special account, which you refuse to touch.

INCREASE AS YOU GO ALONG
This small amount will begin to add up at a rate that will surprise you. As you become comfortable with saving 1 percent, increase your savings rate to 2 percent, then 3 percent, then 4 percent and 5 percent, and so on. Within a year, you will find yourself getting out of debt and saving 10 percent, 15 percent and even 20 percent of your income without it really effecting your lifestyle.

ACTION EXERCISES
Here are two things you can do to apply this law immediately:

First, decide upon your long-term financial goals and then resolve to work toward them one step at a time. The first steps are the hardest and you must discipline yourself to avoid backsliding into old habits.

Second, practice the law of accumulation in other parts of your life as well. Resolve to master a subject one page at a time. Lose weight one ounce at a time. Learn a language one lesson at a time. The cumulative effect can be enormous.

Technique for Success - Negative to Positive! 

Right now there are probably more real estate investors in the market than ever before. Many are new investors  who have just attended a seminar and are overly eager to get started. They've bought a house and now find themselves in the game. That's where the money is to be made or lost. 

With so many 0-3% down loans, there are plenty of motivated sellers with no equity. That usually means the existing mortgage payment is high compared to the rent the house can generate.

In comes the new investor determined to buy that house. He/she has their scripts memorized and want to get the seller to sign a contract. The next thing they know they are driving away from the house with the mission accomplished. Great!  Now they begin wondering what they are going to do next.  Reality can be a shock!

They start advertising to sell/lease the house, but find little interest at a profitable price. The few folks interested have terrible credit. The new investor begins to panic and lower the rent so they get the property producing income. 

Once they find a tenant, the new investor will have to come out-of-pocket to make the mortgage payments. Not exactly the scenario they were expecting. For the poor soul who has many properties in this situation, well, they are soon going to be in big trouble.

But wait!  The better educated investor recognizes opportunity here.  He can solve the problem and take a big chuck of the profits in the process. The clever investor offers to make the negative portion of the payment. So if the rent is $895 and the mortgage is $1095, the savvy investor would suggest an arrangement where he/she would pay the $200 a month negative.  The new investor throws himself at his savior's feet and offers three goats if  Mr. Clever would pull his irons from the fire.

Get this - If the creative one is you - you would structure the agreement so that you would get 150% credit for those payments when the house is sold. That's a 50% return on your money. Also structure it so that you and the novice split the future appreciation 50/50. As you're writing this up, agree on a date in the future when the house is to be sold or you are bought out. 

Now get a third investor to make those negative monthly payments and split the 150% credit with them. That would be a 25% yield for each of you. What rate of interest are banks and CD's paying right now? It should be easy to find people wanting to make 25% on their money secured by real estate. 

It gets better. You keep the 50% backend appreciation (when the house is sold) for yourself!

So let's see, you don't make a payment; you get a 25% return on someone else's payments; you get 50% of the appreciation of a house you don't have to buy or manage; if needed you can sell the contract for fast cash!  Why, it's time to do your happy dance! 

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