Million-Dollar Habits

My wife and I recently participated in Dave Ramsey's Financial Peace University thanks to a Christmas gift from her parents. The class was great. It covered everything from dumping debt to investing. His strategies aren't anything Earth-shattering - just a lot of common sense financial advice. What I liked most about the course was that Dave made it seem as though the dream of becoming a millionaire isn't really that far-fetched for a lot of people. You don't need to be a superstar athlete or hot-shot CEO with a multi-million dollar salary. You just have to get rid of your debt, live below your means, and save. Granted, you have to save a lot! 


So lately, one thing I enjoy doing is reading about people who are already millionaires (or even billionaires) and learning how they got to where they are. The best way to achieve a goal is to mimic how other people have successfully achieved that same goal. What habits did they develop? What advice do they share? So here are some ideas that I have gathered over the last few months. I guess it's my own little "habits of highly-successful people" list.

1. Get an education. There are people who make it without one, but they are the exception not the rule. Not everyone can be billionaire dropouts like Bill Gates or Mark Zuckerburg. My parents always made education a priority in my life and for that I will always be grateful!

2. Get rid of debt! Dave Ramsey is all about cutting up those credit cards and only buying something if you have the funds in the bank to cover it. Cars, vacations, gadgets...everything but your house should be bought with cash (or a debit card). To help in this effort, I recently sold my beloved SUV. Luckily, it was worth more than I owed so I was able to take the cash left over and buy a cheaper, older, but still decent commuter car.

3. Live below your means. I just read this article about Bill Gates that really impressed me.

" I play tennis, I play bridge, I spend time with my family. I drive myself around town in a normal Mercedes. I’ve had a Lexus. The family has a Porsche, which is a nice car that we sometimes take out. We have a minivan and that’s what we use when it’s the five of us." - Bill Gates

Bill Gates drives his family around in a freaking minivan! Are you kidding me? If he can live below his means, anyone can. It's a simple concept - spend less money then you earn - but it does require a lot of discipline. Don't be like MC Hammer or Michael Jackson and buy everything in sight just because you can. That's a quick way to go bankrupt.

4. Save.  One of my favorite stories from Dave Ramsey's class was of a newlywed couple that wanted to buy a house. They both had jobs and made a combined $90,000 a year. Instead of getting a mortgage right away they found a cheap apartment above some old lady's garage and they lived on $40,000 a year. The wife's mother was furious that he would make her live like this, but 4 years later they $200,000 in the bank, they found a deal on a house for $150,000, and he gave her $50,000 to furnish the place. Without ANY debt that $90,000 they make now goes to whatever they want. Wow. Saving is empowering.

5. Be charitable. Whatever your reasons may be - religious, moral, karma, tax deductions, whatever - it is important to be charitable and generous with your money even when you're not making a lot of it. This is a habit that many millionaires advocate. Bill Gates and Warren Buffett, probably the two most famous billionaires in the US, have embarked on a quest to get the world's wealthiest people to sign a pledge that they will donate the majority of their fortunes to charity. I find that incredibly inspiring. Bill Gates has given away $24 billion of his personal fortune to help eradicate diseases like malaria and polio from 3rd world countries. Mark Zuckerburg just gave away $100 million to the Newark School District. Their money is saving lives and empowering people all over the world. Make a difference in the world. Give some money to a good cause.

 Phew! That is probably my longest blog post ever! I guess now the trick is to live up to it...check back with me in 40 years to see if I did it.

The 80/20 Rule Rules!

I recently borrowed a copy of The 4 Hour Workweek from my brother-in-law. I’ve heard a lot about this book and was intrigued by this guy’s philosophy, especially since his passion is traveling and so is mine. It’s all about freeing up time to do the things you really love to do.

On the surface, it seems like a cool idea. But his philosophy is unconventional at best and I disagree with most of it. He is all about living in the now, planning for maximum 6 months ahead, and thinks if you can afford the monthly payment on a $250,000 Lamborgini you should get it. I’m more comfortable with the Dave Ramsey lifestyle – don’t buy anything you can’t pay cash for.

But I did read one thing that I totally loved. The 80/20 Rule. Most people are familiar with the economic applications of this principle: 80% of the wealth is produced by 20% of the people. But he applies this to other areas in life as well, which I think is brilliant. 80% of your stress comes from 20% of your problems. 80% of your revenue comes from 20% of your customers. You get 80% of your really important work done in 20% of the time. You get the idea. The idea is to focus your efforts on the really important stuff, and the rest is just fat to trim off. Genius.  

This is definitely going to change the way I spend my time. Hint - not like this:

Happy Tax Day!

For once, tax day is actually quite happy for me thanks to the fact that I was able to claim my wife's tuition expenses as a "Reduction in Income" so I got a huge return. Happy Tax Day to me!

For the most part, though, it seems like all people do is complain about taxes. The government can never win. Liberals complain that the rich pay too little; Republicans complain that they pay too much; and everyone, political alignments aside, thinks they personally pay too much.

So here are some interesting facts about taxes and those who do and don't pay them:

• The richest 1% of Americans earn 22% of the nation's income, but pay over 38% of the nation's federal income taxes.

• 47% of Americans (mostly low-income) pay ZERO federal taxes.

Keep this in mind next time you vote!

A Former Intern's View: Why Azul is Soaring

I have been reminiscing about my experience at Azul Brazilian Airlines lately. I was definitely fortunate to have learned from the best during my brief time there. They were recently named as one of the Top 50 Most Innovative companies in the world, right up there with Apple, Facebook, Groupon, etc. And check out the interview at the bottom of my post where David Neeleman says that Azul is on track to earn sales of $1 billion this year - after only 3 years in business. Wow!  It is amazing to me that they are having such monumental success in an industry that has really been struggling lately.

A big part of it is their focus on the customer and giving them a good experience. Not to mention the extremely affordable price. When Azul entered the market, the Brazilian airline industry was plagued by a duopoly that drove the price of airfare up to 150% of what it should have been. Only the rich flew. The driving force behind Azul was the idea that fares needed to compete with inter-state buses, which the majority of the Brazilian public used as transportation. So not only was it cheap, but when I flew on Azul I loved the new planes, the lack of a middle seat, the in-flight entertainment, the friendly stewardesses, and unlimited delicious snacks. It's almost like flying on Azul is a time-machine ride back to the glory days of commercial flight. I compare that to my recent experiences on Delta lately where I feel like they gouge you to death with fees and flying feels like an annoyance.

As if Azul wasn't affordable enough already, at one point they launched an extremely popular promotion called Passaporte Azul, similar to Jet Blue's All-You-Can-Jet Pass. For 500 Reais (around $200) you could fly anywhere in Brazil as many times as you wanted within that month! Letters poured in about how family members were reunited after many years because they could finally afford to fly. People in the middle and lower classes were flying for the first time in their lives. Azul was literally changing people's lives. At one point, I was asked to go to the airport and film some customer testimonials of people using the Passaporte Azul. I found a couple guys who were childhood friends who hadn't seen each other in years but happened to bump into each other on their flight. Both had purchased one of the passes so they decided to travel the country together for a whole month. Of all the people I filmed, not once did I hear a complaint or a lack of enthusiasm. In many cases people were actually grateful to the company and its founder, David Neeleman. When was the last time you heard someone filled with gratitude for their long flight from LA to New York? Everyone who flies Azul literally loves it.

Obviously building a great customer experience is essential, but you have to get the word out about it somehow. I may be slightly partial, but since my internship in Sao Paulo was in their marketing department I also attribute a big part of Azul's success to their creative and innovative marketing. Most of what we did would definitely be considered unconventional or non-traditional. We didn't advertise in newspapers or do big-bidget TV ads. I personally spent a lot of time working on creative promotions via Facebook and Twitter. Not only that, but I got to help with the launch of Azul's own social network viajamos.com.br, which means "we travel" in Portuguese and is a site dedicated to travel in Brazil. That, of course, was when I wasn't doing guerilla marketing, roaming the beaches of Rio de Janeiro handing out flyers and signing people up for Azul's frequent flyer program. Hey, it was a tough job, but someone had to do it! (photos to the left). It just goes to show you don't always need a gigantic, multi-million dollar advertising budget to be profitable. If you have a great product/service and some creative ideas to get the word out, success will follow.

I blogged about my semester with Azul, and you can read about my experiences at www.asaventurasdojj.blogspot.com  

Anyway, when I was there I remember the big party they threw when they reached 2 million passengers in
their first year of business. It was a world record. No airline in the history of aviation had ever reached that many passengers in its first year. It was very exciting to be part of that! Now, less than a year and a half later they have reached over 8 million. They started by flying between 3 cities. Three. Now they have flights to over 30. Stunning success! If there was ever a successful businessman to emulate, it would be David Neeleman. And rumor has it he might buy back Jet Blue. If he does, my resume will be one of the first in the inbox. 
Update 2021: These days I'm traveling with kids via minivan and you can read all about it on The Minivan Bucket List