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Zen Garden > SEMINAR 4 - "THE AWESOME POWER OF INVESTING" featuring John Burley

This is our fourth International Live Chat Seminar. If you have been following this series right from the start you will remember that I was one of the panelists on the very first International Live Chat Seminar.

I am very keen on presenting this series because so much vital knowledge is shared in them. Again I watched the live chat in real time and again I was impressed by the guest.

This month's guest was John Burley.

Again I am privileged to be the Editor of the seminar. All this means is that I turn spoken words into written words - with, of course, a bit of creative license. I might add here that this does not change the meaning of anything. It just makes it more "readable."

As usual, I want to congratulate Peter and Ben Sinclair for hosting the seminar and praise John Burley for sharing his wonderful information with us.

The seminar is copyright material so it may not be used without permission. However, you may print it out for personal reference or study.

I commend the following seminar to anybody aspiring to improve their life by understanding investment issues better.

This is the edited transcript of the LIVE CHAT conducted by:

Peter Sinclair ( ) on 25 March 2003 with:

John Burley ( )

The chat was scheduled for one hour and the subject was:


[The chat commenced at Midday, Tuesday, 25 March 2003 - Brisbane, Australia time]

Peter Sinclair: I am really thrilled to welcome John Burley to our LIVE CHAT today....

John Burley: Thank you Peter. It's my pleasure to be here.

Peter Sinclair: The subject is "THE AWESOME POWER OF INVESTING!" John, I would like to predicate today's chat with the knowledge that I am going to refer constantly to a very powerful book called "The Richest Man In Babylon."

John Burley: A marvelous book Peter if I may say so.

Peter Sinclair: Indeed. Just in case our readers are not familiar with this book, it was written by George S. Clason and was first published in 1926. Since that time it has sold millions of copies worldwide. In it he states: "Lo, money is plentiful for those who understand the simple rules of its acquisition."

John Burley: One of my favorite subjects!

Peter Sinclair: John, I know this book is recommended reading for your students. I think, therefore, that we might follow Clason’s "Seven Cures for the Lean Purse" as our guide today at this LIVE CHAT.

John Burley: Sure.

Peter Sinclair: John, from your own personal experience as someone who was in a position to retire at 32 years of age, what does Clason mean with his number one cure: "Start thy purse to fattening?" Perhaps you could explain it in terms of another quote that he uses: "a part of all you earn is yours to keep" I know that's a bit of a double-barreled question but it is all related.

John Burley: Peter, it's actually a very simple idea that is universally powerful. The idea is that you take 10% of your gross income and place it into investments.

Peter Sinclair: What sort of investments?

John Burley: Most people do it in managed funds and things of that nature. This is what I call Level Four investing. Advanced investors, Level Five, radically advance the idea by making much higher rates of return.

Peter Sinclair: This is starting to get very interesting. Please go on John.

John Burley: Peter, these concepts are the ones that put me in a position to retire at age 32.

Peter Sinclair: So how hard is it for someone to become a Level Four investor?

John Burley: Not hard at all. There are seven steps to Level Four financial freedom as outlined in my book "Money Secrets of the Rich."

Peter Sinclair: Could you just outline those seven steps for us?

John Burley: Certainly. 1 - Pay yourself first (10% of your income) 2 - Reinvest your investment returns 3 - Seek Level Four rates of return (12% plus for the long run) 4 - Know what your money is doing (financial controls) 5 - Automatic money system (This is a five step formula) 5.1 - Automatic investment plan (10%) 5.2 - Charitable giving plan (10%) 5.3 - Debt elimination plan (10%) 5.4 - Debt avoidance lifestyle systems 5.5 - Spend the rest! 6 - Financial competence, intelligence and responsibility 7 - Live debt free.

It is that simple. Tens of thousands of people around the world have done it.

Peter Sinclair: That is excellent John. I have read your book and I know that in the book you go into all these subjects in great detail (If anybody wants more detail please refer to John's book). In the midst all your investment knowledge I know that you also discuss Clason's second cure for a lean purse. The second cure is: "control thy expenditures." This cure focuses on budgeting. I know you have written about the importance of cash flow management in personal finances. How can these two disciplines assist with wealth creation?

John Burley: It's quite simple Peter. There are basically three ways to improve your financial situation. First - increase your income from work. Second - get a higher rate of return from your investments. Third - reduce your expenses. For most people the third method is far easier, yet few focus on it.

Peter Sinclair: John, I suppose number one is probably within the scope of most but do you have some ideas for two and three?

John Burley: I certainly do. With regard to the second method, either become a prudent Level Four investor (12-15% returns) with risk controls in place, or educate yourself on how to become a Level Five investor and make 25-100% plus on your investments.

Peter Sinclair: How would one make those 25-100% gains John?

John Burley: I do this primarily in real estate.

Peter Sinclair: Could you explain that for us?

John Burley: I sure can. This year we have already acquired over 150 properties in the US alone. They will all make at least 40% returns. Many of them will make well over 100% returns. On the matter of reducing your expenses - you need to watch what you spend your money on. My book provides literally hundreds of simple, easy to use ideas that can reduce the average family's expenses over 25% without affecting their standard of living. The problem most people have is that they don't think the small expenses matter so they let $50 slip here, $100 slip there. They do it without consciously thinking about the expenses. The reality is that for most families the small expenses are the only ones they can dramatically reduce.

Peter Sinclair: Just backing that up a bit John. You said 150 properties... now that's momentum! For the first time investor, how could they build to that?

John Burley: Start like so many others have. Start like I did. Get educated on investing in real estate, then go and buy one property, then another and another etc.

Peter Sinclair: Talking about growth, Einstein speaks of compound interest as being the eighth wonder of the world and more powerful than the atom. Clason’s third cure is: "make thy gold multiply." How best can we utilize the power of compound interest to do this?

John Burley: Einstein and Clason were perfectly correct. I have strong opinions on this myself. The idea is that rather than letting compound interest work against you through consumer debt, you can start having it work for you by using proven systems to make high rates of return and then re-investing the returns. In that way, the compounding effect can dramatically increase the rate of return.

Peter Sinclair: And these proven systems are readily available?

John Burley: Yes. You can access information in the US on telephone number (800) 561-8246 and from my website at In Australia and New Zealand the telephone number is 1300-550-2140 and the website is

Peter Sinclair: What can people expect to find on your website John?

John Burley: On there are free reports and a Discussion Forum that anyone can join. There is no registration required.

Peter Sinclair: Fantastic. Like I mentioned earlier, you all need to read John's book "Money Secrets Of The Rich" It truly is AWESOME. In fact, even that doesn't sum it up.

John Burley: Thanks for those kind words Peter. Believe me it was a tremendous task to produce that book. I should mention that in the US and Canada it is also known as "Automatic Wealth."

Peter Sinclair: Moving along to Clason's fourth cure, he states that we should: "guard thy treasures from loss" and in doing so he encourages conservative investing and the pursuit of wise consultation. Can you expand on this?

John Burley: I regard Clason as though he were a Level 4 investor (in respect to rates of return). However, his thinking is quite remarkable. An investor should fully understand what he or she is investing in and use risk controls to reduce potential losses.

Peter Sinclair: Like stop-losses in shares?

John Burley: Precisely. I never invest in anything without an exit strategy and a plan for what I am going to do with the investment. People need to understand that Level Five investors can also make substantial profits on the purchase, not necessarily the sale.

Peter Sinclair: John, you have already mentioned that you are heavily into real estate investing, do you have any experience with covered calls?

John Burley: Covered calls? Yes, I have used them frequently. They can add to the income factor and serve as insurance on your investment. However of late, most of my investment time has, in fact, been in real estate.

Peter Sinclair: Would that be because of the state of the share market?

John Burley: No, a Level Five investor can make money in any market. The reason, for me is it is so much easier in real estate. We make over 40% on every transaction, with long term cash flow and locked in capital gains. I am much more "in-love" with real estate deals. That's just a personal position, not a judgment.

Peter Sinclair: 40% is certainly a great return. So up, down, sideways, it doesn't matter to a Level Five investor?

John Burley: If a person truly is a Level Five investor, it doesn't matter. In fact Level Five investors prefer a bad market to a good one. There is so much more opportunity because all the Level Three investors are scared to death. They are all in the process of selling low after, of course having bought high!

Peter Sinclair: Would you say it all comes back to education?

John Burley: Yes, Peter, it really does come back to education. There are two ways to get that education - the hard way in the street, or the easy way from people who have already done it and are doing it now.

Peter Sinclair: John, this is fabulous information that you are sharing with us. We still have three of George Classon's "cures" to go. He says: "make of thy dwelling a profitable investment." That is his fifth cure. Is the ownership of your home with in-built equity, a necessary pre-requisite for wealth production or are their other ways?

John Burley: Peter, this is one that I don't agree with in that I do not consider one's personal residence to be an investment because I regard it as an expense not an income source. Your home, is just that - your home. It is a function of the lifestyle you want and not a true investment, in my opinion. With that said, we own a lovely home (free and clear of debt, of course).

Peter Sinclair: Liability versus asset as Robert Kiyosaki teaches?

John Burley: Yes, our good friend Keith Cunningham explained it very clearly to us in 1991-2.

Peter Sinclair: Moving right along John - "insure a future income" is the sixth cure. What are some of the ways that we can safely insure the security of an ongoing future income?

John Burley: One is income protection insurance. Another is to create assets that can later be turned into cash flow. A third insurance is to create assets that create cash flow NOW! This is by far my favorite way to insure lifetime income.

Peter Sinclair: Clason's seventh and last cure for a lean purse is: "increase thy ability to earn." What are the best ways to expand our financial intelligence and competence John?

John Burley: Like I have said before, education is the key. Learn from those who have already done it and then go out and DO it yourself!

Peter Sinclair: No doubt that is what you have done. Can you tell us to what extent you have gone with this education?

John Burley: I personally have spent over US$500,000 on books, tapes, videos and seminars. And that in my opinion is why we have experienced such financial success.

Peter Sinclair: John, I love the story about the 18 year old girl whom you encouraged to put away $100 a month. Can you share that story with our readers? I must say, it spoke volumes to me, particularly as I assist my own children in these matters.

John Burley: Yes. You refer, of course, to my friend Tiffany. She is 24 now, married and a mommy. She used to work for us part-time. One day she came to me and told me she wanted to be rich. I told her okay. I said: "if you want to be wealthy, Tiffany, you will have to put $100 a month away." At the time she was making around $400 a month.

Peter Sinclair: How did she react to that advice?

John Burley: She said she couldn't afford it. She said that she wanted to be able to buy more CD's etc.

Peter Sinclair: So what was your advice to her after she said that?

John Burley: I told her bluntly. I said: "fine, then stay poor forever and don't ask for any more (free) advice unless you are going to do what I say." She thought it over and decided to get started...

Peter Sinclair: So, everything went smoothly from that point?

John Burley: Not exactly... several months later she wanted to stop. She told me that she wanted to withdraw some of the money to go on vacation. She asked if she could have it back.

Peter Sinclair: What did you tell her in response to that?

John Burley: I told her no. I told her that a deal was a deal. She had to put in the money and I would help her to invest it. She was angry with me for months. A year later she thanked me and to this day, every time I see her, she thanks me for getting her started. She really is a lovely lady and her baby is great. Tiffany still does her AIP.

Peter Sinclair: And AIP stands for?

John Burley: Sorry, AIP stands for "Automatic Investment Plan."

Peter Sinclair: As we draw this LIVE CHAT to a close John, our friend George Clason also states in the "Richest Man in Babylon" that: "men and women of action are favoured." That is not one of his seven cures but it sure seems like sound advice to me. Is that what you have found with reference to investing?

John Burley: Absolutely! You don't get rich on the sidelines.

Peter Sinclair: John, can you reiterate what action potential investors should take to start on their own paths of wealth procurement?

John Burley: The very first thing, before anything else, is to get educated. From there you should follow the general principles of investing. After that you can establish your own rules and get into the game.

Peter Sinclair: Well, John, this hour spent with you has gone so fast - but what a powerful hour it has been. I really want to thank you for sharing your thoughts and ideas so openly with all the people who have attended this live chat today. There is so much powerful information here!

John Burley: Thanks Peter. I had a great time. It was a really fun discussion for me. We will have to do it again sometime. I hope we can catch up when I am on tour in Australia and New Zealand in July/August of this year. We are also doing the one time only "Ultimate Cash Flow Event" on June 20-22 over here in the States.

Peter Sinclair: Have a fantastic evening John! Thanks so much for your time and wisdom. See you later mate!

John Burley: Good on you Peter. Keep up the education and helping others. Good investing to you and all the people on the LIVE CHAT and those who will read the edited version later on.

Peter Sinclair: I now declare this LIVE CHAT event officially closed!

[The chat concluded at 1.05pm, Tuesday 25 March 2003 - Brisbane, Australia time]

Biographies of the LIVE CHAT Participants:

John Burley:

John Burley is one of the finest wealth-creation minds on our planet. Starting out with little money, a workable plan of action and a lot of desire, John was in a position to retire by the age of 32. In just 10 years he has amassed 160 investment properties (that earn him a six figure passive income a year) and an extensive share portfolio. John is the author of the powerful investment book Money Secrets Of The Rich! that teaches the seven steps to financial freedom.

Peter Sinclair:

Peter Sinclair is a student of success and an entrepreneur. His vision is to help others reach their full potential, and the driving force of his life and his work is to lift people. Peter is renowned and respected as a dynamic writer & speaker, having his articles already featured in hundreds of ezines and magazines internationally. Thousands of people every week receive his Motivational Memos as Peter loves to impart wisdom into the lives of people all around the world. He is constantly creating and researching new methods to achieve that goal.

Ben Sinclair:

Ben Sinclair is the webmaster for Peter Sinclair's Website and the technician behind the chat session and the mastermind behind the forum and the chat forum.

This LIVE CHAT was edited by:

Gary Simpson:

Gary Simpson is the author of eight books. He is a prolific writer who has for many years been published in many magazines and newspapers across Australia and now rapidly around the world. Gary became involved in several network marketing companies in the late 80's which led him into a deep research of personal development. He is an avid reader with hundreds of self help books in an ever growing library. Gary lives in Perth, Western Australia and is a Company Director. He has professional experience in many diverse areas such as the public service, retail, private investigation, insurance and franchising. He is also a senior karate instructor with more than 35 years of continuous training. Gary's "Motivation & Self Esteem for Success" Website is located at

Gary Simpson is a 7th Dan karate master who teaches self defense, motivation, self help and wealth building to students around the world through home study courses. You may reprint this article as you include this author credit and an active link to his web site.

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