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Interview that recently appeared
on Yahoo
under personal finance.
Spotlight: Keith Cameron
Smith
By Jay MacDonald •
Bankrate.com
As part of our Financial
Literacy tuneup, Smith shares
with Bankrate his insights into
how to think like a millionaire.
You were not born wealthy.
(Laughs) Oh no. I grew up on
the lower end of the middle
class. My dad never made more
than $25,000 a year. He sold
auto parts to different garages.
He had different routes to a
couple of different towns around
Florida.
Did you attend college?
I went to college for two weeks
and said that's not for me. I'm
on the list of millionaires that
just did it in the real world
and didn't go to school. School
is phenomenal for some people.
Some people absolutely need to
go to school as part of their
purpose. But some people don't
need to go to school. They don't
need to get a good job so the
government or your corporation
can take care of you, because as
we know, that formula doesn't
work anymore.
When you go through failures
like I have and like other
millionaires have, you learn
something on an emotional level
that you cannot learn when you
go to college. When you get
intellectual knowledge from a
book or a lecture, it's not the
same as investing money in
something and then seeing all
that money disappear. When you
learn something on an emotional
level, that is what really
starts making you stronger.
Your original goal was to be
a golf pro, right? What
happened?
I had an apprentice position at
the LPGA International in
Daytona Beach when they first
got started. I helped them get
their pro shop up and running
and I had my handicap down to
about a four and I thought for
sure I was going to pursue golf
as a career. I took the PAT, the
player's ability test, a couple
of times; that's where you have
to play a couple of rounds and
shoot like 150 between two
rounds of golf. And I could
never do it; my nerves just
couldn't handle it. But that was
one of the turning points in my
life. I sat down with the pro
there at the time and asked how
long it was going to be before I
could really start making good
money. I was making $20,000 a
year as an apprentice. He said,
"I'm going to be honest with
you, it's going to be at least
five or six years before you can
move up." And I said no way, I'm
not going to sit here and make
$20,000 a year for five or six
years.
How did you lift yourself out
of the middle class?
Education. I started learning,
but it wasn't education in the
school system. It was education
from my real-world experience as
an entrepreneur and taking risks
and having some good successes
and some failures, too. Those
are always tough when you go
through them, but I honestly can
say, thank God for those, too.
Because those are the situations
I really learned the most from,
so I had some new knowledge to
apply on the next endeavor.
Your book seems to strip down
dozens of motivational books to
their essence.
What I tried to do in my book
was to stay away from specific
areas like real estate or stocks
or small businesses and instead
encourage people to pursue their
own passion to create wealth.
What would they love to do to
wake up and make money every
morning? That's the key to it.
By far, one of the biggest
things I learned talking to all
these millionaires was they
really enjoyed whatever they
were doing.
You maintain that the wealthy
expect different things from
money than the rest of us. How
so?
The very poor and the poor
are stuck in survival mode; they
just want to survive. The
primary goal of middle-class
people is comfort; I just want
to have enough; I just want to
be comfortable. When you get
into the rich and the very rich,
their primary goal is freedom;
I'm going to do whatever it
takes to experience freedom.
That's the biggest difference.
It's OK to have a plan for
survival, it's OK to have a plan
for comfort, but just make sure
that most of your mental energy
is focused on freedom. Then
you'll start experientially
understanding the old saying,
"Seek and you will find." If you
seek to survive, you will. If
you seek to be comfortable, you
will be. But if you seek
freedom, you will find it. It
just takes longer to create
freedom in your life than it
does to create survival. Does it
take longer to grow a weed or an
oak tree?
Financial freedom is like an oak
tree, where survival or comfort
is like growing a weed or a
little bush; it doesn't take too
long.
Do you remember when you
turned the corner and began to
think like a rich man?
Yeah, I do. I can remember
banging my head against the
inside of an elevator. I had
just worked 11 hours at a golf
course as an assistant pro and I
was going to work at a
high-dollar restaurant that
night from 7 until midnight, and
I was banging my head against
the elevator, thinking, "God,
there's got to be an easier way
to make money than this."
Shortly after that, I decided I
was done working for somebody
else. I was going to learn how
to earn profits. That has made
all the difference. From the age
of 15 to 25, I worked for wages.
At 25, I started working for
profits, and at 33, I became a
millionaire for the first time.
Many would ask, what's wrong
with wages?
When you're working for wages,
your income can only go up a
little bit over a long period of
time. But if you work for
profits, your income can go up
dramatically in a much shorter
amount of time. I really think
people can become financially
free in the next four to six
years if they learn to earn
profits.
But if they're working for wages
their whole life, chances are
they're never going to become
financially free. It is
possible, but it takes 30 to 40
years.
There's nothing wrong with
working for a paycheck, working
for wages, but just make sure
some of your mental energy is
going toward learning how to
earn profits and the day will
come when you will become
financially free.
You make a case that playing
it too safe keeps most people
from financial freedom. How do
you overcome the fear of risk?
As one of the mentors I spoke
with, Nido Qubein, told me,
"Keith, if you take risk out of
life, you take opportunity out
of life." A lot of people
don't understand that risk is
opportunity. You overcome the
fear of risk with three
questions: What's the best that
could happen? What's the worst
that could happen? And what's
most likely to happen? If you
ask those questions when an
opportunity arises, the answers
can give you some insight. If
the most likely thing to happen
will get you closer to your
goals and if the worst thing
that could happen does happen
and you're OK with that, you're
willing to live with it or go
through it, then you go for it
and you take action. But if the
most likely thing to happen is
not going to get you any closer
to your goals, and if the worst
thing that could happen does
happen and you're not willing to
go through it, you simply don't
do it.
Most millionaires have made
mistakes and learned from them.
What's your worst mistake?
A Barney's Coffee franchise.
I started one and lost about
$300,000 in it about two years
ago. I found a double
drive-through location and I
thought it just could not fail.
A lot of people think franchises
are sure things but they
absolutely are not. I put about
$250,000 to keep this thing up
and running and after about 18
months, I finally pulled the
plug. There comes a time when
you have to pull the plug, cut
your losses and go on to the
next thing. I had to pay another
$50,000 to pay off some
equipment leases just to get out
of the business.
Some people reject the idea
of wealth, "It's lonely at the
top" and so forth.
What do you say to them?
A lot of people are still stuck
in the comfort mode, they just
want to have enough, and they
think if they pursue all that
money, they'll lose their
family; they'll lose their
health. That's not me at all.
God, family and finances are my
priorities. I never wanted to be
somebody that went after
financial freedom and lost my
health or lost my family. I
refuse to go down that path. But
I've known people that do that.
They put money as such a high
priority in life that they lose
the things that matter most. But
if you keep your priorities in
order and focus on financial
freedom, it's a wonderful world.
I love people and I use things.
There are some millionaires out
there that love things and use
people and that is definitely
the wrong formula.
Do you manage your own money?
I did everything on my own,
yes. I never went to a
professional to handle my money
for me. What I've come to find
out is, while some of those guys
are great, a lot of those guys
just put on a front; they're
making $50,000 a year and
they're trying to tell someone
who is making a million dollars
a year how to invest their money
and they really don't know;
they're just doing what they've
been told to do. I'm not
knocking anyone; if you're going
to use one, make sure you find a
good one who is doing very well
financially themselves.
What do you see yourself
doing 10 years from now?
There are some things we do for
money that are only good for a
certain season.
That's why we have to keep our
eyes open for new opportunities.
I'm constantly polishing my
portfolio and looking at
different forms of income. I
never got heavily involved in
the stock market. I am still
dabbling in real estate but
nothing real serious right now.
I'm still a young entrepreneur.
I still have a lot to learn. I
haven't mastered all those
principles; I'm still living
them on a daily basis. When I
focus on them, it seems like
opportunities come my way and I
make some better decisions. It's
not just about the money, it's
about the learning process.
-- Posted: Oct. 22, 2007 |
