5 Reasons to Quit Your Job and Start a Business

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Money Mindset

Money is not important.

Money isn't everthing.

Blah... Blah... Blah...

You've heard people say things like this plenty of times, haven't you?  You might have even had these words slip from your tongue a time or two in the past as well.  Do Not Fret.  It's okay, take a deep breath and let's start over.

The rationalization for saying things like the statements above comes from lack of money.  It is pretty evident that people who are financial wealthy do not go around saying things like, "Money doesn't buy happiness."  You can be assured that words such as those come out of the mouths of those labeled BROKE!

Imagine saying to your spouse "You aren't important" or "You aren't everything" or any other similar combo.  How long do you think it would be before you would start having troubles in your marriage?  It is very easy to see that example, however, with money people seem to push that out of their head as they justify why they have none.

Recently we met with a family member to say good bye before our big move next week.  She is older and always always always is reprimanding us for not being spiritual enough.  What she means by that is that we focus too much on money (well, first of all we are in the money business) and that talking about retiring young and being financially wealthy aren't heavenly attributes.  Every now and then she throws in a tease about having made our millions, yet.

This experience each time we meet doesn't really bother me much at all anymore.  I understand that we all have different views and opinions and we are all entitled to them equally.  But the interesting thing that happened recently made me smirk in response to how contradictory humans can be in regards to money.

Her husband lost his work.  Guess what that means?  Yep, no more MONEY coming in.  Guess how spiritual she's feeling right now?  Well, let's just say there's too much stress right now to worry about how to help the poor somewhere else.  Her prayers are filled with suplications of providence instead of other spiritual matters.  She just doesn't know what she's going to do.  How terrible is that situation?  She's 73 years old!

Don't worry about her, she will be cared for by family and those who love her.  But can you see my point in this post?  Money is important and it is good.  It is a tool that can bring options to your life, your family's life and the life of many many many other beings on this planet.  Can we control what others do with their money?  No.  We can only control ourselves, and it is our duty to be good stewards of the money we are given and to multiply it.  It is not enough to bury it in the ground for later, either.

Next time someone tells you money isn't important, you automatically know in your head that they don't have any.  Until they change the way they feel about it, more won't be coming into their pocket any time soon either.

Make the choice to treat money with respect and appreciate it for the tool that it can be for us in our lives.  Only after such a mental shift, can more of it pour into our life.

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Three Ways to Put $100 in Your Pocket Each Month

Always up for some extra cash?  Here are three sure fire ways to add an extra bill into your purse each month.

1.  Bring lunch to work. 

Oh no I didn't just pull out the ol' bring your lunch to work idea, did I?  Uh, yeah, you bet I did.  I go into our office EVERY day (not exaggerating at all) with my lunch from home.  I don't need to get too creative; usually a sandwich, a soup, sometimes fruit and such.  At the most, I spend approximately $12-$14 per week on lunches.  Compare that to people I see stopping at McDonald's or Starbucks in the morning, then spending $6-$7 per DAY on lunches and maybe a buck or two in the vending machines!  Let's just call their average $38 per week.

$38 * 52 weeks = $1976 per year
$1976 / 12 months = $164 per month

Compared to:

$14 * 52 weeks = $728 per year
$728 / 12 months = $60.67

Savings of $103.33 PER MONTH in YOUR pocket!!  You're on a roll!

2.  Pay for gas and groceries with a debit card and take out $5.00 - $10.00 extra dollars in cash.

Wait a minute, I'm supposed to be telling you how to put money in your pocket not take it out, right?  Well, here's the thing.  Let's say you're like the average American who fills up once per week and shops once per week.  That's two trips where you're pulling out a total of about $20 extra each time.  You then take that $20 and put it into a "secret stash" at home.  You don't really feel that extra $10 coming out each time and at the end of the month you have extra cash you would have invariably spent on foolishness (like lunches, maybe?).

$20 * 52 weeks = $1040
$1040 / 12 months = $86.67

There's an extra $86.67 you would have normally seen do a magical disappearing act come back into your life!  You rock! (P.S.  each month deposit that cash into a savings or money market account to keep you away from the temptation to spend it!)

3.  Claim more on your taxes

Now before you rush out to your HR department, please consult a tax advisor or the irs.gov website. 

This seems crazy to me:  People get all fired up about getting a tax "REFUND" each year.  Some people I meet with actually think that the government is giving them free money.  There is a reason it is called a REFUND.  It is simply because you OVERPAID the government taxes and they are required to return to you what you overpaid.

Guess what is happening during the entire year as you keep giving away your extra money to the government?  They are earning INTEREST on your money.  By claiming more you will actually be able to get more of that money on a monthly basis and therefore earn interest on YOUR OWN MONEY!  Instead of giving the government a LOAN and not requiring them to pay you interest when they give it back to you each year!

Some people tell me that they like getting a refund because it's almost like a forced savings account.  Well, if you don't like "thinking" too much then just set up an automatic withdrawal straight from your checking account for the extra you would normally have needlessly given to taxes into a mutual fund.  Some banks are even able to coordinate your direct deposit to withdraw and distribute funds before you even see it in your account.  Therefore you wouldn't have to "think" about putting your money away and you'd be instantly earning interest on your own cash to boot.

Plus, at the end of each year, you're paying off a ton of bills with the refund money.  Bills that you likely wouldn't have accrued had you had enough money to pay for it up front (Saving you interest dollars also!).  Lots of people use that money to go shopping or take a trip.  You'd be more careful about mindlessly blowing your money if you understood how hard you've worked for it rather than thinking it's a free check from some random source.

Savings:  AT LEAST $100 per month.

Do all three and then voila....$300 or more EXTRA in your budget each month.  Money is simple, just learn the rules.  Whether you are playing on the right side or not, the game continues to go on!

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BUDGETING 101

About five years ago I was hired to teach a public education class on the Basics of Family Finance.  I would be the only teacher on that subject amidst the dozens of choices the community had available.  The coordinator and I were very excited about this prospect and felt that we could do a significant amount of good to the families who attended. 

Come registration time we were hopeful and projected a smaller class size since it would be a new topic available from which to choose.  When registration finally closed, both the coordinator and I were completely shocked at the ZERO registrations.  There were a few inquiries and that was that.  No one wanted to invest time and money for a few week course on getting your finances in order. 

So, today (in a different state) five years later when I received my community education catalog in the mail, I was surprised to find that there were multiple finance classes available.  Everything from balancing a checkbook to investing in real estate.  It was a double edge for me.  On one hand I was elated to see more interest in personal money matters, on the other hand I wished that our culture was as preocupied with finance five years ago so that families wouldn't be in the mess they are in today.

Alas, it is what it is, and hindsight is always 20/20.  My insightful hubby said to me, "You were just ahead of the times."  That of course helped.

So now that people care much more deeply about their pocket book and are always looking for ways to stretch out our mighty dollar, I wanted to post regarding the basics of budgeting.  STOP....DON'T CLICK AWAY just yet.  I know what most of you are thinking...oh, I've got the basics down, I need to go further!  The challenge with that is that the basics are usually all most of us need to get ahead, yet we neglect them for their mundane qualities.

Get the basics down and you will do fine with the bigger issues that come your way.

So what are the basics exactly?  I will sum it up in one sentence.  This sentence is so powerful that if taken to heart you can actually transform your financial self within a year max!  Most of us would love a slight improvement let alone a complete transformation, but knowing this one phrase and applying it will make all the difference in the world. 

LIVE WITHIN YOUR MEANS.

Is this brand new earth shattering information?  Probably not.  However, it is basic.  It is so basic we overlook it thinking that it is just too simple advice and cannot possibly work in making our lives better.  Sometimes this piece of advice is unwanted because it would mean sacrificing certain luxuries we afford ourselves on a daily basis such as: dining out frequently, buying new clothes, entertainment costs, hobbies. 

At the end of the day you have to ask yourself what is more important?  Eating at Burger King today or putting five bucks away in my emergency stash?  If you think eating a hamburger is more important, then by all means go for it.  If not, then you know what you need to do.

If you change one thing about your habits this year (or this month, or hell even this week!) then make it a habit of living within your means.  At least work toward that direction.  You'll be so amazed at the money you really have the ability to use and work with to create your financial freedom.

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The Whole TRUTH

Since so many people refinance for the immediate gratification, they get stuck in mortgages that they wouldn't wish upon even their worst enemies! You think that's an exaggeration? Well, tell me if you agree:

A balloon mortgage...payments stay low for a period of time and come the last payment on your mortgage: $467,840...yep, because you just paid interest the whole time...so what is your option at that point? Either pay it off or get another mortgage...EVIL!!

You could also get stuck with an interest only loan...payments are low because ALL YOU ARE PAYING IS INTEREST! There's a more efficient way to just pay interest on your home and have someone else take care of the property for you...it's called renting!

ARM (Adjustable Rate Mortgage)...this usually comes with a fixed rate the first 3-5 years and them WAMO...it adjusts....do you think it normally adjusts to benefit you by lowering or to benefit the mortgage company by raising? Yep, you're starting to see this aren't you?

Pick a Payment....this type of mortgage can be deadly, because you'll get a bill and then the company puts three different totals that would be acceptable as an amount due. High Middle and Low....which one do you think most people choose? Yes, LOW...sometimes middle...the low payments actually amortize negatively and in 5 years or so you'll have to refinance or pay the back end amount or you lose your house!...ohhh but you're smart and will pay the middle right? Usually that's the interest only option, so there again, you're renting. SCARY!

These are just a few instances of mortgage types available...REMEMBER! Refinancing should be taken into account on a long term basis! Are you able to wrap up your debts and now use your freed up money to accelerate the whole thing? Will you refinance your 27 years left into a 15 year term? Those are the important questions.

TRUTH IN LENDING STATEMENT:

The four boxes above are titled:

ANNUAL PERCENTAGE RATE

FINANCE CHARGE

AMOUNT FINANCED

TOTAL OF PAYMENTS

in that order.

The Truth in Lending Statement is one of the most important sheets in your HUGE stack of papers you get as you are signing the acceptance of your loan. It's called "Truth" for a reason, they have to disclose the truth for you.

Look in those four boxes...Does the APR differ from your note rate? Usually does. The APR is the rate you'll pay after all fees are included into the loan. When you think your rate is 5.5% and then you see that your APR says 7.25% you've been hosed. Usually you don't want to see more than a percentage point higher on the APR...and that's almost pushing it. We'll talk about fees in another post.

What is the most important number on that sheet? THE TOTAL COST! You need to reduce that number no matter what it takes...the quicker you pay, the more you apply to it, the less interest dollars you'll pay. DO YOU YOUR HOMEWORK!

When you see the entire Truth in Lending document, in the second big box you'll be able to see what type of mortgage you own, and how the payments are applied. Check on this sheet whether your mortgage says fixed or if it has the "Variable" box checked. You'd be surprised how many people I've met with who would bet their first born child on the fact that their mortgage is fixed, and when we pull this baby out, we can really tell the TRUTH...hey...I'm just the messenger.

Pull you Truth in Lending document out today, review it, and then determine where you stand. Until you get smart about this stuff, you'll end up always shrugging your shoulders and wondering why you're broke. Don't let that end up being you!

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Paying Off Early

So, to continue the last post...

Understanding the reasons behind a refinance are of the most critical importance. Keep it in the forefront of your mind why you are doing it, otherwise you will continue in the vicious cycle of refinancing every 2-5 years so that you can free up a bit of money, and before you know it you'll be 60 years old wondering how come you still have thirty years left on your mortgage!

One thing you get offered by mortgage companies is the option to set up a biweekly program. Paying your mortgage payment biweekly can be a great option, especially if you get paid every two weeks. The point of doing so is to pay a thirty year mortgage down in 25-26 years. Why not cut off 4-5 years right?

Here's the part you need to watch for. Most mortgage companies charge you a set up fee for this biweekly service. I have seen anywhere from $100 - a full month's mortgage payment. Either you pay that set up fee out of your pocket or they gladly attach it to the end of your loan for which you will undoubtedly pay interest dollars. After the set up fee, you may also incur a "per payment" or "draft" fee to help them offset their costs of drafting out of your account automatically. Sometimes this fee is anywhere between $1-$4 per payment.

All this happens so that you can pay your home off in 4-5 years less. Well, as good of an idea as that is, does it really make sense to pay those up front fees? NO! N-O, absolutely not. All that you have to do is basically make an extra payment per year to accomplish the same goal.

See, paying biweekly means you are making 26 payments in a year (52 weeks in a year, pay ever other week, so divide that by 2 and you get 26). Or 13 full monthly payments in that year (Divide 26 by 2). So, how can you still accomplish the awesome goal of paying your home down early (which in the long term costs you much less interest dollars) and avoid all the set up fees that banks may charge you for the biweekly program? Here are a few tips:

1. Begin sending in half payments every two weeks (Before you officially begin this practise I would call your bank and verify that they would accept such an arrangement from you. Be careful though, they'll just try to set you up on their biweekly program and then enlist those fees upon you.)

2. Set up an automatic draft from your checking account into your savings account for your full monthly payment divided by twelve. Once you reach that full payment amount in your savings, send that money in each year. (So if your monthly mortgage payment amount is $1,200; have $100 draft out of your checking into your savings every month. At the end of 12 months you will have accumulated $1,200. Send in that extra payment every year and you will achieve the same results as a biweekly payment, give or take a few months).

3. Find a company that does not charge any fees for their biweekly plan. Sometimes we feel that we wouldn't be motivated enough to do this on our own. That would be quite sad, but at least in the start having something set up would be better than not at all. So find a company that would set you up on a biweekly program without the fees. You see the disclosure forms, so take the time to read them before you sign. Don't just take some one's word for it (even the Mortgage Broker!) -- Note this step might be a little tougher than you think. I personally know of ONE company that not only doesn't charge you a set up fee and a draft fee, but they also give you a .25% off of your rate for setting it up. ONE, so HEAVY research is needed for this step to truly be successful.

At the end of the day, any step you wisely take toward paying off your debt sooner is a step in the right direction. One day at a time!

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Million Dollar Mistakes

There are many areas in our life that could constantly face improvement. The challenge usually lies in the gray area of "not knowing." Most of us in a sound state of mind want to improve our lives and want to get ahead. Sometimes that feat is hard when we keep doing things that are actually holding us back, unbeknownce to us.

One such example is completely rampant in American culture and eats away millions of hard earned dollars every year. The small, seemingly harmless act of refinancing. I am careful in how I write about this subject as it is not necessarily an evil thing in and of itself, however coupling a refinance with ignorance on the rules of money can spell out a disaster in your pocket book.

The challenge with a refinance comes from the motive. Most people go through the process of refinancing for the immediate gratification of freed up monthly money or even cash out. Saving money monthly is great and sometimes it is necessary to take out equity for a loan for something important (hint hint: a Vegas vacation wouldn't qualify for important). If one is to refinance, it should be done with a long term focus in mind.

While sometimes this refinance can get you out of a tight monthly bind by putting in an extra few hundred dollars in your pocket, 95% of the time you're also restarting the clock. Yes, that means your 30 years starts over! So if you've only been at your home 5 years or less(which is the time frame that just about every penny of your payment goes to interest), and you refinance, you can basically look at the time vested in your home so far as rented. Yep, you just rented your home, and restarted the interest clock. So think thoroughly about the long run before entering this venture.

Stay tuned for more details regarding refinancing, and get ready to kiss financial ignorance good-bye...

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Perspective

All must be taken from appropriate perspectives. One incredibly financially damaging thing I see people do to themselves over and over is resent those who are doing well financially.

Why would that matter to your own finances? Because you are sending out the notion that you feel money is a waste and that you want none of it. So when the opportunity comes your way to earn more or better your current opportunity, guess what? You'll pass right by it.

Here are some examples of what I'm talking about:

Me: Look at that beautiful home on that hill.

Friend: I know those people, they have four hot tubs!

Me: Wow! That's cool.

Friend: No it's not! Do you know how many hungry people you could feed instead of wasting money on those hot-tubs?

Me: With that logic you should return the $100 pair of shoes you bought this afternoon and donate that to hungry people.

Friend: I disagree (pout and subject change)

See? It's all perspective. Why is it okay for her to buy expensive shoes, but when someone who can afford to have four hot tubs, thet are now labeled greedy.

Next example:

Friend: I know a guy who drove a Hummer all the way from Utah to California.

Me: Oh?(failing to see the point)

Friend: Oh? What do you mean oh? Do you know how expensive that gas bill must have been?

Me: Does he earn a lot of money?

Friend: Well yeah, he's wealthy. But that doesn't mean you should be wasteful and blow crazy money on gasoline!

Me: So, how long until your truck lease is up?

Friend: 2 more years. I can't wait to get my new one leased.

Hopefully you saw the irony in the second example as well.. Here we have a hard working person being critical of someone for taking a roadtrip in a hummer. Really? You're just being resentful because he has the money to do something like that. Because if paying for Hummer gas is wasteful, well then how much more wasteful is it to pay on a vehicle for years and never come out owning it?

All in proper perspective, my friends.

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Lean and Mean

Let's get right down to the core of this post shall we? Live within your means people! Seriously! I don't know if it has been a blessing or a curse for me in my life, but I've never worried about out doing others in terms of my possesions.

Now, let me clarify. Do I like nice things? Yes. Do I like owning name brand stuff rather than generic? Sure. Is it one of my goals to be the out right owner of a $4,000 Prada purse? Absolutely! However, on my way to accomplishing those things, I don't look to my neighbors stuff and try to have a measuring war with each other.

The saddest thing I see when dealing with people I love is the stress that comes from debt occurred from acquiring "stuff". At the end of the day, that's all it is...Stuff.

Just this week we had a friend who moved into a brand new rental home. The only people living there with her are her two kids and her husband. They opted for a five bedroom house on a huge lot. So what's the problem? Neither of them are employed right now and they are depleting whatever they have in savings on this kind of luxury. To top it off as she was telling me about her place she would say, "I don't want to brag, but..." Brag? About what? Do you see where I'm getting at?

Forget the Jones and focus on you and your family. Get right with your financial selves. Set high goals, and as you work toward achieving them, live below your means and keep your stress levels low.

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What to Get for Christmas

A family member recently asked me what she should get me and my husband for Christmas this year. She suggested maybe a movie or a game or whatever else we might be in need of. The honest to goodness truth, is that I didn't want her to spend a penny on any of that! What would make me terribly happy this year? If all the money that would be spent on me this Christmas would instead be put in a retirement account or an emergency fund. SERIOUSLY.

Think about how much money is spent (anytime really) at Christmas on trivial things. What ever happened to 'it's the thought that counts'? Have we really become so materialistic, that we don't appreciate the thought of just spending time together during the holidays?

I know, I know, if you have kids this might be a harder concept to get through. But we can work on that as we go. But as adults, think about how much better off we could all be financially if we cut our Christmas gift buying in half every year and instead put it into a ROTH IRA or even an emergency fund for the future. Or how about a college fund? Hmmm, maybe even save for a down payment on a house or a car! What a concept!

This is not the norm, however. It may be a hard concept to swallow in the beginning, but at the end of the day you have to understand that it is a series of poor choices that end up leading to a poor quality of life. (Financially speaking of course) So let's make a conscious decision to make a bunch more good choices, so that we may in return have a better quality of life.

So I will reiterate. For any one out there thinking of buying us some presents, at Christmas time:

just show us your mutual fund statement, or your money market statement where we see that you put money you would have spent on buying us something temporary into something that will have a lasting benefit for you and your family!

LOVE & GRATITUDE!

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Is Visa too Close of a Friend?

Me: Do you have an emergency fund?

Client: What do you mean?

Me: You know, a fund set aside strictly for emergency purposes.

Client: Oh, yeah!

Me: Great. How much do you have in there so far?

Client: (Turns to her husband) How much is the balance left on our visa?

Me: [Exasperated sigh]

You would think the above scenario is just a cutesy little blurb on the importance of having an emergency fun that is not made of plastic. But no, on more than one occasion I have had the same answer to my emergency fund question.

Seriously people, a visa or master card does not count as an emergency fund. Now, I know, some of you may not have enough set aside to last you the recommended 6-8 months (or at the very least 3 months), but don't let that be something you simply shrug your shoulders at and say, "oh well" to. Getting your emergency fund in place may be hard, but it is doable.

The saddest thing that can happen is if you never make the effort to have money set aside for emergencies and then you rack up your credit card for them.

Tires blow out? Washer machine breaks? Break your leg and need to pay to get a cast on? Etc. Etc. Also, if you have hard earned cash sitting in an emergency fund, you are more likely to use it only when there are true emergencies. Credit cards are easier to whip out and you may spend on some things that may feel important, but not necessarily emergencies (such as a new sweater to match your purse).

Although I'm trying to be light and have fun, this topic is serious. Pay off your cards and use cash for emergencies ASAP!

don't CHARGE IT!

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Understanding Simplicities...

The reason most people feel intimidated by money is because they feel that it is such a foreign subject they wouldn't even be able to understand. The truth is that money is simple. The fear of not being capable of becoming financially literate, however, is what stops people from learning all they can and then they end up getting screwed in many areas of their financial life (i.e. their mortgages, life insurance, investments, etc.)

Where do you turn to learn? Here are a few tips that should help you get started in your quest to learn the "Rules of the Money Game"

1. Financial Representative ~ Now this doesn't mean a Harvard grad, three piece suit wearing, behind his huge oak desk kind of person. It means someone who has a career or professional relationship with money. Someone who deals with money for a living and someone whose job it is to read and analyze financial documents.

It is important to note that your broke friends and family members do not count in this equation. They are often the ones who want to give you advice and they usually give you terrible advice, so do not listen to them unless they fit criteria #1.

2. Books ~ Yes! Read something! You want to be out of your mess? Go pick up a book that talks about money. Anything by Suze Orman or Dave Ramsey are easy reads that help you gain a better understanding. Some other authors you may want to try are: Robert Kiyosaki; T. Harv Eker, Dennis Couveir & Alan Lysight, David Bach, etc.

3. Go to financial seminars or classes ~ There are lots of these available and most of the time they are free or very cheap. Make the investment of your time to attend several of these within a short period. But don't take all you hear as law. Use what you can and disregard the rest.

These are just some ideas on how to get started. If you use the Internet as a resource for financial education that is great also, but since the Internet is so uncensored don't take every word you read too literally. Do research, take the time learn and dive into this material.

You don't have to end up being a financial guru. In fact, that would almost hurt you more because you'll think you know so much you might then become closed off to new ideas that could dramatically benefit you. All you have to do is start getting comfortable with this material. Pretty soon you will notice things in contracts you sign that you haven't noticed before and you'll be saving yourself thousands if not hundreds of thousands of dollars over your life time!

GET SMART!

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Buy HIGH Sell LOW

Did the title confuse you a little bit? I hope it did, because it means you'd be paying attention. The true way of doing this is actually to BUY low and SELL high. Why did I name this post the opposite, then? Because that is what the majority of people do and then wonder why they stay broke.

Here's my attempt at simply explaining a powerful concept. Dollar Cost Averaging.

Let's say you have the option of buying stock at $10 per share (stay with me on this, it's not that hard). So you buy 10 shares. You then invested $100. (10 shares X $10 = $100) You do this on a monthly basis.

Now the stock market does well, and your shares are worth $12 per share. So this month you put in your usual $100 and now only purchase 8.3 shares with the same $100. ($100 / $12 per share = 8.3 shares)

If the market continues to do well, your share prices will rise in value. We could get to a day where your shares are now worth $20 each! While you may think this is great news, you are actually buying less and less each month. Because that same $100 now only gets you 5 measly shares!

Now let's flip flop the way the market performs.

Instead of rising in price, let's say share prices drop to $8 per share. If you take your usual $100 and buy the same stock, you now own 12.5 shares. ($100 / $8 = 12.5 shares)

The market continues to drop next month. But you don't panic, you buy more shares the next month now at $6 per share. Now you've purchased 16.6 shares!

Here's the good part. Let's say in a good market, you buy your 5 shares for that 100 bucks. The next month the price is $22 for each share. You sell the 5 shares you bought for $110 and make a $10 profit.

Okay, not bad.

But you just had a down month in the market and bought those 16.6 shares instead. It only grew to $9 per share. You sell those shares for a total of $149.40. Your profit is now $49.40. Almost five times better than the first example.

So the lesson is to continue to buy into the market no matter how it's doing. People listen to the news too much and panic when the market isn't doing too well and pull out all their money way too soon. If you ride the wave, you are actually going to be purchasing more shares and then when the market spirals back up, you will own more shares, and therefore be worth a lot more money.

So don't be like most people buying high and selling low. Stick to the rule of thumb of buying LOW and selling HIGH, and you will be much more pleasant with the thought of the market.

BUY BUY BUY!

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Mind Over Money

There is a deadly disease going around our country and even around the world, today. It is the disease of low self image. What does this have to do with money? Well, the fact is that many people don't feel as if they are worthy to receive lots of money. The thing about this disease is that it can be subtle. Sometimes you don't even know you are showing symptoms of it. Heaven forbid someone tells you the symptoms you are demonstrating causing you to get defensive and upset.

"There is a secret psychology of money. Most people don't know about it. That's why most people never become financially successful. A lack of money is not the problem; it is merely a symptom of what's going on inside of you." ~ T. Harv Eker

Feeling worthy of wealth has a lot to do with weather or not you will have any. One simple way you can check to see if you show symptoms of thinking yourself into unworthiness is in the language you use. Do you say things like, "Money doesn't buy happiness" or "Money is not important"? If you do, you definitely don't have any and are on the road to having less.

Think about it. What would happen to your relationship if you said at least once per day to your spouse, "You are not important"? How long would it take before your spouse finally left you? Maybe in some cases it would take a while, but in most, not too long. You would find yourself all alone and yet wonder why they left.

Looking at it from that perspective seems a little extreme. Who in their right mind would say to their spouse that they are not important to them? Yet we do this with money every day. The subtler ways come in forms of complaining, judging, pessimism, sloth, anger, etc. Money is a magnet to that which is positive and strong. Anytime you display the opposite, money will repel itself from you as quickly as possible.

How does money repel?

Ever loose money out of your pocket?

Ever get bounced check charges for something you forgot about?

Ever incur any late fees? Ever get your mortgage or rent increased?

Ever get a pay cut or go a year with out a pay raise?

Even worse, ever loose a job due to layoffs and such?

Ever have a spouse go on a shopping spree even though you've repeatedly instructed that
money is tight?

Ever have kids need expensive materials for school?

Ever have an appliance or car break down or damage during the most inopportune and stressful financial times?

See, whenever things like that and more happen, it is because you are rejecting money and wealth to come your way. Get rid of the crap, the stress, and whining, and slowly (or quickly depending on how fast you can change your attitude) you will see progress come to you in ways you've never imagined!

THINK ABUNDANCE!

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We Wish You a Merry Debt-mas...

Guess what? You won't believe what is coming up in less than two months? (Surprise face has been implanted) Drum roll please...CHRISTMAS!

Okay, if you think that was a weird intro, listen to you friends, co workers, and family over the next few weeks. They all talk about how they "Can't believe" it's almost time for Christmas again. Well, here's a newsflash folks...Christmas comes the same time EVERY year. No exceptions. I bet you that if you had a sneak peak at a calendar for the year 2010, Christmas would also be listed there on December 25.

So, why oh why do we act like it just snuck up on us?

What is the harm of being shocked that it close to Christmas? The fact that when we don't plan for it properly, we overspend on presents just to save face. Well, here's a few tips on surviving Christmas with a thicker wallet.

1. Make a list of the people you want to buy a present for and evaluate it.

Are you buying a present for people just because you feel obligated to or is it because you truly want to impart the spirit of giving in the holiday season? Some of the most wasted dollars go toward presents for co-workers or acquaintances who don't want you to buy them a present anyway. Why wouldn't they want a present from you? Because then you put them in a position where they feel obligated to spend their hard earned money on getting one for you in return.

So do yourself a favor, really truly decide who deserves a present from you. For the rest of the people get them a Christmas card early in the month so that they realize that is all you are getting them and they won't feel as obliged to buy you something special. You may even want to write in the card something like, "Instead of exchanging presents, why don't we donate that money to a good cause this year." It will let them and you off the hook and if you want to follow through on a donation spree, your money will be much better spent there than on a gift that will be re gifted, tossed under the bed, or even worse thrown away in the next move.

2. Budget your Christmas list and shop early

If you have a list, make a budget in advance of how much you are really wanting to spend on each individual. Be strict with the budget and do not go over the amount no matter what. Be thankful you still have a few weeks, because you can get really creative.

3. Do extra work to pick up extra cash - aka avoid the plastic- to pay for gifts

Pick up a part time job, work a business on the side, sell stuff on the Internet, donate plasma, have a garage sale. Don't just rely on your current job to pay the bills, because that's when it becomes easy to pull out your dear friends Visa and MasterCard. If you put extra working effort and man hours to raise your Christmas fund money, you will appreciate it so much more and therefore be more mindful of where you spend it.

Begin your plans for Christmas today. A little bit of time each day will save you thou$and$ of dollars in interest you'd have to pay back and years to pay it back in. You deserve to have your money working hard for you, not the other way around.

YULE-TIDE!

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Your Greatest Asset

Is not your home...

Read that again. Your greatest asset is not your home. It is your ability to earn income. Think about it, does your home pay you a paycheck every month or does your ability to produce work pay you a paycheck? Absolutely, the second, right? So wouldn't it make sense that you insure that asset?

I want you to picture a toaster. This is a very special toaster. You have it in your kitchen and every single month without fail on the first day of that month when you push the button out pops $5,000 in cash. Every month!

Tell me, how do you feel about this toaster? Do you take care of it? I'm sure you do! You probably have it in a glass case and sealed with a key just in case someone gets too close to it. It truly is a valuable commodity in your home.

Now, let's say you were friends with the "Toaster Fairy" that brought this device into your home. Your fairy says to you that although this is a sturdy piece of machinery, you never know when an accident will occur and you will loose the toaster. Your first thoughts might be something like, "Oh, no way! It's sealed in that bullet proof glass case!" Or maybe, "No way! I've only had it for a couple of years, it's still young!" Whatever your first reaction may be.

Then your fairy looks at you as if you have three heads and says, "Very well, good luck then." As she proceeds to fly away you stop her and realize you don't want to be too cocky in the matter and that truly having this toaster is very valuable for your family. So you ask her what you should do. She simply states, "Take the first $500 that pops out and put it in my mail slot as insurance. Thereby when something shall happen to the toaster, I will be able to replace it with a new one that may continue to pop out your usual $5000 per month."

What do you do now? There's no question is there? You definitely, and without hesitation, take the first $500 of that money, insure your toaster, and then sleep with an incredible piece of mind that your family will always be financially secure.

Why would that be any different with your income? If a toaster that pops out money every month is that valuable, wouldn't it make sense that your life and your income producing ability is equally so? Yet, many people ignore their need for life insurance because they do not want to pay the premiums. Let me tell you something, if you feel that paying for insurance premiums would be a little tight right now, then you REALLY need it. Because if paying a monthly premium would be too much while you are still alive, how then would you manage your monthly expenses if the bread winner passed away?

Please make sure you get the right kind of coverage.

In the next few posts we'll discuss what the right kind of coverage is and why. Let me just iterate one thing for sure. ALWAYS buy term insurance. Anything that says whole life, cash value, universal life, variable universal life, flexible multi funded premium life, you bet your life, we'll take your life, or any of the sort is TRASH. Do NOT spend a nickel on any of those unless you want to loose those hard earned dollars.

YOUR NUMBER 1 ASSET!

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Can't You Read???

How serious of a problem do you feel illiteracy to be? It's pretty scary when an adult cannot read words and therefore limits him/herself in life. If you knew someone personally that was illiterate, you would want to reach out and help, right? It's just that important.

Here's a newsflash. There's a kind of illiteracy that is rampant in our country, and there is hardly anyone doing something about changing that fact. What kind of illiteracy could I possibly be talking about? Of course, Financial Illiteracy.

~~U.S. high school seniors, on average, correctly answered only half of the questions on a basic personal finance and economics test.2 (Source http://www.loma.org/res-06-04-literacy.asp)

We can mostly agree that being able to read words is of critical importance to success in life. Now, let's agree that the same applies to being able to understand MONEY. Let's face it, in our life we will always have to deal with money in one way or another. Whether it be through its abundance or lack, through work or home, any where at all, there will be times in our lives when we make financial decisions. The lasting affects of these decisions are monumental in many cases, and we skim by in life making MILLION Dollar mistakes all the time.

~~In 2006 approximately 1.5 million consumers sought assistance in the management of their finances from the National Foundation for Credit Counseling (NFCC). By 2008, the number of customers seeking aid from the nonprofit organization more than doubled to 3.2 million (Source http:/personalmoneystore.com/moneyblog/2009/10/19/credit-repair-illiteracy)

Most people when presented with an opportunity to better their financial situation either get defensive or embarrassed. It's time to take down the shield and welcome the fact that there might be better ways. One of the worst things you can say when approached with new ideas in regards to money management and wealth creation is: "I don't know anything about money." To that I always say, "Well, isn't it about time you learn?"

The truth is that we all have the option to be Money Smart. In fact it is our downright duty to be that way. It's time to stop blaming financial institutions or greedy brokers and agents for our money problems and look in the mirror to the ultimate person that has absolute control over what is happening financially in our lives. If you don't care about your money knowledge, guess what? NO ONE ELSE WILL EITHER! You are the only one who is going to care about you the most, so make it obvious and figure out a way to get money smart. Start to read, start to mentor with successful people, make it a priority to be open minded and growth oriented. It's time to finally break the chain of being broke. The good news is that it is completely up to you!

APPLIED KNOWLEDGE IS POWER!

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Emergency Fund

Let's talk about an emergency fund. And no, I'm not trying to talk about "Visa" or "Mastercard" as emergency funds. It surprises me to this day how many times I bring up the term Emergency Fund and people look at me with a deer in the headlights expression. Seriously, in this day and age, it seems like there is no such thing.

How much of an emergency fund do you need? Ideally? Maybe about a year's worth of income. But here's the trouble. If we have put ourselves into such habits where we don't have an emergency fund at all, if we were to even be disciplined enough to accumulate a year's worth of income, who's to say that we would let it sit there for emergencies only? It seems more practical that you set a goal for an emergency fund amount that is believable for you. At the very least, stock away $1,000 AS SOON AS POSSIBLE.

My suggestion would be to open up a money market account where you'll still be liquid but your potential for a rate of return would be higher than merely a savings account at the bank.

How to get $1,000 or more as soon as possible? BE CREATIVE!
Here are some simple ideas:

1) Garage Sale

2) Craigslist

3) Part Time Work (Job or business)

4) Freelance Work

5) Claim more on your taxes (***SEE YOUR TAX ADVISOR BEFORE MAKING THIS CHANGE***)

6) Fund Raiser

7) Brown Bag Lunches and save the difference

8) Sell your car and buy a less expensive one (Only works if you're driving a paid off car)

9) Do your own housekeeping, oil changes, mowing, shoveling, etc.

10)Commit to it!

These are all ideas to get your brain working on how to accumulate this money. The important thing is that you begin somewhere. Building up your emergency fund shouldn't be a process that gets dragged out for years on end. Set a goal, $1,000 or $10,000 or $50,000. Whatever it may be, and then work like a mad person to set that money aside, preferably in addition to everything you're used to doing anyway (bills, paying off debt, retirement savings, etc.).

Once you hit your savings goal, DO NOT TOUCH THAT MONEY! Yes, you may have had a stressful month at work, DO NOT USE YOUR EF MONEY FOR A WEEKEND TRIP. Yes, the new designer boots are on sale at Bloomingdales, THAT IS NOT AN EMERGENCY. Use it only for expenses that come up UNEXPECTEDLY.

Why is the concept of an emergency fund so valuable? Because you will build wealth. How? Every time you can avoid using a credit card or a loan you avoid paying interest dollars. Hardworking dollars that want to make you financially bullet proof can then be invested and earn interest FOR YOU instead of the financial institutions that funded your debt.

At the end of the day, being financially independent is what we all want isn't it?

$1,000!

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Focus on MORE than Just the Interst % Rate

Look, here is a million dollar plus mistake that is happening all across our country on a DAILY basis. I'll even say HOURLY basis. Home buyers (Not home 'owners'...don't make your payment for 3 months and then let's see who really owns the home) all over America get duped into the dream of a LOWER INTEREST rate and then go refinance their home. We grow up being told to "chase the rate" and as we trap ourselves into this refinance cycle over and over we wonder when we get to age 65 how it is possible to still have a 30 year mortgage.

Hmmmm...I wonder.

I have a lot of acquaintances in the mortgage industry and I really despise the mortgage industry because of their tactics. If you sit down with a loan officer, you are usually going to be asking them two specific questions:

1. What's my rate
2. What's my payment

Your loan officer is very glad you asked them those two specific questions because they make the most sense for them. They know if you can be satisfied with those two answers, you'll move ahead blindfoldedly. In reality, those two things don't do much for your overall financial picture. Instead, try asking these two:

1. What will the total cost of my loan be?
2. When will I be completely paid off?

Because at the end of the day, isn't that really why you want a lower rate? To pay less? Well, if you continue to refinance time and time again, you always push back the day you pay off your mortgage. We've done this so much in our society that I have had people say to me, "We'll always be in debt" and they seem to think this is an acceptable way to live.

You want to know one reason why you might be broke...that is one of the reasons. So do yourself a favor, if you are refinancing, remember that you might get a .25% lower rate, but you are restarting the clock. You actually just cost yourself more money and you definitely pushed back your retirement because of it as well.

Let's get S.M.A.R.T. about our $$ shall we?

Here's an exercise for you to illustrate this point:

Grab a little kid and ask him/her to play a game with you. Pull out from one pocket a dollar bill. From the other pocket pull out a piece of paper that has the percent (%) symbol on it. Ask that little kid which one he/she wants.

What do you think he'll/she'll reach for? The dollar...EVERY TIME. Isn't it funny that kids get this simple concept so early in life, and as adults our view point can really get messed up?

K.I.S.S.

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Have You Even Met the Jones'?

Who in the world are these Jones people that we have to keep up with?

If you've lived in the USA for any period of time, surely you've run across the saying "Keeping up with the Jones'" a time or two. It is an idiom in our country and when it is spoken of, most of time it is in humor. Let me say right now, there is nothing humorous about it.

Let's examine these JONES people shall we?

~In 2006, the United States Census Bureau determined that there were nearly 1.5 billion credit cards in use in the U.S. A stack of all those credit cards would reach more than 70 miles into space -- and be almost as tall as 13 Mount Everests. (Source: NY Times, Feb. 23, 2009)

~Eighty-four percent of the student population overall have credit cards, an increase of approximately 11 percent since the fall of 2004. (Source: Sallie Mae, "How Undergraduate Students Use Credit Cards," April 2009)

~On average, today's consumer has a total of 13 credit obligations on record at a credit bureau. These include credit cards (such as department store charge cards, gas cards, and bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.). Not included are savings and checking accounts (typically not reported to a credit bureau). Of these 13 credit obligations, nine are likely to be credit cards and four are likely to be installment loans. (Source: myfico.com)

~Average credit card debt per household -- regardless of whether they have a credit card or not -- was $8,329 at the end of 2008. (Source: Nilson Report, April 2009)

~The average outstanding credit card debt for households that have a credit card was $10,679 at the end of 2008. One year earlier, that average was $10,637. (Source: Nilson Report, April 2009)

~"As household wealth has declined in the downturn, more American families are facing financial distress due to high debt burdens. In 2007, before the recession began, 14.7 percent of U.S. families had debt exceeding 40 percent of their income." (Source: U.S. Congress' Joint Economic Committee, "Vicious Cycle: How Unfair Credit Card Company Practices Are Squeezing Consumers and Undermining the Recovery," May 2009)

~The average American with a credit file is responsible for $16,635 in debt, excluding mortgages, according to Experian. (Source: U.S. News and World Report, "The End of Credit Card Consumerism," August 2008)

~The average college graduate has nearly $20,000 in debt; average credit card debt has increased 47 percent between 1989 and 2004 for 25-to 34-year-olds and 11 percent for 18-to 24-year-olds. Nearly one in five 18-to 24-year-olds is in "debt hardship," up from 12 percent in 1989. (Source: Demos.org, "The Economic State of Young America," May 2008)

~28 percent of those surveyed say their ability to pay off their credit card balance has become more difficult. (Source: Javelin Strategy & Research, "Credit Card Issuer Profitability in a Difficult Economy," July 2008)

These are only a small snapshot of what is going on out there with people and their finances. Most of the time we get into these traps, because of trying to KEEP UP with or IMPRESS people who really don't care anyway!

"My neighbor got the new heavy duty snow blower, I will one up him with my new top of the line model. My Co-worker buys those nice designer shoes, I will one up her with a matching designer purse."

Silly right? The problem comes when we live on impulse, trying to match up with what others view us as, and then live an internal struggle because of our stress. If you are tempted to keep up appearances, ask yourself frankly, "Who pays my bills?" If they answer is the name of the person you are trying to impress, great, purchase it. If not, then bypass the purchase and move on with your life.

Truly at the end of the day, the person you are looking to impress is not thinking about you or your fancy purchases. They are too busy thinking about how stressed they are because of all their over spending.

RISE ABOVE THE REST!

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