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Archive for August, 2010

29
Aug

Finance 106 – Golden Rule: Grow your Net worth

money-ideasNet worth is the ultimate indicator of financial success.  If you monitor it and maintain a target growth rate goal, you will really make progress.  Net worth is calculated by taking all of your assets and subtracting all of your liabilities.  The answer is what you are worth. 

 

As children we have $0 net worth, as we attempt to establish ourselves we purchase necessities and creature comforts to validate our adulthood and independence.  At this point our net worth falls to a negative number.  At one point we should turn our focus on  building our negative net worth until one day we are Thousandaires!   Read moreRead more

21
Aug

Finance 105 – I’d rather be the son that can, than the son that can’t

money-risk-responsibilityIn many developing countries they believe in having many children to work the fields as well as provide for the parents in their elder years.  Our western, industrialized country has Social security and retirement plans that reduce elders reliance on their adult offspring for support.  Yet as many of us know, this is not always the case.  Many Americans work all of their lives somewhere within the middle class, but due to a lack of planning or financial wherewithal, retire poor and die broke. 

 

Many of us are stuck between two dependent generations.  As we strive to do better than our parents and take a leap that we hope they support and encourage, we have to balance providing for our children as well as our elders all while trying to accumulate a comfortable life for ourselves.   Read moreRead more

20
Aug

Finance 104 – Self assessment and strategy development

Take your monthly income and breakout your monthly expenses as a percentage of that income (pie chart).  You should know what percent of you income goes to:

Rent/Mortgagemoney-taming

Transpiration

Utilities

Revolving debt (credit cards)

Installment loans (student loans, etc.)

Entertainment

Insurances

Emergency savings

Vacation/Holiday savings

Retirement savings

Any other ancillary accounts

 

 

Once you know all that categories and the percentages you can start to devise a plan of action that will represent a better percentage mix.  Read moreRead more

19
Aug

Finance 103 – Credit card management

credit-card-31Credit is a pit bull that can protect you, love you, then turn and bite you in the ass. This is the most complex financial concepts that present the biggest risk as well as reward to a household’s financial success. Credit is the promising to spend future earnings in order to obtain a good or service today. However, when terms of loans fluctuate, or ones income or total debt changes, promises tend to be broken. Leveraging is an effective money management tool that we all should use and master. If not, it will master us.                     

The definition of interest is ‘the cost of money’. Read moreRead more

18
Aug

Finance 102 – Make your money Boo

players-clubOne big surprise that we have awaiting us as we enter adulthood is about all that stuff or parents, teachers and counselors were spewing.  If you don’t perform well and take school seriously you will be greatly handicapped in your incomability (a term that I coined) throughout your life. 

 

As I consult people I encourage them to get their children involved in the financial learning process with them.  Children should understand the value of saving.  An example is if you give your child a weekly allowance of $10, one money-drive-parentinggreat idea is to tell them that they can’t spend it until the next week.  So if they spend $3 and have $7 left, you will only give them $7.  This will teach them the concept of spending restraint.  If they start to build up a savings and have $30 saved, then you may have to match that with $30.  If the amount of money is great enough you can take them to the bank and start a savings account in their name.  You can also encourage them to place their own money in the offering basket at church or give a portion of their savings to feed the homeless during the holiday.  I ask my children how much they want to give and leave it totally up to them. You can have them buy things for themselves that you were going to buy for them anyway, such as gifts to the family during Christmas or birthdays.          Read moreRead more

17
Aug

Finance 101 – Control your wants

money-dreamsTo want is to be motivated to work hard for the material lifestyle that you desire. This is a good thing that is one of the basic yet questionable American values. To dream is to have wants that are unobtainable due to the fact that you do not have the earning power to obtain such riches. Dreaming is fun, but don’t get depressed because Vegas or the lotto is not working out for you.

Understand the difference between a want and a need. You need a car, you want BMW. Your son may need college tuition; the extra $100 per month that you save on forgoing your BMW dream for another 5 years could be redirected into a college savings fund. In America the priority is to make money. Everyone around you wants your money. Every commercial is to get your money. We must understand that our wallets are under constant attack. The objective of marketing firms and advertising agencies is to make you think you want or need their product so you can validate yourself. Don’t fall for the hype.

Have a Balanced value system. Learn to indulge in the qualities of life to a reasonable extent. Know how to value and appreciate the lifestyle that says, “I can buy that car, that purse and that suit, but I find great comfort in having a fat bank account more than a luxury automobile, a posh this or a trendy that. Delay your wants for another period in your life. Don’t try to live outside your means because the Jones’ got a new car, or you need additional validation of your manhood or worth. What percentage of your monthly income should go towards transportation, 10%, 25%, maybe 40%?

16
Aug

A fool and his money are soon parted

money-crystal-ballIf you’ve already settled for being a slave, at least be a smart slave.  Each day this week I will publish a personal finance tip.  I will cover the basic principals that I preach to all of my personal finance clients.  I’m not sure if this information is going to be Earth moving for you, as I don’t know what level of financial sophistication you may be, but I’m sure we’ve all heard most of it.  Hence, my reluctance to publish this topic before.  The difficult part is maintaining the discipline to stick to a sound strategy.

 

We need to understand just as we were relentless in the game of monopoly as a kid, we need to strategize and have a plan of execution in order to master our adult game of monopoly. For those of us who don’t know the definition of the word ‘monopoly’ other than the board game, I’d advise you look it up and understand its impact on your life right now. 

 

Everyone and every company is out to make money.  This is why we get out of a warm bed in our comfortable homes each morning at 5am.  We began our paper chase so that we can maintain a warm bed and a comfortable home.  Okay it’s 5pm, you dart to your car after earning another $143 after deductions.  A whole week of work and the car you are jumping into is paid for the month.   What a vicious hustle of chase thy tail.  Five tips to catching your tail to follow.

9
Aug

Dating #5+

smerfsOn your first date play the game, “What was your childhood favorite”.  Some questions should be: What was your favorite cartoon, sandwich, drink with sandwich.

On a future date 5+, ask her on a picnic. Pack the basket yourself. Pull out a laptop with her favorite cartoons downloaded on it. Pull out her favorite sandwich and drink.

9
Aug

Date #3

Cook for her

Cook for her

8
Aug

Dating don’ts

dead-dateWhile  on a date I hate it when…..

Add your bad experiences, date killers and dating pet peeves on the comments section