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Smooth Sailing in Life Won’t Happen, But Things Can Still Be Great with the Right Attitude

The illustration below shows how we all want our finances to go, smoothly all the way until we reach our financial goals. However, “life” happens and then we have the picture below it with all kinds of obstacles and bad weather, sketchy bridges to cross and danger all around.


How can we manage chaos, the never-ending changes, or surprises throughout our life? Many people manage very well, so I got curious and set out to interview over 100 of our most successful Money Mastery clients and here is what I found:

  • They are positive thinkers.
  • They believe good things will come out of everything bad.
  • They love rubbing shoulders with other positive thinkers, even seek them out.
  • They thrive on adversity and don’t shrink away from it necessarily.
  • They make lemonade out of lemons.
  • They prepare in advance for the unseen events that can unfold.

An example of this kind of positive thinking is Jack Simplot, growing potatoes in southern Idaho, and raising a couple thousand head of cattle. Jack had to get creative about what to do with all his potato peelings after environmentalists almost shut him down, so he tested his cattle on eating the peelings. It worked, as they ate the peelings and thrived. Today many people purchase his Ore-Ida spuds in a box.

  • They don’t mind taking risks.
  • They don’t run unprepared into trouble, but they do take thoughtful and calculated risks.

An example of this are the pilgrims leaving England in the 1600’s for religious freedom. “One doesn’t discover new lands without consenting to lose sight of the shore, for a very long time,” the author Andre Gide once said.

  • They are comfortable in their own skin.
  • They don’t mind the scrutiny of others, because they live their life with integrity.
  • They look out for others less fortunate than themselves.
  • They are givers, leaving behind far more than what they were given when they started.

A very good example of this is Mother Teresa. She helped thousands of sick and poor people along her way.

So, do you want smooth sailing throughout your life? It won’t happen that way, but you can have a wonderful life both financially and in your relationships by embracing these tried and proven approaches to life. I had a wonderful experience interviewing my Money Mastery clients about what makes them successful and making notes on what they taught me. I am much more positive and have a different outlook today because of this effort. Hope you do too.

New Year, Changes, Economics, Money and You…

Recently I watched a presentation given by world-famous economist, Jim Rickards.  His track record seems impressive in terms of being able to predict economic change.  I want to use his economic outlook to illustrate my point, which is that we have more options today than ever before due to some very significant changes in our economy and society.  The way we communicate has changed.  The way that we learn has changed.  They way we market has changed.  They way we spend and save money for the future has changed.  We have seen start-up companies become Facebook, Google, Twitter and so many others.  Our lives are so different from just 25 years ago.  You cannot walk down the street without seeing most everyone using his or her smart phone.  Don’t you agree with me, that the past gives little to no indication of what the future will be?  Maybe we can expect change as the one thing that won’t change?  My point is that with this constant change brings uncertainty.

That does not mean that the unknown future is hopeless or need be more scary than it really is. The fact is, it is brighter and has more options than ever before.  The problem is that with so many options we experience paralysis by analysis.   When we arrive at the end of our life and ask the question, “what has my life stood for?”,  I’m afraid we will find that we went in so many different directions all at once that we maybe stepped one inch in any of those directions, not really achieving anything at all because  we did not focus on any one thing.

Jim Rickard’s predictions indicate that we will experience the domino effect in the coming year in terms of economic change. How will those changes affect you? The only way to make sure they don’t affect you negatively is to be certain you are focused financially and not trying to head in several different directions at once. With so many financial options and so little understanding of how those options all must work together, it is more important than ever that you get focused in this new year on what really matters so you can manage your money (and your life) more wisely.  The key is to see clearly where you want to go and stay focused. For more information on how to clearly prioritize where you want to go financially, go to www.moneymastery.com.

Be Thankful for Your Problems, They Just Might be Opportunities in Disguise

We’ve all heard the age-old question:

“Is the glass half empty or half full?”

Well, the answer really depends on how you look at it. If you are grateful for at least one-half of a glass of water, you will be careful and drink it slowly and not tip it over. But if you are discouraged that you only have half of a glass of water, you might disregard it altogether. The point is, we can learn to make the most of what we have or we can be angry that we don’t have more and squander all of it all together.

Here’s a few examples of what I mean:

Problems at work:  Problems at work actually provide you and your family with the income to take care of the needs of life and more importantly, the opportunity to create more wealth. You can focus on the unpleasantness of certain coworkers, products not working as they should, or the mistakes you and others make. Or you can be grateful to have a job and learn to solve problems. Problem-solving promotes growth and learning. Negativity only drags everyone down.  Why not soar like an eagle by simply looking at work problems as opportunities?

Health problems:  Okay, so these can be a real bummer and do limit opportunities, or so it seems. But with all of the advances in today’s healthcare, the difficulty is much less than it once was. Remember that your great-grandfather had to have his teeth pulled when they decayed because filling a cavity wasn’t an option 100 years ago. Rotted teeth had to be removed so they wouldn’t infect the rest of the body and result in a painful and terrible death! Imagine, just 75 to 100 years ago, dental care was that archaic. George Washington once carved wooden teeth that he would bite down hard upon to force them betweengeorgewashington his good teeth so he could chew! Now we enjoy so many advances in medical and dental care that we really should consider looking at the glass as being half full with regards to such problems. And with minimal planning of our personal finances, we can afford the insurance needed to take advantage of these wonderful advances.

Communication problems:  I think it’s so funny when I hear people complain about their terrible cell phone plan and how their coverage is so terrible, and on and on. Think back just 25 years ago… Let’s say you agree to meet your family at the state fair. You arrive on time at the gate but your family with the tickets doesn’t show. You wait for an hour and then decide to go home. Much later that night your family arrives home and tells you their sad story. Their car broke down one mile from meeting up with you. They thought they could fix it, but couldn’t. There was no way to communicate this with you. If they had access to a cell phone, like we do today, they would have been able to call you in 10 minutes and the problems would have been quickly solved.  Instead of looking at all the problems with modern day communication, how about being thankful for all the opportunities it presents us with? I am amazed every day at how much my life has been enriched financially and socially by the technology I use and enjoy every day, including the Internet, social media and cell phones.

There are hundreds more examples indicating how wonderful we have it today. So let’s examine the question again. Is the glass half empty, or half full? If you practice always keeping a happy and positive outlook opportunities will present themselves financially, socially, emotionally, and physically that you could never have imagined.  I promise… I learned this 50 years ago when I was terribly burned all over Peter2my body in a horrific car accident. During my long, and very hard recovery I had to learn to look at the glass as being half full or I truly would not have survived. This important life-lesson has been the guiding light that has directed the rest of my life, influencing greatly the opportunities I have had financially and in many other ways.

In the face of some very disturbing trends politically and financially in our country today, it is more important then ever to take a positive approach and learn all you can about possible solutions to difficult problems. For financial help, be sure to visit www.moneymastery.com today!

The Risk of Losing Use, Control, and Liquidity of Your Retirement Funds

One of the crazier things that happens in the American retirement system is that we turn over our money to investment firms, who then turn around and put the risk back onto us, but they still stand to gain as they make their money anyway. In the meantime, if we put that money into qualified retirement plans (like a 401(k), 403(b), traditional IRA, TSP, etc.), and we try to access it, we then usually pay taxes, an early withdrawal penalty, and/or we pay interest on our own money! We lose the use, control, and liquidity of our funds. If we had control of
Debtour money, we could do things like: pay off debt; acquire cash flow positive assets; make our own choices with our own money.

With all the debt that most Americans deal with, why are we locking up all our money in 401(k), IRA, and savings accounts that make us pay a penalty if we need to access them to pay off this debt?  The debt levels of many Americans are continuing to climb. Here are some debt statistics to chew on from Tim Chen at Nerd Wallet (2015):

U.S. household consumer debt profile:

  • Average credit card debt: $15,863
  • Average mortgage debt: $156,584
  • Average student loan debt: $33,090

In total, American consumers owe:

  • $11.86 trillion in debt, an increase of 1.9% from 2014
  • $901. billion in credit card debt
  • $8.17 trillion in mortgages
  • $1.21 trillion in student loans, an increase of 8.5% from 2014

Let’s think about a credit card with a 15 percent interest rate and a $5,000 balance. If you are carrying that, but you have $50,000 in a 401(k) earning a 3.8 percent cash-on-cash rate of return, you are still going into the hole -11.2 percent each year on that money! Let me put it another way, if you simply had access to those funds to pay off that credit card without a penalty, you could give yourself a 15 percent rate of return hike because you would stop paying interest!

Now, those on the other side of the argument, like the lawmakers and politicians, will say that if we allow the public to use their retirement money to pay off debt, no one will have enough money to retire! This is crazy in my opinion.  Imagine being told you don’t know enough to use your own money in the best way possible? How can we when we know this money is trapped?  This keeps us more in debt, so that even if we have been lucky enough to save up some money for retirement, Americans are still retiring in debt, which means they don’t have enough income to provide for their needs. This is partly because they don’t haveRiskGame the use of their own funds during their lifetime; they are either penalized or taxed for using it, or both.

If Americans had control of their own money, they could live without any debt, and redirect all the interest they are paying to banks back into their own families’ estates, and then create a rich legacy for themselves and their families. Since we have turned over our retirement money to Wall Street, we lose control over our future.

Losing the use, control, and liquidity of your money is another major risk to your retirement. Stay tuned for additional posts on risks you face with retirement funds and go to www.moneymastery.com for more information on debt and retirement planning.

 

5 Ways to Make Sure You Know the Rules of the Financial Games You Are Playing

Knowing the rules of the game is one of the 10 Money Mastery Principles I teach my clients.  As simple as it sounds, you wouldn’t believe how many people do not understand this concept or who think it’s not that important. What you don’t know CAN hurt you, and I can personally attest to that. It is vital that you understand the contracts you have entered into when it comes to your mortgage, credit card usage, and insurance policies. If you don’t understand the rules, those who do (namely insurance companies, banks, and mortgage lenders) will run right over the top of you in an effort to get more money out of you.

Here are 5 things you should do to make sure you always “know the rules:”

  1. Don’t get overwhelmed by the amount of information you need to know. Remember, you don’t have to know everything, you just need to begin by knowing something.
  2. Take the time to learn the rules. It usually only takes 30 minutes to learn what you absolutely need to know in order to make informed decisions.
  3. Don’t trust others to know the rules for you. Take responsibility for your own financial well being and do what is necessary to ensure success: hire a professional if needed to help you understand the rules. This can usually be done for as little as $300.
  4. Do first things first. Avoid the temptation to dabble in risky behavior before you are secure enough financially to afford that behavior. Pay off high-rate credit card debts first and know the rules of the credit card game before you play it.
  5. Give yourself 24 hours to consider a financial decision. Never feel pressured to make an important financial decision on the spot. Take 24 hours or overnight to consider all the issues to which you will be obligated by signing a contract, and re-read anything related to the rules of that contract before signing.

More Leverage Ideas to Help Your Money Make More for You

In my last post, 5 Ways to Make More Money You Probably Never Thought About, I noted how wealthy people use their money and resources to make more money for them, rather than squandering them or sitting on them. In this post I wanted to give you some additional ways in which you can get your existing money and financial resources to do more than one thing at a time for you.

  1. Apply savings to debt. Rather than “parking” money in passbook savings that will make very little interest, why not deposit that money in a HELOC (home equity line of credit)? This puts the saved interest expense in your pocket (which is usually always going to be more than what you’d earn in passbook savings) while still keeping that money available for those emergency and emotional spending events that are sure to happen.
  2. Turn a non-producing (or low-producing) asset into a high-producing asset. Money that you have deposited into a 401(k) or IRA, for example, is sitting their earning a modest amount of interest, or it may even be losing money, so it’s probably not wise to put all your long-term savings into such “stagnant” programs. Investing some of your money into real estate or equipment that can be leased out is a better way to get your assets to produce more money for you.
  3. Spread out your investments. Consider various investment options based on how they are taxed, risk risk level, capital appreciation, and so forth.
  4. Increase your return on investment. While it’s important for people with large debt loads and little savings to be quite conservative early on with their savings habits, as you get spending and debt more under control you will see a little cash accumulate. When this occurs it is foolish to leave the money in a low-return program such as a CD. Consider, instead, what savings should be converted to higher yielding investment plans.
  5. Examine ways you can make your current investments more valuable. Like I mentioned in my last post, can you convert real estate space into rental income Do you need to study the market and trade investments in more lucrative fields? Can you use the equity in your current real estate to purchase additional properties to begin a “rolling” real estate investment?

More ideas in coming posts. Hope these are some you will take into real consideration as they could be resources you already have that you are not using to their full potential.

Time Is Money… Use it Wisely

Time is money and money can buy you time

…time on the beach, time with family and cherished friends, time to start businesses that can employ others and create security for them and you, time to retire the way you want to rather than working until you die as a greeter at a big box retailer.

Time and money go hand in hand. That’s why here at Money Mastery we teach principles about how to manage both time and money and why Screen shot 2016-05-03 at 3.33.07 PMthe name of our company that owns the Money Mastery concept, system, and all of its copyright materials is “Time & Money, LLC.”

One of the principles we teach is Money Mastery Principle 10, which 
states: “Money in motion creates more money.” An example of this is when someone deposits money into a bank, then the bank loans it out to someone else.  The proceeds from that loan are then deposited into another bank where it used to loan out to someone else for another purpose. The initial bank deposit multiplies several times as it is used over and over again within the banking system, creating a multiplier effect and putting that money in motion to make even more. In my experience, this principle about money also applies to time management.  If you hire a secretary to help with your work, you can get a lot more done than if you try to do all the work yourself.  If you hire this secretary for $20 an hour, but their work creates $40 in revenue you have multiplied your time, and subsequently your money as well.

Another Money Mastery principle about money that also relates to time is Principle 2: “When you track your money, you control it.” By tracking you have good information as to how much money you have left, and a record of how much something will cost so you can plan for it in the future.  Tracking also applies to time management. When you track your time you will know how much it takes to complete a project, earn revenue for a specific investment, or how much your own personal skills are worth. This point of reference can help you when you plan your next project, determine how much time you will need to make certain investments pay off, or how Clockmuch you should charge someone for your services.

Now let’s focus on Money Mastery Principle 7, “Always look at the big picture.” When you are planning for retirement, it is important to predict when you will have enough money to retire.  Applying this principle to time management can help you know how your time spent today will be able to harvest surplus savings to be used during retirement.

I urge you to learn the powerful Money Mastery Principles. Not only will they help you make sense of every aspect of your personal finances, but they will also help you manage your time, and as I  have already pointed out time is money and money is time — they go hand in hand. Contact me for more information today: peter@moneymastery.com, 801-292-1099.

8 Questions Your Credit Card Issuer Doesn’t Want You to Ask

If you’re like most Americans, there’s a pretty good chance that you received at least one offer for a new low-cost credit card this month. While some of those offers look tempting, with rates as low as 6 percent and no annual fee, you may want to use caution before abandoning your present card (or cards). Asking the right questions will insure that you’re getting the best deal, one that won’t end up costing you more in the long run.
Before you sign, be savvy. Make sure you review the fine print the credit card company doesn’t want you to read, or get them to answer to your satisfaction, the following questions:
  1. How long does the new rate last?  If the offer isn’t for at least six months to a year, it’s not worth it.  That’s because you’ll need at least that much time to pay down your balance at the new rate.
  2. Does the introductory rate apply to new purchases as well as transferred balances?  Many people assume when they transfer their balance to a new card that the low rate applies to any new purchases they make on the card.  Usually card issuers offer the lower rate only on the transfer balance, and charge high rates on any new charges made to the card after the transfer.  Be sure you know their policy before signing.
  3. How high will the rate go when the trial period is over?  Make sure that rate isn’t higher tcreditcardhan the one you’re already paying.
  4. Is there an annual fee for the new card?  Even though the interest rate may be low, the offer may include a ridiculously high annual fee.  Ask the issuer if they’ll waive the annual fee; if not, wait for a better deal.
  5. Is there a grace period for finance charges and how long is it?   Ideal grace periods should be between 25 and 30 days before a charge appears on your account.  But beware, some issuers begin charging interest expense the very day you use your card.
  6. What does “pre-approved” mean?  It may mean that the credit issuer will re-screen you after you sign, so if this is not disclosed in the offer, look elsewhere.  Bad or soft spots in your credit history can be ample justification from a card issuer’s standpoint to bump you to higher rates.
  7. What is the charge for late payments?  Beware of cards that charge a penalty the very first day you’re late on a payment.
  8. Will a late payment change the introductory rate? If you pay late, some card issuers will bump you to a higher penalty rate during the introductory period.

Take the time to learn the rules of the complex financial games you are playing (like using a credit card) by reading the fine print on the offer.

 Remember, knowing the rules puts you on an even playing field with the credit card issuer. Don’t be satisfied with skimming over these rules. And don’t be satisfied with any credit issuer who can’t answer your questions fully.

Nobody Should Have Anything to Do with Managing Their Own Money…

…Until They Read This!

What does it mean to personally manage your money? Well, I can tell you what it doesn’t mean. It doesn’t mean making money and spending money — after all, even little kids can spend money.  Spending money is the easiest thing to do!  True money management means coordinating how you will use your available financial resources to accomplish goals before you spend those resources. It means planning, organizing, controlling, and systematically directing how money will be used the most efficiently. Unfortunately, this idea of systematic planning is missing inshutterstock_222388387 (640x427) the lives of most Americans.

Personal money management is also not a hardship, does not require denial, does not include arguments and abuse, and most importantly, does not mean going without.  Let’s face it, we will always have more opportunities to spend money than we will have money to spend, or as we like to tell our Money Mastery clients, “you can have anything you want, you just can’t have everything you want.” In other words, we must learn to prioritize how we will use limited resources most efficiently or those resources will be gone before we know it. It’s fine to want things, but it’s not okay to want everything…we must make a choice and the only way to make the choice responsibly is with a system that lets you prioritize those wants so you don’t have to feel deprived while keeping you on track to use only that which you have available and nothing more.

You can assume right now that what you know about money is not sufficient in today’s society and economy.  What you know about money management you have learned from family, experience, observation and tidbits here and there from your accounting friend down the street, or even from financial advisers — people who  think they know, but don’t know you or details of your circumstances. The result is you will go through life making some good decisions but by and large you will be very inefficient with your money.

In my experience, most people don’t know what they don’t know about money!

There is a solutionTime and Money.  It is to adopt the principles, practices, tools and techniques of the Money Mastery® program because it is the only holistic, broad spectrum personal financial program on the market today.  This is a brave statement, but “holistic” is the key word.  This means, in terms of money management and all the financial blessings that can be yours, a holistic program is the only way to go and will include the following:

  • Plans for managing every aspect of your finances which are spending, borrowing, savings, and tax reduction.
  • A means to direct each of those plans so they all work together, at the same time, synergistically.
  • Someone with whom you must be accountable and who will provide follow up for you.
  • Tools and techniques that help you follow the plans, including tracking programs and predictability calculators.
  • Ongoing education and training and access to long-term resources.

Programs like mint.com do not touch upon anything but spending. What about how your spending is affecting your debt, savings, and tax burden? With Ramsey and Cummuta you get a wealth of information about debt and how to get out of some of it, but what about plans to help you learn how to control spending so you can stay out of that debt? And where’s their information on securing a predictable retirement and how taxes can affect all of that?  Kiyosaki is just one upsell after another and Orman is focused mostly on investing.

Take complete charge of your money, and you will feel completely in charge of your life. The only way to do that is to realize that you’ve been trying to take charge with a tenth of the knowledge you need. Without a holistic approach, it doesn’t matter much what anybody tells you, you will never be in control of what you make.

For more information on how to holistically learn personal money management, contact Alan at 800-292-1099.

The Tax Haven of Starting Your Own Business

Self-employment may not be as much of a leap as you may think.  A hobby you are passionate about and some entrepreneurial spirit are all you really need to start your own business. Check out this example of one of our clients:

Perry & Michelle Kamboris — Mixing Love of Dogs with “Self Employment”

Perry and Michelle Kamboris* were from a small Midwestern town and liked to go boating at many different lakes and reservoirs with their two registered Husky dogs.  The couple loved meeting new people and making friends from all parts of the country.  After learning about Money Mastery Principle 9 and the significance of Schedule C, the Kamboris’ immediately applied this new information to their travel lifestyle.  They realized that their knowledge and interest in Huskies, along with their love of travel, could be turned into a “self-employment” business opportunity.

Husky

They arranged for a referral fee with the same person from whom they bought their dogs to begin promoting the sale of the Husky breed while on their boating trips. They then took pictures of their dogs and prepared an inexpensive advertising flyer that they placed on all windshields of the trucks at the boat docks wherever they went boating.  The response was overwhelming!  They not only made some money on the referral fee, but because they were running a small side business, they were able to deduct the veterinarian bills on their dogs, travel expenses for their boating trips and even the food for their Huskies on Schedule C.  Veterinarian’s bills alone for their two dogs averaged $300 each month and the travel expenses to various lakes and reservoirs were sizable.  Combining these Schedule C deductions with all their other deductions, Perry and Michelle began saving $300 on their taxes each month.  By putting this saved tax money into a retirement savings plan, the Kamboris’ will have nearly $178,000 extra interest income in 25 years simply by forming a viable small business.

“We were thrilled when we actually saw the results of our actions on paper,” said Perry.  “We had no idea that developing our hobby with the dogs into a little part-time business venture could bring such valuable dividends.  Plus we love going out on the boat and meeting new people anyway.  To us it was a no-brainer!”

*Names have been changed to protect privacy.