My car’s water pump went out. What a pain! I had to wait in the Wal-Mart parking lot while calling the dealership to get it in for repair. It was smoking hot. I was smoking hot at my broken car. Combine it together, I was in flames. Cost of repair? My frustration and
Archives for July 2006
Do you understand insurance? Life insurance? Auto Insurance? Health Insurance? I know that it is certainly NOT the most interesting subject in the world, but if you do not take the time to truly understand these products, it will cost you big time.
Rules for purchasing insurance:
- Do not just “take an insurance agent’s word for it!” Truly seek understanding of the product! If you understand it, you will be able to make a good purchase that you will KNOW is a good purchase.
- If you are speaking with an insurance agent, and you start feeling like you are being “sold” on a product – LEAVE IMMEDIATELY!!! Use Donald Trump’s words – “You’re fired!” Complete with the New England accent if you wish. You do not need to be sold on an insurance product, you need to understand the insurance products. Once you understand the products, you will be able to make a sound decision.
- Obtain at least three quotes from three different companies. Ensure that at least one is an independent company that is able to surf your insurance needs among many different companies. Competition makes prices go down. When prices go down, you will get to keep more of your money.
- Do not cancel an existing insurance product until you have obtained a replacement. Do not cancel your auto insurance before you have obtained auto insurance from another company. Do not cancel your life insurance before you have obtained alternative life insurance from elsewhere. A gap in coverage is ripe territory for Mr. Murphy to show up.
- Do not allow your insurance to be combined with another financial product. For example, cash value life insurance is both life insurance and an investment in one product. The problem with these types of products is that the fees are tremendous. Purchase your investments and insurance separately.
- Send out your insurance occasionally for quotes. You want to ensure that your rates are remaining competitive with the open market.
- Ask for a better deal. Insurance is a service product. Service products are negotiable.
- Be careful of purchasing insurance from a family member or a good friend. You may have your judgment impaired because you really want to please and help them.
Again, a boring subject. If you kept reading all the way to the end of this article, I am impressed! You can save a lot of money on insurance by employing these tips.
I want to do something with my life! I want to help others accomplish far more than they ever thought possible! I want to make something happen! I will not accept status quo. I believe that tomorrow will be better than today! I believe that I can help make tomorrow be a better day for others. I will not wait for my ship to come in. I have found exactly what I have been made to do in life, and I plan to pursue it with abandon.
You too can make tomorrow better! What skill or talent do you have that you can share with the world to make it a better place? Who could you impact today and make their life nicer? Do you know what that skill or talent is? Here’s help. What is that one thing that just makes you want to wake up at 4AM every single day and say, “Let’s go!!!”? What is that one thing that you could talk about all day every day and not grow weary of? That’s it!!! Go do something with it!
We can talk about financial peace all day long, but the whole entire point of obtaining financial freedom is to be able to do EXACTLY what we have been made to do. REGARDLESS of the income potential. REGARDLESS of the naysayers. REGARDLESS of what your broke friends and family think. REGARDLESS of your comfortable life and ability to just lay back and put life on cruise control.
Make it happen!
Why do people do what they do?
Why does someone buy a brand new car and finance 106% of it (sales tax and all!)?
Why does someone go to college and finance it 100% with student loans while obtaining a degree in basket weaving?
Why does someone take a very expensive vacation to Hawaii and put it 100% on their credit card?
Why does someone withdraw all the equity out of their home to start a new business?
It happens every day! Look around! You can see it! You may have to only look into the mirror to see someone who has done one of these financially horrendous items. That is as far as I have to look!!!
Back to my question. Why?
1. No plan. They wanted to spend the money on the item, but they did not plan for the expense. Consequently, they only money available when the purchase was made was very expensive debt money.
2. No control. They wanted it! They wanted it now! They did not want to wait. No! Must have item … Must have item now … Will be emotionally scarred for life if item is not obtained now …
3. Not willing to face up to the fact that the item may not be available for them at this time, so they buy it anyway hoping that “the money will come from somewhere”.
4. Talked into it. See #1, #2, and #3. You’ve seen it happen. The friends start talking about it. The friends are going on the vacation. The friends have the new car. Your friends are going to college and are not having to work while there. Justification is found through others’ circumstances.
If I were to attempt to sum the reasons that people do stupid things with money, I would say it is because they were ignorant of the COST of those major financial decisions. If they truly knew the COST of those decisions, many tears of sorrow and regret and many money fights with their spouse could be avoided.
I have a friend who helps coordinate the personal finance course with Jenn and I. This friend is in charge of delivering cost saving ideas after the intermission.
She has been doing this now for about 6 weeks. All I can say is , “WOW!” I have seen an entirely new level of financial discipline. This week she brought in three boxes of pencils with each box containing a dozen pencils. “How much did I pay for these pencils?”, she asked. “How much? Come on, how much?”
One of the class members ventured, “$1.00?”
“Fifty cents?”, another tried.
“Ten cents?”, a class member asked bewilderingly.
“Five cents?”, was asked cautiously.
“Nope! Less. I paid one penny for each box. They were so cheap that the store could not even charge me tax.”
This lady has brought in a fine art painting. “How much?”, she asked. After a series of guesses, we arrived at ZERO. She had checked the painting out at the library!
I am discovering that there is an entire new level to managing your spending! Don’t tell me you can’t do this! Don’t tell me you can not live on your income! All you have to do is control your own self!
You may be saying, “THIS WOMAN IS A WACKO!!!”
I would say you may be right, but she isn’t broke anymore.
I choose to be wierd. Why? Because normal in America is BROKE! I am NOT doing BROKE anymore!
Can I get a witness?