Archive for July 2006

Avoid Stuff-itis ==> Pursue Self-Control

Do you ever see something that created a “I really want that!!!” feeling inside? Maybe it was a jetski, or a new type of shoes, or a new car, or new furniture, or …

We all have! For me, one of those things was a brand new Honda Odyssey minivan. I remember it well. It was 2001, we had a one year old baby with plans for more, and this new minivan just captured me. You might be asking me, a minivan?!!? I know. I know. A minivan. I used to be cool. Anyway, I priced out this minivan. I really wanted this minivan. I wanted the one with the DVD player (not very common then), the 16″ aluminum allow wheels, the deep dark red metal-flecked paint, leather, and an awesome sound package. For only $30,000, I would be able to drive away in this new car.

Jenn is the saver. I am the spender.After many talks with Jenn, we decided not to buy it. This was before we really became serious about our finances, but even this seemed outrageous to her. I recently came across the annual budget that I had developed to try to convince her that we should purchase this new vehicle. The budget is $10,270 PER YEAR short!!!

Review of the budget is comical! In my attempts to make the budget balance, I had written in the costs that we could reduce. Let’s see, auto insurance (right, with a brand new $30K vehicle), cable TV (an annual savings of $600), internet (savings of $264), groceries (right … with a new baby), miscellaneous spending … It is really enlightening to look back and see how bad “stuff-itis” had captured me.

We did not purchase the Honda. A review of Kelley Blue Book’s estimated private party value for this vehicle in good condition shows $12,620. Additionally, if we would have followed the financing plan I had established, we would not yet be done making payments!!! WOW!!!

I am glad I had a great wife who forced me to pay attention to what this would do to our family’s finances. Instead of still being in debt, we have been debt-free (except for our house) since February 2004 (31 months!!!) and the house debt is being exterminated. I will take that trade any day of the week!!!

Avoid stuff-itis. Pursue self-control. You will win financially.

Someone needs to do this …

Here is a list of “helpful” companies that exist solely to “help” people.

Check Into Cash
Cash Advance
Extra Payday
Cash America
Axcess Cash
Payday OK
PayDay USA
Advance America
Check Smart
Check ‘n Go

Let’s see how helpful …

Check Into Cash states under their “Our Standards” link that “A payday advance is a responsible, dignified choice for short-term cash needs” and “Customers understand the value of convenience and the growth of payday advances reflects a broader national trend toward increased convenience and customer service.”

Under Check Into Cash’s “How It Works” link, the claim is stated “If you sometimes run short of cash between paydays, for any reason, let Check Into Cash be your safety net. It takes just a few minutes.”

I cry out, “BULL CRAP!!!” and “THAT IS UNACCEPTABLE!!!”

The FACT is that these companies charge OUTRAGEOUS amounts of FEES and INTEREST. They are only interested in ripping off poor people and keeping them poor. Annual Percentage Rates range anywhere from 250% to 500% on these loans. OUTRAGEOUS!!! This is NOT helping people.

Someone should do this … Open up a store next to every single one of these RIP-OFF, HORRIBLE financial institutions. That store’s name should be something like “It’s Like Free Money!” or “Cash Advice” or “Keep Your Payday, OK?” or “Be Smart, Not Check Smart”. Inside, there are highly trained, highly capable financial counselors that will meet FOR FREE with each person who walks into the door and helps them understand the true cost of a cash advance loan. That person would then offer FOR FREE to help them develop a budget and hold them accountable to that budget. Additionally, monthly follow-up visits are conducted FOR FREE to help them gain control of their finances.

I am fed up with poor people being ripped off. This must be stopped.

Are you investing for retirement?

Retirement.

What a word.

Ask 100 persons what retirement is, and you will probably get 100 different answers. However, each answer would probably have a similar theme. Each answer would most likely include the theme of “stopping or slowing down dramatically what I have been doing and replacing it with some other activity.” Many times, the “other activity” does not generate much of an income. That means that you must prepare for it.

Prepare?!!??! You want me to prepare??!! I can’t even force myself to pack one day before I leave on vacation, and you want me to think about something that is going to happen years from now?

YES!!!

Why?! Because I want you to be able to do that “some other activity” some day!!! If you do not prepare financially, your plans may never happen or will experience severe delays. I really want you to be able to do what you want to!

There are many ways to prepare for retirement including: investing in stocks, bonds, mutual funds, rental properties, owning a business, owning real estate, owning intellectual property, writing a great song and selling licensing rights, patents, antiques, precious metals, and 1000s of other ways. The key is to diversify your retirement holdings so that your risk is mitigated. Don’t hold all of your money in bonds, stocks, and mutual funds that are focused only on one segment of the market (like all in high-tech). Spread out your investments into many types of healthy markets.

The key is to START NOW!!! If you are 20 and you haven’t started, walk over to an investment advisor today. If you are 30 and you haven’t started, RUN over to the advisor. If you are 40 and you haven’t started, SPRINT over. If you are over 50, for Pete’s sake, TAKE A RACE CAR to the advisor’s office!!!

See you in retirement!

Back from vacation!

Well, vacation was awesome! Time spent with family far away from home is great!

I was able to take a lot of time to think. During vacation, I always take the time to ask myself the following questions:

1) Am I happy with where I am in life right now?
2) Will I be happy with where I will be in 5 years if I keep on the path I am currently on?

WARNING: Don’t ask yourself these questions unless you really want to know the answers!

As I thought through the questions, one thing stood out very clear to me (again!). I love to teach! I love to teach people tools and skills that immediately impact their lives for the better. Whether it is teaching someone about how to budget for the very first time or how to use Microsoft Excel to analyze data, I love to teach!

I was put on this earth to teach. It is what fires me up. My life’s passion statement is “to help others accomplish far more than they ever thought possible”.

Game on.