Archive - December, 2009

Thankful

Each year, I make a point to reflect on everything that took place in the past year.

Here is a short list of what happened in 2009.

  • Announced STUNNING news that we are expecting a 2nd child (read about it HERE)
  • The IWBNIN team spoke/taught 91 times!   (we want to speak at your church or business in 2010 – contact us HERE)
  • We taught over 40,000 people!!!!   Unbelievable!!!
  • Released a new book – What Everyone Should Know About Money Before They Enter THE REAL WORLD
  • Built a tree house in the backyard for my daughter – and camped out in it TWICE – once in a major thunderstorm!
  • Caught a “Fish-Of-A-Lifetime” – a 47″ 28.3# Muskie

103_0975

  • Completed my 2nd 26.2 mile marathon (like Pastor Jeff Kapusta just did) in Houston, TX – and I beat my goal – and two of my brothers while finishing in less than 4 hours – 3:55!!!!   (you can read about it and see my mile splits HERE)
  • Took off with my wife on two separate trips WITHOUT the daughter – NICE!

I am SO thankful for the blessings in my life, and I can’t wait to see what 2010 holds!

Did I mention that we are having a son in early February?!!?!?!

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Isn’t Our Word Worth Anything Anymore?

I was listening to talk radio the other day as I was traveling to my home state of Indiana.

A caller said something like the following, “We bought this house.   We owe more on it than it is worth.   We are just going to give it back to the bank.”

I see this exact thought process happening across the nation, and it frustrates me greatly.

The core of the problem as I see it is this:

Something has happened to us – somebody is going to have to pay – it is NOT going to be us.

Isn’t our word worth anything to us anymore?   If I purchased a house that has dropped in value substantially, it does not change the fact that I gave the bank MY WORD that I would repay the money I borrowed!   MY WORD is not a flippant statement that I can reverse when it becomes inconvenient to me.   MY WORD is far more important to me than a few thousand bucks.

Other situations I see this happening rampantly … business contracts and marriage vows.

In the Word it states “Simply let your ‘Yes’ be ‘Yes,’ and your ‘No,’ ‘No'”.

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Discipline Is Just As Important As The Plan

Discipline matters just as much as the plan.   It does not matter how good the plan.   If the discipline is not there to do the work, the plan becomes useless scribbles on some paper.

It is so easy to be UNdisciplined.

Think about it.   How difficult is it to be …

  • Physically out of shape (round is A shape, but it is not IN-shape)
  • Overweight
  • Spend money we don’t really have
  • Spend money without a plan
  • Lazy
  • Spiritually unconscious
  • Ignore family
  • Selfish

I wrote a book titled I Was Broke. Now I’m Not. Writing the “I Was Broke” part was EASY.   The hard part was taking the necessary steps so that I could write the “Now I’m Not.” part.

Why don’t we see books titled, “How to be B-R-O-K-E.   Ideas for spending all of your money (and then some)”?   It is because many people do not need a guidebook for accomplishing this.

It always falls back to discipline.

So let’ start a discussion about that topic …

Read the entire series

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New Book Has Started Shipping!

I am PUMPED to announce that my new book, What Everyone Should Know About Money Before They Enter THE REAL WORLD, began shipping today!

It is hard to believe that I have been able to author ONE book – let alone TWO!

It is my hope that this book helps people AVOID and PREVENT financial mistakes because it is so much more difficult to attempt to CURE them.

If you were not able to pre-order your copy, you can purchase a copy HERE thru Friday and still receive it in time for Christmas!

I’m PUMPED!!!

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CNN Money Article – MUST READ!

There is a new post written by Carolyn Bigda on CNN Money titled, “Stick With Your Financial Diet”, and I believe every person should read it.

Here is a great line from this article:

“With the worst of the recession seemingly over, history suggests that many of us will soon revert to boom-time bad habits. People grow overly optimistic about their circumstances in periods of economic growth …”

Read the full article HERE.

If you are on a debt diet, what are you doing to ensure you stick to it?

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CONGRATULATIONS to GroceryFreak.com!

I am PUMPED to say that IWBNIN team member “The Saving Freak” was mentioned on The Clark Howard Show yesterday!   More specifically, The Saving Freak’s website – GroceryFreak.com was mentioned.

Congrats Saving Freak – you have saved me and a lot of other people a ton of money on groceries, and you deserve the KUDOS!

If you have a moment, will you go over to GroceryFreak.com (HERE) and congratulate The Saving Freak ?   You might even subscribe to receive each posts FREE in your e-mail (HERE).

New Book – Chapter on Credit Scores – Part Five

I am EXCITED and PUMPED about my new book for high school students, college students, and twenty-somethings – What Everyone Should Know About Money Before They Enter THE REAL WORLD.

To celebrate the release of this book, I am sharing one of the chapters of this book (see all of the chapter titles HERE)

Here is another section of the “Credit Scores” chapter:

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Everyone Should Know …

A credit score is a debt management score, not a measure of your financial health.

Review the items that comprise a FICO score. Did you notice that it does not include items such as:

  • The amount of money in a savings/checking or retirement account?
  • The amount of equity in a home?
  • Paid-for items that have value (car, house, expensive jewelry, etc.)

A FICO credit score only looks at debt. One could literally have $1 million in the bank and have a credit score of ZERO because they have not used debt for a long period of time.

There are people who define themselves by their credit score. My credit score is 801, they boast. I have seen many people who have extremely high credit scores who are absolutely broke. They have a high credit score because they have managed their debt well, not because they have managed their money well!

There are many people who have purchased a brand new car using debt when they could have paid cash for a nice used car. They bought the new car solely to boost their credit score. It might improve their credit score, but it hurts them where it really counts – the bank account!

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Read the entire series HERE

Learn more about the book and RESERVE YOUR COPY (ships 12/15!) at its dedicated website HERE

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Six Sigma: Statistically Significant Result

You may not know this, but I am a certified, bonafide Six Sigma Black Belt and Lean Expert.   You may have no idea what this means, but it has served me well as an engineer and business manager.   These skill sets help one focus on removing non-value added activity, eliminating unnecessary costs, and determine the truly significant variables that drive product or service improvement and ultimately, profitability.

Even though I left Corporate America a three years ago, I have certainly never stopped using the skill sets I learned!   They are tremendously helpful in running I Was Broke. Now I’m Not.

As I was walking into my daughter’s school the other day to sit with her during lunch (it was square pizza day!), I saw a bar graph that showed the results of the 4th-graders voting for their “Favorite Fast Food Restaurant”.

ChickFilAWins

It reminded me of the power of transforming “data” into “useful information”.   This chart shows a significant result – Chick Fil A smoked their peers.   I asked the kids at lunch why they like Chick Fil A so much.   The answers?   Without exception it was because they loved the food.   Not the toys.   Not the packaging.   Not the cows.   It was the food.

I bet that a simple study similar to this one would allow people to understand the largest financial issue that they need to address as well.   It is time to bring Six Sigma and Lean to the world of personal financial management!

Regarding the kid’s study of favorite fast food restaurant, I would have to perform a 2-sample double-blind t-test to be certain that this is a statistically-significant result. :)

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New Book – Chapter on Credit Scores – Part Four

I am EXCITED and PUMPED about my new book for high school students, college students, and twenty-somethings – What Everyone Should Know About Money Before They Enter THE REAL WORLD.

To celebrate the release of this book, I am sharing one of the chapters of this book (see all of the chapter titles HERE)

Here is another section of the “Credit Scores” chapter:

========================================================

Everyone Should Know …

What number is a good credit score?

According to Fair Isaac, a credit score can range from 300 to 850. The higher the score, the lower the risk. This means you want a higher number.

Companies establish their own criteria as to which credit score is a good credit score. As a general rule, any FICO score greater than 750 is an excellent credit score. Anything more than 800 is considered outstanding. As credit scores drift into the 600 range, credit might still be available, but it will come at a higher cost. Credit scores in the 500 range might prevent you from obtaining reasonable lending rates and terms.

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More from this chapter tomorrow!

Read the entire series HERE

Learn more about the book and RESERVE YOUR COPY (ships 12/15!) at its dedicated website HERE

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Congratulations Bank Of America!

Bank of America has repaid its TARP (Troubled Asset Relief Program = BAILOUT) funds back in full to the Federal Government (taxpayers).   A total of $45 billion has been repaid.

As a shareholder of Bank of America stock, I am pleased to see this.

As a tax-paying citizen of the USA, I am ecstatic to see this.

You can read CNNMoney’s take on it HERE and Bank of America posted it on their investor relations board HERE.

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New Book – Chapter on Credit Scores – Part Three

I am EXCITED and PUMPED about my new book for high school students, college students, and twenty-somethings – What Everyone Should Know About Money Before They Enter THE REAL WORLD.

To celebrate the release of this book, I am sharing one of the chapters of this book (see all of the chapter titles HERE)

Here is another section of the “Credit Scores” chapter:

========================================================

Everyone Should Know …

How to establish a credit history and build a great credit score.

Many young people ask me, How do I even get a credit score? They have no credit history, which makes it difficult to obtain credit, so it appears they are in a tough no-win situation.

Here are some ways to establish credit. Obtain a credit card from a local department store. Plan to spend a certain amount at that store using a written spending plan. Purchase the item at the store using the credit card. As soon as the credit card transaction is completed, tell the checkout clerk that you want to make a credit card payment. Immediately pay off the credit card. Making purchases like this once or twice each month can really lead to a great credit score.

This impacts the credit score in several positive ways. The age of the credit relationship increases. Payment timeliness receives another good mark. Over time, the credit card issuer will most likely increase the credit limit because they will see that you have managed your smaller credit limit well. As a result, your percent of available credit utilized will decrease. This bodes well for your FICO score.

If you do not qualify for an unsecured credit card, you can apply for a secured credit card. A secured credit card works in the following manner. The credit card company requires you to have money in an account that they provide. The credit card company prevents your use of this money by placing it on hold. If you fail to pay the credit card payments, the credit card company will use these funds to satisfy the debt.

I must issue a strong warning. NONE of these credit-building techniques will work well financially if you do not apply the rest of the learnings in this book. If you obtain a credit card, run up a balance, fail to pay it off immediately, and end up paying compound interest to the bank. You might end up with a great credit score, but you will be losing financially.

I have met many people who have an OUTSTANDING credit score, but they are flat broke. They have financed themselves to oblivion, but have managed to pay their payments on time. One minor event can lead to financial ruin for these individuals, and I have seen this happen hundreds of times.

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Read the entire series HERE

Learn more about the book and RESERVE YOUR COPY (ships 12/15!) at its dedicated website HERE

Read recent posts

New Book – Chapter on Credit Scores – Part Two

I am EXCITED and PUMPED about my new book for high school students, college students, and twenty-somethings – What Everyone Should Know About Money Before They Enter THE REAL WORLD.

To celebrate the release of this book, I am sharing one of the chapters of this book (see all of the chapter titles HERE)

Here is another section of the “Credit Scores” chapter:

========================================================

Everyone Should Know …

The key measurements that determine a credit score.

The credit reporting agencies are secretive as to how they calculate credit scores, but it is well known that credit scores are directly impacted by the following items:

  • Type of credit issued
    • Revolving debt (credit card)
    • Installment debt (anything with payments and a pay-off – car loan, boat loan, student loan, etc.)
  • Age of the credit relationship
  • Amount of credit one can obtain (total of all credit limits)
  • Amount of credit one has consumed (percentage of total credit limit)
  • Payment timeliness
  • Requests for credit
  • Outstanding judgments

According to FICO’s publication, Understanding Your FICO Score, a FICO credit score is determined in the following way for the general population.

FICO Score Pie Chart High-Res

FICO scoring breakdown [from FICO’s publication, Understanding Your Credit Score]

For people who are just establishing credit, it will be different since payment history is not yet available.

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More from this chapter tomorrow!

Read the entire series HERE

Learn more about the book and RESERVE YOUR COPY (ships 12/15!) at its dedicated website HERE

Read recent posts

New Book – Chapter on Credit Scores – Part One

I am EXCITED and PUMPED about my new book for high school students, college students, and twenty-somethings – What Everyone Should Know About Money Before They Enter THE REAL WORLD.

This book has been in the works for over a year.   Over that time, I sought out feedback from YOU, from people I have taught, and from my own experience.

My primary question for students was:   “What confuses/scares/intimidates you most about money?”

My primary question for “older” people was:   “What do you wish you had known about money before you entered the real world?”

The feedback was amazing, and I am SO EXCITED to have this resource to help us in our crusade to help others accomplish far more than they ever thought possible with their personal finances.

With that introduction, I want to share a portion of one of the chapters with you.   It is about “Credit Scores”.

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Everyone Should Know …

Your credit score will have an impact on your life.

Credit scores are a measure of one’s ability to manage debt. The dominant credit scoring system which is used by most lenders was created by Fair Isaac. This system provides a measure of an individual’s credit worthiness and is commonly known as a FICO Score.

A credit score impacts many things. It determines whether or not you can obtain a loan. If you qualify for a loan, the credit score dictates the interest rate charged.

Credit scores also impact insurability. When you obtain auto, renter’s or homeowner’s insurance, the credit score directly impacts the insurance cost. The lower your credit score, the higher the insurance premium will cost. I have seen insurance premiums doubled because of poor credit.

Credit scores also impact the ability to obtain a cell phone contract or an apartment lease. It can affect utility connections. Utility providers usually require much larger deposits from people who have low credit scores. If you have an excellent credit score, a deposit might be waived entirely.   Credit scores can even impact your ability to obtain a job.

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More from this chapter tomorrow!

Read the entire series HERE

Learn more about the book and RESERVE YOUR COPY (ships 12/15!) at its dedicated website HERE

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New Book – Blog Tour

I am excited about the upcoming release of What Everyone Should Know About Money Before They Enter THE REAL WORLD,   my new personal finance book for high schoolers, college students, and 20-somethings!   The official release date is December 15th!!!!

If you have a blog or website that you write, you have an opportunity to obtain a FREE copy of this book.   All you have to do is CONTACT US HERE and include the following information:

  • Your blog address
  • A name and a shipping address
  • A commitment to write a blog post about the book

Thanks so much to everyone!   I can’t believe I get to do this stuff for a living!

Learn more about What Everyone Should Know About Money Before They Enter THE REAL WORLD HERE.

$1,031.76 Emergency

If you had a $1,031.76 emergency expense come up that needed to be paid RIGHT NOW – TODAY – what impact would it have on you?

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A $1,031.76 emergency would ...
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Author’s Note:   I made up the $1,031.76 number … :)

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