Archive for March 2013

SERIES: I’ve Declared Bankruptcy – Now What? – Part Three

I’ve declared bankruptcy. Now what?”

This is a combination “statement – question” that millions of people have made over the past few years. According to the United States Courts website (HERE), 1,221,091 individuals and companies declared bankruptcy in the U.S. in 2012 alone. We’re launching this series to help people who have went through bankruptcy so they never go back and so they can prosper!

Part Three Fix the root cause.

Identifying the root cause is very important, but fixing it is even more important. Statistics indicate that nearly half of all individuals who declare bankruptcy will declare it again at some point in their life. You can ensure that this statistic is lowered by ensuring that you address the root cause and prevent it from leading to bankruptcy again.

Did a pile of medical bills incurred while you were without medical insurance send you into the financial ditch? Address the root cause (not having medical insurance) by ensuring that you never again allow medical insurance to lapse.

Did you get laid off from the job you held for years and a lack of savings sent you into a downward financial spiral? Address the root cause (not making savings a top priority) by ensuring that you save money every time you are paid money in the future. It is a bill you owe to yourself!

Maybe you entered into a business partnership based solely on trust and your partner left you holding all of the bills. Address the root cause (failing to seal a handshake agreement with a contract that clearly identifies ownership, roles, responsibilities, privileges, and liabilities) by never again entering into an agreement without a rock solid contract.

Perhaps poor spending behavior and impulsiveness finally caught up with you and left you with an overwhelming pile of debt. Address the root cause (failing to have a monthly budget that prioritized giving, saving, and investing) by submitting yourself to a financial coach who will hold you accountable to living and operating by a budget every month.

Changing behavior is rarely fun, but it is so worth it!

Read the entire series (available after 3/25/2013)

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SERIES: I’ve Declared Bankruptcy – Now What? – Part Two

I’ve declared bankruptcy. Now what?”

This is a combination “statement – question” that millions of people have made over the past few years. According to the United States Courts website (HERE), 1,221,091 individuals and companies declared bankruptcy in the U.S. in 2012 alone. We’re launching this series to help people who have went through bankruptcy so they never go back and so they can prosper!

Part Two Identify the root cause of what resulted in bankruptcy.

In your quest to move forward financially and to never again have to declare bankruptcy, it is vitally important that you conduct a detailed autopsy on what resulted in the death of your finances. What were the underlying real issues that created the financial mess? This can be a difficult process because you may have to sift through some painful memories, but this is what can help you never return to being totally broke.

The root cause is the real reason that bankruptcy occurred. If one is not really searching to fix the issue, they might say that the root cause of bankruptcy was that “they just felt overwhelmed.” Being overwhelmed is not the root cause. It is a feeling created by a deeper issue. For example, suppose this individual had purchased a new car and a new house, and then lost their job two months later. This situation certainly can create feelings of being overwhelmed, but we now have identified a contributing factor: job loss.

But the job loss is not the real root cause either! The REAL root cause is the fact that a new car and home were purchased without having any financial margin (savings) stored up “just in case of” a major negative financial event. Therefore, the real root causes of the situation are:

  1. NO SAVINGS  “Not having financial margin stored up”, and
  2. NO MONTHLY MARGIN  “Living against the edge by having all income pledged away to loans”

Do you see the process?

Here are some helpful questions to ask when determining the root cause(s):

  1. Did this happen because of one major poor financial decision or because of a series of poor ones?
  2. When did the situation become unmanageable? What made it that way?
  3. Why did you decide to declare bankruptcy?
  4. What could I have had in place that would have prevented bankruptcy from happening?

This is not about assigning blame and creating guilt. It is all about identifying the real culprit of bankruptcy so it can be addressed and prevented from ever causing bankruptcy again!

Read the entire series (available after 3/25/2013)

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SERIES: I’ve Declared Bankruptcy – Now What? – Part One

I’ve declared bankruptcy. Now what?”

This is a combination “statement – question” that millions of people have made over the past few years. According to the United States Courts website (HERE), 1,221,091 individuals and companies declared bankruptcy in the U.S. in 2012 alone. We’re launching this series to help people who have went through bankruptcy so they never go back and so they can prosper!

Part One If you are beating yourself up over declaring bankruptcy, STOP IT!

One of the biggest obstacles for anyone recovering from bankruptcy is overcoming guilt and embarrassment. In fact, many people never really get over these feelings. It is perfectly okay to say, “That was horrible. I’m never doing that again!” It is not okay to stay stuck. Acknowledge the very real feelings that come with the territory, and then resolve to move on. As the late great leadership expert, Zig Ziglar, would say, “Today is the first day of the rest of your life!”

Beating yourself up will tell you LIES. Here are some common examples (participate in the discussion by sharing others you’ve heard in the comments section):

  1. “I’m not smart enough to win with money.”
  2. “I hope I never get money again because I’ll just wind up broke like last time.”
  3. “My family and friends believe I’m a failure.”
  4. “The world is against me.”
  5. “I can’t trust anyone.”

These are LIES. Ignore them. They only allow you to beat yourself up some more. Stop it! (because you can do this!)

Read the entire series (available after 3/25/2013)

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SERIES: I’ve Declared Bankruptcy – Now What?

I’ve declared bankruptcy. Now what?”

This is a combination “statement – question” that millions of people have made over the past few years. According to the United States Courts website (HERE), 1,221,091 individuals and companies declared bankruptcy in the U.S. in 2012 alone.

Bankruptcy is an embarrassing, stressful, and humiliating process. It can make one feel like they are not just a financial failure, but a total failure as a person. That’s not true, of course. Many people have made the tough decision to declare bankruptcy (Dave Ramsey is a famous example in the world of personal finance – so grateful he shares about it openly!), and it became a catalytic moment in their life that launched them to an incredible future. This is the very reason the option to declare bankruptcy exists in the first place: to help people recover from extremely difficult financial decisions.

Because bankruptcy affects people so deeply, over a series of posts I’m going to help answer the question: “Now what?” The reason this matters so much to me is because a large percentage of people who declare bankruptcy once are likely to file again! In fact, 28% of the people who filed for bankruptcy in 2011 were “repeat filers.” It is my goal through this series to help bankruptcy filers become adept financial leaders and managers so that they can prosper and never be broke again!

To open this series, here are a few facts about the most common types of bankruptcy one can declare:

  1. Chapter 7 Bankruptcy  Liquidation of one’s assets (minus exempt items)
  2. Chapter 9 Bankruptcy  Municipality bankruptcy
  3. Chapter 11 Bankruptcy  Reorganization under the bankruptcy code
  4. Chapter 12 Bankruptcy  Family farmer or fisherman bankruptcy
  5. Chapter 13 Bankruptcy  Individual debt adjustment

And here are some interesting facts about bankruptcy:

  1. You can’t erase student loans by filing bankruptcy  This is true in almost all cases.
  2. You can’t erase taxes owed by filing bankruptcy  This is true in almost all cases.
  3. You can’t erase child support or alimony obligations by filing bankruptcy  This is true in almost all cases.
  4. More than HALF of bankruptcies are due to medical bills  The failure of our own bodies causes a financial collapse. Awful!
  5. Filings for bankruptcy have dropped substantially over the past few years (more than 10% each year)  Has the economic recession gotten our attention and made us better money managers?

I look forward to this series. Please share your stories and comments as it will help thousands of people who are in this process right now!

Read the entire series (available after 3/25/2013)

The I Was Broke. Now I’m Not. Group Study Kit costs only $20 and can help you avoid bankruptcy and position you to prosper! Check it out HERE.

How To Become A Millionaire Using Compound Interest

“How to become a millionaire.”

That title can seem to reek of selfishness or greed, but what if you looked at wealth this way:

  1. Wealth allows us to serve and bless the less fortunate.
  2. Wealth enables us to fund the work of our church and other great causes.
  3. Wealth allows us to focus on doing EXACTLY what we’ve been called to do!
  4. Wealth provides income so we can meet our needs when we are no longer able to work.

Perspective matters, doesn’t it?

I’ve tried broke, and I’ve tried not being broke. I like not being broke much better!

With that said, here’s how YOU can become a millionaire:

INVEST and capture the power of COMPOUND INTEREST.

When it comes to compound interest, three things matter a lot:

  1. Amount of money invested (start with whatever you can and work to increase it from there)
  2. Time (start early!)
  3. Interest rate (growth rate of your investment)

Here’s how YOU can achieve $1,000,000 at a constant Interest Rate of 12%:

  1. Invest $85.00 per month for 40 years at 12% annual interest.
  2. Invest $286.13 per month for 30 years at 12% annual interest.
  3. Invest $1,010.86 per month for 20 years at 12% annual interest.
  4. Invest $4,347.09 per month for 10 years at 12% annual interest.

Here are some ways YOU can achieve $1,000,000 in just 20 years:

  1. Invest $1,697.73 per month for 20 years at 8% annual interest.
  2. Invest $1,316.88 per month for 20 years at 10% annual interest.
  3. Invest $1,010.86 per month for 20 years at 12% annual interest.
  4. Invest $768.54 per month for 20 years at 14% annual interest.

Here is how YOU can achieve $1,000,000 with just $300 per month:

  1. Invest $300.00 per month for 473 months at 8% annual interest.
  2. Invest $300.00 per month for 404 months at 10% annual interest.
  3. Invest $300.00 per month for 355 months at 12% annual interest
  4. Invest $300.00 per month for 318 months at 14% annual interest.

For those familiar with investing, I already know one of the biggest questions you want to ask:

“Where on earth do I get 12% annual interest?”

It’s a great question! The number one way to get 50% or even 100% interest is to contribute to an employer-sponsored retirement plan where matching contributions are made. For example, if your employer matches your contributions “dollar-for-dollar” up to 3% of your pay, that is a 100% interest rate that AUTOMATICALLY HAPPENS with NO RISK! It’s called FREE MONEY! Beyond that, I like investing in mutual funds that are older than me and also in other great investments like residential and commercial real estate as well as small businesses.

In fact, I have spread my investments into most of these categories with small businesses and mutual funds being my preferred options. If you are interested, you can view my CURRENT INVESTMENTS HERE.

Are you wanting to break out of the ordinary into extraordinary? My latest book, OXEN: The Key to an Abundant Harvest, can help you grow what you have into an abundant harvest. Read more and purchase OXEN HERE.

QUESTION: What do YOU need to do to become a millionaire? Share with us in the comments HERE.

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