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12 Reasons You Aren’t Winning With Your Money

I get the opportunity to travel and speak to different groups of people, in different phrases of life, with different financial struggles. However, they all of one thing in common: they all want to win with their money. The unfortunate reality is that there are a lot of people who aren’t winning with their finances. It can be frustrating and overwhelming. The GOOD NEWS is that you can win with your money. You can become debt free! You can start living your fully funded life.

Here is the list of the top reasons (in no particular order) I see that people aren’t winning with their money. If you currently aren’t winning with your money, read the list below to see if any of these apply to you.

  1. Unwilling to admit there is a problem
  2. Inability to say NO (to themselves, spouse, and/or children)
  3. Shiny Stuff Syndrome
  4. Lack of financial education
  5. Spouses not working together
  6. Lack of giving (rarely do I see selfish people truly win with their money)
  7. No savings (it is impossible to win financially if you do not save)
  8. Unwilling to take risk with any investments
  9. Listening to the wrong (and broke) people
  10. Impulsive spending decisions
  11. Failure to carry health and disability insurance
  12. Unwilling to work for it

Would you add any additional reasons to this list?

Ready to Get Organized? Part THREE

There are two types of people – those who are organized and those who aren’t. Which do you fall under? How about with your finances? It’s extremely important to have your finances organized. In fact, I believe that a lack of organization is one of the top reasons that people do not reach the peak of their financial potential. So, are you ready to get organized? Here we go!

PART ONE  Understand why you are doing this in the first place

PART TWO  Prepare a list of all of your financial accounts

PART THREE  Information to include on your Financial Accounts Form

This form is meant to be the be-all end-all location for your entire financial picture. When you are looking for key financial information, you won’t have to go far because it is all contained within this file. When you pass away, it will allow your estate executor to easily understand what they are dealing with.

Here are the key items to include on your Financial Accounts Form.

  • Investment Accounts: Include your 401(k), 403(b), 457, TSP, Roth IRA, IRA, Stocks, Bonds, and Mutual Fund Investments
  • Bank Accounts: Include checking, savings, money market, CDs, and any other accounts held at a bank or credit union.
  • Real Estate: If you own real estate, be sure to list the addresses and the financial status of these holdings.
  • Will: According to LexisNexis and LegalZoom, 55% of Americans do not have a will or other estate plan in place. Have one, and include it’s location and your assigned executor on this document.
  • Power of Attorney: Healthcare POA, Limited POA, or other legal assignments of responsibility should be included in this document
  • Insurance Policies: Include Life Insurance – be sure to include policies provided through your workplace. Also include insurance on key possessions owned.
  • Jewelry (or other valuables): If you have valuable possessions, be sure to list them and their location
  • Safe Deposit Box: If you have one, indicate it on this document and include it’s location.

I know! I know! This can seem overwhelming, but it is absolutely worth the effort to put this together!

 

Ready to Get Organized? Part TWO

There are two types of people – those who are organized and those who aren’t. Which do you fall under? How about with your finances? It’s extremely important to have your finances organized. In fact, I believe that a lack of organization is one of the top reasons that people do not reach the peak of their financial potential. So, are you ready to get organized? Here we go!

PART ONE  Understand why you are doing this in the first place

PART TWO  Prepare a list of all of your financial accounts

If you are a slightly or very disorganized person (like I used to be!), this is probably going to be the most difficult part of the entire organizational process. It is important to gather together your financial statements so you can easily prepare a one or two page document that details your entire picture.

To speed up the process, we have a tool that you can use to consolidate all of your information into one place. You can download a copy below:

Financial Accounts Form (PDF) or Financial Accounts Form (MS Word)

Below is a sample of how the information can be written into the file:

In the next step of this series, we will talk about specific types of information that you need to be sure to include on this document.

Ready to Get Organized? Part ONE

There are two types of people – those who are organized and those who aren’t. Which do you fall under? How about with your finances? It’s extremely important to have your finances organized. In fact, I believe that a lack of organization is one of the top reasons that people do not reach the peak of their financial potential. So, are you ready to get organized? Here we go!

PART ONE  Understand why you are doing this in the first place

Let’s face it. We are all extremely busy. The last thing we need to do is initiate another paperwork process just for the sake of what “might” happen. I believe, however, that this process is an extremely valuable step toward maximizing one’s financial potential. If you take the time to complete the steps in this series, you will discover areas where your financial plan is lacking AND also where you are winning (which is very satisfying to see).

Here are some reasons to get organized financially:

  • Control: It is hard for the finances to run out of control when you are focusing this intently on your financial affairs
  • Improved financial focus: We tend to improve that which we focus our attention on
  • We will die someday: Our family will appreciate a clearly organized set of financial affairs

Organization and a great financial plan are two of the key reasons that Jenn and I have been able to experience financial freedom!

Is It Worth It?

Is it worth it?

I had a person express to me the importance of them receiving a paycheck because they are living paycheck to paycheck.

This individual has been working over 20 years and is still living paycheck to paycheck.

WOW!

Is everything they have purchased with their money been worth living paycheck to paycheck for 20 years? Balancing each week to pay the bills without bouncing a check?

OUCH!

If you keep doing what you are currently doing, are you going to look back in 20 years and still be living paycheck to paycheck? 10 years from now? 5 years from now? 1 year from now?

Really?

You see, I believe that for more than 95% of Americans the issue is NOT income. It is OUTGO! I believe that you can change your financial future. I believe that I can NOT change your financial future. You will change your financial future only when you have committed yourself 100% to the goal of living beyond the life of “paycheck-to-paycheck”.

I can help teach you. I can help educate you. I can plead with you. Your spouse can beg you. Only you can do it!

Looking for a next step? Check out my latest book for all the details – HERE.

Fun Summertime Activities For FREE (or close to it)

Well we’re getting ready to say goodbye to spring and hello to summertime! That means heat, no school, and lots of free time. In this tight economic time, a lot of people are getting very creative about how they spend their time and money. Let’s face it, we all want to have fun – even more so when the money is tight and times are stressful! Here are some ways that I have seen people having fun and it is costing them NOTHING (or next to it).

  • Start a blog
  • Listen to a podcast
  • Play a board game, card game or any kind of game
  • Check out the community calendar
  • Library visits – just to peruse the books, magazines and check out free movies
  • Bake a new dish using stuff that is already in the pantry and freezer
  • Clean up the yard
  • Learn a new skill (maybe how to change your car’s oil)
  • Start a DIY project
  • Start a new workout routine
  • Attack one room in the house and reorganize it
  • Volunteer at a local community center, food pantry, or animal shelter
  • Take the train downtown to people watch – I LOVE doing this in Chicago!
  • Catch up on some old shows with Hulu.com
  • Take time to pet and play with the dog and cat
  • Go on a hike or a walk
  • Pick-up basketball games at the local park

These are a few ideas. What are your favorite things to do that cost little or no money?

 

Is Your Money Making Money For You?

As I described in my book, Oxen: The Key to an Abundant Harvest, you truly begin winning with money when your “money makes money for you”.

With that said, here’s a great question to ask yourself: “How much interest is my bank paying me for the money in my savings account?”

Chances are high that the number is 0.01%. In fact, I checked several large banks and here’s what I found for their basic savings accounts:

  • Bank of America – 0.01%
  • Wells Fargo – 0.01%
  • Bank of the West – 0.01%-0.02% (Depending on the state you live in)

This is why I hold all of my business and personal savings in ONLINE BANKS. This is not a “bank with website access”. They are banks that exist almost exclusively online. Since they do not have physical buildings, they have to do extraordinary things to attract customers, like offer higher interest rates. You can check out my top 5 reasons why I use online banks HERE.

Let’s look at an example. Let’s say you put $2,500 (one month’s of expenses – Rung 2 of the IWBNIN Ladder) into a savings account today. In one year you could earn almost $25.00 in interest from an online bank vs. $0.25 from one of the large banks. I’d say that’s a great deal! Now that might not seem like a significant amount of money to you but it’s free money and every little bit helps! Also, remember this is your savings account, not an investment account.

With this information, I’d encourage you to do 2 things:

  1. Find out how much interest your bank is currently paying on your savings.
  2. Check out the online banks that we recommend HERE.

 

5 Essentials to Paying Off Debt – Step 4

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date

STEP 3 – Accelerate your debt elimination

STEP 4 – Use the Debt Snowball Technique 
We can all agree that debt is a drag. It hangs on like a bad relationship or a fixer-upper money pit house. Anyone, when given the choice, would choose to be debt free over paying debt payments every month.

The average family possess credit card debt, student loan debt, furniture debt, vehicle debt, and a personal loan or two. Then a house payment enters into the picture. Every single month, 40% or more of the family’s income is “dead on arrival” because it must immediately be sent out to lenders. Let’s work on changing that!

With Steps 1-3 complete, we can now focus on actually paying off the debt using the Debt Snowball Technique!

Let me explain the process for using the Debt Snowball Technique.

  1. List ALL debts from the smallest balanced owed to the largest.
  2. Pay the minimum payment on all debts except the smallest one.
  3. Pay as much as you can on the smallest debt.
  4. When the smallest debt is eliminated, take the monthly payment you were paying for that debt and add it to the monthly payment you’re making on the second smallest debt.
  5. Continue this process with a vengeance until you are debt free!!

I highly recommend this technique because you will see individual debt payments disappear more swiftly from your monthly budget. For more information on the Debt Snowball Technique, grab a copy of my latest book, I Was Broke. Now I’m Not.

5 Essentials to Paying Off Debt – Step 3

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date

STEP 3 – Accelerate your debt elimination
DEBT – This four letter word often consumes so much of our lives, thoughts and actions. But, it doesn’t have to!

When it comes to debt, I understand how stressful and frustrating it can be. I understand the weight and fiction it can bring to a family. However, I also know the freedom that comes when one become debt free and I want you to experience this freedom!

When you are ready to start attacking your debt, here are a few ways to accelerate debt elimination. (But before you begin, make sure you’re not making the #1 Debt Mistake – HERE.)

3 Ways to Accelerate Debt Elimination:

  1. Reduce Interest – Many people with substantial consumer debt do not realize that 50% – 75% of their payments are merely going to the lender as interest. This greatly reduces your ability to lower your debt. So, here are a few ways to lower your interest:
    1. Transfer to a 0% Interest Credit Card (Learn more HERE)
    2. Call & ask for a lower rate
    3. Pay on-time
    4. Establish automatic payments
  2. Increase Income – Since we’re all friends here, if we’re being completely honest, we all vote for this option, right? But a lot of people don’t realize that there are numerous ways to increase income that are within your hands. Here are a few:
    1. Pay Raise (see salary.com)
    2. Tax Refund
    3. Bonus
    4. Work Overtime
    5. Extra Job
    6. Sell Some Possessions
  3. Decrease Outgo – This is an option that is always available to us, but it’s probably not fun. If you can decrease the outgo to other things, you can increase the outgo to liberating your life from debt!
    1. Create and follow a budget!
    2. Sell some possessions

You can learn more about each of these steps in my book, I Was Broke. Now I’m Not.

5 Essentials to Paying Off Debt – Step 2

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date
When I meet with people, it’s a guarantee that I will calculate their debt freedom date. When I do this, it’s clear that people do not like debt! It’s also apparent that people have not been paying attention to their finances and do not have a well-defined plan for their life. Otherwise, they would not have incurred most of the debt. However, there is always HOPE and a way out! 

In these meetings, I often use the example of a dragon. Follow me here! How can you effectively defeat a dragon if you don’t know how many heads it has or how large the dragon is? So, before we calculate your debt freedom date,  let’s establish three things: 

  1. Who do you owe
  2. How much do you owe
  3. What are the payments that you are ACTUALLY making

You can list these on the Debt Freedom Date Calculator. Now we can calculate your debt freedom date! This date is simply the date that you will be debt free (including and excluding the house).

Let’s look at a sample. In this sample, the couple listed all of their non-house, non-business debts, as well as their house debt. After all of the debts are inputted, the debt freedom date is calculated. This couple will be debt free, excluding the house, in just 3.3 years and completely debt free, including the house, in 7.7 years!! Get fired up!

Debt Freedom Date Calculator

Are you ready to take your next step? You can calculate your debt freedom date HERE!

IMPORTANT NOTE: When you take this next step to become debt free, you must eliminate the potential for new debt! If you keep swiping the credit cards and running up the balance, you’re just eliminating your potential of becoming debt free.

Have you calculated your date? How many months until you’re debt free?

 

5 Essentials to Paying Off Debt – Step 1

I have found that a large group of those who attend one of my events, are living paycheck-to-paycheck AND carrying debt. In fact, statistics from a recent survey I conducted show that 57% of people are living paycheck-to-paycheck and 73% of people are in debt (excluding the mortgage). When asked how people are doing with managing their money, 45% said that they were barely keeping their head above water or drowning! Only 9% of people feel like they are winning with their money!

No matter where I go, I see the footprint of debt on people’s lives – marriages failing, stress and depression taking over, and hopelessness closing in. And all of this is happening in the wealthiest country on the planet! This is entirely unacceptable!

I WANT YOU TO BECOME DEBT-FREE!! It changes your life! It enables you to accomplish far more than you ever thought possible with your personal finances! It allows you to do exactly what you were put on earth to do – regardless of the income! In this series, I’m going to share the process that I followed to become debt free. Are you ready?

STEP 1 – Understand the WHY before the HOW
I believe this is the most important step in becoming debt free! In the hundreds of financial coaching sessions that our team has led, it’s amazing how many people do not have a plan for their lives. We ask them the “why” and they stare at us like we’re speaking a different language.

Unfortunately, this is the first time that many of these people have ever seriously thought about what they want to accomplish with their lives. As a result, they are bumbling through life just trying to make it through the day. What a miserable way to live!

I cannot overstate this fact – YOUR LEVEL OF EXPECTATION DETERMINES YOUR LEVEL OF PREPARATION!

When Jenn and I wrote down our plans, hopes & dreams on paper, we realized that our lack of money management proved we had no real expectations of accomplishing these plans, hopes & dreams. We wanted to move back to South Carolina to take a job that paid way less than what we were making, but every single dinner at Outback was robbing us of that opportunity. Every single debt payment went off to make the bank wealthy while at the same time robbing us of our God-given dreams!

That made me MAD! It made me FURIOUS! It made me realize how incredibly stupid I was to be managing our money so crazily! I had a significant amount of our income going to pay car debt, credit card debt, and student loan debt. Add in the stupid house payment, and I had thousands of dollars per month running off to make the bank wealthy!

By writing out our plans, hopes, & dreams on paper, Jenn and I were motivated to manage our money differently. It caused us to view debt differently.

Take your first step today by writing down your plans, hopes & dreams. If you are married, you need to do this separately and then take time to discuss it with each other. By the way, one of my plans, hopes, & dreams is for you to become debt-free!

Why do you want to be debt free? It’s not easy! After you get started, it might be easier but it’s not going to be easy. There are so many things that compete for your money. So, why do you want to break free from debt? One of the most common responses I get is, “so I can do whatever I want”. I don’t believe this is the best response. I believe a better response is, “so I can live a fully funded life doing exactly what I’ve been put on this earth to do!”

What has kept you from attacking your debt?

 

 

Where Are You On Your Money Journey?

Can we all agree that money is a journey, not a moment? This journey comes with ups and downs and curves. With that being said, I know everyone is at different places and levels of progress. Some people are winning with their money, while others are struggling to get by.

I’m so passionate about helping people accomplish far more then they ever thought possible with their personal finances. It’s what drives me! In order to serve you better on your journey, will you fill out this quick survey answering the question: “Where are you on your money journey?”

 

#1 Debt Mistake

When I meet people at events, I often ask them: “What is your top financial goal for the year?”

By far, the most common response is, “I want to reduce or eliminate debt!”

This is an incredible goal. Reducing or eliminating debt helps create financial margin and reduce stress. However, many people make the mistake of skipping straight to debt reduction without first saving money in an emergency fund. This is a HUGE MISTAKE.

You see, I made this mistake for a long time. I wanted to kill debt. I was frustrated and angry and wanted to say goodbye to my long-time friend, Sallie Mae Student Loans, the bank, credit card companies, and stores. I wanted the debt to be G-O-N-E. So I ran right past the more important step – saving money.

Take a minute to think about it. If you do not save but only focus on attacking your debt with any and all extra money (tax refunds, bonuses, money freed up by budgeting better, etc), you will begin to see your debt go down.

Then your car will break down.

How will you pay for it? Since you skipped the “save money” step, you will have to use credit to pay for it. This becomes an extremely disappointing moment. It causes many people to give up on debt freedom and say, “I just can’t seem to get ahead.”

Choose to save money first. I recommend starting with at least one month of expenses. Once all of the non-house, non-business debt is gone, build the savings to 3 months of expenses.

Yes, this slows down the debt pay-off. Yes, it’s frustrating to focus on savings when you have debt (especially when you include interest). BUT if you save first, you will secure your ability to stop acquiring new debt, which is the biggest step you can make towards true financial freedom.

Interested in learning more about saving, eliminating debt, and budgeting? Check out my book I Was Broke. Now I’m Not.

5 Basic Steps to Investing – Step 5

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money

STEP FOUR  Unleash the Power of Compound Interest

STEP FIVE  Continue to Learn about Practical Investing Opportunities
There are so many different types of investment opportunities, so I’ve broken down a few of them.

Stocks – When you own stock in a company, you technically become a part owner of that company. You have some claim to the assets and earnings of the company. Stocks are foundational to most investment portfolios. They are known to be very volatile in the short term but have historically outperformed other investments in the long run. 

Mark Twain has famously said this about investing in stocks: “October: This is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June, December, August and February.”

There are two major types of stocks:

  • Common Stock: Common stock allows the holder to vote in the shareholder meetings (depending on the amount of stock owned) and provides access to dividends or profit sharing produced by the company.
  • Preferred Stock: Preferred stock holders have priority over common stock holders. This applies in many areas including when dividends are being paid to shareholders.

Bonds – A bond is a large debt owed by a company, government, or even a school, where the borrowing institution has agreed to repay an established amount of interest payments for a set period of time. When this time expires, the borrower then returns all of the principal back to the lender(s). Bonds can vary in maturity times anywhere from 1 year to 30 years. I like to think of my personal residence as a bond investment. A bond is generally less risky.

Mutual Funds & Exchange Traded Funds (ETFs) – Mutual funds and ETFs let you accumulate a wide variety of investments that couldn’t normally obtain without consuming large amounts of time and money. Mutual funds and ETFs are funded “mutually” by you, me and millions of our closest friends. Our money is pooled together and then used by the “mutual fund managers” to invest in hundreds of other company stocks, bonds, and other sorts of investments. Usually, mutual funds and ETFs have specific charters that direct their investments. Our mutual fund might only focus on established companies in the USA while another could focus on investing in up-and-coming companies in third world countries.

Other Investing Opportunities – People so often hold themselves to these common types of investing and never branch out. Investing opportunities are all around you! You can invest in a small home and rent it out. You could invest in small businesses in your community. When you are investing, you can think outside the box. Some of the greatest returns can be found when investing in unorthodox ventures.

Next Steps
– Review your investments and know what you are invested in
– Start to think OUTSIDE of the stock market when you’re investing
– Start investing!
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Step 4

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money

STEP FOUR  Unleash the Power of Compound Interest  
Have you ever heard the say, “my money is working for me”? This is exactly what compound interest does for you! When you utilize the power of compound interest, you’re allowing the interest you’re making to also earn interest.

For example, let’s say we have $100 in an investment account that grew to $105 in one year. This is the equivalent of 5% interest. Now suppose the $105 is left alone for another year and continues to grow at a rate of 5%. Will it be paid another $5 interest when the second year is up? No! It will be paid $5.25 because interest was received on $105 – not just $100. Interest earning interest!

Take a look at the below example of a $100/month investment growing at an annual compound rate of 12%.

Compound Interest Table

 

 

Remember,  you are only investing $100 each month! After 40 years, you’ve only invested $48,000 BUT your account balance is $1,176,477! This means that $1,128,477 is the interest you have gained!

Now do you see the POWER of compound interest?

Where do you find investments that offer 12% return? I have found no investments that constantly return 12% every single year, but I have found several mutual funds that average over 12% return over the past 50 years. Some years could lose 15% while others gain 30%. You can see a list of my current investments HERE.

How to maximize your investment growth:

  1. Invest enough to receive the entire company match: By investing in an employer-sponsored retirement plan that matches a portion of your contributions, you could even receive a 50% or 100% return!
  2. Monitor your investments at least every six months: I track my investments at the end of every single month. This helps me understand how each one is performing and allows me to make necessary adjustments.
  3. Consider investments beyond the stock market: The stock market is just one place to invest. Consider investing in a small businesses, real estate, and intellectual property – like patents and licensing rights. Remember, a higher interest rate almost always means a higher risk.

Next Steps
– Establish a consistent investing habit. Invest into your retirement account every paycheck for the rest of your working life. Even if you can only invest a small amount, it will add up to more than you can imagine!
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

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