How I Changed My Child’s Life In 15 Minutes

I changed my new daughter’s life in just 15 minutes time a couple of weeks ago.

That’s quite a dramatic statement, isn’t it?

But it’s true.

How did I change her life?

  • Did I move?
  • Did I decide to change careers?
  • Did I do something super drastic?

Nope. In fact, I did something you could also do to change your child’s life.

Here’s what I did:  I opened my daughter’s 529 college savings account and established automatic monthly contributions. It took a total of 15 minutes. And with that one decision and accompanying action, I changed her life.

Think about it. Because her mother and father took action when she was ZERO years old, when she is EIGHTEEN years old she won’t have to worry about:

  • Paying for college
  • Graduating with a boatload of student loans
  • Whether or not she can even afford to go to college

The magnitude of her parent’s simple decision will still be felt decades from now.

Perhaps you could take 15 minutes of your time right now to open your child’s 529 college savings account and help change their life.

10 Reasons I Love Budgeting

I love budgeting.
Let me count the ways.
My budget set me financially free.
For the rest of my days.

10 Reasons I Love Budgeting

  1. Reduced stress.
  2. Clear plan for the future.
  3. Intentional generosity.
  4. Focused savings.
  5. Anticipate future expenses.
  6. Same page as my bride.
  7. Allows me to maximize every dollar.
  8. Funded my dreams.
  9. Blessing my children.
  10. I can use a Microsoft Excel spreadsheet.

Do you love budgeting? Why?

One Change Can Be The Catalyst For Life Change

I believe most people are one or two major financial decisions away from completely changing the trajectory of their financial future.

  1. Increase investment by $200 per month. If a 25 year old were to change their monthly investment by $200, it would change their net worth by $2,352,955 by age 65. (12% growth for 40 years).
  2. Eliminate all non-house debt. This usually reduces a person’s cost of living by $500 to $1,250 per month. Suppose an individual were making $750/month in payments. $750/month would equal $9,000 per year! If this were invested and received 6% interest for 20 years, it would be worth $346,531.
  3. Keep the paid-for car for an extra four years.  Suppose the monthly car payment were $359.96 (like my first car payment). If the $359.96 were saved each of the next 48 months, it would be worth $19,475 (at 6% annual growth). No more car payments for the rest of your life!
  4. Eliminate cable TV.  At $75 per month, this can add up to quite an investment. Suppose this $75 were placed into an investment for 30 years at 12% annual growth. This would be worth $262,122.
  5. Prepare a budget. When my bride and I prepared a written budget for the first time in July 2003, we discovered more than $500 was disappearing every month for “miscellaneous cash withdrawal.” This money was utilized to intentionally eliminate debt. In 14 months, all of our debt (except the mortgage) was eliminated. In 10 years 1 month, our home was paid off. Preparing a written monthly budget every single month has been a huge part of our financial progress.

What is the one change you could make this week that could completely change the course of your financial future?

It takes tremendous courage to make a change. It will require sacrifice. It is WORTH IT.

Sad Realities About How People Manage Money

Here are some sad realities about how most people manage money:

  1. We know more about our favorite team or TV show than we know about our own financial situation.
  2. We spend more money on video games for our children than we save for their college education.
  3. We say we have plans, hopes, and dreams, but most of us never take the time to even write them down – let alone prepare a plan to accomplish them.
  4. We will spend hours planning for a Super Bowl Party but no time preparing a financial plan.
  5. We spend all of our money every month and then claim the lack of savings is someone else’s fault.
  6. We raise kids for 18 years and somehow never take the time to teach them about money management – giving, saving, investing, budgeting, compound interest, etc.

I’m committed to helping people change this reality. It’s good to have a favorite team (especially if it’s the Indianapolis Colts, Indiana Pacers, and the Chicago Cubs), but not if it takes the place of ensuring my finances are in order and funding plans, hopes, and dreams. It’s awesome to have an incredible Super Bowl Party (especially if my Colts are in it), but not if I am overspending money because I didn’t have a budget.

Are you ready to help millions of people change their lives? One step is to be a part of our Core Coaching Program – CLICK HERE to learn more.

Monday Money Tip: Life Insurance

In today’s tip, I talk about a vital component of most people’s financial plan – Term Life Insurance. This is one of the most misunderstood components of personal finance, but it doesn’t have to be that way! This will be worth the small investment of time required to watch.

Can’t see the YouTube video? Copy and paste the following link in your favorite browser: http://www.youtube.com/watch?v=UoG-I6GkNuY

You can receive the weekly Monday Money Tip in your email by subscribing HERE.

Crazy Statements People Make About Money

Here are some crazy statements people make about money:

  • “My children are my retirement plan.”
  • “I’ll always have a car payment.”
  • “I don’t need to save any money for retirement because Social Security will cover me.”
  • “I can’t pay my house off in 10 years because it is a 30 year mortgage.”
  • “I want to buy a 401(k).”
  • “I’m still paying off the original Nintendo.”
  • “Money is evil.”
  • “I can’t budget.”

What crazy statements have you heard people make about money?

How To Pay Off Your House In Less Than 10 Years

Many people believe that because they have a 30 year mortgage, it will take 30 years to pay it off. Some have been enticed by gimmicks (that cost thousands of dollars) purported to help speed up their home pay-off using some “little known” and “magical” formula. The truth is there is one way to pay your mortgage off earlier – by paying extra money toward the principal balance and less money toward interest.

Here’s an example:

  • $150,000 mortgage balance
  • 4.5% interest rate
  • 30 year mortgage
  • $760 principal & interest payment

If one were to pay $200 extra per month toward principal ($960/month), the mortgage would be paid off in 19 years 8 months (a full 10 years sooner)!

If an extra $790 per month were applied toward principal (1,550/month), the mortgage would be paid off in 10 years flat.

Use our “Early Pay-Off Calculator” to calculate the difference extra principal payments or interest rate reductions would make!

5 Ways To Pay Off House Earlier

  1. Refinance to a interest rate
  2. Rent out a room and use the rent to pay toward principal
  3. Use tax refund to reduce principal
  4. Use a bonus to reduce principal
  5. Eliminate PMI and use the money to apply toward principal

I applied this technique and paid off my house in 6 years flat, and you can read every month of my journey by clicking THIS LINK.

Monday Money Tip: On-Line Banks – Earn More Interest On Savings!

I’ve used my on-line bank accounts since 2007. They have been incredible for me, and I think they can be a very helpful way for you to maximize your savings as well! You can check out the on-line banks I recommend HERE.

Can’t see the YouTube video? Copy and paste the following link in your favorite browser: http://www.youtube.com/watch?v=SjNnvHn0Sp8

You can receive the weekly Monday Money Tip in your email by subscribing HERE.

Joseph Sangl’s Current Investments

Anyone who has attended a Financial Learning Experience has heard me say that it is important to INVEST money and to do so every single time you are paid money. At the end of our live events, I am regularly asked or emailed the following question:

“What investments do you recommend?”

My answer is always, “I don’t recommend specific investments. I can only tell you the investments I own, and they have worked well for me. The investments you choose are up to you.”

Occasionally, I update everyone on the investments I currently hold. Below is a chart of the current investments we hold. If it is publicly-traded, I have included the ticker symbol. Click on the chart itself (or HERE) to see a larger version.

JSinv2014

It has been a year since I last updated my investments. 2013 was obviously a great year for equity stock investments. As I mentioned then, I suspected the market would continue to grow. Of course, I was very happy to see this come to pass as I continued to purchase individual stocks. Due to the growth of the market, my stock investments grew from 2.2% to 3.0% of my overall portfolio. We continued to grow our small businesses and real estate holdings. This is part of our continued to effort to diversify BEYOND the stock market. As a result of the continued growth of small business and real estate investments, we have seen them push our market investments into a smaller piece of our portfolio. We are close to a 33%-33%-33% split between small business, real estate, and market investments.

JSinv2014pieMy thoughts:

  • I believe we will see continued growth of the U.S. Economy. This is based in part to my unscientific research of traveling the entire United States with our business activities. There are cranes in the air building skyscrapers in every major metropolitan area and shovels in the ground in the suburbs for new homes. You might notice that I’m investing in major home builders stock as a result of this belief.
  • Keeping cash and cash equivalents as financial margin is still essential to every person. This provides money to take advantage of opportunities.
  • I think it is a great time to continue investing in new businesses and existing ones. Our team will continue to investigate potential business acquisitions.

 

8 Ways To Speed Up Debt Elimination

In a recent live event, 58% of respondents shared that “reducing or eliminating debt” was their top goal for the year.

If this is one of your top financial goals, here are some key ways you can speed up your debt freedom date.

8 Ways To Speed Up Debt Elimination

  1. Reduce Interest Rates Many people with substantial consumer debt do not realize that 50% to 75% of their payments are merely going to the lender as interest – greatly reducing their ability to lower their debt. If you have high interest rate credit card balances, consider transferring to a 0% interest card (like these 0% Balance Transfer Credit Card Offers). Is your mortgage interest higher than those listed at BankRate.com? If yes, consider refinancing the mortgage. It is amazing what a few hours of focus on interest rate reduction can do to speed up your Debt Freedom Date!
  2. Pay Raise Are you being compensated fairly? Check out Salary.com for current pay rates of positions similar to yours. Take some moments to document how you are adding substantial value to your organization. If it makes sense to have a conversation with your leader, do it! Nothing like some more income from your current job to speed up debt elimination.
  3. Tax Refund A tax refund might be an “interest free loan to the government,” but it also represents an opportunity to impact debt in a big way.
  4. Bonus A bonus can also help kill some debt. One great thing about debt freedom is it allows future bonuses to be used to fund future dreams – instead of paying for things from the past.
  5. Found Money From Better Budgeting When I started preparing and living by a budget, it literally transformed my finances. I freed up hundreds of dollars that was going to “miscellaneous cash withdrawals” and impulsive grocery shopping trips.
  6. Sell Some Possessions Sell the boat, motorcycle, extra car, and collectibles. Eliminating possessions will free up space, eliminate stress, and greatly speed up your pace toward accomplishing debt freedom.
  7. Overtime If you have the chance to work overtime, it can really help speed up debt reduction. Plus, you’ll be too tired to spend the extra income on frivolous things.
  8. Second Job If you don’t have the opportunity to work overtime at your existing job, take a second job – or start a small side business. The key here is to focus on something that is short term. You don’t want to sign up for a permanent second job. Instead, commit to applying all additional money to your debt elimination plan. The reward when you become debt free? Quitting the second job and still prospering because you’ve freed up all of the money that was previously committed to payments.

You can do this!

Read the How To Pay Off Debt Series

Small Business Tip: Importance Of Audits

Small business owners don’t lack for things to do. There is the endless work of creating new products and improving existing ones. Meeting with new customers and existing ones – local and abroad. Hiring employees and freeing up non-performing ones to “pursue other opportunities.” You get the thrilling task of managing payroll and cash flow. You get to deal with all of the wonderful governmental entities – federal, state, and local – regarding licensing, codes, rules, laws, and endless regulations. Then, of course, there are the meetings with your CPA around tax time.

The LAST thing you need is to wonder if your financial books are correct and accurate.

Unfortunately, we hear of cases of a modern-day Judas, where a rogue employee who has been entrusted with the money decides to help themselves to it and embezzle money. It can literally bankrupt a business.

This is why it is important to conduct financial reviews and perhaps even complete third-party audits. Annual financial reviews are instances where internal members of your organization are tasked with performing random “tests” of financial records and require those in charge of the finances to provide objective evidence that records are retrievable and accurate.

Third party audits take this process to an entirely different level. An outside organization is hired to put the financial team through a rigorous test of all critical financial systems – accounts payable and receivable, payroll, record-keeping, financial reporting (balance sheet, cash flow statement, and income statement), and separation of authorities (i.e. separating rights of who can print checks from check signers).

While no review and audit can completely eliminate the chance for fraud, it can reduce it tremendously. And it will allow you to make business decisions with full confidence in your finances and the financial team.

Here’s the statement I use: “Trust, but verify.”

This post is part of a Small Business Series here at the wildly popular JosephSangl.com. Click HERE to read more of the posts in the series.

Bible Money Tip: Generosity Is Contagious

I recently heard Ken Friar, Executive VP of INJOY Stewardship Solutions, share the following statement:

People don’t plan to be selfish. They just don’t make a plan to be generous.

But it only takes one or two people who are living generously to move literally hundreds – even thousands – to give.

Consider Exodus 36:3-8:

And the people continued to bring freewill offerings morning after morning. 4. So all the skilled workers who were doing all the work on the sanctuary left what they were doing 5 and said to Moses, “The people are bringing more than enough for doing the work the Lord commanded to be done.” 6 Then Moses gave an order and they sent this word throughout the camp: “No man or woman is to make anything else as an offering for the sanctuary.” And so the people were restrained from bringing more, 8 because what they already had was more than enough to do all the work.

Moses cast the vision God had given to him, and the people responded in an amazing way.

I’ve seen similar examples happen throughout my life. When tornadoes swept through Alabama in 2011, I saw one or two people begin giving to provide immediate assistance, and it compelled me to give. The next thing we knew, more than $100,000 had been raised.

When Hurricane Katrina smashed the Gulf Coast, people around the world rushed to help by giving tremendous amounts of money. The same was true for the earthquake in Haiti and tsunami in Indonesia.

We see it happen when a family’s home burns down and a community unites together to help them.

Generosity is contagious!

As I consider the various “contagious giving moments” I’ve witnessed, here are some common variables:

  1. There was a clear need. We all want to make a difference with money that we give away. We want a “return on investment” on the money. Without clear understanding of the ROI, we are more inclined to hold onto their dollars.
  2. The need was urgent. There are many cases where there is a need, but it isn’t urgent. Urgency is what causes us to move immediately.
  3. There was a trusted entity to send money. There have been so many highly reported instances of financial mismanagement that we have been conditioned (and rightly so) to ask the question, “Is this organization going to handle this money in the exact manner they’ve communicated?”
  4. Someone gave first. When we see our friends, family, or heroes give, it inspires us!

Have you ever been able to be a part of a “Contagious Generosity Moment”? Will you take a moment to share it with us in the comments?

This is part of the “Biblical Financial Lessons” series here on the wildly popular JosephSangl.com. Click HERE to read more posts in the series.

Monday Money Tip: 0% Interest Credit Card Balance Transfers

If you carry a credit card balance, this tip can literally help you save hundreds or thousands of dollars a year!

As always, I maintain a page of current on-line 0% interest credit card balance transfer offers HERE.
 

 

Can’t see the YouTube video? Copy and paste the following link in your favorite browser: http://www.youtube.com/watch?v=4UmdaRGcPR8

You can receive the weekly Monday Money Tip in your email by subscribing HERE.

Leadership Tip: Importance of Communication

During a leadership conference I attended, I heard a great statement by Pastor Van Moody. He said:

When you get sick of saying it is when they are just starting to get it.

It is so true. As a leader, you are the chief vision caster. This means that the vision must ooze from every pore of your body. Even when you feel like everyone in the room has heard you say it 7,004 times, say it again. After all, vision leaks.

While you may have heard yourself say it 7,004 times, it could be the first time one of your clients hear it. It might be the first time a team member truly heard you say it – and finally get what you are saying.

What is it you want your organization to accomplish? What good thing are you expecting your team to deliver? What do you dream of your customers saying after your organization has served them?

Say it! Then say it again …

This post is part of a Leadership Series here at the wildly popular JosephSangl.com. Click HERE to read more posts in the series.

Small Business Tip: Monthly Cash Flow Planning

Every single month, I sit down with Matt. Most of you don’t know him, but he is a key reason IWBNIN has continued to grow and expand. You see, Matt is our Financial Administrator. He manages all of the finances for our businesses. He and his team manage the regular financial management dealings of a business: payroll, accounts payable, accounts receivables, bank account reconciliation, credit card reconciliation, and governmental filings. However, Matt helps with a monthly task which we’ve found to be vital to our success – monthly cash flow planning.

For our two businesses with employees, we sit down at the beginning of each and every month to plan our financial decisions.

Here is the process we utilize:

  1. 12 month rolling plan  We have a rolling 12 month plan. This means at the end of each month, we add a new month at the end of the plan to ensure we are always looking forward for an entire year.
  2. Evaluate last month  We review last month’s plan to identify any major deviations – both positive and negative. This intelligence is utilized to continually improve our planning.
  3. Plan next month  We make changes to this month based upon known information.
  4. Review the next 12 months  We make changes to future months based upon known information.
  5. Make business critical decisions  We utilize the cash flow plan to determine when we can spend money for larger initiatives.
  6. Live by the plan throughout the month  Once the plan is finalized, the financial team follows it. If an unusual opportunity presents itself or major expense crops up, it generates a conversation amongst company leadership to determine an appropriate course of action.

Here’s how we’ve found the 12 month cash flow planning process to be helpful:

  1. Prepare for major financial challenges  As with any business, there are cycles. Some months are higher revenue while other months cause business owners to wonder if their business is going to fail. These cycles can create cash flow crunches if not carefully planned for. Viewing 12 months out allows our leadership to make better decisions.
  2. Prepare for known, upcoming non-monthly expenses  This type of planning forces a leader to think longer-term. As a result, known upcoming non-monthly expenses can be accommodated with ease by ensuring appropriate accrual accounts are established. Nothing makes me happier than to know the money is stored up for estimated quarterly tax payments, car repairs & replacement, annual software licenses, etc.
  3. Communication  Monthly reviews create a “trip point” that forces communication to happen regarding the financial and general affairs of the organization.

Want to get rid of a bunch of financial headaches? I highly recommending instituting a monthly cash flow planning meeting!

This post is part of a Small Business Series here at the wildly popular JosephSangl.com. Click HERE to read more of the posts in the series.

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