Some links to personal finance blogs & misc stuff

I've enjoyed reading about people who are interested in building and developing their finances.

Interesting personal finance blogs:
No Credit Needed - NCNblog is diligently paying off his debts from 2 auto loans and a credit cards. He's diligently logging all of his progress for us to see. I'm impressed that he's making the kind of progress that he is.

No Credit Needed Blog

Everybody loves your money Everyone loves your money blog
Hazzard shows us different ways to save money and even get some free stuff. He's got a net worth of $263,700 which is really impressive.

I enjoy reading these personal finance blogs. These guys are definitely doing the financially mature thing!!

Other links

www.technorati.com is a place that will tell you how many other blogs link to you.

www.feedburner.com tells you how many people are subscribed to your rss feed.

So... please link to this blog and sign up for my rss feed so that I can get SOME readings on these sites. :)

Well.. it's the end of July 2005.. I've had fun writing and getting to know other personal finance blog people. I'll try to kick it up a notch in August. There's always lots of financial maturity stuff to write about.

Shameless self promotion:
Check out my credit repair blog if you want to learn more about credit repair.

If you're in Canada check out my www.canadian-money-advisor.ca where you can read yet more of me rambling on about stuff. If it's financially related, I want to talk about it.

Need a quote on life insurance go to Term Life Insurance Quotes. Life Insurance should be a part of everybodies' financial scenery.

Cheers

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Tough situation - What would you do?

I talked to an ex employee of mine who was in a pretty tough situation.

He and his wife separated and divorced a few years ago at which time the ex wife took their small boy and moved to a city 500 miles away. (Very sad story)

This fellow is a good worker. Over the last 5 years he's worked hard to get to his ideal job. In a field he likes and making good money.

The problem is that he really misses his boy. The dad wants to be a part of his life.

Should he give up everything that he's worked toward and move to the city where his son is? If he stayed put, he would have more financial stability to help the son out financially?

What would you do? Do you keep your job and life stability, or do you do whatever it takes to be with your children?

Practice and exercise your financial plans

As a follow up to my
Please make up your mind article.

When you make your decision whether to be rich or not, next thing is to practice the steps to your goal.

My example of practice:
I had to stop getting too many credit cards.
I get tons of credit card offers in the mail. I used to wonder if I should take advantage of them. (I have more than enough credit cards). However, I used to read over every credit card offer. I wondered if I could get that new $50,000 credit card. At one point, I had 48 inquiries on my credit reports.

I decided that enoughs enough. I am not going to apply for any more credit cards for six months. That was my decision.

Next I had to figure out how to not apply for credit cards. This answer was simple. I decided that every time I got a credit card offer, I would rip it up immediately. Not even look at it. Believe me, this was hard for the first few times. I started to rip them up and made a habit of it.

It's been over a year since I applied for any type of loan or credit card. I don't even miss my credit card addiction any more. I have learned to deal with my existing resources. I had to practice not applying for credit cards.

The point is that what ever your goals are, you're probably going to have to practice and exercise the things that are going to take you to your goal. As you get better at the tasks, they'll become easier. Set a time limit.

ie... I am not going to purchase any electronics for 6 months.
I am going to put an extra $50 on my credit cards for 12 months.
I am going to spend 3 hours per week studying about investing this month.
I am going to look at 3 properties per week for 3 months.

The above examples are routines that you can get into. Routines make it easier for people to do things. Once you get into a routine that will help your goal, you'll spend less time on less important things.

Practicing and exercising tasks that take you towards your goals is the only way to get better at them and to achieve your goals.

Please, make your mind up about your wealth!

I get a little upset when I read different posts of people who waiver on their personal finance fence. Should I do this, or should I do that?
Should I get a credit card? Should I buy this? Should I save this much? Should I pay off this debt? Should I become rich?

The whole idea is to practice control on your situation. Set a goal and then just DO the goal. Money is a very personal thing.

If you want to be rich, be rich! Don't ask permission from everybody. It's ultimately your decision.

There are certain ways to become rich. They are pretty straight forward.
• Don't spend all of your disposible income.
• Save or invest wisely so that your money makes money
• Be frugal and look for deals
• Work hard and increase your value so that your make more money with the same amount of hours.

Ultimately SAVE MORE YOU SPEND OVER A PERIOD OF TIME TO GET TO YOUR GOAL. Increase your assets over your time line. If your assets aren't increasing, you're not getting any richer.

Just DO it.

Here's the other part... if you try to become richer, you may decide that it's too difficult for you or that you really aren't interested in becoming rich. (Most people don't really want to be rich!)

Make a decision to be happy where you are for the rest of your life. If you decide not to be rich, then don't beat yourself over the head for the rest of your life. Your priorities are different than somebody who wants to accumulate wealth. There is nothing wrong with NOT wanting to be rich.

Once you make a decision about something, that should set your mind at peace. If you're deciding to be rich, then you're deciding to work alot, sacrifice alot and purchase things that go up in value instead of purchasing all of the recreational toys you've always wanted as an example. You're going to decide to do these things until you meet your financial goal. That's it. Just do it!

If you decide to not become rich, I suggest you at least get some financial plan in place for your retirement. However, your time will be yours and your money will be yours. You can spend them on what ever you want. You just won't be rich. Okay then, if that's your decision, Just do it!

Please make up your mind about what you're trying to accomplish with your money.

Die Broke or Die Rich?

There are two types of books that are written these days.

Die Broke and Make yourself fabulously wealthy.

Where as the Die Broke philosophy says you can't take it with you, it has some good points.

Create fabulous wealth philosophy says that should live enormously well today and then leave a bunch of money as an inheritance to your family or favorite non-profit.

I would be interested to open up this discussion and see what people think about these opposing ideas?

Personally, I am more of a die broke type of person.

Are you a die broke type, or a create fabulous wealth type?

Creditors make 48% of your money?!??

I wrote an article about credit cards and debt settlement. Debt Settlement in United States and Canada The examples are simplified.

Stats:
10,000 credit card limit
10,000 debt outstanding
19.99% interest rate
3.5% minimum payment (3.5% of debt principal outstanding)
$350.00 monthly payment

19.99% x $10,000 / 12 = $166.00 monthly interest requirement

$350 -$166 = $184 principal paid down.

$166 / $350 = 48% interest payment

48% of your credit card payment money is going to the credit card company as revenue.

This percentage changes based on the different variables but it does speak loudly as to why the credit card companies like your business. That's a pretty nice stream of income for them.

Question: Do you really want to pay that much to the credit card companies?

The Millionaire Next Door: Book Commentary

The Millionaire Next Door is brilliantly written by Thomas J. Stanley and William D. Danko. I can't imagine all of the research that they must have done in order to collect as much information as they did about millionaires.

Chapter 2 - Page 27 - Frugual Frugal Frugal.
In this chapter they speak about deca millionaires, or people with $10 million+ in assets. It mentions that these people are frugal. ie... they watch what they spend.

It is my impression of this chapter that most people who have developed a net worth of $10 million plus really understand the value of making money, and keeping money in their possession. In other words asset development and asset protection. I believe that these people would be a long way away from 'needing' anything. I also believe that they don't have a urgent desire to make impulse purchases on things. That would calm down their purchasing desires quite about. Because of this these deca-millionaires work hard and are careful with how they spend their money. This is a deeply intrenched lifestyle to them.

As I develop my assets, I like to think about this example from The Millionaire Next Door. It really makes me think and evaluate my goals and priorities before spending money unnecessarily.

If your goal is to develop a net worth of $1 million+ then you probably will have to prepare yourself for some frugality.

It is my belief that in order to become a millionaire, one must learn the value of time and money.

Just in case you're interested, here are some links to purchase the book.

MONEY Magazine: Confessions of a compulsive shopper - Jul. 21, 2005

I had to post this. She spent $50,000 on credit cards... Ouch

Methinks she is needs some money counselling.
She needs to get on all of the wonderful financial blogs that I'm getting to know and enjoy.!!

MONEY Magazine: Confessions of a compulsive shopper - Jul. 21, 2005

How would NO ADVERTISING affect your finances?

I must say, I love contrast thinking. Going to opposite ends of the spectrum usually gives a nice middle ground understanding of things.

HERE GOES:
What would happen to you and your spending habits if there was no advertising any where in the world?

• No TV Advertising
• No Radio Advertising
• No Newspaper or magazine advertising
• No outdoor billboards advertising
• No fliers or direct mail advertising
• No internet advertising (Noooooo.......!!) :)

A world of silence.

What would happen if you took away all of these stimulants and triggers to buy stuff.
You're probably sitting there thinking, "That's never happened in my lifetime!" Thus you have no idea how you would deal with it.

First of all, because your mind is so used to being hammered with advertising, you would immediately miss 'the noise'. You might even crave advertising for a while. Why? Because it's stimulating and entertaining.

After a while however, your mind would quieten down. You might even start to forget about some of your favorite ads and all the rest that bombard you day after day.

You would probably spend less money. You would probably impulse buy less.
Hmmm....

A quiet moment for reflection please...

Having said that, it's not likely going to happen. As you can see in my description I own an advertising company. I love communications.

I just wanted to point out a contrast. If you so choose to, you can filter out alot of the noise. Much spending/over spending is prompted by the advertising industry.

My pet peeve - people who tell how much it costs!

I try to avoid people who have nothing more to talk about then how much they paid for stuff. Sometimes out of sheer curiousity, I'll ask how much something cost. Otherwise I don't want to know. That's between you and the store. I always assume that you have more than sufficient funds to purchase the item and that you're going to enjoy the item for a long time.

If I am interested to know how much something costs, I'll go to the store and ask. If I don't think I can afford it, I won't make the inquiry.

Some people are fixated on how much they paid for things. They want to tell you the details of how they financed something.

Here's my opinion... if you're that concerned with how much you paid for something, you probably can't afford it or shouldn't have purchased it in the first place.

If you have more than enough money in place to purchase an item and have spent time planning the purchase, then it should be pretty comfortable for you to make the purchase. People usually talk about the price of things when they've gone out side their means to make the purchase. They're feeling uncomfortable and want to share their pain or discomfort with you.

I also hate listening to people who have saved 50¢ on a can of tomatos at the grocery store. If you have enough time in the day to talk about a 50¢ savings then I think you have enough time learning to make more money. People who make more than enough money don't brag about saving 50¢. I am more interested in how you learned to earn an extra 50¢ on something than how you saved 50¢.

Bragging about saving a small amount of money means that you have more of a contractionary mindset than an expansionary mindset. It means that you're always spending $25 worth of time saving $1. That doesn't make sense to me.

A contrasting example
A client of mine was driving me around in his $65,000 Mercedes, in St Pete Beach Florida. He apologized to me that the car was only worth $65,000, as if it should have been more. I was driving a Saturn at the time and was quite impressed with his luxury vehicle. He thought that I would think less of him for driving such a crappy car! My impression of him was that he must be pretty successful to have that kind of mindset.

Just another money blab...

How to feel rich . The first step to wealth.

Feeling rich is probably more important than being rich. Assuming you make enough money to live on and have some cash reserves in place to fend off problems.

As my business started to take off and I made more and more money, I started to purchase the most expensive things of what I wanted/needed. I'm more of a need based person. After a while I had purchased absolutely (the most expensive items) of everything that I've always needed. I went searching for the most expensive garden hose, for example. It was alot of work looking for the most expensive garden hose!

After a while, I started feeling like, "I don't really need much else." AND, "I don't really WANT much else either." At this point, I felt like I would if I had $10 million sitting in the bank. I didn't feel any cravings to purchase any more stuff. More money for me would just mean stashing it away.

HOW TO FEEL RICH EXERCISE
Here's an exercise that I have done by myself in the past. It's a simulation of what you would do if you had $10 million (or $100 million) dollars given to you, tax free.

HERE'S WHAT TO DO:
Take a pad of paper and write down
"I need to spend $10 million in the next 30 days"

Then you proceed to purchase $10 million worth of things that you've always wanted.
You must spend every penny of the money and not save anything. I do this because I'm assuming that I'll have future income to save etc.

The list might look like:
Pay off credit card debts: $32,000
Pay off house: $126,000
Pay off car: $19,500
Pay off lines of credit: $5,000

Now your debts are paid off.

You've only spent approx $175,000 on paying off debts.

Next you need to start purchasing the stuff you've always wanted.

Lamborghini: $350,000
New house: $1 million
Cadillac CTS Sports car $52,000
Boat
Seadoo
Cottage $250,000
RV $100,000
Most expensive garden hose!
etc
etc
etc
Total $10 million dollars of stuff purchased

Now your life style has changed quite a bit.
You own all of this stuff. You need to pay ongoing taxes and insurance on your new property and vehicles. You've got operating costs for all of your new possessions.

Oh yeah, I forgot to mention that you NEED TO calculate all of the ongoing time and money that it's going to take you to maintain all of these new properties and toys!!

Most people find it hard to spend the $10 million. Once they've taken 'ownership' of the new items, they all of a sudden don't really want them any more.

This is when you start to 'feel rich'.

The bottom line, being content with what you already have, is better for you mentally and financially, but also will save you tons of money in the future.

Being content with what you have means that you won't be constantly wanting to buy that new toy to make you feel better. That's a big part of financial maturity.

Thoughts?

Financial Maturity - What's the problem?!!

People ask me, why are you so concerned about financial maturity or money maturity.
It's one of my pet interests I guess. I've always been interested in the affects of money and people's lives.

I worked as a financial analyst in the early 90s' and learned a great deal of lessons from administering $110 million in debt for the company I worked for. At the time, the company was paying 12% interest on their loan. That's the equivalent of $13.2 million per year in interest or $1.1 million per month.

I scratched my head and said to myself, this company could buy alot of assets or salaries for $1.1 million each month. I learned about debt in a big way at that point.

I then asked myself what happens to people when they're in debt over their heads. So much of their disposable income goes to paying off the banks interest charges.
Because I was so horrified by the amount of interest companies and people were paying, I started to ask myself if these interest payments were really necessary? ie. were people and companies buying stuff they didn't need based on emotions? If you're not careful you can easily rack up some debilitating debt.

Yesterday I was reading another blog where the guy was talking about his debt problems and payments. He mentioned that part of his debt came about because he "HAD TO" purchase a TV surround system for his home.

I'll put it to you this way... if you're complaining about your debts, you DON'T NEED TO purchase a TV surround system for your house. That is not financial maturity.

It's my little pet theory that lack of emotional control leads to financial problems. If you can't control your desires, you're always going to be in trouble.

That's why I like to write about financial maturity. I'm hoping that maybe some might learn from my experiences and get better emotional/financial control over their situation.

Peacefulness and tranquility with out money?

On my trip I met some folks who absolutely amazed me.
They made good money, but were content to enjoy the beauty of nature each day.

They had a 20 year old TV with only 2 channels. They still use a wood stove, regular stove and microwave to cook their meals.
They grow their own garden and bake their own bread. They keep busy doing the "basic" things of life.

As I spent a few days with them, I questioned their lifestyle a great deal. Frankly, I haven't met too many people who still bake their own bread , and hang their laundry up to dry. These people were genuinely content to enjoy their natural surroundings each day. I was amazed. They hadn't been to a restaurant in several years. They hadn't been to a movie theater in about 15 years.

As far as people go, I would spend more time with them. They were pretty well grounded and stable people. They enjoyed visiting with neighbours and strangers. They enjoyed seeing the same birds and gophers etc each day.

The thing that struck me the most was their 'financial maturity' or attitute towards money. Because they enjoyed nature so much, they didn't spend much money on anything except basic food and utilities. The rest went to savings. They don't have any loans outstanding, so no pressure there. They didn't have this big need to go and buy electronics and gadgets. They didn't feel a big need to 'keep up with the Jones'. This was their genuine attitude and outlook on things.

It was pretty strange and refreshing and I thought I would take a minute and write about them here as they have a pretty unique perspective on how they spend their time and money.

Personally, they were a little too basic for myself, however, I learned alot about how to be more content with basic things from them.

Monty Loree


High risk auto loan company

Take control over collection agencies

In my new website, www.canadian-money-advisor.ca we are helping Canadians by talking about the laws regarding financial industry companies.
This page deals with Saskatchewan laws relating to collection agencies. I'm explaining what the law means and how it will help the consumer get control over that harrassing collection call.

You don't have to be harrassed by collection agencies. You can take control. Much of financial maturity is educating yourself as to your rights when it comes to creditors, collection agencies etc. The more you know, the better you'll be able to take control of your situation.


Canadian Money Advisor - Facts, History, Opinions and Comments about financial institutions in Canada

PayDay Loan News - Scary!!

Along with this press release, I saw a news item on CBC that talked about how PayDay Loan companies
are charging much higher than 60% interest rates on their loans.

60% interest rate is the highest amount that any lending institution can charge the consumer.
Payday loan companies are charging the 60% and then adding more on top for administration fees.
The CBC report sited that someone allegedly paid over $1000 on a $100 loan!!

Payday loans are the very last place you should try to get money. If you're even considering them, you should really take a look at your financial situation for a long time. Short term loans are going to be, by far, the most expensive.

Canada NewsWire Group