Sunday, October 31, 2010

Are you getting your personal financial advice from Yahoo?

Some may scoff at this, but my homepage is not set to Google. It is set to Yahoo. I like all the interesting news bits that they post on the page. I like the little part about "Trending Now". I welcome the outside information. However, I have to wonder, "Who is writing their personal finance section?"

Now, don't get me wrong, all of it is not bad. I like the series they have showing how people have paid down enormous amounts of debt. What I don't like is that these people usually have gone to extremes to do so. I don't know if you have to eat "old canned food" to pay off a $1,000 credit card, but if that's what you want to do, then go for it. I mean read this quote from, Debt Busters:

I can't buy clothes, no coffee out, no eating out. To save money, I've done the normal budgeting things like buying generic brands of groceries. But I've also started wearing all black and dyeing my clothes to extend the color. I've been re-gifting, growing my hair long to avoid haircuts, stuffing two loads of laundry into one and eating a lot of old canned food I've found in my cupboard.

This woman is beyond extreme.  She's wearing all black? Has she gone emo? I guess cutting out all of life's little enjoyments would depress me as well. I really want to know what is this "old canned food" that she's talking about. Was it expired and she took a chance? Was this her way of paying penance or saying, "Hey world, I lived life in the fast lane and now I'm taking a vow of poverty." I mean, what's up with that?

This woman's actions are so harsh, I wonder what she's going to do when she allows herself to start spending again. It's kind of like the Atkins diet. Don't eat any carbs! Don't even smell them! Then that one day you decide to take one bite of Aunt Betsy's birthday cake, you think, it won't kill you.  And the next thing you know you-are-in-the-late-night-take-out line-at-Dunkin' Donuts' scarfing down Munchkins and toasted coconut doughnuts.

If you want to read the rest of that article, you will see that they are taking paying off your debt to a new level. I'm just concerned that it's really not helping people. Wearing all black and reaching for the generic bin isn't going to help you survive.  Yes, you can strip away every bit of vanity or like the other family, you can start shaking down your couch for change, but will that really give you enough to make it when you retire?

When I first started reading about personal finance, I thought this was the way to go. Sacrifice! Sacrifice! Sacrifice! But you know what, I was wrong. Yes, you should make sound decisions when it comes to spending money, but you need to find a way to make the right type of investments in your future.  Hoarding change and selling your car may sound like a great idea. But what other ways can you make more money?  How can you increase your cash flow and your net worth?

One thing these articles never suggest are real ways to invest. They list stocks, bonds, and other forms of paper investments. The site even has a calculator on it to help you.  But I don't think they are really trying to help you. They have questionnaires that are supposed to help you assess your current situation, but they all seemed geared towards purchasing mutual funds, stocks, bonds, etc. I think these articles are bad examples for people who really want to increase their net worth not just pay off some bills.  

Here are some suggestions to getting out of debt without eating expired canned food and wearing all black:
1) Track your spending on an automated site. In a  previous post I mentioned that writing what you spend on paper is useless. You will either lose the paper or forget what you spent your money on.  If you automate it you can see a budget breakdown. Some programs can show you in graph form or in percentages exactly where your money is going.  You can use an iPhone ap that has been lauded as an easy to use system.  Or if you are like me and you don't own an iPhone you can try www.outright.com. They ask you for a credit card, but you don't have to actually tell them your credit card or banking information. Just bypass that part and use the system. 

2) Once you know where your money is going, decide what is really important to you.  Why do you want to get rid of this debt? What do you plan to do after you get rid of your debt?  It's one thing to have a plan to be debt free, it's another to have a plan to be financially free. Those are two different things. I think many of us focus on the first one and then we don't have a plan for the second part.

3) Be reasonable! A vow of poverty will not get you closer to your goal.  Focus on where you want to be 6 months, 1 year, 5 years and 10 years from now.

4) As you are paying down your debt, pay yourself first! I can't tell you how this idea has helped me.  I can quickly see my money grow and I feel good knowing that I knocked away at my debt and I have something to show for it.  The first time I paid off all of my credit cards, I had nothing to really show for it. I gave everything to the invisible credit card gods.  I was relieved, but then I was like, what's next? Put something aside for yourself. You'll feel a lot better!

5) Leave some room to play! Now, if you lost your job, I wouldn't suggest spending $50 on dinner.  But I will say you need some time to enjoy life.  Eating cat food or recycling leftovers to the point that you are taking chances with your health aren't really good for you.  You want to look at this time of purging consumer debt as a growing opportunity. If you don't find ways to release your past negative habits they will appear again.

6) Learn about investing! There are all types of investments you can make. There are so many that you probably don't have time to learn them all in one year.  I believe that if you spend your time paying off your debt and learning more about money and how it works, when you are debt free you will find out how to become financially free.

Know!
Empower Yourself

Saturday, October 9, 2010

You're Only 13 Years Old!

The other day I had a great conversation with my niece. I was telling her about the recent developments in my business. I also told her to think about becoming a millionaire. She gave me the usual arguments,
"I don't want to be rich, I just want to be comfortable."

"I think it's better to give, than to receive."

"Business hurts people."

The sad thing about her comments is that she's only 13.

At 13 years old she has already internalized a lot of negative thoughts about money. I know from talking to her mom that my niece is really good at saving money. She can save half a penny if you let her. I was talking to her about how she saves her allowance and if she can do that, then she could do a lot more. She briefly interrupted me to tell me that she doesn't get an allowance.

STOP!!! Wait a minute, this young lady doesn't receive an allowance? I'm not judging, that's not a bad thing, but how is she saving money?

She just saves money from her birthday and whatever change her mom allows her to keep if she runs errands for her.  Now, I was a bit shocked that my niece has the ability to save money for over a year.  She has managed to parlay the bits and pieces that she gets from her mom and turn it into a savings account. 

Then I told her, "It sounds like you are waiting on a paycheck! You are dependent on someone else to decide when to give you some money.  Do you really need to depend on your mom in order for you to make some money?"  My niece tried to hem and haw about the fact that she has money, but at the end of the day, she doesn't really have anything. She's learning to wait. She's learning dependence on the kindness of others to give her some money. 

My niece is bright. She's won writing competitions, swim meets, cheerleading competitions, and she's even assisted in summer youth programs.  I asked her what kind of skills could she use to make some money of her own.  See, she was getting on my case because I don't watch a lot of television. I really don't have time. I told her if she stopped watching television and tutored someone for $15-$20/hour look how much more she would have within a month. Now let's say my niece watches 40 hours of television a month.  If she took 4 of those hours she could make $80 a month then she would be a lot richer and she wouldn't be waiting on her mom.  Then I told her to take half of that money and spend it like crazy.  I told her to take the other half and put it aside to place in her 401k when she turns 16! Just imagine if my niece spent the next 3 years saving a minimum of $40/month.  By the time she is 16, she would have $1,440 to deposit into her 401K!!!! Hmmm....sounds good to me! That's a great start!

If making a little change on the side is great for Malia and Sasha Obama, then I think my niece can jump right on in! Check this out Sasha and Malia Learning about Finance!

Note: I copied and pasted these images from the internet. They are not mine.

Friday, October 1, 2010

Help my business sucks!!!! Great webTV!

This is the BESTEST TV show I have seen on the web!!!!!  I can't begin to say enough about Andrew Lock.  I found his show completely by accident. I went onto iTunes and I typed in m"marketing tips". Quite a few names came up, universities, the usual fanfare.  However, the catchy looking logo that said, "Help My Business Sucks!" screamed out to me. How could I not click on that catchy icon? 

That one click has changed my life.  Andrew Lock offers one tip after another that just blows my mind.  He has links, free information and more.  Andrew started this webcast in 2008, so I'm a few years behind.  Fortunately, he hasn't deleted his earlier episodes. I have started watching from episode 1.  I keep a notebook next to me and while I learn, I jot down notes and ideas. 

One of his ideas that has me dizzy with possibilities, is his episode about business cards. In Japan, a business card is your lifeline.  Everywhere you go, people carry a "meishi".  There are books written on the right way to exchange "meishi" with others.  There is a lot of bowing and so on, but what I started to realize was that I had a stack of cards that I haven't really used. I have sent people follow-up emails, notes, etc. But what can you really say to someone that you just gave a card to, chatted with for a minute and then went on your way?

Well, Andrew offers a great idea, instead of giving out your business card, why not give the person a copy of your book, a recent article you wrote for a magazine, a CD/DVD, or anything that provides them with information.  I love this idea!!!! I thought I was doing something by adding my picture to my business cards. Once again, that's really nothing new.  When I was selling for a home parties business, they often told us to give women a pendant that said, "Happy Mothers's Day" or "Breast Cancer Awareness Month" along with your business card. The women may wear the pendant or at least remember that you were kind enough to give them something that supports a cause.  All of these different types of information allows people to remember you more for what information you have to offer, than what you are selling. 

Andrew provides links to free online image sites like http://www.sxc.hu/, offers tips on how to draw traffic to your website, and even how to get speaking gigs. The best thing about it is that most of his content is user generated.  We can ask him questions and get top notch tips for free!!!

Andrew often says that his show is better than an MBA, I agree. His tips are real and can easily be put to use. 

I wanted to add the clips to this entry, but I was unable to.  Instead look at one of the episodes underneath this blog. 

Supersized Postcards, How to Approach JV Partners, Web Graphics, A StarTrek Themed Dentist, and a BIG Marketing Lesson from The Hard Rock Cafe

Episode #19 – Supersized Postcards, How to Approach JV Partners, Web Graphics, A StarTrek Themed Dentist, and a BIG Marketing Lesson from The Hard Rock Cafe