Have Yourself a Meaningful Little Christmas
Are you tired of the commercialization of Christmas?
When you stop and think of it, does it really matter if you buy people another toy/trinket or some other thing that has no lasting value? Do materialistic things really matter that much?
As I get older, I’ve been reflecting back on my childhood and Christmas in general. I don’t remember all the presents I got, but I do remember the quality time spent with family that I am fortunate to have. Making memories through experiences are worth much more than a toy or other tangible gift.
So I propose to you: this Christmas, give a gift that has lasting meaning.
Action Steps
- Sit down and hand write a note to the person you care about. Tell them how much they mean to you and why you feel blessed to have them in your life. Wrap this present and give it to them: it will go much further long term than anything you could possibly give them.
- If you want to give a gift: give a gift that keeps on giving… a gift certificate for a nice dinner out perhaps or another experience that will bring you closer with your family or friends. These memories are priceless.
- Give to others out of the kindness of your heart. It feels much better to give than receive.
Think Being a Lifestyle Entrepreneur is for You? Find out.
When I read Ryan Allis’s book From Zero to One Million , he spoke of a lifestyle business versus other business types. A lifestyle business is a business where you don’t bring in a ton of revenue, but you produce results that let you live the lifestyle you desire.
At www.Anywire.com , I found an article on how to become a Lifestyle Entrepreneur . This article asks you the questions you need to determine whether or not you would fit into this category.
Answer the following:
- Do you want to work fewer hours but still make good money? This can be achieved by increasing your earnings/per hour or by finding other ways to make more money.
- Do you want the freedom to travel and not be limited by geography?
- Do you want to do "work" that doesn’t feel like it, so that your business and fun blend together?
If you answered yes to one of these questions, then I strongly recommend that you take a look at the article Become a Lifestyle Entrepreneur: Complete Guide and 40+ Resources that really gives you all the resources you need to help you discover which type of Lifestyle Entrepreneur you want to be!
Happy Growing!
The Creative Economy: It’s Impact on You, and How To Profit From It
According to the blog Lateral Action we are transitioning into the age where creativity rules.
A country can produce two things: goods and services. It used to be that America was the engine for producing goods, but that has since changed as globalization has taken hold. Manufacturing jobs have shifted overseas, and these countries can produce the bulk of the world’s needs with maximum efficiency.
Since just about anything can be outsourced these days - from graphic design to accounting and assistants- there is little left to compete on other than our creativity. As discussed in the 4-Hour Work Week by Tim Ferris, Indian virtual assistants (VA) can work with a greater knowledge of research and technical skills than most American college graduates. In the book The Elephant and the Dragon , Robyn Meredith states that there are more college graduates in one province in India than in the entire United States!
So clearly, there’s no shortage of competition.
According to Mark McGuiness of Lateral Action, it’s no longer about being efficient with our time. He writes:
"Organization, professionalism, efficiency, productivity and initiative – these are becoming ubiquitous, and depending on where you live, there’s a fair chance someone, somewhere, can provide them cheaper than you can."
I see the way for you to differentiate yourself by developing skills that allow you to capitalize on your creativity. And don’t tell me you have none: everyone has a little! This could be by creating information products, designing something like a new product idea, or selling a service that fills a need within a niche market.
By discovering your own unique skills and making connections with others, you can work to provide more value to more people…and reap the personal and financial benefits.
In Your Court
How do you feel the Creative Economy will affect you?
In what ways do you feel you can capitalize on the new economy?
What are your fears or perceived limitations with moving forward?
Be sure to subscribe if you haven’t already, and leave your comments below…
Tip’d: The Best Community Site for Investors
Tip’d is an awesome site for both amateur and professional investors that provides financial news, ideas, and tips. The site’s goal is to foster a spirit of community around the subject of investing: think of the relationships you could make!
The site is much like Digg.com: Tip’d users can submit content to be "Tip’d" by other users, as well as tip content that they find worthwhile on the web. The more "Tips" an article gets, the higher it moves on the site for the whole community to benefit from. If you hit the front page, you’re onto something good!
Unlike Digg, where you have stories from nearly every industry, Tip’d is focused on the financial niche, giving all of us a valuable source for financial information. After all, we are all investors, and with the increasing changes in the world of money, having access to a resource like this is invaluable. My favorite part: the information is sorted for you, and the best rises to the top!
I highly suggest you sign up at the site and become a member of the Tip’d community with me. "See" you there!
How To Build a Better Budget
Everyone has a budget: a government, a business, or an individual.
So how do you budget your money?
There are only two ways to budget your money:
- Budget Deficit
- Budget Surplus
A Budget Deficit is when you do not plan well and spend more money than you make. This could also be that you fail to plan and instead rely upon yourself to guesstimate about how much money you will need for your bills on a monthly basis. If you run your finances like this, you’ll be in a world of hurt.
A Budget Surplus is making a conscious decision to pay yourself first by including in your expenses the payment you need to make to yourself every month. Budgeting in this way ensures that you have money that you are setting aside for yourself in order to build your asset column. This makes you more accountable for your expenses and makes you live on whatever is left over, instead of trying to save whatever you have after paying your bills.
Budget for a surplus : you’ll be glad you did! Use the money you set aside to build your asset column to increase your passive or portfolio income. This may take time, but have patience. Continue to invest in yourself and your financial education in order to make it happen.
Your Net Worth = Your Network
Have you heard the old saying "It’s not what you know, it’s who you know?" That was certainly true in the Industrial Age, but in the information age, the saying needs some tweaking.
Now, the new mantra is: "WHAT you know determines who you CAN know." And who you can know makes a difference.
A Great Transfer of Wealth
Many people today are hurting because of the new economy. It’s true that much of it was caused by greed and excess on Wall Street and in Washington, but there are also external forces, such as the rising use of the internet, that are transferring wealth away from one group of people and into the hands of the other.
On one side, you have those who believe in working hard, saving their money, and investing in a well diversified portfolio of mutual funds, bonds, and other paper assets. On the other side, are the business owners and investors who are erecting virtual real estate that is dwarfing the value of even tangible real estate.
How to Cope
I would consider investing time and money in building your network. Screen who you spend your time with carefully: are they moving forwards, or slipping backwards? Are they growing, or decaying? Adapting, or dying?
I know it may sound a bit harsh, but it’s true that there are those who are adapting or growing, and those who are decaying or dying. It’s the power of the mind now that will win out financially. In the Industrial Age, it was your labor that was valued. In the Information Age, it’s all about the power of your intellect, and your ability to make money work hard for you, rather than you trading time for money.
Assets & Liabilities
We all have a Balance Sheet. We have Assets and Liabilities: an asset being something that makes us money whether we work or not, and a liability being something that costs us money whether we work or not.
While this is a great definition for looking at our financial health in numbers, there is a variable that does not appear on your Balance Sheet. The intangible that is fast becoming your greatest asset: your network .
Your Net Worth = Your Network
Seek people who are leaders in their respective fields; those who are on the forefront of innovation and progress; the thought leaders and the doers. By being around the right people, you will think, talk, and act differently than the masses. And that, my friends, is the key to financial security and financial freedom .
Action Steps to take NOW:
1. Read posts at www.NetworkingEffectively.com to improve your communication skills.
- Learn how to Network from a professional. See what he recommends you do and say when meeting people. These skills are invaluable.
2. Attend a local Chamber of Commerce meeting.
- Meet with local business owners and find out what they are experiencing as problems and what trends they see. Listen more than talk: you have two ears and one mouth for a reason. You can pick up changes you should be aware of, or a business opportunity.
3. Join groups online in social forums.
- Make yourself known as someone who is willing to learn about what’s going on in the world today. Ask tough questions and seek areas of interest to you that you believe will be of importance to you now and in the future. Again, look for trends.
4. Increase your knowledge of the internet and its affects on business.
- Read publications like Forbes , Businessweek , Fortune , and The Wall Street Journal . Read top blogs related to different subject matters.
5. Attend conferences and seminars.
- These events are where the best and brightest come together. Share in their experience, wisdom, and insight. Take advice from those who have been there/done that, or are currently doing it. You’ll learn priceless information, and information is key in the new economy.
6. Meet with local leaders.
- Take people to lunch in your area that are business or social leaders. Talk with Economic Development or other local officials. Find out what plans are being made for your area in regards to business and economic development, and see how you can take part in improving the future.
Please leave comments about your experiences!
The 4 Types of People in the World of Business
Robert Kiyosaki, the international best-selling author of numerous books including Rich Dad Poor Dad and Increase Your Financial IQ , explains the four different types of people in the world of business as:
1. Employees
2. Self-employed/Small Business Owners/Specialists
3. Big Business Owners
4. Investors
Watch the video below for great financial training on each of these people directly from Robert. Once you are done with the video, I would highly recommend reading his second book Cashflow Quadrant for greater clarity on the advantages and disadvantages of being one or another of those people.
Fannie and Freddie: Tale of a Takeover
Fannie Mae and Freddie Mac, two of the nation’s largest companies that back mortgages, were taken over by the Fed as of Sunday 9/7/08. They provide funding for nearly three quarters of all new-home mortgages according to the Wall Street Journal . The government will provide nearly $200 billion dollars of capital to keep the two mortgage companies afloat.
What does this mean for your money?
Your dollar is going down in value…again. The more the government prints, the less yours is worth as they continue to add more supply to the market. Inflation will rise, and the those who are saving in low-yielding investments are having your wealth taken away. I hope the bailouts stop soon, we can’t afford this debt! For more on the story, see the Wall Street Journal article U.S. Seizes Morgage Giants. .
The Rules of Money for Gen Y
The rules of money have changed over time. It used to be that you could go to school, get good grades, get a safe, secure job (with benefits), and retire on Social Security, a pension, and personal savings.
As Gen Y, we realize this isn’t the reality for us. Safe, secure jobs are as ancient as the Romans and we know there is no golden parachute waiting for us in retirement.
So what exactly is the reality we face? In order to understand what’s to come, we must understand what’s happening in the global economy. We can look at the future of money by understanding the timeline of events that have led us to where we are today.
Bottom line: There are new rules of money for our generation.
In order to understand the new rules, we must first understand the 3 Types of Income :
- Earned
- Highest tax bracket. Federal, State, and FICA taxes erase about 50% of your total wages.
- Earned by trading time for money. There are only so many hours in a day, so there is a limit on how much you can earn.
- Portfolio
- Middle tax bracket. Long-term capital gains and dividends are 15%.
- Earned by buying stocks, bonds, mutual funds, CD’s, REITs, Notes, and other securities.
- Passive
- Lowest tax bracket. Taxes can be as low as 0%.
- Earned through wise investments in real estate and royalties.
In our generation, working hard and getting a high-paying job will make you broke. You’ll be working for earned income and pay more in taxes.
Your Goal: To turn your earned income into passive and portfolio income as fast as possible. In an age of rising inflation, the dollar will continue to fall and the only items of value left will be those true assets that you have.
The New Rules of Money…a Timeline
The rules of money have changed. But how did we get here?
Here is a brief timeline of events that have led the U.S. to be in the financial position that it’s in, and how it’s affecting you.
1913: Federal Reserve Bank Established Federal Reserve History
- This non-government, non-U.S., privately held bank would now control the monetary system.
August 14, 1935: Social Security Act signed into law
- This is the greatest pyramid scheme ever created. The idea was to provide workers with pay to help offset the expense of old age. The age to get full benefits was 65 when the law was first passed; in 1961, an Amendment lowered the age to 62 to get partial benefits.
1943: Automatic Payroll Tax
- The Federal Government needed money to fund WWII. In order to raise money, a law was passed that allowed taxes to be taken directly out of employees paychecks. This ensured the government got paid first before any wages could be taken home and spent on other things.
1971: Gold Standard Abandoned
- Under President Nixon, the U.S. is taken off the gold standard. No longer is our money backed by anything of real value. It is now a currency , subject to the ups and downs of the marketplace. The only reason it still holds "value" is because we all believe that it does. This will continue as we all play musical chairs…and the person left standing when the music stops will be the one holding a bag with worthless cash.
Watch an interview with Congressman Ron Paul about the monetary situation in the U.S. as a result of this decision: Ron Paul Interviewed by Mike Maroney
1974: Establishment of the 401(k)
- Workers longer life spans began to weigh heavily on the balance sheets of companies. They could not keep financing the lives of people for 15 or more years beyond their retirement. The Employee Retirement Income Security Act (ERISA) was passed to handle this challenge. Workers were now responsible for their own retirement planning: there were no more pensions to bank on. The problem? No financial education in school. This low financial intelligence has lingered through today, as our parents gave many of us old, outdated advice on the subject of money.
- The problem with 401(k)’s is that they are administered by financial institutions that diversify your investments in mutual funds as a "safe" long-term investing strategy. The problem is, not only are your investments not safe (they are only "diversified" amongst one type of asset class: paper assets), but they are taxed at the highest rate: earned income. So when you get to your retirement day and you think you have a big nest egg: wave goodbye, cause the government needs it’s share of your pie.
Stay up-to-date on here and listen to the financial news to know of what new law changes and other policies are put in place that can affect your money.
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