I know what you’re thinking… I’m going to go into a long monologue about the necessity of joining a network marketing company or having a blog or doing Internet or social media marketing to live a life of Financial Wisdom, right? BUT I’M NOT!
There’s a simple reason for that… ‘most’ people (97% of the public) have no business going into business for themselves. They don’t have the right mind set, or the fortitude to stick with it, or to be teachable, or the strength to see it through to the point where financial freedom shows up.
So… what I’ve put together here today is a list I gathered at a seminar (by James W. Rickard of the Stewardship Services Foundation) recently that may be the missing element for at least ‘personal financial stability’ that the majority of people can put to practice with a few shifts in organization and self control.
If put to practice you’ll find yourself free from financial stress, void of unnecessary spousal tention over money, and living a life of comfort and peace.
- Control your emotional spending. Never carry more than $50 in your wallet or purse (I recommend $20 for emergencies only) and if the item costs more then you need to either take a lap around the mall or the store or go back home and discuss the item with your spouse as to whether it’s ‘necessary’ or just something you ‘want’…
- Learn to save money. Put $100+ per month into savings. If you average a 7 1/2% return over 40 years, you will have at least $302,382 at age 65.
- Learn to spend less than you earn. (Proverbs 21:20) Leave a solid gap between your spending and your income. Put the extra away in savings so you have money for those unexpected expenses.
- Don’t finance pleasure items: vacations, cruises, time shares, boats, motor homes, etc… This needs to be non-negotiable.
- Have cash in an emergency fund. Set different goals as you go. Start with wanting to have $500 in an emergency fund account, then raise it to $1,500 and then $5,000 as fast as possible. Don’t use a credit card! Save up and pay yourself back for these unexpected expenses.
- Control your credit cards. The statistics are staggering! Over 200 million used every day. In 2001, $670 billion charged on credit cards. In 2008, $2 trillion charged on credit cards. Presently over $800 billion owed on credit cards. There is $373 million per day of interest income for credit card companies. The average household has 6 active credit cards. 60% carry unpaid balances from month to month. The average household is $800 in debt on credit cards. Statistics say that if you’re $5,000+ in credit card debt they’ll ‘have you for life!’ 17% is the average interest rate! Most just pay the $75 minimum monthly payment, and if they do only that it will take them 19 years to pay off, and they’ll pay $11,578 in interest. (I only use my debit card for ‘charging’ and I have the cash in my checking account.) Now put $75 into savings monthly for 19 years, earn 7% interest, compounded monthly, and you’ll save $35,000. Put $4,000 per year into the same account for 40 years, and you’ll have $875,000!
- Have adequate life insurance to protect you family. ($400,000-$750,000) I carry more…
- Be self-insured for life insurance by age 65 or retirement. This means that you have your car and home paid for and your pension fully funded.
- Have a solid retirement plan in progress by age 40 (hopefully younger). This absolutely takes discipline! Only 47% of people in companies with matching pension plan investing options actually do it! It’s stinkin’ free money people! Max this option out if you’re lucky enough to have this option!
- Own your home by age 65 or retirement.
- Have a workable budget. The key is discipline and control. Remember budgets are set up to track our spending patterns and then to set guidelines for spending wisely.
- Know that there is a difference between bad debt (credit cards and loans) and monthly obligations (food, utilities, necessities).
- Understand the TAX law as it applies to you. Having a home based business reduces tax liabilities significantly. Consult a home based business tax accountant about this easily overlooked benefit. (Matthew 22: 15-22)
- Have an estate plan that includes a will and /or a living trust. A living trust helps your loved ones avoid the potential long time delays that probate will force.
Here For You And Your Success,
PS There are so many ways we can improve our own lives, how about the people around us? Take a moment and share this post with your friends on Twitter and Facebook if you feel this will help people over come some of the hurdles of financial stability that we all need and deserve.
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35 Comments and Pings on 14 Truths To A Life Of Financial Wisdom
Great post Kary, I love it. I am able to do my online business knowing I am able to only buy things I really need. This post is great for anyone out there. I will be retweeting this and sharing it with friends. Great post Kary
Aaron Decker´s last blog ..How to Live the Dream
Yes, Aaron. Keeping spending under control with a business
is REALLY important. Balancing the things that your really
need vs the things we want without going into massive
debt is a challenge for many entrepreneurs. I try to purchase
things from the profits of my business and sales, reinvesting
it back into my business.
Kary
Some sound timely advice Kary.
As Aaron,I have already re-tweeted it and put it on facebook.
Especially in these times of financial instability for many,it’s great to read this again and live by these principles.
Thanks for the reminder
I appreciate your kind comment…
Keep in touch.
Kary
Hey Kary: Thanks for the financial planner advice. Check out the “Riches Man in Babylon” by Clausen. Thanks for the sound advice. Especially your 1st paragraph that 97% may not be entrepreneurs. Appreciate your share.
Your friend,
Arlan
Arlan, like most of my posts, I write
them as a reminder for myself…
Advice we can all live by for sure.
Kary
Hey Kary,
This is very sound financial advice. Thanks for sharing. Perfect timing for setting our cash flow goals for the month of August.
J
Make Money Fast
Carstarphen´s last blog ..Let Your Haters Be Your Motivators!
Some very sound advice Kary.
Those who follow it will keep out of some very common financial pitfalls.
Jon Ochs´s last blog ..Twitter Pay-Per-Click My Review Of TwitHawk
Thanks Jon!
Look forward to chatting sometime soon and
catching up.
Kary
This is such great stuff. Of course there is so much more you can add, but this is a great start.
Others that can be added is make sure you help your kids save for college. There really is no reason to get student loans, which interest rates have tripled in the last 5 years alone, from 3% to 8%. Crazy and unnecessary to start life in debt.
Also, never finance anything that depreciates, for example a car. I would say a house too, but that is a bit hard to save up for and purchase all cash. I am just against any financing or debt.
I will just repeat what you said because it is worth repeating, “if you don’t have the money for it, don’t buy it”.
Of course there is a lot more people can do and I
agree with training up your children with the right
mindset about money invaluable to their future…
Kary
Great stuff Kary.
I have a question that someone asked me recently and I wasn’t sure how to respond, so I’d like to run it past you.
“When your spouse is not in agreement with your choices to invest and spend what’s left, as opposed to spending and investing what’s left, what do you do?”
My response, “Continue to keep an open dialogue about it, showing the wisdom and factual results of such an arrangement.”
What say you?
Kellie
Kellie Frazier´s last blog ..What’s Your VPA 3 Key Components to Turn Dreams Into Reality
Hi Kellie,
I completely agree with your response. This is a very
tricky and common issue with couples I believe…
especially online entrepreneurs. Be a good listener
and do your best to be completely ‘present’ with
your family when you’re off-line and away from your
computer. Set up office hours and specific times
to be working on your business. That’s a start at
least.
Kary
Hi Kary This is a great blog..really appreciated the value here.
Kaye Flack´s last blog ..TalkFusion Webinars Squeeze Page
Hey Kary great post with some really solid advice man. Keep up the awesome content. Also a good habit is to take 10% of everything you earn and pay yourself 1st. That 10% goes into an interest bearing that is not touched. Thanks for the post.
Ed Reiner´s last blog ..Do You Make These Mistakes When Setting Goals
Hi Kary,
Love this post. It is both timely and practical. At one time we had a lot of credit card debt and we have been paying it off. We are excited because we almost have it paid off.
We always invested in our future and our businesses however creating credit card debt is the worse kind given the interests etc.
Three years into our current business we got rid of all our credit cards and now only use a debit card or the cash we have on hand.
It made a world of difference allowing us to finally free ourselves from that monkey on our back.
Thank you, your post will be of great benefit to all your readers.
Faith
Faith Barnard´s last blog ..Boosting Your Personal Branding in Social Media in 3 Simple Steps
Kary, you brought it home this week… You have so much in your heart to share, I always love to stop by and read your words of wisdom. Thank You so much today…
Grace and Peace, Tina
Tina Herz´s last blog ..Keep Your Priorities In-Line not ON-line…
HI Kary,
This is a very important point you make about how people handle their finances. We all need to get our house in order if we want to fully create the life we want as entrepreneurs. Thanks for the road map.
Kary,
Great basic steps to begin planning for your financial future. These are basic and can be expanded on as the need arises.
Not only are you reminding yourself, but you are also reminding us to stay on track and be aware of everything we do financially.
Thanks,
Val
Val Wilcox´s last blog ..Opening Doors Within
Rockin wisdom. When you referred in your post to proverbs 21:20 it reminded me of a book that all should read. “The Richest Man in Babylon.” great, timeless, biblical truths about money and wealth management. Awesome stuff Kary. Great change cause most of your posts totally suck. ;0p
Patrick McIntosh´s last blog ..Soccer Fitness For the Over-30 Crowd
Great wisdom and given in a way that can be understood and applied.
Love your post Kary. I wonder if you would have any recommendations on “on best practices” in the following situation. Because of the economical downturn, we had to close the business of my husband and had to look for other occupations. We do not have credit card debts, but we were not able to pay all our suppliers and taxes. They have been very patient with us. Now that we are in a new location and that my hubby has a new job (I am building up my marketing plan for my business), we still need to sell our house to be liberated from its morgage payments and to be able to begin to pay our dues. We are concern about the interest rates, especially on taxes. Is it any trick you could give us on how to avoid the heaviest interests. We are in regular contact with the officers to keep them updated on our situation. Many thanks in advance. I just love your posts you are such a great inspiration. Warmest regards, Evelyne
Hey Karey,
This is some real good practical information. I think financial responsibility all boild down to “discipline”. Can you discipline yourself and control those urges to not spend money when you don’t have it? Can you discipline yourself to save on a regular basis? Can you discipline yourself to pay off those credit cards as soon as possible?
Just my thoughts.
Rodney Gainous, Jr.´s last blog ..Decide Commit Succeed
Hey, Hey, Kary!
You know that Mentor Mama is really passionate about these issues! So, I salute you for reminding us all that we must step up and be responsible for our own financial freedom. As shallow as it seems, financial troubles are often at the core of discord in relationships….both personal and business.
As you discussed in Tips #7, #13 and #14, it is important to seek out the help of professionals, an insurance agent, an accountant and an attorney to support your efforts!
Thanks for your ongoing guidance!
Mentor Mama
Nancy Burke Barr´s last blog ..How Did You Miss It Mentor Mama’s Marvelous Mixer
hy kary,
fact is that most people know they should safe money for their retirement and security, be more disciplined but how many are capable of sticking to these plans!?
its a good reminder that´s telling us to take more actions!
thanks a lot for these inputs!
gerald
Gerald Gigerl´s last blog ..How To Create The Most Stable And Beneficial Relationships You’ve Ever Had
Kary Rogney your content never ceases to amaze me you have great ideas and you deliver value everytime.
I hope my blog looks yours soon.
Be Blessed & Have Success
Arthur Bernier Jr
Hey Kary,
There is a ton of helpful advice here. Nice to have your take on it. You make lots of sensible suggestions. And it is staggering how much the world is in debt.
Having a back up plan is always needed and I hoping having multiple income streams over my working life will set me in good stead when I eventually retire.
I over pay my mortgage every month and it is staggering how much interest you can save yourself.
Thanks for the great post.
Beth
Beth Hewitt´s last blog ..Easy Social Bookmarking
My Man Kary,
Thanks for the checklist… I personally know much of what you wrote, but here I am in debt with credit cards (not too much thank God), no will, very little savings, and no retirement plan.
It takes influential people like yourself to remind us what is most important in life, FAMILY and we as men need to take accountability and look out for our loved ones first and foremost. If we’re not taking care of ourselves, it will affect our family in a negative way.
Awesome Post,
Thanks,
John Engle
John Engle´s last blog ..The Fundamentals of Comments for Personal Brand Marketing!
Awww.. Kary what an AWESOME post! I agree in every aspect! These tips actually remind me of Start Late, Finish Rich by David Bach. Finding those little things that most think are necessities (which are truly not) and reducing or eliminating them can do increase your savings and all around budget tremendously! (I am proof to this)
Basically in his book he goes over your “Latte Factor” and how you can find these factors in your everyday spending. Those small things you buy daily that you can add up over time and create a massive savings, retirement and security to live a comfortable and happy life.
Thanks for sharing!!! Taking some of the new ones I learned here and implementing them!
Jennifer May´s last blog ..The Importance Of Branding YOU Around Your PASSIONS
Hi Kary,
Unusual and timely, you say. Unusual, yes. Timely. I have to differe with you here.
I would definitely recommend using a debit card . . no credit cards. I would say a credit card for a vacation would be permissible if you could take no more than two months to clear the debt.
Money decreases in value over the years so that I am not one to say SAVE YOUR MONEY. You need to invest in assets that are going in increase in value–not decrease. When I finished getting my med tech license, I got a job that was considered a very good job back in 1958 and my monthly check was around $300. To put any of that in a savings at that time would only compare to pennies today. . . . Today $300 would not pay for my monthly groceries and nutritional supplements.
Lottie Jenvey
special_images@yahoo.com
Lottie Jenvey´s last blog ..Giving Value
Thanks, Kary…These are some great lessons that we need to be made aware of or reminded about. Thanks for sharing such valuable information.
Wow, great post Kary! It’s always good to have a financial management list and this is a great one! I started saving last summer but I need to do it again!
Yes, we are absolutely in charge of our financial freedom (or lack there of), and this post is a stellar start for anyone looking to find there way. It really all boils down to making conscious choices, every single day.
Thanks for sharing this wisdom, Kary!
Beth Allen´s last blog ..Superfoods- Fuel of Today’s Superheroes!
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