I recently heard this quote from a close friend and it stuck in the back of my mind of how this very quote is one of the often misquoted verses from the Bible that sends a contradictory message regarding money and wealth.
Naturally, I thought it was necessary to set the record straight surrounding this quote and the poor message it sends that money is "bad".
Actually, the Bible verse 1 Timothy 6: 7-10 states, "For the love of money is a root of all kinds of evil".
What is the difference, you ask? Well, actually there is a huge difference. Money itself is not inherently evil. Money in the hands of the right person could be used to do all sorts of good. It is the 'love of money' that is the problem. A love of money causes a person to be greedy, power seeking, and negligent of other areas of his or her life.
So, remember this small change of wording can create a world of difference in your own beliefs surrounding wealth and money.
If your beleif is that money IS the root of all evil and that money is bad; chances are you'll go through your life creating that very thing in your reality.
Choose your words carefully.
Tuesday, May 11, 2010
Wednesday, April 14, 2010
Tuesday, April 13, 2010
Ms Penny Pincher
Day 53
Today I finally broke down and got a new mobile phone...I've been needing to get a replacement for a few weeks now. Reluctant in making a decision, this came with much conversation with those closest to me about either purchasing the latest intuitive gadget for internet access or sticking with my modest Boost Mobile phone and plan that has saved me significantly over the months.
The decision? I got the latest intuitive Boost Mobile...upgraded key pad and all : ) At a glance it looks similar to a Blackberry....but significantly less with no contract and huge monthly savings on the plan.
Even though my friend who accompanied me on my field trip today gave me a little teasing about my new penny pinching ways, I have no grief about this decision at all.
Actually, I feel secretly great about it and I'll share with you why.
Old Way:
On average I purchased 2 phones annually.
I purchased phones averaging $300 per phone = $600 avg/year
My contract for phones and the amount of usage for business on average $250/month
Total annual costs for mobile phones and service = $3600.00
New Way:
On average I purchase 2 phones annually averaging $80/phone = $160/annually
No contract.
My costs for unlimited text, local and long distance calls = $50.00/month = never more
Total annual costs for mobile phones and service = $760.00.
That is $2840.00 in annual savings...nearly $250 in monthly savings...
imagine having the extra near $3000.00 a year to invest?
...and that's exactly the new plan.
Denial into Dollars:
I used to continually tell myself that it's a business tax write off, however, the write off does not make me money (although I can still write off the $760 I'm spending annually)....investing the savings does; eventually paying me a passive income stream to cover my mobile costs while making me more and more money.
I'm just sayin...
Ms. Penny Pincher is taking it to the bank with her modest mobile in hand : )
Today I finally broke down and got a new mobile phone...I've been needing to get a replacement for a few weeks now. Reluctant in making a decision, this came with much conversation with those closest to me about either purchasing the latest intuitive gadget for internet access or sticking with my modest Boost Mobile phone and plan that has saved me significantly over the months.
The decision? I got the latest intuitive Boost Mobile...upgraded key pad and all : ) At a glance it looks similar to a Blackberry....but significantly less with no contract and huge monthly savings on the plan.
Even though my friend who accompanied me on my field trip today gave me a little teasing about my new penny pinching ways, I have no grief about this decision at all.
Actually, I feel secretly great about it and I'll share with you why.
Old Way:
On average I purchased 2 phones annually.
I purchased phones averaging $300 per phone = $600 avg/year
My contract for phones and the amount of usage for business on average $250/month
Total annual costs for mobile phones and service = $3600.00
New Way:
On average I purchase 2 phones annually averaging $80/phone = $160/annually
No contract.
My costs for unlimited text, local and long distance calls = $50.00/month = never more
Total annual costs for mobile phones and service = $760.00.
That is $2840.00 in annual savings...nearly $250 in monthly savings...
imagine having the extra near $3000.00 a year to invest?
...and that's exactly the new plan.
Denial into Dollars:
I used to continually tell myself that it's a business tax write off, however, the write off does not make me money (although I can still write off the $760 I'm spending annually)....investing the savings does; eventually paying me a passive income stream to cover my mobile costs while making me more and more money.
I'm just sayin...
Ms. Penny Pincher is taking it to the bank with her modest mobile in hand : )
Monday, April 12, 2010
"National Financial Literacy Month"
Day 52
Obama names April as "National Financial Literacy Month"; encouraging citizens to take responsibility for their finances during this economic crisis.
Check out this link to read full article in Forbes Magazine--
http://www.forbes.com/2010/04/13/credit-card-budget-income-forbes-woman-personal-finance-money-mistakes.html?boxes=Homepagechannels
other related links on this article which are quite interesting:
The One Big Money Mistake You Don't Want To Make
What The First Date Can Teach You About Love, Money And The Person You're With
Five Topics To Help You Determine Financial Compatibility
Practically Painless Guide To Managing Money
Are You And Your Partner Financially Compatible?
Do Men And Women Think About Money Differently?
Ten Questions To Ask When Hiring A Financial Advisor
Why Older Women Are Going Back To Work
Obama names April as "National Financial Literacy Month"; encouraging citizens to take responsibility for their finances during this economic crisis.
Check out this link to read full article in Forbes Magazine--
http://www.forbes.com/2010/04/13/credit-card-budget-income-forbes-woman-personal-finance-money-mistakes.html?boxes=Homepagechannels
other related links on this article which are quite interesting:
The One Big Money Mistake You Don't Want To Make
What The First Date Can Teach You About Love, Money And The Person You're With
Five Topics To Help You Determine Financial Compatibility
Practically Painless Guide To Managing Money
Are You And Your Partner Financially Compatible?
Do Men And Women Think About Money Differently?
Ten Questions To Ask When Hiring A Financial Advisor
Why Older Women Are Going Back To Work
Sunday, April 11, 2010
To buy or not to buy, that is the question....
Day 51
Question: Should an 18 year old, self employed college student, who is just establishing credit, purchase their first home?
This question was posed to me over the weekend. Owning my first home in my mid 20's, I can only speak from my experience as a young, single income homeowner as well as my experience of selling homes to young adults. Although liberating; for me, it came with much responsibility that at times I questioned I was ready for.
With that said, I would encourage the following to set the young homeowner up for better success in owning vs renting:
1. Have 8 months minimum reserves saved
2. Have down payment and closing costs (approx 3-20% of sales price) saved -- depends on fha or conventional financing
3. Have reserves saved for furniture, appliances, utility deposits, improvements
4. Purchase a home warranty and renew it annually.
You never know when an ac unit or hot water heater, roof leaks may present themselves; be prepared by protecting your investment with a warranty to help cover these expenses.
5. Have a consistent income. If you're self employed; please, please, please take my advice of suggestion #1 before purchasing a home.
6. Consider using the property as an income property by renting out a room or two. ***BUT put the money in reserves for investing back into your investment. DO NOT RELY ON THIS INCOME TO COVER YOUR MORTGAGE.
7. Have your taxes and insurance impounded into the mortage-it's ALOT easier to manage these costs by not having to pay a seperate tax or insurance bill.
8. Understand your investment and exit strategy.
When purchasing the home, know what the rental rates are for similar homes in your neighborhood. Maybe you live in the home the entire time before you sell or maybe you keep the home and rent it once you move; but, understand in advance, if you were to have to move on and rent the home, if the rental rates will cover your mortgage. Also, understand your tax liability on your investment. If you own your home for 2 years minimum as a primary residence you can avoid paying capital tax gains. If you do sell before, understand your tax liabilities!!
9. Consider purchasing a lower maintenance investment; ie patio home or condo.
Co-op living provides you with ownership opportunities with the common grounds, roof maintenance and replacement, blanket insurance policies, and other costs that are often times included in your monthly home owner association dues. This increases your monthly expenses on your investment, but can drastically reduce your risks of major costs to the up-keep of your home.
10. Understand your support and if you're in trouble, who is there to help you out.
There is alot of responsibility in home ownership. To go from living with your family to the responsibilities of home ownership is a big adjustment and takes much preparation and maturity. Set yourself up by being prepared. If you were to get in over your head, who is there to bail you out? If this list is limited, making sure the above is concrete is even more imperative.
Home ownership is a great way for our youth to invest in their future. However, learn from my generation's mistakes by being more conservative and prepared and not relying on credit alone to own a home. The responsibilities are greater than the upfront downpayment costs and fico scores to get your foot in the door. It's months/years of costs that extend beyond a monthly mortgage.
Set yourself up for success....rent until you're ready.
Question: Should an 18 year old, self employed college student, who is just establishing credit, purchase their first home?
This question was posed to me over the weekend. Owning my first home in my mid 20's, I can only speak from my experience as a young, single income homeowner as well as my experience of selling homes to young adults. Although liberating; for me, it came with much responsibility that at times I questioned I was ready for.
With that said, I would encourage the following to set the young homeowner up for better success in owning vs renting:
1. Have 8 months minimum reserves saved
2. Have down payment and closing costs (approx 3-20% of sales price) saved -- depends on fha or conventional financing
3. Have reserves saved for furniture, appliances, utility deposits, improvements
4. Purchase a home warranty and renew it annually.
You never know when an ac unit or hot water heater, roof leaks may present themselves; be prepared by protecting your investment with a warranty to help cover these expenses.
5. Have a consistent income. If you're self employed; please, please, please take my advice of suggestion #1 before purchasing a home.
6. Consider using the property as an income property by renting out a room or two. ***BUT put the money in reserves for investing back into your investment. DO NOT RELY ON THIS INCOME TO COVER YOUR MORTGAGE.
7. Have your taxes and insurance impounded into the mortage-it's ALOT easier to manage these costs by not having to pay a seperate tax or insurance bill.
8. Understand your investment and exit strategy.
When purchasing the home, know what the rental rates are for similar homes in your neighborhood. Maybe you live in the home the entire time before you sell or maybe you keep the home and rent it once you move; but, understand in advance, if you were to have to move on and rent the home, if the rental rates will cover your mortgage. Also, understand your tax liability on your investment. If you own your home for 2 years minimum as a primary residence you can avoid paying capital tax gains. If you do sell before, understand your tax liabilities!!
9. Consider purchasing a lower maintenance investment; ie patio home or condo.
Co-op living provides you with ownership opportunities with the common grounds, roof maintenance and replacement, blanket insurance policies, and other costs that are often times included in your monthly home owner association dues. This increases your monthly expenses on your investment, but can drastically reduce your risks of major costs to the up-keep of your home.
10. Understand your support and if you're in trouble, who is there to help you out.
There is alot of responsibility in home ownership. To go from living with your family to the responsibilities of home ownership is a big adjustment and takes much preparation and maturity. Set yourself up by being prepared. If you were to get in over your head, who is there to bail you out? If this list is limited, making sure the above is concrete is even more imperative.
Home ownership is a great way for our youth to invest in their future. However, learn from my generation's mistakes by being more conservative and prepared and not relying on credit alone to own a home. The responsibilities are greater than the upfront downpayment costs and fico scores to get your foot in the door. It's months/years of costs that extend beyond a monthly mortgage.
Set yourself up for success....rent until you're ready.
Saturday, April 10, 2010
T Harv Eker
Day 50
“There is a secret psychology of money. Most people don't know about it. That's why most people never become financially successful. A lack of money is not the problem; it is merely a symptom of what's going on inside of you."
T Harv Eker
“There is a secret psychology of money. Most people don't know about it. That's why most people never become financially successful. A lack of money is not the problem; it is merely a symptom of what's going on inside of you."
T Harv Eker
Friday, April 9, 2010
Financial Fitness Friday
Day 49
Pay off your debt first before saving.
I know, this goes against the grain of my own preachings of having learned the importance of paying yourself first. However, having been in great debt personally, I've learned a person is limited to getting ahead unless they pay their debt down before doing anything else with their savings, especially high interest debt. Otherwise, this alternate approach could end up costing you a fortune in the long-term.
For example, let's say you put away $200 a month into savings instead of paying off the balance of a credit card with an 18% interest rate.
Clearly you'll be building your savings, but the bad news is you'll be paying nearly 20 times more in interest than what you will have earned in your savings.
Following this routine for 5 years, you'll have saved over $12,000, but you'll owe over $18,000 (including some $7,000 in interest alone) -- leaving you more than $6,000 in the red.
Many of us have gotten ourselves in the credit crunch, leaving most in compromising positions and up to our heads in debt.
1. Put a plan together to tackle your debt first.
2. Next, focus on building your reserves (8 months minimum).
3. Then you can begin exploring your investment options and truly growing your wealth.
My advice?
For every dollar earned,
10-20 percent into paying off your debt
10 percent into building your reserves
*if you don't have enough left over for expenses, it's time to downsize, simplify and create additional income streams.
Once your high interest debt is paid down, continue putting 10-20 percent into building your reserves. Once this goal is met, you will no doubt be on your way to making yourself wealthy, by increasing your investments to pay you interest, rather than the other guys!
DECLARATION:
"I play the money game to win. My intention is to create wealth and abundance."
Pay off your debt first before saving.
I know, this goes against the grain of my own preachings of having learned the importance of paying yourself first. However, having been in great debt personally, I've learned a person is limited to getting ahead unless they pay their debt down before doing anything else with their savings, especially high interest debt. Otherwise, this alternate approach could end up costing you a fortune in the long-term.
For example, let's say you put away $200 a month into savings instead of paying off the balance of a credit card with an 18% interest rate.
Clearly you'll be building your savings, but the bad news is you'll be paying nearly 20 times more in interest than what you will have earned in your savings.
Following this routine for 5 years, you'll have saved over $12,000, but you'll owe over $18,000 (including some $7,000 in interest alone) -- leaving you more than $6,000 in the red.
Many of us have gotten ourselves in the credit crunch, leaving most in compromising positions and up to our heads in debt.
1. Put a plan together to tackle your debt first.
2. Next, focus on building your reserves (8 months minimum).
3. Then you can begin exploring your investment options and truly growing your wealth.
My advice?
For every dollar earned,
10-20 percent into paying off your debt
10 percent into building your reserves
*if you don't have enough left over for expenses, it's time to downsize, simplify and create additional income streams.
Once your high interest debt is paid down, continue putting 10-20 percent into building your reserves. Once this goal is met, you will no doubt be on your way to making yourself wealthy, by increasing your investments to pay you interest, rather than the other guys!
DECLARATION:
"I play the money game to win. My intention is to create wealth and abundance."
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