When Even the Rich Runaway...

Even the working rich are worried according to Forbes. "Housing has imploded, the market's a yo-yo, recession's in the air. And the 'working rich' are learning to do without." This according to Russ Alan Prince, president of a private wealth-research firm and author of the book The Middle-Class Millionaire.

Princes research points out that 78% of the Working Rich, identified as those with $1MM-$10MM in Net Worth and still working for a living, consider themselves "very or extremely concerned about their ability to maintain their current financial position." Furthermore he believes 21% of them are already reducing spending.

Compared to the first half of 2007, the last six months saw a 20% drop in Luxury spending. According to a source in the report, "Luxury consumers have never expressed such a dismal view of their financial status." This is a compounding issue for the economy as the Working Rich are known networkers. In other words they talk to one another before purchasing, which if sentiment is down can lead to a vicious circle of reduced spending. The spending is transitioning into higher perceived value items, felt to be less frivolous.

This is a big indicator the economy is in trouble as this group has been a leading indicator of things to come. Great time to make sure that your debt, budgeting and money management is firmly in place!

BTW - Broke Grad Student is running the current Carnival of Personal Finance with a great spin on the topic! Take a look!

The spending is a mixed bag of information though. Hi tech gagets continue to sell well, but Jewelry is down. Luxury car are stable, but sports cars are slowing.

College the Poor Kids Way

Mrs. Micah featured a post recently about a sister who was talked into co-signing for her sister's student loans. Not surprisingly this did not turn out well. But it raises an interest point. Many of us are ill prepared for our financial life when we go off to college, or on our own.

Oh sure we think we are. We get signed up for credit card, and maybe even get a FREE t-shirt for signing up! We probably then only use the card for emergencies...no pizza or beer left in the house! Taking our girlfriend out! Maybe even rent once or twice.

Pretty soon that one is maxed, bummer, luckily you get a second one to help pay the first minimum payments. If you are lucky this ponzi scheme keeps up until you leave school and get a real job. Now you are saddled with big student-loans and credit card bills!

Some kids are "lucky." Their parent fit the entire bill down to spending cash and help with those pesky Credit Card bills. They want their kids to have the best start possible. Unfortunately, either situation sets up for potential failure. You either engage in the workforce with pre-made debt chains, or no real sense of how life works.

Our kids won't be like this. First we have made a conscience decision NOT (and I smell the angry emails already) to pay for their education past High School. We will help them with 100% free rent and food, in exchange for chores if they chose to go somewhere close.

Why oh Why you cheap *#$^ !?

Every single kid we knew that went to college on the parent express left school 100% unprepared for real-life, if they graduated at all. They took basket weaving and Klingon 301. They never worked the menial jobs that give you an appreciation for honest work, honest wages.

No I don't want our kids saddled with an insane amount of debt leaving school either. I would rather see them take 5-6 years to graduate and come out 100% paid.

Everyone that I know paid their own way had it hard. But they studied hard and really wanted it. Guess what? When they did graduate they had a huge sense of accomplishment! They, on their own completed one of life's milestones! What independence!

I call this: College the Poor Kids Way!

To do this you can't just throw then in the deep end at 18. You have to make sure they know what they need to succeed in the world. The whys and hows of Credit. The basics of budgeting and money management. Even a bit about investing.

Their first real investment will be in securing more income by having a college degree. Their investment will be in themselves! And what a great investment to make!

In conclusion:

Don't think for a minute that this means we don't value a college education. There are way to many studies that show the value of post-High Scool Education. We just believe that giving the lifetime gift of independance, through life experience, is worth 5-6 tough, but managable years.

(please throw tomatoes..they are softer!)

Our First Winner and Best of the Week

Exciting photo finish as I had some more sign up for my RSS Feed rigt before 10PM PST, the time for the first drawing. The winner has been notified and I hope to get a quote in time for my mid-day post!

For everyone else there are three more chances and you are already entered! If you are already signed up, you are entered for all of the contests as long as you are a subscriber at that time! If you didn't sign-up yet still great chance to win! Sign up NOW!!!

The blog had a great week as week added a bunch of RSS and regular readers, we were quoted in a blog on msn Moneyblog and there were some great posts out there that I want to make sure you get to see!

Best of the Web:

• Mrs Micah - She had a great post about people scrapping her site. This is where sites use code to use your posts as their own, She even included a great form letter!
• ShoeMoney - A great piece about Ringtone scams, greedy News companies and one of the funniest clips EVER about Spam! Do not watch it while drinking Milk as it will come out of your nose!
• My Dollar Plan - Did an amazing job pulling together a cool list of the most popular Personal Finance Blogs by their RSS numbers. We aren't there...yet! But a great "To Read" list.
• Paid it Down and Moving Forward - Sharon does such a great job, she wrote a post that really hit the reason I don't like Dentists...
• Birthday's!!! - Both Need to be out of Debt and Plonkee are celebrating First Blog Birthdays. Congratulations, and Thanks for all of the great insight!

Our Most Popular Post of the Week:

• Mortgage Crisis Vs. Integrity - From the link on msn, this brought a lot of people (for me anyway :0 ) to my Blog!

Milestones:

• Second time on msn MoneyBlog! (Officially beat to death, I know!)
• Biggest Individual day ever at 90 visitors (Inching towards the 100 mark!)
• Over 9000 Page Views
• Over 3300 Visitors!
• Our First Poll Showed that Classical and 60's Music are your favorite to work on you finances by! Thanks for voting!

That's the week that was. There are some great links to check out to help budgeting, money management and your finances!

Dealing With Budget Windfalls

Some of us have irregular pay involving bonuses. These are often based on cryptic calculations that involve the Mayan Calendar and a jar of Mustard...In other words you can't count on them. Sure you might have a pretty good idea, but it is hard when you are expecting one amount and another comes in.

Many with this sort of Bonus don't budget it even though it can be up to 30%+ of our pay or we budget at the lowest imaginable payout. The reason is the last thing you want is when you finally get the check to be disappointed. I have been there. One time I was sure my bonus was going to be $10,000 based on the previous year. When I got the check it was less then $5000, still a great amount...unless you wrote checks or planned out more!

This post came up because I was reading a favorite Blog "Paid It Down and Moving Forward" by Sharon. She and Hubby received his Yearly bonus and she is now Consumer Debt Free (Way to go Sharon!) and well better funded in their Emergency Funds. They also bought one thing; A Dell laptop. A very nice purchase to help her with her Blogging and other needs. While she didn't get beat up her readers, I have seen others that have been, with statements like, "You aren't Serious about getting out of debt!"

Here is what I suggest about these, windfalls be responsible...to a point! Remember, these aren't gift, this is part of your pay. You basically have had it held until the end of the year. You haven't been able to spend or invest it or pay for any little extras. I like to look at every bonus in three buckets; Near-term, Medium-Term and Long-Term. I try to get about 1/3 to each bucket as well.

So this process begins when you are doing your yearly budget. What are you expecting to get? Not the best case but not $0 either. Then I look at what yearly bills I have. Will the bonus cover that? What is it doesn't? In our case, Property Taxes and Christmas. My bonus should cover those, but in case it won't I plan out how much per month I need to put into achieving that amount and pay towards it. When/If the Bonus arrives I fully fund it.

When the money arrives I fund those yearly bills first, then I look at my near-term needs. Any Bills that is would help to either catch up or get ahead on? If so I do that. Next-up, I start working, or reviewing my Baby Steps. Is my initial Emergency Fund fully funded? Do I need to catch up on any bills that aren't urgent, but are important, like car repair, new tires, etc..

After that I jump into the big pool of Baby Step #2, paying off consumer (non-mortgage) debt. If, and only if, that is all done, I suggest getting something that is in your "Would be nice stack." I would put a limit of no more than 5% of the total, it can even just be part of a uber-vacation fund you are saving for! The reason is that If we don't treat our selves every once in a while we will blow it big time at some point! Like a good diet that Ice Cream Sandwich won't kill you once a month or so...every night though...

Beyond that I would suggest you work the rest of the Baby Steps!

So Here is that Order Again:

• Yearly Bills
• Near-term needs
• Emergency Fund Baby Step #1 - Initial Emergency Fund
• Important, but not urgent bills - Tune-up, Car Repair, Piano, etc
• Baby Step #2 - Pay off as much consumer debt as possible
• Get something that is in your would be nice list - Not to exceed 5% of bonus Total
• Baby Step #3 and Beyond...

I am not a financial council. I am just someone who has had a lumpy income for the last eight years and made all of the mistakes you can! Windfalls don't happen everyday! Go get advice if you want it. Just get out your Success Map, Budget and work your Money Management!

Congrats again Sharon, I loved this line from her Blog, "while it's WONDERFUL to be cc and car loan free, we will not lose focus and will continue to SAVE. We will NEVER, and I mean NEVER have credit card debt again."

Don't forget to sign up for my email RSS feed for a chance to win some great software from FruitfulTime, a $50 Value!

Giving Away $50 Software and Best of the Week

Great week all around for the blog we had our biggest single week ever with Traffic, began our first RSS Signup contest, had more comments then ever, AND read some truly great posts out there this week.

First on the RSS signup contest, there were some questions emailed to me. The contest will run for the next four weeks. On each Saturday night during the contest I will run a list randomizer to pick a winner from my Email RSS list. Unfortunately there is no way for me to pull the regular RSS list as well, so if you are a standard RSS reader, just sign up for the email version to enter yourself in the contest! Second there is NO cost to enter, just sign-up! And last NO you don't need to enter every week, just once and you are in for every drawing. So enter early, to be entered into all of them!

Next it is time for my Best of the Web:

• ShoeMoney - A great Post/Video this morning. A Rap about SEO (Search Engine Optimization). Great starter course in the shape of a Rap tune...pretty original, and catchy!
• Collecting My Cash - This post shows really well that good people are hard to find, but you better do whatever you can to keep your Great people, which Wealthy! is...of course!
• Catherine Lawson - A Total favorite blog (and person!) had a neat article talking about Bands blogs. Being a musician at heart, if not at practice, this had great points for all bloggers!
• Ian Denny/ Phoenix From the Ashes - Every time I read his blog it feels like I am reading the beginning chapter about a future king of the business world! This lesson is about Cash Flow. It is written in the Business Sense but it plays the same for all of us.
• John Chow - John is one of the most successful bloggers out there. In this post he explains why you should set up your business separate from yourself.

The Most Popular Blog Article of the week according to Feedburner:

• My New E*Trade Account Sucks - STILL all messed up by the way! This is tomorrow's lunch time fun!

Milestones:

• Over 8000 Page Views
• Over 2800 Visitors (more than 500 over the week!)
• 120 posts!
• First RSS Contest!

That's it. There are some really links to check out to help budgeting, money management and your finances!

Five Great Ways to Sharpen the Saw

I am a fan of Steven Covey's "7 Habits" Book. All of the tips are really helpful to see you become more effective.

For me though, if you really want to make some movement in your finances, budgeting or life in general, one step more than others gets ignored. And it is a perfect Saturday topic...#7 is "Sharpen the Saw."

This comes from a story about a lumber jack that is sawing harder and harder and just not making the same progress as before. When someone asks if he has sharpened his saw, he says he doesn't have time, he needs to saw.

I am really notorious for doing this...getting so myopic that I am only focused on the trees, not the forest. I need to remind myself that a well-timed break can actually save time sometimes! I this spirit I offer Five Great Ways to Sharpen the Saw up and get you back to top form in no time.

Saw Sharpeners:

1. Exercise - I know, half of you jumped to number two, but it is true. Not only is it good for you, but it can take your mind off your troubles, even if it is 30 minutes on a elliptical or walking around the neighborhood.
2. Hobbies - I can tell a real difference in what I am getting done now vs when our little Monday and Friday Golf game was going on. I am not the only one, my wife said just last week, when am I going again. Luckily this one gives me a little of number one as well.
3. Take a class - On something 100% not related to work! Non-credited if needed. Like to cook, take a once a week French cooking class at the local Community College. Learn auto repair. You'll actually save yourself money in the future!
4. Meditate - Oh now I've lost you :) It does need to be in an ashram in the mountains, just sit in a hot bath-tub and clear your mind...you too guys. The ladies have it right, a hot bath can really relax you. Let your problems float away.
5. Read - This is something other than the sports page, or the grocery coupons. Actually go to the library! There are great people who work there (like Mrs. Micah) who are there to help open your mind. So I don't go ing a rut of reading the same thing, I will ask the librarian, what's cool, what are people talking about? I also like Biographies as it gives you real world example of people that have gone through either similar issues or even worse and come through.

In a 24/7/365 world we need to break every once in awhile, except from this blog, read it everyday :) Seriously though just clearing away a little of the mind clutter will really take you much further, much faster, whether it is life, budgeting or managing your money!

Most Common Financial Mistakes to Avoid

In Personal Finance for Dummies, by Eric Tyson they discuss some of the key traps that people fall into with their personal finances. I know these series of books have a mixed reputation, but I like his personal writing style as it is informative and yet fun to read.


Here are the Top 10 Most Common Financial Mistakes to Avoid with comments by moi:

1. Not Planning - Sounds basic, but I read about so many people who are only focused on their debt. That's great, but it is only one part of your financial picture. Failing to plan really is a plan to fail. Get a Success Map in place that lays out your next 3-4 steps at least!
2. Overspending - Um...yup. That's bad! Basic accounting, regardless of what web companies used to say, clearly shows that you have to have more coming in then going out. Positive Cash flow. You can borrow for a time, but no flow...no go.
3. Buying on Credit - See above. A cash management system can literally save you thousands a year. I credit this as the single best move we made when we turned the boat around. We generally die from 1000 cuts, not an enormo blow out. Paying for dinners you had five years ago is pretty silly.
4. Not Saving Early Enough for retirement - Guilty. "Don't worry I am gonna die young and leave a good lookin' corpse!" Well think of it this way...If you save early and often and you are that 0.001% that won't need the funds, you can leave the money to relatives or a great charity. If you wrong, you get to eat Meow Mix for 20 years :)
5. Falling Prey to Financial sales Pitches - It is the herd mentality in us. No one wants to be the last in to a sure thing. Stock tips, unless you have illegal knowledge, are gambling. Even worse are the annuity sales people that get Grandma to sign over the mortgage payments.
6. Not Doing your Homework - Don't be lazy with your finances. It won't miracle itself great. I know so many people who either have their 401K at a way too conservative number like 90%+ MMA funds, cause they are afraid to lose anything and those the are 90%+ in high risk high growth funds. It needs to be a balance, depending how close you are to retirement. Take the time to read everything and ask questions. At our 401K meeting no one asks any questions! Or they ask questions like...why is this down? A single extra percentage can mean thousands in your fund when you retire.
7. Making Decisions based on Emotion - Another one I see, especially right now. a very nice lady in her early thirties in our department saw her 401k down 8% and wanted to flip everything to low-yield bonds. Another was gonna change their allocation every quarter depending on what was hot in the previous quarter. Chasing winners is a fools errand, don't do it.
8. Not Separating the Wheat from the chaff - This refers to following advice from a single voice...like me! Get a bunch of different opinions, find someone you trust. Don't just take the first advice you hear.
9. Exposure to catastrophic risk - Make sure your insurance is up to snuff. It is horrible enough to lose everything, but t have to start all over as well is unthinkable.
10. Focusing too much on Money - Don't be a zealot! you don't really need to track who spent what on gum. Also money needs to be the ends to a mean, not the other way around. It is important, especially when you don't have it, but your relationships are far more valuable!

All in all a pretty darn good list. I have hit every single one of these mistakes...multiple times on some of them. I am not a financial planner just someone in the same boat as you. The important this is to be in charge of your Success Map, Budget and money management, not to let them be in charge of you!

Any other common mistakes that you have made? Comment! Share!

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Listen While You Work

OK this a Bizaro-World post that fits into the "Random Acts of Silliness." As I was paying bills and getting ready to blog, I turned on iTunes as I do when I write, and I began to wonder if I am normal, well as normal as normal gets. I wondered, "What do others listen to when paying Bills or Blogging."

Now, I thought, that could be a fun Poll!

For me, I have always been tied to music as a student of music or Professional Musician (another oxymoron!) or like now am tied to music even in marketing, so I tend to have music playing all day as it helps me concentrate.

I also have the CD collection of a schizophrenic monkey...I know everyone says that, but I do. I have David Cassidy and then Danzig is the next artist!

So I looked at my Top 10 Songs played this month (artist then track):

1. Enuff Z'Nuff - New Thing
2. Beatles - Mean Mr Mustard
3. Beatles -I Me Mine
4. Blondie - Dreaming
5. B.W. Stevenson -My Maria (this is the Original version!)
6. Racer X -Heart of a Lion (Huge Paul Gilbert/Anime Fan! - Hence the nom de plume)
7. Weird Al - Canadian Idiot
8. Jerry Reed - She Got the Goldmine (I Got the Shaft)
9. Missing Persons - Words
10. Beach Boys - California Girls

So how about you? Listen to anything doing bills? Something happy to feel better, or blues to wallow in the sorrow or Alarming ARMS?

Budget by Beatles? Money Manage by Monkees? Saving by Santana?

Fill out the Poll and if you use other comment here to share!

The Five Levels of Wealth

In the "Complete Idiot's Guide to Getting Rich" the author Larry Waschka describes five separate levels of wealth.

This book grabbed my attention when I bought awhile ago, frankly because at the time I though, heck if an idiot can do it, I'll be a bajillionaire! Not so fast Wile E Coyote, there is the little issue of following that ACME plan!

Here are the paraphrased outlined levels:

1. Level 1 - You are able to maintain your standard of living while still saving your Target Saving Goal, which is the annual amount needed to fund your retirement.
2. Level 2 - Your Investment Portfolio (could be 401k too) is large enough on its own to deliver a return large enough to cover your TSG and keep up with inflation.
3. Level 3 - Your portfolio returns enough to cover your desired lifestyle and inflation.
4. Level 4 - You have enough assets to produce a return big enough to increase your lifestyle, now and in the future, while keeping up with inflation.
5. Level 5 - You have enough assets to produce a return well beyond what would could ever spend. You no longer have to work and can make large charitable gifts.

Quite a gap between Level One and Two, but this list makes sense from an investment focus. Once we are through Baby Step #2, paying off our consumer debt and Baby Step #3, saving 6-months worth of expenses we should be able to apply our snowball to reaching Level One.

Level Two is pretty tough. Given that we will try to deliver 8% returns we will need to have 12.5x our savings number to reach the goal. Say I wanted to save $20,000 per year, which means that I would need $250,000 saved. Not impossible, but like I said tough...

Level Three is gonna require some extra muscle. To replace $140K salary we would need the 12.5x again or $1.75 Million! To hit this I need to save $70K per year. Now compounding really helps here so it won't be actual salary savings used to do that, but it won't be easy at all.

Level Four is kind of based on your lifestyle choice, so if you have a high three reaching four is probably off. It is just you definition of what big is. For sake of comparison say I would like $200k. To pull that off I need a cool $2.5MM

Pipedream time. Level Five. Time to open the RacerX PF Memorial Library and Grille (the 'E' makes it Classy). I am saying...$100MM.

That is a fun exercise, but it really doesn't meet my personal goals. My goal is simple. Make sure that my family is taken care of and that we can spend our twilight years in comfort but not ostentatiously.

The only way we are gonna get there is to have that plan that is always a few steps ahead of us! It takes planning, budgeting, money management and most importantly...patience.

Debt Chain Freedom

Have you ever thought about quitting you job and doing something else, like writing or gardening or even working with the less fortunate? Why don't you?

Probably for two reasons: one, you have debts; two, you don't have the money to do that.

Those are the physical manifestations of having debt. Real life debt chains. The only way to free yourself is to break those chains.

To break the chains first you must Visualize your Debt. Think of every dollar owed as a link in the chain, every different debt is a chain each holding you down like a staked balloon. So if you have four credit cards to pay off, imagine four chains tying you to the ground.

I personally like to look at each of my debts that way. For example, I received my bill for my CitiBank Platinum Card. I continue to make the minimum payment on this as it is not my top snowball debt, yet! My bill showed I owed $9119. If i think of every dollar a 1 inch link, that is 759 ft of chain! But today I paid off $313, or 26 feet! so after I paid this I literally imagine cutting off that 26 feet of heavy rusty chain that was holding me down!

OK, I know it sounds weird, but for me I like to feel the following:

1. Progress - Thinking about cutting of the 26' of chain feels like real progress to me.
2. Value - I am freeing myself inch by inch! I am buying my freedom at $1/inch!
3. Keeps me in Check - I don't want to add another inch to these heavy oppressive chains do I? So why would I take on extra debt?

For me this has really helped, just paying off dinners that I had 5-years ago doesn't make feel better. But every time I retire $1 I really do feel lighter!

Last whacky tip. Actually go to Home Depot or your local hardware store where they sell chain by the foot. Find the heaviest chain you can and buy one link. They will look at you a bit strange, but then keep that heavy piece of chain on your desk or wherever you do your bills. Every time you pay off even $1, pick up the link and feel the weight and think about that manifestation falling off of you. If you are tempted to spend, do the opposite, image all the extra feet of that chain tying you down.

This is a quick visual and sensory piece of conditioning that can help you stay on budget and manage your money better.

Be Treated like a Credit Card Superstar

Credit Card companies are raising their rates, service fees and anything else they can, especially those that need to pay their way out of the sub-prime loan mess they created. Guess who is paying for that mess...you. That is unless you stand up for yourself.

In 2004 the average cost of customer acquisition for a regular credit card was $100-$120. A Platinum level customer $150-$200! And this was before the credit crunch. These figures are going up...way up.

It is the law of diminishing utility. Less available good customers are available, as they already have cards, multiple actually. However the credit companies have to still hit their numbers for Wall Street so what did the do, they expanded the available customer pool by lowering barriers to entry. Lower income, lower FICO, etc.. But now that has backfired so what can they do...steal each others customers and charge their current ones as much as they can.

Have you seen your offers lately? Are they getting bigger or smaller? It is a great way to see how creditors see you and your file. Read them! Look at the offers and rates. Are the terms generally improving? If so you are one of those that they want. Now that you know it, it is time to get a little Lindsay Lohan on their butt :)

Let me stop here and explain something...to have leverage, you have to have to be one of those coveted customers. Good (but really doesn't have to be too high) income, good credit (720 FICO) and a decent amount of credit longevity, say 5-10 years of paying regularly and only 35% or less utilization of the credit. If you aren't start working to get your FICO up to that semi-magical 720.

So ,you just got the BofA letter that says the charges are all going way up, what do you do? First really review the changes and see how they will impact you. No use getting upset if they just increased your late fee, and you are never late! However, this doesn't mean that you should call.

• First know what you want, or what you will take instead. - They can't take the charges away, OK, what can they do with the APR% to compensate! Can you get a longer Grace period? What else (bonus points) can they do?
• Call Customer Service - Explain that you do not want to be affected by these changes, and if they insist you are considering closing the account. Usually they will send you right to retention. If not, be very pleasant and ask customer service what they can do, if they say that they really cannot do anything it is policy, etc..Ask to speak to the manager. Once again as pleasant as possible!
• Management - Explain again in detail what was discussed, they will usually have the information, so don't try to stretch the truth at all. They will 99% of the time cough something up. Usually a few APR points to retain you. Bargain for as much as possible! If they just shut you down, explain that you are very disappointed and that you will have to really consider closing the account (But do not close it!)
• Work your Competing Offers - If they didn't do what you needed the next time you get an offer from a competing bank that is close, call them and ask them to beat your deal! For example, "Tom I really like the offer, but I get 3% better from BofA and xyz bonus, what can you do to get my business!"

The point is YOU have the leverage not them, there are a lot of banks that want your business...including your own! Get what is yours and don't just accept your fate! My point isn't to pick on BofA, this is and will happen with all major banks, just remember, if they lose you it costs them $200 to replace you!

Over the course of 20 years being proactive to get the best deal, with a little negotiation, can save your budget and you significant money.

KISS me Wealthy!

I think it was Sleeping Beauty where the all the poor Girl needed was a kiss, from Prince (not the Prince...nor Morris Day and/or the Time, that's another story). I am pretty sure it was because her family forgets to invite the crabby next door neighbor to a party.

Well a KISS can help secure something in life, wealth. But the one I am referring to is the acronym: Keep It Simply Stupid!

You can over-complicate budgeting and money management to the point where you literally cannot succeed. The first budget I did after our middle-one was born had 373 line items! I had a line item for...gum!

What this really meant though was I had 373 potential failure points and only 1 (meet budget) success metric. Now here is the balance:

Failure Points - Exceed budget

Success metrics - Each of my Top 10 goals, (10 success metrics); Meet my snowball target, pay all of my bills, etc..

I think you get the point. These are very easy to understand success points that allow for creativity to achieve the goals. On top of that, the chances for success well outnumber the chances for failure. Success breeds success. Appreciate your successes and embrace them and you will have more.

In relation to finances, embracing KISS will make it easier to do the things you need to do to build a strong financial future. Budget, Saving, Paying off debt, Planning for retirement and Building a wealth portfolio real isn't that hard. It just takes making 100 right decisions a day.

If you are going to be successful you have to make the correct decisions...not every time, just more of the time. You can do it, Just Keep It Simple Silly (I don't think you are stupid!)

100th Post Spectacular

This is the 100th Post for the site. Kind of a milestone for me since I really didn't have a plan to start. I enjoy writing and I always enjoyed personal finance as well, though you wouldn't know it from mine!

At 100 posts averaging 350 words per (and I think I am higher) post, what does that word count equate too. Interested I looked it up on Fiction Factor and here is what is said for 35,000 words:

Novella 20,000 - 50,000 words. - Although most print publishers will balk at printing a novel this short, this is almost perfect for the electronic publishing market length. The online audience doesn't always have the time or the patience to sit through a 100,000 word novel. Alternatively, this is an acceptable length for a short work of non-fiction.

Cool huh? ..."this is almost perfect for the electronic publishing market"...Hey that's me!...an acceptable length for a short work of non-fiction...Me too!

Given that if this was a TV show they would do some sort of retrospective I thought it would be fun to pick my 5 favorite posts over the last 100 and give a line or two of background on them. I always wonder what influenced someone to write something, maybe you do to. Without further ado:

1. "Personal Finance by Michael Scott of the Office" - This is by far my number one read piece, probably because it got picked up by msn-money. I love The Office, both versions as it was a super UK BBC series first that I started watching on BBC America. This episode introduced the phrase to our house of "Things that no one needs, like back-up magic sets."


2. "The 861 Tax Argument Brought to You By Wesley Snipes" - I wrote this as my second daily post because I was looking up something else and ran across the Snipes story. Fascinated I hit up Wikipedia and looked up the tax argument. This was huge for two weeks with search for me...weird. The ones I think will really run don't, and then this takes off! A side note: He did get off of the Felony charges and was only convicted of three misdemeanors.


3. "Top Personal Finance Necessities" - I think while not earth shattering was probably a favorite of mine because it gave me a chance to show my entire philosophy, at least for those starting out. Never got a comment! You never know what's gonna resonate...


4. "180 Degrees in less than 180 Days" - Great Idea from Simplicity in Kansas (which is an amazing blog BTW). I like it because it gave me warm and fuzzies writing it thinking about how far we've come.


5. "We Saved 33% on our Grocery Bill" - Good solid advice on saving money on a big budget item. Wish I wrote that well more often!

Based on that I have learned posting the first 100 articles, I hope the they continue to be of service, or even lighten you day a bit! Budgeting doesn't have to be hard or painful or a prison sentence! It, with active money management and a good Success Map can lead you to reaching your goals! Can't wait to bring you another 100!

And to the 2,000 guests that have visited, and the next 2,000 to come - THANK YOU!

Carnivals and The Wall Street Journal

There are some really great Carnivals going on out there today, It is making me forget it is Cold outside today!

KCLau.com is running a fantastic Money Tips Carnival. It also features our Top Personal Finance Necessities post. Check it our tons of great articles to help you save money and increase wealth!

Mabel and Harry are running a super Carnival of Leadership Development and were kind enough to include our Performance Review Time post in the mix. I truly believe that working towards growing your career is one of the most important drivers of wealth. Just a 1% difference per year can mean an additional $40K per year during a 30 year career...and that is only that year!

A really exciting thing happened last night...Life, Liberty and the Pursuit of Money's post about Microsoft Buying Yahoo was listed in the Wall Street Journal Blog! It was just a line listing in the "Blog Post about this Topic" section...But Hey! it still counts in my book!

Performance Review Time

It is actually pass the time when my annual review is due. With a new outside management parent company things have been crazy. Since I am planning to NOT spend any raise and just apply it to our debt snowball, it really isn't like I "Have" to have a review now...I just want to get it over with.

I am one of the lucky few that gets and gives reviews...middle management my boy, middle-management :) However I thought that I would give some tips for being on both sides of the review desk. I have had tips on your career before, but this post is aimed at helping you during that once a year love-fest.


Tips for the reviewee:

• Document any and all victories - Throughout the year keep a $2 journal of all the things that you accomplished...do not be shy or humble. The ones that can document and show their value get the raises intended for the humble!
• Before your Boss writes your review - Make sure you get the information to him/her. If you format is the way reviews are done, by strength type, all the better. Bosses are people too and will use a lot of what you said if you provide it. Hopefully this leads to a more positive review, unless you are a horrible writer :)
• Push if you can, Pull if you must - Set a level of expectation to your salary requirements. You'll be surprised how much a, "Hope we are least looking at 5%, Bob!" Will go. First off it will gauge their reaction. If he answers, "Not likely" ask why and be prepped to go over your best points verbally. Even if you don't get 5%, you will set an expectation level of which Bosses are loath to break unless they have too. So give them a nudge up, or even a slight pull, but...
• Don't Threaten Everyone - Unless you are prepped to walk, greenmail is very tricky and you can wind up begging for your job back at a lower rate...I have seen it happen!
• Don't be defensive, but ask for clarification - If points come up that surprise you, like you think your productivity is high, but your Boss feels it is low, ask for direct example clarification and be prepared to have counter examples. This has to be delivered in a frank, non-confortational manner.

For Reviewers:

• Get the review done on time - It is not fair to make someone to wait to know what they got as an increase, which is really the main thing they want to know. You don't like it, so don't do it to others!
• Nothing in the review should be a surprise - If someone is not picking up the slack...tell them now and not a year later. All you did is make sure it didn't get corrected!
• Have weekly one-ones - I try to have weekly one-ones with each of my staff. I have my set questions, but the rest is their time. Whether it is to get me to finally sign the doc they need, or discuss their career path with the company. Want to increase retention and not be blindsided by someone leaving? Do this now! You will separate yourself from 99% of other managers
• Praise twice for every hit- No one feels motivated after a hour beating! Make sure to reinforce the good aspects, if they don't have any...fire them. You are better off with with NO-body than A Body.
• Don't blame other for anything negative - The "I think you are great, but Sara really doesn't like you". Take a stand. This is Your review of them, not their peers, or your bosses.
• Have clear examples of every criticism - if you say they are always late, have it documented. it should go, "Jill, on 14 separate occasions you were late". And have the back-up. Then it is the facts talking and not personal preferences.

The last piece of advise is to try and not take it personal, very few bosses (although I have worked for them) want to hurt or belittle you and usually genuinely want to be of help. Remember we all have two ears and one mouth!

I would also suggest that whatever bump you do receive, you do not start spending it. Forget it ever existed. We are adding ours to our snowball. If you continue to do this you will pay off debts faster, budget and manage your money better, and not get into the trap of spending every dime you make!

ps - The Carnival of Debt Reduction is now running over at My Dollar Plan it feature a special Life / Liberty post!

Personal Finance QuickTake: Buyouts

Chrysler announced today that they will offer buyouts of up to $100,000 to its hourly employees. Chrysler had just last year renegotiated their contract with the UAW to allow them to hire some new workers at a lower pay scale.

From a personal finance angle, would you take 2-3 years salary or keep your job?

For e it would be tempting as it would push me to start my own business, or buy one that I have been considering. With that sort of cushion behind me I could afford to take a bit of a risk...But it is still a risk.

There is a reason they are doing this. It isn't out of the goodness of their heart, just ask the 33% of white collar workers that were offed. They got basic severance. However the blue collar workers have a contract and the company can ill-afford a strike, nor the payout from violating the contract.

The US based manufacturers are getting leaner everyday, which will hopefully mean healthier, although a credit crisis won't/isn't helping.

If you did take the money what would you do? Would you be able to budget and manage your money, a lump-sum, over multiple years? Especially if you couldn't find work?

I am Late Blogging about Procrastination

I hate to admit it but I am a procrastinator. It isn't that I am lazy or don't work hard, but without time clock pressure building up, I have a hard time focusing on a single issue. This has affected my money management, time management and overall well-being.

I am not alone in this, Stephen Hawking, the preeminent Physicist of our time said that finding out that he had ALS was the one of the best things that ever happened to him, as it forced him to focus on a certain topic, in his case Physics. He said otherwise he probably would have dabbled away at 1000's of different subjects instead of focusing on one.

For me, there is something about the time pressure, or it needed to be done now that focuses me. Perhaps it is that I just see to many possibilities and having no time forces a decision. "A or B, youngish Lad..."

That being said I do not miss deadlines or delay others with my issue. It is there on time, even if I work 24-36 hours straight. It isn't fair or proper to make others suffer due to your inability to meet your responsibilities.

So how about you...Are you a procrastinator? If so does it empower, or hurt you, or others? How has this affected your personal finances and money management?

Weekly Top 5 Personal Finance Articles

Sunday already! Busy week for me as I had to catch up from recent business travel. Lots of great things were floating in the Blogsphere about personal finance, budgeting and money management.

Here are my Top 5 Articles of the Week:

• Dividends4Life - A great SET of articles about pre-screening dividend stock that show some of the tools he uses to run true comparisons. MUST reads for anyone looking at individual Stocks
• The Skilled Investor - They not only ran the most recent Carnival of Financial Planning but also just ran a great piece about choosing, hiring and paying for a financial adviser and what you should expect in return.
• Green Panda Treehouse - Another double-dipper. They ran a great Carnival of Personal Finance and also had a great article talking about how they pay their bills and work their budget process. I love that sort of insight as I always learn something new!
• Catherine Lawson's Business Advice Blog - I love all of her posts (and comments!) but 107 Great Resources to Unleash the Entreprenuer in You is really uber-impressive. My hand cramped on my 39-tips...she did 107!!!
• The Digerati Life - 7 Things to Consider as a First-Time Real Estate Investor was a great read, talking about the cyclical nature of the markets, but how real estate is still a great investment

Life, Liberty and the Pursuit of Liberty News:

• Reached 20 Subscribers! Thank you! It is so easy to sign-up and for me, since I read a lot of blogs, it really is the best way to sign up. Just click on the rotating headline!
• Reached 1500+ Visitors! Thanks Again for reading it is very much appreciated!
• Reached 5000+ Page Views!
• I am really liking BlogRush... I have had over 15,000 widget views for my brand and about 30% of my posts reaching "Hot" status. Sign-up to today if you want more traffic...Just click on the bottom of my Widget! You get bonus view credits while you are building your blog and I get credits for signing you up!

Happy Personal Finance, Budgeting and Money Management reading!

Small Town Movie Theaters

A quick break from money management for a second. One thing I miss about being in a bigger city like Salt Lake, is the dirth of places to see a movie. I am not talking about "Die Hard 74" I mean the off-the beaten path movies.

For my B-Day the Ms. and I were going to see "There Will be Blood." Just us no kids, nearly 3 hours of quite time! And as of yesterday it isn't playing anymore...to make room for "Meet the Spartans"...The movie that is up for best picture got bumped by next years "Razzie" winner.

We have been so good about not spending money, that we have curtailed our movie going, which is a favorite thing for me to do. Before we would go to most new releases even before most of our friends.

In a way this does tie into personal finance a bit. By being responsible with money sometimes we can be/feel a bit more isolated from others who do spend. Whether that is them talking about their fabulous vacation, new clothes, car etc. I truly am not a jealous sort of person, and I don't wish that I was doing anything else, but what we are doing right now. But it is interesting how much of what we talk about togehter socially ties to spending.

How about you? Have you ever felt cut off because you were being responsible?

Top Personal Finance Necessities

If you want to get ahead in any endeavor there are always is a list of Must-Do’s. The list may look simple at first; however it is often the simple things that get forgotten. If you want to really get on the right path of money management and debt reduction, start today! So, in celebration of the 39th anniversary of a certain event…I humbly submit the following 39 Top Personal Finance Necessities.

1. Find out where you really are financially – This is a scary step but if you don’t do it you can’t fix it.


2. Decide that you want the situation to get better – If you cannot stop the bleeding you can’t be saved. Period.


3. Stop the bleeding – Lock the credit cards up, freeze them, give them to Mom, whatever it takes.


4. Be prepared to make sacrifices – The Van Gogh of the month club will probably have to go
   
5. Build a Budget – Build one that deals with the following: Consumer debt pay; Recurring Bills; Cash Items; Mortgage or Rent; and Targeted Saving
   
6. Make your budget realistic – If your grocery bill for the family is always $400, budget $400, not $200! You are better having a little fat on a budget then cutting muscle.
   
7. Build escape valves into the budget – Without having the ability to make some small person purchases, you are setting yourself up for a big failure later on.
   
8. Budget isn’t a four-letter word – It is a lifestyle choice. Not a club to get people not to buy stuff!
   
9. Emergency Fund –Do you have an Emergency Fund? If not It should be your first priority. You will never break you debt chains unless you stop using debt!
   
10. Build a Debt Snowball – This is for your Consumer debt pay, do this right after you fund your Emergency Fund
    
11. Kill the bills that you can – See #4 if you are confused. Wash your own car; mow your own lawn; read the paper online. The more you trim the easier it will be.
    
12. Develop an Envelope System – Pay cash whenever you can, not just when it is convenient. You’ll potentially save thousands a year.
    
13. Review your Mortgage – Are you in an ARM? When is it going up? Get a plan to refinance if your credit is good, or work on your FICO Score until it is. If you are in a fixed loan: How is the Rate? Know your deal backward and forward.
    
14. Check your FICO Score and Credit Report – Many people have inaccurate information on their report. It is easy to dispute and if they don’t respond it gets taken off.
    
15. Check your Insurance – Make sure you have enough coverage. It feels counter-intuitive to say save, save, save then go shop for insurance, but a great way to destroy your finances is to have a disaster and no way to recoup.
    
16. Get a career plan – Are you floating along, or do you know where you want to be in five years. So many people will return cans for $5, but then won’t be prepared to get the most out of their salary, the way we get the bulk of our income.
    
17. Understand you didn’t get here in a week – You aren’t getting out in a week
    
18. Get everyone in the house involved – If they aren’t they will never be bought in, and won’t understand why things are changing.
    
19. Full disclosure – Everyone needs to know how the family is doing financially. It will end the requests for vacations and extras that we will all cave on eventually, especially if we have kids!
    
20. Find a mentor – Great blogs are out there. Pro’s like Dave Ramsey, Suzy O, too. Find whoever speaks to you. Listen and Learn. But don’t be afraid to ask questions, especially “stupid” ones!
    
21. No matter how bad it is… – Realize it IS worse elsewhere…I guarantee that!
    
22. Track everything –You don’t have to go out and buy MS Money or Quicken (although they are great). You can do it with Excel or free spreadsheet programs that are out there. I use both, as I like the master sheet view I have created in excel.
    
23. Understand how you got here – Break your “vicious circle”…Be conscience of your issues and you’ll be surprised how much more manageable they are.
    
24. Tell your story – Doesn’t have to be a blog. Talk to a friend, you’ll be surprised how many have/are going through the same thing. Also the peer pressure of telling folks you are starting this will help you to not want to disappoint them.
    
25. Have a success mindset – If you tell yourself “you can’t do it, it’s too hard.” You will be right!
    
26. Avoid “Get Rich Quick” Deals – the only ones that make money on these are the ones selling them.
    
27. Do Not invest in Stock Tips – I don’t care if your Uncle Tommy knows this guy, eventually you will lose. You have way better odds in Vegas.
    
28. Do Not over invest in your own companies stock – Enron anyone?
    
29. Be systematic – Doing 1% of 100 things is not as effective as knocking out 100% of one thing
    
30. Retirement – Once your consumer debt snowball has worked its magic, try to maximize your retirement contribution
    
31. Invest in yourself – Need a degree to go to the next level in your career? Take night classes. Need some job/trade certification? Get them. I would just make sure that there is a ROI there, no professional students!
    
32. Health – Try to be healthy as possible. Exercise. Think of it this way…a heart attack is expensive!
    
33. No one is perfect – Dave Ramsey was once 100% broke! The only thing you can do is to move forward the best you can. If you make a mistake, or slip, jump back on the budget horse!
    
34. Your Net Worth – Is not the same as your Self Worth, easy to confuse the two, but they are not the same at all!
    
35. Shop around for everything – Make it a game of I bet I can get that cheaper!
    
36. Never buy a New Car – 20%+ depreciation for driving it off of the lot
    
37. Understand the Difference between Needs, Wants and Desires – Handle your base needs first, before you buy the Louis V private space capsule.
    
38. Understand that this is a marathon, not a sprint - The market drop today is the bull market tomorrow.
    
39. The Power of Compounding – Every dollar you save or pay-off today can literally mean hundreds later. The sooner the better!
    

Ok… this is a ridiculously long post. I also know that some of these feel very basic. But if it is so basic, why isn’t everyone doing it? Sometimes the most obvious stuff is right under your nose! Remember I am not a financial adviser, just someone going through the same thing as you! I hope this helps you on the road of money management and personal finance