The other day I noticed “is money real?” scribbled in my notebook.  Many of us spend more waking hours at work, preparing for work, complaining about work, and commuting to and from work than enjoying our families and friends. My question is “to what end?”

Consider that a generation ago, single-income households were the norm. Now, two-income households are, but what is interesting is that after you factor in child care, taxes, health insurance, and a separate car for the second spouse to get to work, the typical two-income household has less discretionary income than the single-income households of yesterday, despite earning ~75 percent more gross income. That’s partly because the purchasing power has eroded. In fact, one of the challenges currently plaguing the Euro is that some of the participating countries want to pay off their debts with devalued currencies but can’t because they are tied to the Euro. When these countries issue bonds to raise money, one would hardly expect the market  to enthusiastically embrace them. After all, their spending and tax problems are secondary to their credibility (or lack thereof) issues.

That’s because money is only real to the extent that we believe that it is real. The value of money relies on someone else’s interest in receiving it. Consider an area that has been recently ravaged by a natural disaster. Temporarily, canned goods and other foodstuffs may be more scarce and thereby more valuable than than a $20 bill. Money is simply a medium of exchange, nothing more or nothing less.

Moreover, in the present age, money is often not even changing hands directly. Millions can be made from a few hand signals in a trading pit and agreements. Billions can be made from intellectual property, such as merchandising deals and royalties. For example,  Cars made a respectable $462 million in the box office; Cars merchandising exceeded $8 billion (16 times box office receipts).

Why Understanding Money Is Not Real Is Important

The financial value of an idea can far exceed perhaps the monetary potential of the most intuitive applications or venues. The Cars example illustrates this point. This brings me to a fascinating concept called the principle of adjacent possibilities. It has been used to describe how innovation occurs. It suggests we innovate when we go from where we are to “the next room.” Imagine if you enter a room, of a castle, that has 5 doors. Each time you walk through one of the 5 doors, you enter another room with 4 new doors. You can only investigate new rooms from the context of the room you left. In other words, innovation is not occurring by “leaps and bounds” but by the next “adjacent possibility.”

Related Article: Through The Looking Glass

This principle explains why some ideas are simply ahead of their time, such as Video Mailbox. What is Video Mailbox? Well, it was the Netflix before there was a Netflix. It offered a VHS by mail service to subscribers for a fee in 1987. Like Netflix, Video Mailbox also provided subscribers a pre-paid mailer to return movies.

Obviously, it didn’t last. Sadly, for Video Mailbox, some ideas are just too revolutionary for their time. In contrast, Netflix still has a market cap of $4 billion at the time of writing this, even after an ill-executed and significant price hike, failed plans to split the company into two (streaming and DVD services), and their loss of Starz content.

If you have a great idea, that’s fantastic. You’re 10% done.

An additional takeaway from the principle of adjacent possibilities is that you are in a castle of expanding possibilities rather than in a conventional (limited) construct. In other words, your potential is limitless. Consider how you would use 10 pounds of iron: I can come up with three different ways to use it which would help you derive 3 different levels of income:

• You can create horseshoes in which case, the iron would be worth $30.
• You could alternatively create needles. In this scenario, the same iron would be worth $300.
• You could create watch springs. The same iron is now valued at $3000.

This is why whenever I hear about someone who is dissatisfied with his or her present, I ask “what future do you see?” Do you see a world of poverty, lack, and abuse, or do you see a world of prosperity, provision, and harmony? In either case, you’re right.

“Think you can, think you can’t… in either case you are right.”

Related Article: 4 Reasons You Should Set Unrealistically High Goals

Now, I recognize we can be more complex. For example, the following parable provides some context to just how challenging choosing a positive outlook can be:

“within me there are two dogs. One dog is mean and evil. The other dog is good. The mean dog constantly fights the good dog. When asked which dog wins, he reflected and said it is the dog that I feed the most.”

Within us, there can be a kind of duality. However, we determine which voice is the most credible. We decide the one we nurture. At some point, we are choosing our financial opportunities or limitations.

Closing Thoughts

In suggesting that money is only as real as someone believes, I am not advocating creating counterfeits bills. I am suggesting that you write your own ticket. This very year could be the year of your uncommon success. After all, what is too much for you? Seriously, is it $5,000 per month? What about $50,000 per month? I remember hearing a keynote speaker a few years ago who was not satisfied with his company’s income. He had devised all sorts of stretch goals to expand it. At the time of the talk, it was $30,000,000 per month. I don’t know what adversity you face to make your dream a reality, but I do know that you cannot listen to the mean and evil dog. I hope you begin your journey towards infinite income potential. I certainly believe that is your possibility, but tell me, what future do you see?

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Image Credit:  Images of Money

Many people go into debt trying to look rich, thinking that the debt affords them a better quality of life. Such sentiments are overly simplistic and somewhat shortsighted. I have made the case several times before: debt actually decreases quality of life. That’s because those who are indebted have less money to spend as they desire than those who earn comparable incomes and are debt-free. However, we often set up an arbitrary hierarchy for different types of debt. While I am encouraged about the increased awareness of the the good debt myth, still many label some debts as “good” or “okay” to make them more socially acceptable.

Perhaps no debt is so reverenced as the ubiquitous student loan. Don’t dare suggest student loans are bad. You’ll be classified as out of touch. After all, school tuition has increased outrageously, and education is your passport to the future. Unfortunately, lately the future of borrowers have been plagued with turmoil, delayed dreams, and multiple disappointments.  Recently, I came across an article that only strengthened my belief: even student loan debt can decrease quality of life.

Student Loan Debt and Marriage

The hallmark of healthy marriages is teamwork. There shouldn’t be “his” or “her” debt. It should “their” debt, regardless of what the loan agreement says, assuming that both spouses are working together. Despite knowing this on a conscious level, student loan debt sometimes strains some marriages. For example, the borrower may feel like he is burdening his partner with debt unfairly and thereby feel a  guilt about working through the debt together. This guilt may be confounded by his wife’s resenting the additional financial hardship the student loan debt represents. Ideally, both spouses would approach this as adults and work together to improve their situation.  However, even in the best case scenario, deep-seated emotions regarding debt, obligation, partnership, and contributions can rear their ugly heads and create marital discord.

In addition to the emotional challenges, there is also a financial reality to bringing a lot of debt into a marriage. Quite simply, there is less money for the couple to pursue their dreams, and the stress of dealing with a mountain of debt can take its toll even on very sound relationships. It is unsurprising that financial problems are among the top cited causes of divorce.  Such concerns provide the context for why graduates with student loans appear to be increasingly delaying marriage.

Student Loan Debt and Children

As we discussed last week, it costs an estimated $250,000 to raise a child from birth to age 18 according to the Census Bureau. The financial implications of an expanding family are clearly significant. Accordingly, graduates appear to be delaying having kids as well. Part of this stems from concerns that the added expense of additional mouths to feed may make paying off the student loans more difficult. With finite resources and a lot of debt, having an additional person to care for may not be trivial. Having children is also life changing in other ways. For example, since Generation Y is more likely to have an entrepreneurial bent, there may be additional concern that having children could mean that they’ll be stuck in the rat race forever.

Another consideration plaguing graduates regarding having children is that their student loan debt diminishes their ability to care for children. After all, we’re talking about the boomerang generation: if you are having difficulty caring for yourself, you are not in a prime position to care for others. Of course, on an intellectual level we know that love is what’s necessary to raise kids and that many people grow up with less and still become productive members of society. Still, such concerns are possible deterrents nevertheless. Additionally, some delay having children because they feel that fastest way to climb out of their financial holes is using their ambition to increase their income. Sometimes this may entail working extra hours, extra shifts, having another job, or starting a business. Regardless, the goal is to either increase income immediately or to position themselves to quickly advance their career (which will also increase income); either option may be at odds with simultaneously raising a family right out of school.

Student Loan Debt and Bankruptcy

Many are familiar with the old story of physicians, lawyers, and other high income-earning professionals who racked up ridiculous amounts of student loans and other debt, only to file bankruptcy to wipe clean their respective financial slates, so that they can keep their high income and not pay their creditors. Well those days for the most part are long gone.

Debt is one of the top 5 causes of bankruptcy; however, after the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, student loan debt survives even bankruptcy unless the debtor can prove repaying the loan would create “undue hardship,” which is a legal standard that is particularly difficult to meet. You may think that this fact alone would prompt families to steer clear of ridiculous amounts of debt to pay for school, in favor of creative solutions, but that’s unfortunately not the case. Student loan debt is still very socially acceptable and is growing.

During times of financial hardship, borrowers have some options for repaying federal loans, such as Income-Based Repayment and Loan-Forgiveness programs; however, most private loans only allow repayment on their timetable, or else. Borrowers who default on private loans are subject to collection calls for the life of the loans, where they will likely be threatened, insulted, and embarrassed. Additionally, these lenders punish those who become delinquent and eventually sue them. The sometimes illegal and downright nasty tactics that collection agencies use to intimidate debtors into repayment are well documented. Moreover, borrowers who default also have to deal with penalties and interest. For private companies, the collection  fees can be up to 25% of the original loan balance. A recent WSJ article profiled Danielle Jokela who owed $100,000 upon graduation, paid for most of  5 years  (deferred paying the loan a couple of times for a few months), and still owes $98,000 due to the fees associated with the deferment. It is absolutely disheartening.

Closing Thoughts

I admonish students to think very carefully before taking on debt for school, particularly a significant debt load. In the US, two-thirds of college seniors graduated with loans in 2010, and the average loan exceeded $25,000 (Project on Student Debt); of course, that amount can vary widely. Additionally, think very carefully about your income-earning potential after graduation. For example, does it really make sense for the typical family to spend $200,000 educating a child for social work, where the median income of US national averages is $47,005 (salary starts around $30,000)? Also, consider the likelihood of graduation (nothing sucks more than having the debt without the degree or job); unfortunately, I know too many people in this position too. I apologize if this is offensive. I just find the situations that many of us willingly place ourselves in tragic. Think about the life you want to lead BEFORE you attach your John Hancock.

From someone’s who’s views on debt are more liberal than many, let me leave you with an admonishment from Robert Kiyosaki: “debt is a two-edged source.” In other words, improper usage can bring you to the brink of financial disaster. Don’t sign yourself up for a trip that you are not prepared to take.

There are two ways to conquer and enslave a nation. One is by the sword. The other is by DEBT. John Adams

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Have you ever wondered why the rich get richer? Such topics seem to touch a populist nerve. Some use the rich get richer as a basis for all that is wrong. After all, the golden rule is “he who has the gold makes the rules.” Personally, I believe the answer is complex and multi-factorial. In addition to the divisive political and sociological issues surrounding economic disparity, there are personal finance aspects of the discussion that I think we could  all benefit from. In this article, we discuss eight reasons the rich get richer.

Debt

One reason the rich get richer is because of their views about debt. The Duggar family is perhaps the perfect recent illustration of this. If you are unfamiliar with their story, the Duggar family is known for having 19 kids. They are on the reality show 19 Kids and Counting on TLC. The economic impact of having such a large family is enormous. According to the Census Bureau, it costs about $250,000 to raise just one child from birth to age 18, so you can imagine the substantial financial challenges with raising 19. If you thought that they hit the jackpot because they are on reality TV, you may be surprised to learn they were financially comfortable before they were earning between $25,000 to $40,000 per episode. They attribute their success to the fact that they were DEBT FREE, didn’t use credit cards, and used the excess capital to invest successfully in commercial real estate.

Even many of those who are pretty strict on borrowing could stand to learn from the Duggar family. They decided that they would not purchase a house that they couldn’t afford to buy outright with cash. Then, they grew their home with their income (I know it is a very novel idea), which was buoyed by their smart investments. The Duggars’ aversion to debt is not unique among financially successful people:

According to a survey by Forbes, 75% of the Forbes 400, the 400 richest Americans, believe that the best way to get rich is to become and stay debt-free.

Debt limits your potential by binding your most powerful wealth-building tool: your income. Additionally,  people who are free think differently than those who are indebted.

Income

The average income of millionaires is $350,000, roughly 5 times the average income of the typical North American family.  Millionaires are, as a group, economically productive. Many have created businesses or chosen careers uniquely suited to their personalities, abilities, education, and passions. Thus, the success that follows is not particularly surprising.

Personally, I think we all benefit from careers that are authentic fits for us; that is likely the best way to significantly improve compensation. If you are a traditional employee, examples of some questions you should ask yourself are: do you consistently get bonuses and complements on your work? Do you frequently get offers from recruiters to double your pay? Does your boss trust you and give you autonomy with your work even though you may lack direct experience in a particular area? Do you have a proven track record of excelling? Remember to keep in mind what you are “playing for.” Likewise, if you are a business owner, you may be asking about ways to increase your profitability, to carve out or maintain your competitive edge, or to better market your goods and services?

Too often, we passively assume things will automatically fall into place professionally and thereby relinquish any power we have to take control over our career advancement. Purposefully, improve your income and your influence.  Look for ways to become a thought-leader in your area and to leverage your intellectual expertise. Are you willing to pay the price to become among the most highly compensated in your chosen career?

Assets

The rich fill their portfolios with income-producing assets. For example, while I cannot use him as a model of fiscal responsibility, one credit to Michael Jackson’s financial acumen was that he appreciated the value of acquiring assets. He purchased music catalogs and other assets that generated income and supported a lifestyle that few could even dream of. Did he make financial mistakes? He made plenty, yet at the time of his death, Michael’s net worth was reportedly around $50 million. Regardless of your feelings about his financial habits, that sum is significant and speaks to the value of acquiring or creating assets. A second reason owning income-producing assets is important is because of leverage. Rather than working only for linear income, such as with a traditional job or even with self-employment in some cases, asset holders earn passive and portfolio income as well. Thus, their income continues after their work is completed, and their time is better leveraged to pursue other interests, including building more wealth. Of course, if you are the owner of a business that does not require you to directly operate it daily, then you have similarly leveraged your income. Thirdly, assets are important to the wealthy because the types of income that assets generate, particularly passive and portfolio income, are often tax-advantaged compared to earned income.

Taxes

Render unto Caesar the things which are Caesar’s – Bible

Taxes are not trivial. We’re taxed when we earn, spend, save, and invest. Taxes are typically our number one expense. If you plan to build significant wealth, it pays to appreciate the tax implications of your financial decisions, such as utilizing tax-advantaged retirement accounts, retiring early, purchasing (or creating) tax-advantaged assets, and receiving tax-advantaged income. In fact, the distinction between tax-deferred and tax-free accounts alone could be in the seven figures over a lifetime. Familiarizing yourself with at least some of the basics of the tax codes can greatly empower you to make wiser decisions with respect to your money. Also, don’t shy away from consulting experts (accountants or tax attorneys), when necessary, or getting second (or third) opinions. A lord chief justice of England reportedly said that a citizen has “not only the right but a duty to pay only the minimum tax applicable to him.” Learn how to effectively (and legally) minimize your taxes, or you may not have the capital to finance your dreams.

Network

I recently went to bachelor party with some friends and was shocked to realize just how many professionals attended. It might as well have been a networking event. It was the late billionaire J Paul Getty who said if he were down to his last five dollars, you would not find him in some cheap restaurant trying to eat all he could. He would rather be in a nice hotel lobby drinking coffee with visionaries and leaders. His rationale was that the people he wanted to be a part of his future were at the hotel not the restaurant. See the wisdom in his decision. In fact, if you want to predict someone’s income, look at the average income of their 5 closest friends. That’s because birds of a feather not only flock together; they often end up at the same destination. I can think of countless opportunities that have been presented based on network alone.  Sometimes interviews are rendered completely unnecessary or just a formality because of the strength of a recommendation from within a network. One of the biggest advantages of joining organizations is the network of members that they provide you access to.

Be particularly discerning about who you network and don’t network with. If you are an introvert, like myself, there is hope. Read books like How to Win Friends and Influence People or 25 Ways To Win With People, or even consider enrolling in a program, such as Dale Carnegie’s Effective Communications & Human Relations/Skills For Success course. Don’t limit your financial opportunities because you are stuck with familiar.

Experience

If you did it before, you can do it again. That’s the general sentiment anyway, which is why so many employers look to hire people who can demonstrate a proven track record. Additionally, that’s why people who once earn six and seven figure salaries, but get knocked down, have a tendency to earn it again. Once you get comfortable at the next level (whatever that means for you), it becomes distinctly uncomfortable with anything less.

This reminds of a fabulous story of a dog, Anja, who was selected to go through an extensive $16,000 training course. Although she wasn’t the only dog of the household, she was chosen by the trainers as having the highest aptitude for this program. Once Anja was trained, she then spent a great deal of time with the owner, much more than the other dogs of the house. She rode with him, ate with him, traveled with him, and had a very pampered life. Time passed, and she brought her owner much joy, so he thought that he would reward Anja by placing her with the other dogs, so that she could interact with her own kind.  The accommodations were less lavish but more than adequate. However, instead of being grateful, she acted as if she was being punished. It was as if she was saying “who are these beings? I’m made for luxury and to be YOUR companion.” She was no longer comfortable with what was once familiar and satisfactory. She wanted out because it was no longer good enough. I am a firm believer this is what happens with achievers. Achievers know that they are made for greatness, and anything less will simply not do.

Courage

These can be perilous times. The persecution of the frugal is not imagined; the wealthy seem to be twice as often despised than admired. Additionally, there is an onslaught of people trying to steal what it might have taken a lifetime to create. Do you have the courage to forsake popular opinion in favor of your convictions, to forgo the luxury cars and McMansions when they do not fit within your budget, to tell your family, friends, coworkers, and possibly even neighbors NO. In Do You Have The Courage to be Wealthy, I discuss how courage is necessary to build significant wealth due to the risks you may undertake and the adversity you will inevitably face and because the path can be tremendously lonely.

In fact, Felix Dennis said “never yet have I met a self-made rich man or woman whose family or personal relationships were not plagued by the burden of creating a fortune, even a small fortune.”

Nonetheless, if the price to pay to build significant wealth was small, everyone would pay it. Courage to thrive in this environment is vital.

Family

“Can you live forever? Marry the wrong spouse, and every day will feel like an eternity. Marry the right spouse, and life will be joyful and perhaps even a rich experience.” Thomas Stanley

Ninety-two percent of millionaire households in America are composed of married couples. Interestingly, the divorce rate of nonmillionaire couples is 3 times that of millionaire couples. To say that there is a  strong correlation between being married to the right mate and building wealth is clearly a massive understatement. Divorce is consistently 1 of the top 5 causes of bankruptcy, but you don’t need me to point out the financial havoc that divorce can have. Thus, protecting marital unit is not only a matter of the heart… it is also a matter of the wallet.

Although financial compatibility is important, couples bound for the altar should make sure that they are compatible on multiple levels. Dave Ramsey often says marriages have a statistically better chance of surviving if the spouses agree on spiritual, financial, children, and extended family matters. Over 90% of millionaires ranked their spouses as being honest, responsible, loving, capable, and supportive, and there was no significant difference between male and female respondents. In short, marital fidelity affects your financial fidelity.

Closing Thoughts

In conclusion, there are multiple reasons the rich get richer. If your current path isn’t leading you to build significant wealth, recognize the signposts, and adjust your course accordingly. I’ve heard that we ultimately may not decide our futures; we decide our habits, and our habits decide our futures. Birth “rich habits” today. Embrace and emulate those that are where you want to be, and your journey will no longer be as lonely, your struggles may be lessened, and your life will surely be changed for the better.

Change before you have to.  Jack Welch

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Your Money Personality: Tightwad or Spendthrift

By: Roshawn Watson

Were you clenching your wallet or purse strings straight from the crib? It is interesting how some people are characterized as being naturally gifted with money whereas others appear challenged from the beginning.  I always stress that most of personal finance is behavior; however, we often ignore what drives that behavior. Surprisingly, it is not all about discipline. There are reasons frugality comes easier to some. Over the years, numerous publications have shed light on the origins of financial behavior. In this article, we will discuss some of the biological etiologies of our spending orientations.

Could Biology Explain Your Spending Tendencies?

It turns out that most of us are relatively unconflicted about many purchases; however, some of us are either super-sensitive (tightwads) or distinctively blunt (spendthrifts) to spending money. Recent research has indicated that insula, a neural substrate involved in conscious urges, may hold the key to explaining some of this variability. Insula determines the amount of pleasure (too little insula) or pain (too much insula) derived from events, such as spending money or smoking. Tightwads have too much of it resulting in pain, and spendthrifts have too little and consequently experience pleasure.

A recent study looked at the brain scans of volunteers after they were shown an item and then the item’s  price. About 30% of the volunteers had elevated insula (tightwads) and 20% had reduced insula (spendthrifts). In both cases, there was regret. Spendthrifts became regretful because they were more likely to overspend. Tightwads experienced regret for not spending enough and were relatively less happy than their unconflicted and spendthrift counterparts.

More Than Just Feelings

The implications of our spending orientations go beyond feelings. For example, spendthrifts are three times more likely to be in debt than tightwads regardless of income (Scott Rick, George Loewenstein, and Cynthia Cryder, 2008). This highlights perhaps the biggest limitation of focusing solely on increasing income: you cannot outearn bad spending decisions, which is why some degree of frugality is important. This creates a perplexing situation: what’s one to do when his or her biology is warring against common sense?

Marital Bliss

Some people counterbalance their natural spending orientations by selecting partners who differ in their spending habits. This is a true case of where opposites attract. Both spendthrifts and tightwads tend to marry spouses’ with the opposite spending orientations. In such unions, the partners tend to balance each other out initially, so they don’t go to either extreme. The tightwad may like the spendthrift’s sense of adventure and fun whereas the spendthrift may like the tightwad’s dependability and stability.  Moreover, spendthrifts that marry tightwads generally do better financially than couples made up of two spendthrifts. However, as time progresses, important conflicts arise, particularly with larger purchases, such as homes and vehicles. Obviously, these purchases have a much greater impact on long-term financial goals compared with simply choosing a recreational activity. Accordingly, such purchases can result in marital discord when spouses can not get on the same page. Ironically, the very spending differences that initially attracted them to each other become the source of contention.

Incidentally, when two people of the same spending orientation marry (two spendthrifts or two tightwads), they generally have a much happier marriage. Not surprisingly, couples comprised of two tightwads are the best off, financially speaking.

Pain of Paying Cash

One of the first things that came to mind when reading these studies was the pain of paying with cash. Recall, one study indicated that participants spend 12-18% more when spending plastic money compared with paying with cash. The data from the fast food restaurants suggests the number may be as high as 50%. It is no wonder why debit and credit card machines are so ubiquitous now. Clearly, the ability to use plastic money affects our spending behavior. In exploring the mechanism behind this, researchers found that some individuals actually experience pain when they are forced to part with dollars and that this pain is diminished (blunted) when using plastic money.

In light of the insula research, I now suspect that the operative phrase is “some people.” I wouldn’t be surprised if they performed a subgroup analysis, they would possibly find that a disproportionately high number of people that experienced pain when paying for purchases with cash are tightwads. That certainly is in line with what the insula research has shown thus far: tightwads derive some degree of pain from spending. Moreover, the potential implications of the insula research are particularly interesting for the spendthrifts: suppose aberrant insula response predisposes spendthrifts to not experience the “pain of paying cash.” Obviously, they have little to no qualms utilizing debt (recall they are indeed three times more likely to be in debt than tightwads), so it is not a stretch that perhaps they may not have the same apprehension to spending their paper money either. If this is true, what other contrived checks and balances commonly used to keep our finances in order are not particularly suited spendthrifts? The possibilities are truly endless. This is why in 4 things to stop doing with your finances, we discussed the importance of recognizing the biological etiologies for poor financial behavior.

Of course, it is unclear whether the pain experienced when paying with cash is indeed the result of insula.

Closing Thoughts

Perhaps the biggest challenge in reviewing this literature is my concern that spendthrifts will disavow all responsibility for their financial decisions because of purported biological predispositions. Clearly, the origins of our behavior are multifactorial, so there is no one cause  for all misbehavior, regardless of whether exploring biological, psychological, or other origins implicated in spending orientation. For instance, research has also shown that smokers with damage to insula have disrupted addiction to smoking: they can “quit smoking easily, immediately, without relapse, and without persistence of the urge to smoke.” Clearly, this finding doesn’t mean that smokers with normal insula have an inability to quit. Likewise, spendthrifts with low insula must similarly find means to reign in their spending too, regardless of their biologic proclivities.

Lastly, if you like this article, please subscribe to my FREE email updates or RSS feed (reader), Retweet it, Like It on Facebook, Tipd it, Fark it, Stumble it, and tag it on Delicious. Also, click here to receive my eBook for FREE.

Reader Questions: Given what we have just discussed, should tightwads be celebrated for what comes naturally? In contrast, should spendthrifts be vilified when they are suffering from an insula deficiency?

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Yakezie is a network of personal finance and lifestyle bloggers who aim to encourage and support one another. Blogging can be a lonely journey, particularly when you are just starting out, so having friends makes the experience so much more rewarding. Today, I am honored to be hosting the Yakezie blog carnival.  Below are the varied submissions from across the blogosphere. Enjoy, and I hope you are having a fabulous Easter!

Side Note:  I’ve been on vacation for the last 10 days, but I intend to release new content this upcoming week.

Jon Rhodes @ HypnoBusters writes Napoleon Hill – The Secrets of How To Think Rich – This post is about Napoleon Hill. Under Andrew Carnegie’s wing, he studied more than 500 rich and successful people over a 25 year period to find out what traits they have to make them so successful.

Eric J. Nisall @ DollarVersity writes Financing Options For Small Businesses With Bad Credit – It’s not just individuals who have trouble obtaining credit, businesses can too. And, just as with individuals there are a variety of options for doing so.

Roger the Amateur Financier @ The Amateur Financier writes My Future Work, and My Future Worries – A discussion of some of the concerns I have about my future since I started having seizures, and my optimism that I’ll be able to make it through alright.

Mark D. Cook @ Pathway to Trading writes Are you a Futures Trader? – Former U.S. Investment Champion and “Stock Market Wizard” Mark D. Cook talks about trading the futures markets.

Khaleef @ Faithful With A Few writes Roth Vs Traditional IRA: Which One Is Best For You? – Roth vs Traditional IRA is an important distinction By understanding the differences, you can increase your retirement nest egg by hundreds of thousands of dollars!

Khaleef @ Fat Guy, Skinny Wallet writes Why A Roth IRA Is Better For Us Than A Traditional – A Roth IRA is a powerful tool for saving toward retirement Find out why we chose this option over a Traditional IRA, and see if this move is right for you!

Thad Puckett @ Thad Thoughts writes Ten Vacation Ideas That Don’t Have to Cost a Bundle – Vacations don’t have to add stress to your budget. These 10 ideas are money saving tips to have fun and save money!

John @ Married (with Debt) writes Have Free Banking Accounts Gone the Way of the Dinosaur? – It’s over. The days of free checking have gone the way of the free “check under your hood and wash your windshield” at the service station.

Kylie Ofiu @ Kylie Ofiu writes 10 Things I have learned – 10 things I learned comes from a conference I attended where some bloggers behaved badly, I was a panelist and there were some great tips I picked up.

Aloysa @ My Broken Coin writes Five Lessons on How To Survive in a Ghetto Apartment – From day one I slowly started to learn what was appropriate and what was not in my (hood). Over time I acquired a set of certain survival skills that came in handy for a single girl who found herself living alone in a ghetto apartment.

Don @ Money Reasons writes Benefits of Blogger Carnivals – This article is all about the benefits of blog carnivals. I list the reasons why you should host and submit your articles to blog carnivals.

KT @ Personal Finance Journey writes 5 Ways to Save on Interest on Student Loans – The average college student graduates with $25,000 in student loan debt. Many more students have higher balances than this. If you are repaying your student loans, there are several strategies you can utilize to pay less in student loan interest. Consider the following: Automate your payments.

Don @ Money Smart Guides writes The End of Buy and Hold? – I received a free one year subscription to Money Magazine for buying something (I can’t for the life of me remember what it was). In any case, there is an article that interviews Andrew Lo from M.I.T.

Shaun @ Smart Family Finance writes Should Families Buy a House or Rent an Apartment: Why Home Equity is Overrated – Every time you assume your home’s market value as the equity you command you are overestimating your net worth.

Ashley @ Money Talks Coaching writes Skipping the Mortgage Payment to Pay the Car Loan? – I read this article the other day about the order in which people pay their bills, or rather, the order in which they do not pay their bills.

Kyle @ The Penny Hoarder writes Enter to Win our April iPad Mania Giveaway! – Welcome to the April Ipad mania GIVEAWAY!!! The Penny Hoarder has teamed up with Bay Area Mommy a number of other bloggers to bring you this amazing chance to win the two hottest tablets in the market today! Grand Prize: The New iPad (or $550 cash) Second Prize: Kindle Fire (or $200 cash)!

Jeremy @ Modest Money writes Outsourcing Online Business Tasks To Earn More Money – Do you run one of the many online business that could benefit tremendously from outsourcing? Read about how a seasoned internet marketing professional learned how to use outsourcing to earn more money.

Van Beek @ Stock Trend Investing writes Buy and Hold Dividend versus Trend Following Risks – When you apply a certain stock investing strategy, you implicitly choose to accept the risks that go with that strategy. Here we describe the specific risks for two well-know and often applied strategies.

MMD @ My Money Design writes Which is Better – Term or Permanent Life Insurance? – Part 2 – Should you buy cheaper Term insurance that will expire or the more expensive Permanent insurance that is guaranteed for life? Let me share with you two real quotes I received, and we’ll crunch the numbers to figure out which one is the better alternative.

Crystal @ Budgeting in the Fun Stuff writes House Hunting on Pause – It was a short daydream, wasn’t it? Just last week I was talking about house hunting and now I am back to my original thought, no way.

Suba @ Broke Professionals writes Perfectionism On The Job: What It’s Costing You – I was a perfectionist – until the world’s worst day at work made me realize what I once considered my greatest strength on the job was actually my biggest weakness.

Daniel @ Sweating the Big Stuff writes Why I Already Won The Lottery – I did not win the lottery over the weekend, but, I feel pretty lucky anyway.

Jason @ Work Save Live writes 3 Words to Start the Week Off Right – ROCK CHALK JAYHAWK! I couldn’t resist the opportunity to throw out some love to the 2012 KU Basketball team! A season that started with minimal expectations has turned into something that ZERO Jayhawk fans could have fathomed. A lineup that consists of ZERO McDonald’s All-Americans.

Ryan @ Early Retirement Investments writes Demand for Rental Property and Residential Contracting is Expanding – Lately, it seems like the demand for rental property and residential property are on the rise! Read how these areas are expanding

Corey @ Steadfast Finances writes Benefits of an Adjustable Rate Mortgage – Have you ever considered an adjustable rate mortgage? Find out the benefits and whether it is right for you.

Steve @ Money Infant writes Living Like a King in Bangkok – I thought that before I give you some insight into my own Bangkok budget I would put to rest the rumors of living like a king on $5000 a month in Bangkok.

Hank @ Money Q&A writes My Favorite Financial Tools That I Use – From time to time, I’m asked about which financial products I personally use and which I would recommend to others. I have finally listed many of the financial resources, firms, services, and products that I personally use and recommend.

The Happy Homeowner @ The Happy Homeowner writes Whitney & The Roth: How Whitney Houston’s Song Titles Can Teach You Everything You Need to Know About the Roth IRA – A unique twist on the standard “What is a Roth IRA” information, this post discusses the best of the Roth through Whitney Houston’s song titles.

YFS @ Your Finances Simplified writes An in-depth view on Roth vs. Traditional IRA – Since the conception of the Individual Retirement Arrangement (IRA) in 1974 from the Employment Retirement Income Security Act (ERISA), it has helped thousands of individuals to save money for a comfortable retirement. Over the years, the types of IRAs …

Evan @ My Journey to Millions writes April 2012 Net Worth Update – Finally Doubled Up – From March 1, 2012 to April, 2012 my net worth has increased 6.18% Year to Date my net worth has increased 20.02% From January 2011 to April 2012 my net worth has increased 107.37%

PITR @ Passive Income To Retire writes Real Estate Investing Is Back On the Table – Find out what makes real estate so attractive to investors and why there will always be a demand for rental properties.

Andrew @ 101 Centavos writes A Labor Shortage? Surely You Can’t be Serious… – China running short of people? But they’ve got a billion and a half people over there. Surely you can’t be serious… I am serious, and don’t call…

Jeremy Waller @ Personal Finance Whiz writes Do You Have What It Takes To Be Debt Free And Financially Successful? – No. You probably don’t. You see there’s a reason that the majority of people are in debt. There’s a reason why the average amount of credit card debt per household is $15,956. There’s a reason why the average American consumer has a total of 13 credit obligations on record at a credit bureau.

Sean @ Free Snatcher writes 5 Tips to Help you Become Debt Free – Eliminating your debt is the first step to becoming Financially free. Here are 5 steps to painlessly become debt free. Thanks for your consideration.

Kay Lynn @ Bucksome Boomer writes What Do Your Friends Really Think about Your Old Car? – My friends, who are also co-workers, gently suggested it was time for my husband to get a new car. That is not what someone who recently broke the shackles of debt wants to hear!

Jon the Saver @ Free Money Wisdom writes Six Questions About the Federal Income Tax – These are six questions you should ask yourself when it comes to the federal income tax. Make sure you’re not overpaying the government!

Mr. Money @ Smart on Money writes Learn the Basics of the Roth IRA – Part of the reason the Roth IRA has become so popular in the past 15 years is because they offer a nice way to save for retirement that offers tax-free withdrawals at retirement. In other words, you are investing with money that has already been taxed, and when you pull the money out at retirement the contributions and earnings are tax free. Pretty nice, huh?

Wayne @ Young Family Finance writes Purpose of Budgeting – Are you left wondering why you should budget? Find out the purpose of budgeting and whether it’s important for you.

Daisy @ Add Vodka writes Taking Care of Clothes – I somehow doubt it’s a secret that I have a large wardrobe. I love clothes, and they really are to blame for my spending problems in the first place. A world without fashion would be a world without fun.

Luke @ Learn Bonds writes Treasuries head south as US stocks end best Q1 in more than a decade – All you need to know about today’s bond market action with commentary on top moving stocks as well.

Dr. Dean @ The Millionaire Nurse Blog writes 24 Stupid Things People Do With Their Money! – Have you done stupid things with your money? Check out this list and see how many you are guilty of.

Corey @ 20s Finances writes How to Save Money in Your 20s – Have you ever felt like it is hard to save money as a young adult? While I have already talked about why it is difficult for young adults to save money, it doesn’t mean it is impossible. If you are in college and wondering how to put money aside, saving money may not even be a question because of the massive amounts of college debt that you are facing.

Barb Friedberg @ Barbara Friedberg Personal Finance writes How to Handle a Tax Audit; The IRS Says I Owe $25,000 – Read about my harrowing experience dealing with a surprise audit letter from the IRS

Forest Parks @ Frugal Zeitgeist writes Trim Your Grocery Bill – A look at ways to trim your grocery bills!

Steve Zussino @ Grocery Alerts writes Guide to Freezing Food to save money – Part of living a frugal life is about buying things when they are at their lowest price and then preserving them. One of the ways to do this is to freeze them. So many things can be frozen, and at the same time separated into smaller amounts.

Lisa @ Cents To Save writes Top 5 Reasons I LOVE to Thrift Shop – Thrift shopping is a great way to stretch your hard earned dollar. From finding great deals on items to use around the house, to selling and making a profit on eBay with thrifted items. Definitely a win-win for your budget!

Gil Tenorio @ Financial Management Blog writes How to Start an Emergency Fund – This article discusses some tips on how to start an emergency fund.

Tushar @ Start Investing Money writes Filing for Bankruptcy – How Retirement Accounts Are Affected – This Post was Originally published at Filing for Bankruptcy – How Retirement Accounts Are Affected on Start Investing MoneyBankruptcy is a horrible thing to endure, but in these uncertain economic times, it is becoming an all too common occurrence.

Christopher @ This That and The MBA writes Deadliest Catch Returns April 10 – It is amazing what some will do to make money for their familiies.

SFB @ Simple Finance Blog writes Size Doesn’t Matter: Why Bigger Isn’t Always Better – American culture seems to suggest that bigger is better – but I’ve found three cases where size doesn’t matter when it comes to your family’s finances

Lina Zussino @ Baby Alerts writes Canada Education Savings Grant and your child’s education – According to Statistics Canada the average cost of undergraduate studies cost $5,366 in annual tuition fees in 2011/12 compared to $5,146 the previous year in 2010/09. That is an increase of 4.3% over a year. Thankfully the government of Canada now offers Canada Education Savings Grant (CESG for RESP) this will help ease the burden.

Kevin @ Thousandaire writes The First Step to $1 Million of Net Worth – A 20 year old reader sent me an email asking me how to approach his finances. Get rid of debt and start a Roth IRA are the two first steps.

Little House @ Little House in the Valley writes March Progress Monitoring – The beginning of April means a time to recap my goals. I like things in three, therefore my goals were to save money ($6,000 for the year), continue to grow my blog (375 readers daily), and ride my bike (1,000 miles this year). So how am I doing at day 90?

Cash Flow Mantra @ Cash Flow Mantra writes My Experience as a Prosper Borrower – I used Prosper to finance a loan to pay a large tax bill, and I found the process effortless. Here is my experience thus far:

Jon Rhodes @ Affiliate Tips writes Affiliate Marketing – A Great Potential Career? – This article shows you the sort of lifestyle you can lead by becoming a full time internet affiliate marketer.

Jen @ Master the Art of Saving writes 6 Free Financial Resources & Tools to Improve Your Finances – If you’re interested in monitoring or improving your finances, then you probably don’t want to be spending money to do it. That would just be silly and………

Maria @ The Money Principle writes Five things older people have and young people… – We glorify the vigour and enthusiasm of youth and have grown fearful of older age. In doing that we are forgetting that that growing old has its advantages and that it can be done with elegance, grace and dignity.

Sicorra @ Tackling Our Debt writes Let’s Talk Money – The Series – With Karl – Karl at CultOfMoney was this week’s guest for the written interview series titled Let’s Talk Money. Karl shares his personal view points on saving money, spending money and building up a healthy retirement fund. Check out this post to see how he saves 40% of his after-tax income.

A Blinkin @ Funancials writes I Don’t Want To Be Debt Free – Did you do a double-take when you read this title? Considering a lot of my readers are personal finance bloggers, I’m guessing yes; especially since the majority of personal finance bloggers see debt as an unnecessary evil.

Jeffrey @ Money Spruce writes Money Rules Book Review: A Quick Guide to Finances – I recently checked out the new book Money Rules: The Simple Path to Lifelong Security by Jean Chatzky. It’s modeled much like Michael Pollan’s Food Rules with many one-page “rules” that give short but useful tidbits of information.

Amanda L Grossman @ Frugal Confessions writes The Groundhog Day Financial Lesson I am Doomed to Live Over and Over Again – Have you ever had a lesson in life appear over and over again, and you feel as though you are doomed to attempt to learn it for the rest of your foreseeable

SB @ Finance Product Reviews writes MB Trading Brokerage Platform Review – MB Trading the unsung hero of the brokerage world. 7 times best brokerage award winner. Read this review to learn more about it

Darwin @ Darwin’s Money writes Pairs Trade: Real Examples and Profit Potential – Here’s a way to invest and profit with zero dollars out of pocket! Amazing but true, you just have to pick the right direction!

SB @ Finance Product Reviews writes MB Trading Brokerage Platform Review – MB Trading the unsung hero of the brokerage world. 7 times best brokerage award winner. Read this review to learn more about it

SB @ One Cent at a Time writes What is Obama Care and How Does it Affect Us? – In-depth analysis of President Obama’s health care reform bill, fondly called Obamacare. Is it going to change the present health care chaos around us, or it’s blow to your freedom and liberty?

Krantcents @ Krant Cents writes Why Did I Start My Business? – Why did I start my business? I wanted to know if my reasons matched theirs. I wanted to know if I was like Warren Buffett, Steve Jobs, or Bill Gates.

Eddie @ Finance Fox writes Getting Rich Is A Two Sided Equation – Budgets are not a drag, at least not to me, and it shouldn’t be to you either. A budget is like a wing-man to your money. When put together to work, they’re a great one-two punch.

ShortRoadTo (James) @ Short Road To Retirement writes Mystery Shopping: A Great Way to Earn Extra Cash – Discusses how people can earn $20 per hour by mystery shopping. Provides information on how to find mystery shops and what companies have mystery shopping programs

Pat Huddleston @ Investor’s Watchblog writes Montana Becoming a Ponzi Hot Spot? – Is your pastor introducing you to investments? If so, you need a new pastor.

PK @ Don’t Quit Your Day Job writes Adventures in Lottery Playing – What Was The Expected Value of Mega Millions Tickets? – 60 of the 1.46 billion tickets in the recent Mega Millions drawing were purchased by yours truly. Read on as I explain how I calculated the expected value of my tickets!

Investor Junkie @ Investor Junkie writes Unleash the Power Within Review – I drank the Kool-Aid during my time off last week. I just got back from a four day seminar with the self-help “guru” Tony Robbins, and his infamous Unleash the Power Within (UPW for short). The seminar can be summed up as a rock concert, somewhat religious awaking, and emotional boot camp all rolled into one. It is certainly nothing I’ve experienced before in an event, and maybe not ever again.

Jason @ Live Real, Now writes The Happy Challenge – Here is my challenge to you: For the next 21 days, write down 3 thing you are grateful for. What makes you happy? It’s okay if it’s hard. If it’s hard for you, you need it more than most. Now, the truly hard part:

YPFinances @ Young Professional Finances writes Why I Can’t Claim Student Loan Interest – I always thought being able to claim the interest paid on student loans was the silver lining of having that debt. Now, it turns out I can’t claim this – and the IRS was kind enough to notify me.

Eric @ Narrow Bridge Finance writes April 2012 Net Worth and Earnings Update – March was an exciting month in the world of my finances. It marked the conclusion of my journey to become student loan free. It included my bonus at work, which made the debt payment possible, and it ended with a 6.5% increase in my net worth.

Srinath @ The University of Money writes List of oil stocks worth a look – Oil Stocks is must have in your portfolio as these stocks have given returns in the past few years. Soaring demand of oil and rise in oil prices will make sure that these stocks give better returns this year too. Take a look at these top oil stocks.

Miss T. @ Prairie Eco Thrifter writes 7 Reasons Why Failure Is a Good Thing – Don’t view failure as bad luck, instead look at each attempt to reach your goals as a triumph. There’s always something to learn, ways to grow, different viewpoints to see, and new opportunities waiting just around the corner.

SJG @ Life [Comma] Etc writes The Personal Part of the Budget – An early revelation in my personal budgeting journey!

Shilpan @ Street Smart Finance writes 5 Keys to Win Customers for Life – There are many factors involved in the influence process that creates a happy, friendly repeat customer base. Sometimes best of efforts go in the vein to create that influence. Nonetheless, friendly conversation has an immense role to play in building rapport with guests who ultimately connect with the caring, compassionate friend behind the desk more so than any amenities and luxuries of a hotel can ever impress their wildest imagination.

Busy Exec @ The “Busy Executive” Money Blog writes A closer look at the 10 year retirement plan – Whether you believe it or not, numbers hold all the answers. I figure that I’m about 1/3 of the way to my money “R” number and 10 years away from my age “R” number.

Ray @ Squirrelers writes What is the Value of Your Professional Network? – Networking is purported to be very important by many, but some dismiss it. This post discusses the topic of just what value there is to your professional network

Steve @ The Loonie Bin writes Freedom 75: This Aint Your Grandad’s Retirement – Why is it that people always put retirement off until later in life?

TTMK @ Tie the Money Knot writes Inheritances: Honoring Wishes or Equalizing Value Among Beneficiaries – Inheritances can be tricky for family dynamics. This can happen if people in the same family get different amounts. How would you handle such a situation?

MaryAnne @ Parenting and Money writes Why Using Credit Cards Is Good For You – This is a good post on the benefits of using credit cards. Learn why using the credit card can help you save money.

Money Cone @ Money Cone writes 12 Hands On Tips to Protect Yourself Online – I’ve outlined a series of steps with specific recommendations on what to use to protect yourself online. It is easy to make a generalized comment like ‘Use a good anti-virus software’, but then what is a good anti-virus software? I’m going to try to do better than that. Every step has a specific action towards protecting yourself from online fraud.

Kari @ Small Budget Big Dreams writes Financial Confession: I Hide Money – Do you hide money from your friends, family and spouse? I do, but it’s probably not what you think.

Beating Broke @ Beating Broke writes Invest in Yourself Instead of the Lottery – Many of us dream about what we would do with more money. However, the best way to achieve the dream is not through purchasing lottery tickets for a multi-million dollar jackpot that we won’t win (even if you use the worn out argument, “somebody has to win”). Instead, the best way to achieve that dream is through our own lives. Dream about what you can do with your life, how you can improve it, and then set to work doing so. That will get you infinitely further than buying a lottery tic

Jake @ I Am 1 Percent writes 7 Financial Tips For Young Adults – Seven tips I wish I had in my late teens and early 20’s that would’ve assisted me in my road to being in the 1 percent

Matt @ Living in Financial Excellence writes It’s Never Too Late to Change Your Financial Future – You can change; the decision is up to you. Of course it would have been better if you would have started to contribute to your 401(K) twenty years ago. It would have been better if you had cleaned up your student loan mess before you got married. What happened in the past happened in the past, but you can decide to change your future today!

Philip Taylor @ PT Money Personal Finance writes Family Emergency: 3 Lessons to Learn Before the Next One – Life is unpredictable. Article contains 3 things that are important to remember or plan for in case of emergencies.

Teacher Man @ My University Money writes Why Cutting The GST Was Great Politics and Terrible Economics – As some of you may have picked up on I tend to have a slightly right of center bias on economic issues (not social ones I should quickly point out). I tend to believe in many of the bedrock foundations of fiscal conservatism such as a balanced budget, the responsibility of the individual, and small governments.

Karunesh @ chase-a-dream.com writes Learn to dramatically improve your concentration using mindfulness – Mindfulness is putting all your heart and soul into that one task, to exclusion of all else such that you lose the contact from external world.

Tushar @ Everything Finance Blog writes 4 Easy Ways to Build Your Credit Score – Financial mistakes in your past can cause your credit score to drop. Things like late payments, defaulting on a loan, or having large amounts of debt can negatively impact your score. But all hope is not lost—you can build your credit score by making changes to your financial habits today.

Robert @ The College Investor writes Transitioning to a Green Household – Now that we are migrating into a more “green” society, it is becoming easier to switch to a green household where you are being more eco-conscious in your daily life. Switching to green can also create extra savings each month in homes everywhere.

Tyler @ Poor Student writes Apply For A Credit Card – It goes against the conventional wisdom, but most students should have a credit card.

J.P. @ Novel Investor writes TurboTax Review: Tax Prep Made Easy – TurboTax is one of the most popular online tax preparation and filing services around. During tax season, it’s nice to have tax software that makes finishing that return as quick and painless as possible.

Karl @ Cult Of Money writes Sprint Training for your Money – The point of spring training for baseball is so that players can shake the rust off after a long off-season, work on their fundamentals, and lets coaches evaluate what players will work best on the baseball team. I’ve written with the baseball analogy with respect to fantasy baseball before. If you follow the same process for real baseball and have a spring training for your money, you’ll be ready for opening day too. Just remember though, there’s actually no off-season for your finance

Timothy @ Wealth Artisan writes Dividend Payout Ratio Calculator – Dividend Payout Ratio Calculator – Use this calculator to automatically look up a stock ticker symbol to locate the Dividend Payout Ratio (DPR). Finding a Dividend Payout Ratio has never been easier.

Earth and Money @ Earth and Money writes Stop Price Shopping for Groceries Now! – For most people, going to multiple grocery stores to take advantage of sales on different items is a complete waste of time and resources.

Mark D. Cook @ Pathway to Trading writes Impending Financial Doom from Wall Street’s Complacency – Former U.S. Investment Champion and “Stock Market Wizard” Mark D. Cook goes in depth about a complacent stock market.

Steve Zussino @ Canadian Personal Finance writes Why and How to Create an Emergency Fund – An emergency fund is an essential part of every family’s financial plan, yet so many people don’t seem to have one set up. Wouldn’t it be nice if you no longer had to worry about what would happen if a financial emergency came up? That’s exactly the kind of security you can get with an emergency fund and exactly why you should have one in place.

Kraig @ Young, Cheap Living writes How To Get Started with Mint.com – This article outlines the overall concept of Mint.com and the basics of how to use it. It looks at how it displays and calculates your net worth when you connect it to all of your financial accounts. This post also describes Mint’s budget functionality and how to create and manage a budget using it.

Glen Craig @ Free From Broke writes Visa® Black Card Review – A Carbon Card That’s Expensive But Full of Benefits – The Visa Black Card offers up an exclusive carbon card, that is chock full of benefits for its card holders with a hefty annual fee. See more in this Visa Black Card review.

Michelle @ See Debt Run writes The Minimalism Kick That Left Marks – I fully encourage minimalism, but please…proceed with caution. Throwing out something you will only need to immediately replace can hurt your efforts.

Paul Vachon @ Frugal Toad writes Where to Find Financial Aid for College Tuition – With college tuition rising much faster than the rate of inflation, more college-bound students depend on financial aid to help pay for college. This comprehensive guide shows where to find financial aid and scholarships.

B. @ Below Her Means writes The Ponzi Scheme of Psychiatric Care – A personal vent about an expensive psychiatrist that left a lot to be desired.

Image Credit:  Grand Grrl

Crisis is merely concentrated information. When you are facing a big financial problem, you can simultaneously feel lonely, irritated,  ineffective, and hopeless. Nonetheless, a devastating financial blow doesn’t mean that doors of abundance are forever shut. Men don’t drown by being underwater; they drown by staying underwater. You can come out of hardship, and the best way to do this is with a plan. Here are 9 steps to navigating a financial crisis.

That which does not kill us makes us stronger. Friedrich Nietzsche

Define the Immediate Threat

I believe one of the first steps to coming out of a financial crisis is to stop the immediate hemorrhaging so that you can fight another day.  To achieve this end, you should clearly define the impending threat. First, doing so allows  you to allocate your resources accordingly. Second, defining the threat can likewise help you take a step away from the intense emotion associated with the crisis, so that you can gain clarity on the facts. For example, suppose you identify your threat as an outrageously large hospital bill. While it is true this could potentially harm your credit should you be unable to pay, that is not where you are at today most likely. Today, you’re just overwhelmed by the large amount owed, so that’s where the focus should be. Perhaps the hospital will be able to work with you to make the bill more manageable given your income (such as agreeing to partial forgiveness or at least a workable plan), or maybe it is time to start thinking creatively about increasing your income.

The point is to not allow a general awareness of financial problems to dictate your attitude and behavior. Get the real facts; otherwise, you will be ruled by fear, misinformation, and anger.

Anger dwells only in the bosom of fools. – Albert Einstein

Seek Wise Advice

Opinions are like noses: everyone has one, and they usually have a couple of holes in them.

During a crisis, it is important to draw on the available resources, including your access to seasoned mentors, but you have to be careful that you are getting wise advice.  Rather than asking advice from anyone that will listen, I love listening to trusted teachers. They have insights well worth the time it takes to develop relationships. In fact, just last week, a professional investor prevented us for making a very costly mistake.

Someone can see the folly in your most carefully laid out plans, so make sure you access their wisdom. While it can be difficult sharing where you have missed it, where you lacked knowledge, or where you have been challenged, especially if you are a private person, it often does more harm to suffer quietly. You have access to this mentor for a reason. Don’t squander opportunities to dip into their wells.

Draw Inspiration

How do you give birth to a bright future?  I think motivation is key. The old saying goes your attitude determines your altitude. It becomes very difficult to continuously face life challenges as an “Eeyore.” Sometimes you REQUIRE an infusion of motivation to simply persevere. Remind yourself of uncommon achievers, such as Walt Disney who persisted despite being fired for lack of creativity and Steve Jobs who persisted despite of being ousted by the Apple board. Don’t forget Sylvester Stallone’s powerful story where he believed in himself despite being told repeatedly he wasn’t good enough.  Lastly, remind yourself also of when YOU were an uncommon and unlikely champion.  Going through a difficult time does not make you any less awesome.

All men fall, but the great ones get back up.

Resolve

Develop a resolve rectify the situation. As long as we are very emotionally connected to the drama surrounding a problem, it can be difficult resolving the actual problem itself. Misery loves company, so some people are indeed comforted by rehashing their issues to garner sympathy repeatedly, but that won’t necessarily take them any closer to the solutions. In fact, it may prolong their troubles because they are focusing on the problems for sympathy sake rather than for seeking insight.

I’m not suggesting that you discount your pain. Pain is very instructive and can be instrumental in developing the resolve to change your life, BUT if you are too focused on describing the pain instead of finding solutions to your crisis, you won’t progress.  Decide which is more important: sympathy for your pain or movement towards your victory.

Create an Actionable and Specific Plan

It’s great when our troubles do end quickly, but if Publisher’s Clearing House¹ doesn’t knock on your door, are you still implementing a plan that will make you a financial champion? Creating an actionable and specific plan to overcome a large problem can seem daunting. The key is to keep perspective. Rome was not built in a day and neither was the mess you’re in, most likely.  Therefore, don’t ignore the law of process: you can not always be what you are not, but you can become what you are not.  Also, be sure that your plan is specific. For example, to plan to get out of debt is not specific enough. Instead, plan to  pay off $40,125 in debt over 18 months. That specificity allows you to break the goal down into manageable parts and sets benchmarks whereby you can  judge  your progress.

Course Correct

Inactivity is the biggest thief of opportunity.

Take action! It is so painful when capable people persist in misery and lack when they possess all that’s necessary to enter into abundance.  It is not enough to know what the problem is or know the correct course of action to get out it. At some point you have to progress from “knowing” to “doing.”  For example, while reading books and attending seminars and conventions are great, that’s often not what changes a person’s life. Similarly, knowing that business owners are 5 times more like to become millionaires in itself won’t impact your financial world, nor will having a phenomenal idea that never gets implemented. A wide variety of ideas and desires puts money in no one’s pocket. It is only when you use that acquired knowledge or idea and follow a plan of action that you create success. Start taking decided steps out of the mess today.

Track Your Progress

Being on a plan where you are being held accountable is a powerful thing. I noticed this years ago when listening to Dave Ramsey’s radio show. He would methodically walk people through the baby steps. As they saw measurable progress, they were motivated even more to fix their financial sloppiness. Lives were changed by providing a psychological reward (moving to the next stage in the baby steps and encouragement from Dave Ramsey) that incentivized good financial behavior. Contemporary psychology refers to this as the principle of reinforcement: “responses, which are accompanied or closely followed by satisfaction,…will, other things being equal, be… more likely to recur…” (Thorndike, 1911).

You can add positive reinforcement to your crisis eradication plan as well.  The rewards don’t have to be big. You may elect to simply chart your financial progress (such as tracking your debt to income ratio, your wealth [or net worth], your debt repayment, the number of cards that you have cut up, etc.) and announce to someone you admire that you are hitting your goals. Often, heartfelt praise is sufficient reinforcement.

Perform a Financial Autopsy

It frequently isn’t until an autopsy is performed that we realize the true pathology underlying someone’s death. Similarly, uncovering the root causes to your financial dysfunction often requires a financial autopsy: introspection and thoughtful consideration of the factors resulting in the crisis. Otherwise, we only address the superficial behavior or problem and are thereby powerless to prevent it from recurring.

For example, 80% of personal finance is behavioral, but we often spend the majority of time on the conduct, and then we wonder why people get suboptimal results. For example, the imminent threat identified earlier, such as “I can’t make my credit card payment this month,” may actually be merely the symptom of the true problem, such as:

• not living on a budget
• having an income inadequate to meet your needs
• having a broken money philosophy
• limiting financial beliefs
• having antiquated money practices

When you are out of the thick of the  drama surrounding your crisis, make sure that you truly unload the underlying issues. Perform a systematic financial autopsy, even if it requires meeting with a financial counselor. Deal with the core issues so that the misbehavior doesn’t materialize again.

Memorialize the Event

Yes, it is borderline sadistic to memorialize a financial tragedy, but one of the blessings of harsh financial pain is that it creates such a powerful mental and emotional scar.  When recounting a profoundly negative financial event, “sane” people not only remember the trauma that they endured but also resolve to NEVER experience it again. This is  known as what some refer to as an “emotional implantation moment.” The power of an emotional implantation moment is that it memorializes that event in your mind. It instantly transports you back to the same feelings and thoughts that you had during that tragedy.

Perhaps we should take this one step further and couple our successful navigation of a difficult financial patch with something that is really positive that perhaps we couldn’t have done beforehand, such as throwing a phenomenal “I’m out of debt party,” taking that enviable vacation, or giving that sizable donation. Regardless of what you do, don’t allow the crisis to leave you bitter and fearful. Place a positive spin on it. After you are out, celebrate leaving that season of your life.

Whatever you don’t acknowledge, you don’t celebrate, and whatever you don’t celebrate will eventually exit your life – The Law of Recognition.

If you value your successes, don’t treat them trivially. They are major and worthy of your celebration.

Closing Thoughts

Yesterday is in the tomb, but tomorrow is in the womb.

You do not have to be defined by negative circumstances and challenges. By strategically approaching crisis, you can decrease the noise and focus on results. Additionally, remember some of the biggest proponents of personal finance and financial literacy have had devastating financial adversity including Dave Ramsey, Robert Kiyosaki, Donald Trump, and Suze Orman. Harness strength found in their stories of triumph. Know that your latter will be better than your former. Lastly, remember when assessing the size of your financial mountains not to discount the size of you.

Adversity causes some men to break; others to break records. William Authur Ward

Decide today which man or woman you will be!

Lastly, if you like this article, please subscribe to my FREE email updates or RSS feed (reader), Retweet it, Like It on Facebook, Tipd it, Fark it, Stumble it, and tag it on Delicious. Also, click here to receive my eBook for FREE.

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¹Note, the estimated odds of winning a recent $10 million sweepstake were 505,000,000 to 1 according to About.com, so if you are banking on winning, it may be a VERY long wait.

Image Credit: Photoloni

I’d like to live as a poor man with lots of money. – Pablo Picasso

There are plenty of millionaires who attribute much of their wealth to frugality, but the fact remains the average income of millionaire households is approximately $350,000 (~5x the national average), so it is certainly not frugality alone that accounts for building wealth.Today, we explore the loaded question: is it better to be frugal or to be a high earner?

What’s Your Potential?

What would you attempt to do if you knew that you could not fail? In so many cases, your answer will account for a mere fraction of your potential. Ultimate Guide to Becoming a Doer

We all have different earning potentials. General income trends are just guidances that fail to account for the unique ways you may leverage your skills, abilities, and passions that go beyond your education, profession, gender, race, and socioeconomic status. If your potential could be fully-characterized by a mere formula, believe me, it would already be marketed and packaged for you to buy for $5.99. We know that’s not the case.  For example, an ex-convict who has much trouble speaking (3rd grade education) decided he didn’t like his odds finding solid traditional employment, so he embarked on several entrepreneurial endeavors and earns in excess of $30,000 per month. I’m sure plenty of people wrote him off, but that didn’t stop him from finding his niche.

It is unfortunate when people retreat to cutting lifestyle as their only way to build wealth because they have all but written off increasing their earning potential. Considering that most people don’t meaningfully increase their income by chance, if you aren’t deliberate about increasing your earning power, it may be difficult and lengthy to manifest.

Are You Really Frugal?

The best offense is a good defense.

Frugality deals with obtaining value from your resources (such as money). Perhaps the most derisive aspect of frugality is that value is subjective. What’s frugal to you may be wasteful to me and vice versa. It is somewhat ridiculous for the “frugality police” to get on their soapboxes deriding anyone who spends his or her money differently. Having different values doesn’t mean that someone is wasteful per se. The issue is more complex. For example, changing your own oil can be frugal. However, if one’s argument against doing so is “my time is worth more than the cost to have someone else change it for me, so I would rather spend my time in my areas of core competency,” then how is that not frugal? After all, he is obtaining maximum value from his resources.

Interestingly, most millionaires are frugal but are not necessarily “first-cost” sensitive. Instead, millionaires are “life-cycle-cost sensitive,” so the total costs rather than upfront costs are most important. The initial sticker shock of paying someone to do tasks you could do for yourself or paying extra for higher quality products or services is often deceptive, as the total costs of going the “expensive” route may indeed be less. Additionally, imagine the profound life-cycle benefit of continually investing time in improving your professional credentials, personal brand, knowledge-base, and network instead of spending your time doing all repairs and maintenance work yourself. Simply put, just because you can doesn’t mean that you should. This is why the large majority of millionaires are not do-it-yourselfers! (For more characteristics of the wealthy, please check out millionaire facts)

True frugality is not about being penny wise but pound foolish.

The Power of Earning More

Of course, earning more also gives you many options. First and foremost, it is mathematically easier to hit certain financial goals when you earn more (all other things being equal). Second, earning more may yield more flexibility with your time. For example, rather than increasing your personal production through sleep deprivation, neglected relationships, and other sacrifices, you can improve your production capacity. This may mean bringing someone else on your team to carry some of the burdens or using technology that enables you to do more with less. While this may involve added costs, you can still come out ahead financially provided that gains from the increased production capacity exceeds the added costs of hiring help or paying for technological advances. Don’t spend so much time trying to be productive that their is nothing left to give, which is why Stephen Covey noted that highly effective people are mindful of their production versus production capacity balance.

With our technology, with objects, literally three people in a garage can blow away what 200 people at Microsoft can do… Corporate America has a need that is so huge and can save them so much money, or make them so much money, or cost them so much money if they miss it… Steve Jobs

Concluding Remarks

In the end,  the debate over frugality versus increasing income will continue, probably unnecessarily so because earning more and being frugal are not mutually exclusive. Most millionaire households obtain their financial footing through embracing both frugality and earning more. For example, just as affluent households are more likely to use coupons (frugal activity) compared with less affluent households, millionaire households have average annual incomes that place them in or near the top 1% of earners (~5x the average American household).  The distinction of whether frugality or earning power contributes more to overall economic success ultimately depends on the economic productivity of the household, which varies. Recall, “Toyota Millionaires” differ from “Mercedes Millionaires” both in terms of their degrees of frugality and economic productivity, yet both are considerably more frugal and economically productive than the general population. Perhaps rather than  determining which is better, the real question is whether your household financial practices will help you reach your financial goals.

Lastly, if you like this article, please subscribe to my FREE email updates or RSS feed (reader), Retweet it, Like It on Facebook, Tipd it, Fark it, Stumble it, and tag it on Delicious. Also, click here to receive my eBook for FREE.

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The Nastiest Habit (That We All Have)

By: Roshawn Watson

“The soul would have no rainbow had the eyes no tears.”

Many of our actions are driven by our desire for safety. From having an emergency fund to carrying insurance, we all want to know that we’re going to be okay. Recent economic events have cast doubt on the financial plans of many. Rules that were seemingly unequivocal began to no longer apply to the new economy, where historical annualized returns weren’t predictable, home values had net  depreciation, and gold had a tremendous ride to the top. During such times, many understandably want to flee for cover, but therein lies the most important question: “Where to: are there any safe investments anymore?”

Have There Ever Been Safe Investments?

People have always assumed some level of risk when building wealth anyway, regardless of whether we were investing in the financial or real estate markets or becoming business tycoons. “Sure things” typically amount to hype and empty promises mixed with a large amount of confidence. Perhaps, the primary lesson the most recent economic debacles highlighted was that real risks still persist. However, these risks aren’t generally new; it’s our awareness of existing risks that’s been expanded. For example, the markets have well-documented histories of cyclic booms and busts. While it is easy to be cavalier during the “good” times (such as during the dot-com and real estate bubbles), it is when things aren’t going well that we discover our true risk tolerance. Hopefully, that doesn’t mean that we should, like a record number of young people, avoid investing, but rather embrace investment strategies that minimize risks while providing reasonable returns. If we simply retreat to saving or put money in CDs, it will lose purchasing power due to inflation and taxes. Also, it is hard to really capitalize on the long-term magic of compounding interest and appreciation at the “jaw-dropping” rate of 1.48% (the current national overnight average for a 5-year CD).

In short, the issue was never whether there are safe investments, as risks were always inherent, but rather which investments are appropriate for our current level of risk tolerance?

Investing Has an Encouraging Track Record

The history of investing is still encouraging. Data suggests that long-term investors win. This is just as true today as it was 50 years ago. Some may ask, what about the “Lost Decade?” That’s the period from 2000-2010, where the S&P had an overall -1.25% return. The whole Lost Decade hypothesis relies on a series of assumptions that lack validity for the majority of investors. For example, most people don’t do 10 years of investing all at once, and most people aren’t exclusively invested in the S&P. Additionally, fixed-income funds have outpaced stock in the last 10 years; small cap investors (Russell 2000) have had an annualized return of 6.3% and MSCI Emerging Markets Index returned 12.3% annually (as of January 2011). Even if you went all the way back to post World War II, the S&P still returned an annualized, inflation-adjusted 5.8% as of January 2011. That’s significantly less than the much touted 12% but still whole a lot better than what you would get from many alternatives. Of course, the good track record is not limited to the stock market.  Even though the current property appreciation rate and pricing data aren’t particularly impressive in many markets, consider the overall returns real estate investors who are leasing their properties to tenants with little to no debt. The point is even in “down” markets, some people are making money through their investments, and the overall track records overwhelmingly supports long-term investing over not doing so.

Investing and Self-Fulfilling Prophesy

One of my favorite quotes is “think you can or think you can’t, either way, you’re right.” About eight years ago, I was preparing to take a Biopharmaceutics exam, and I wasn’t my usual motivated self. This was not my favorite subject, the weight of this exam was high in relation to the overall course grade, and the exam was described as pretty intimidating. Anyway, at one point, I decided to throw myself a pity party. Fortunately, a friend told me, “well if you think you are going screw it up, you will.” YIKES! That’s was all I needed to hear to mentally get myself back into gear to ace the exam. The point is, it would have been just as easy for me to accept that exam as too difficult based on others’ reports and the negative thoughts that I was battling. Had I done so, I have no doubt I would not have performed very well. The legend of the exam’s difficulty was accurate. As I recently mentioned in How To See a Bright Financial Future, we tend to move in the direction of our most predominant thoughts, so my thoughts about my performance on the exam were relevant.

Don’t minimize the influence your thoughts have on your ultimate performance, whether your challenge is taking a pivotal exam, acing a job interview, investing, or starting a business. This is one reason I don’t particularly listen to doom-prophets with respect to the economy. I believe most mean well and raise reasonable concerns sometimes, but they are coming from only one perspective, and it’s a limiting one. If one fully embraced their vision of the world and sometimes the corresponding hysteria that goes with it, what reasonable person wouldn’t be scared to invest or start a business endeavor? That’s a price far too high to pay for the benefit staying completely “informed.” My stance is to collect the needed data while performing due diligence, but don’t allow fear to stop you. Fear will rob you of the very ambition and momentum necessary to manifest your dreams.

Inactivity is the biggest thief of opportunities.

Concluding Thoughts

Financial challenges are nothing new. From the real estate crises in the 80s to the one in the 2000s, from the stock market crash of 1987 to the decline noted from 2007-early 2009, from high unemployment of 1983 and 1992 to the high unemployment now, I think we’ve been down this road before. Sure some of the players and terminology have changed, but in many respects, it’s the same old dance. Accordingly, just like it would have been a mistake for most to avoid the markets from 1980 to 2010, I believe it is likewise a mistake to avoid the markets from 2010-2040. Notice, in no way am I saying that the land is not occupied by giants.  I’m saying you are well able to conquer them. Decide today which report you will believe, for that will determine your courage to become wealthy.

Lastly, if you like this article, please subscribe to my FREE email updates or RSS feed (reader), Retweet it, Like It on Facebook, Tipd it, Fark it, Stumble it, and tag it on Delicious. Also, click here to receive my eBook for FREE.

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Greetings friend. It’s been an incredible month! Your support has truly been a lifeline to this site. I appreciate you for sticking with me, tweeting, commenting, sending me emails, including me in your round ups, advising, encouraging, and for all of the many ways you have shown love. I value  you so much! Thank you!!!

Uncommon Round Up

Here is  my Ultimate Guide to Becoming a Doer. (Dumb Little Man) – I’m honored it resulted in me getting quoted in the New York Times.

The prolific and insightful Trent shares an interesting perspective about jobs and the entrepreneurial mindset. (The Simple Dollar)

While I don’t personally sign up for new cards (or directly allow their ads on here), I still get asked about their promotions. FMF compiled a centralized resource. (Free Money Finance)

Amanda included last week’s 10 Reasons to Seek Abundance in her round up along with some other articles of interest from the blogosphere. (Interest Co Nz)

Jeffrey offers 67 Free and Inexpensive Hobbies. Who said hobbies have to be expensive? (Savings Advice)

What’s your Travel Style? Resort Relaxer or Exploring Adventurer? I am unapologetically a resort relaxer. I so enjoy Young’s fun personality, which shows through with this post! (Young And Thrifty)

Hmmm, here’s one to ponder: Would You Buy An Engagement Ring At A Pawn Shop? This may not be acceptable for every household. (Sustainable Personal Finance)

How I Quit My Job, and What I Plan to Do Next. Congrats Kevin. I applaud you on beginning the next chapter of your life! (Invest It Wisely)

Do you read blogs by people who are in debt? I read blogs by people from many walks of life. If I happen to know someone’s background, that may provide added context for his or her advice. (The Money Principle)

I am a big advocate for budgeting. Average Joe says: Forget 5 Steps to Budget Success–How About One (this site is a new blogroll addition; thanks for all the support and laughs Joe!)

Have you ever had a bad interview? Here’s an interesting account: When an Interview Goes Bad (Fiscal Phoenix)

I feel very strongly about failures and how they affect us. I’ll be revisiting this topic later. For now, here’s an interesting article: When Failure is the Best Option (Careful Cents).

The recent investing trends are quite interesting. The Novel Investor discusses: An Under-Invested America: Is Conservative The New Norm?

While I won’t be writing about goal-setting again for some time, here’s another take on “stretch goals.” The Power of Setting Modest Goals (Thad Thoughts)

Diversification is pretty common knowledge, yet how often do we do it? The Risk of Investing in Your Company Stock (Stock Trend Investing)

Here is a list of carnivals that I have participated in:

Best Of Money
Best of Money #141 @ Mom’s Plan
Best of Money # 144 @ Squirrelers

Carnival of Financial Camaraderie
Carnival of Financial Camaraderie #18 @ My University Money
Carnival of Financial Camaraderie #19 @ Newlyweds On A Budget
Carnival of Financial Camaraderie #20 @ My University Money
Carnival of Financial Camaraderie #21 @ Thirty Six Months
Carnival of Financial Camaraderie # 22 @ My University Money
Carnival of Financial Camaraderie #23 @ Canadian Finance Blog

Carnival of Personal Finance
Carnival of Personal Finance #346 @ The Jenny Pincher
Carnival of Personal Finance # 347 @ One Cent At a Time
Carnival of Personal Finance # 349 @ Sustainable Personal Finance
Carnival of Personal Finance # 350 @ Well Heeled Blog
Carnival of Personal Finance # 351 @ Girls Just Want To Have Fun

Yakezie Carnival
Yakezie Carnival @ The Amateur Financier
Yakezie Carnival @ Steadfast Finances
Yakezie Carnival @ 101Centavos
Yakezie Carnival @ Financial Success For Young Adults
Yakezie Carnival @ Not Made of Money

Totally Money Carnival
Totally Money Carnival @ Afford Anything
Totally Money Carnival @ The Frugal Toad

Festival of Frugality
Festival of Frugality #325 @ Debt Free by 30!

Photo Credit: Images_of_Money

By: Roshawn Watson

Sometimes it seems like the only reason people seek abundance is to lavish themselves with every luxury imaginable. Overall, I find that to be a very narrow and limiting perspective of abundance. The reasons for seeking abundance transcend pure indulgence. Building significant wealth will not only revolutionize your life but may also impact the lives of those in your circle, your community, and beyond. Thus, shouldn’t we seek abundance as a societal duty? Here are 10 reasons to seek abundance.

Calling

Are you a rock star stuck in an accountant’s body?

There is nothing more tragic than for people to die with their music still in them.  When this occurs, there is a collective lost because not only do we lose the people we cherish, but we also lose their unique gifts.  Stephen Covey says that we all desire to “live, to love, to learn, and to leave a legacy.” One of the best ways to achieve that is by relentlessly pursuing our callings. Your calling is where your difference is celebrated rather than tolerated. It’s where your skills and abilities, personality, and passion align themselves. While we should not cease to find creative means for pursuing our dreams regardless of finances, sometimes there are financial barriers to doing so that cannot be ignored. However, a person with more than enough is not constrained and is free to wear his passion and live his dreams.

Where the spirit does not work with the hand there is no art. Leonardo da Vinci

Freedom

I am not a fan of our culture of debt. This Babylonian system paralyzes many would-be achievers and robs them of their destinies. Their youth and health are sacrificed in the pursuit of the almighty dollar. Instead of working for themselves, they work for their lenders because it’s their lenders who own their cars, homes, and furniture. If Sallie Mae could repossess their education, she would; instead, she lobbied Congress to make sure they’re saddled with her until she’s paid off or until they die. What a mess! However, if you are walking in abundance, you can make decisions uninfluenced by the concern for sustenance. Your debt and jobs are not your gods. Unfortunately, such freedom is not cheap.

Those who expect to reap the blessings of freedom, must undergo the fatigue of supporting it. – Thomas Paine

Emergencies

Eight in 10 households will have an emergency in the next 10 years; thus, it is no longer a matter of if something will happen but when something will happen. People should not assume that credit will be available when they need it. Those lines of credit have a tendency to dissipate once lenders catch whiff of something gone awry. More importantly, the last thing one generally needs during a crisis is debt anyway, and providing a loan is not an act of kindness. The borrower typically lines the pockets of their lenders, and for this privilege he may get the equivalent of a travel mug. In contrast, a person with abundance can face the same financial dilemma, but the size of his resources to resolve the problem shrinks an elephant-sized crisis to a mouse-sized inconvenience.

Education

Your intellectual capital is among your greatest resources. For instance, millionaires as a group are highly educated (approximately 80% hold college degrees according to Tom Stanley) and strongly invest in the education of their offspring. Despite its value, higher education costs are ridiculous, typically rising at twice the pace of normal inflation. Nonetheless, your marketplace advantage is based on what you know, when you know it, and how soon you can act appropriately. An entrepreneur-professor, serving on the board of an $8 billion company, was traveling with the CEO and simply marveled at how current the CEO was on complex financial instruments that were:

1. completely outside of his background and seemingly unrelated to his industry and
2. challenging to the professor’s own highly capable students.

The professor argued if the CEO of a $8 billion company prioritized continuing education that much, how much more should we value it. Embracing abundance not only gives you more funds to invest for your education but may also afford you more time to obtain it.

Welfare

Virgil stated that the greatest wealth is health. Although I doubt he was referring to material wealth, yet it is hard to generate income when you feel awful: being in good health does provide more opportunities to build wealth. The most extensive longitudinal study on wealth and longevity indicated that those with financial wealth live longer. There were numerous reasons for this. First, those with abundance had better nutrition and access to care. For example, it wasn’t just about having insurance; the quality of insurance mattered as well. Additionally, wealthier individuals tended to be more oriented towards their futures and made choices that sustained their longevity. For example, they were less likely to smoke and to be obese but were more likely to exercise and to moderate drinking. In aggregate, your physical well-being is tethered to your wallet.

Give Back

Anytime I hear someone decree I only need just a little bit for me and my family, I always think to myself, “what a selfish and scarcity-minded person.” It’s MONEY that feeds the hungry, provides clothes for the poor, and shelter for the homeless. Why would you only want enough for you? What about others? A great way to add meaning to your life is to intentionally contribute to someone else’s success. Additionally, you are a lot more likely to get wealthy by serving others anyway. It’s great to have enough for yourself. After all, charity starts at home, but hopefully it doesn’t end there. Being able to help others is perhaps the best reason to pursue abundance in the first place.

Fun

Surely, abundance allows more fun. In fact, fun is often what we first think about anyway. I’m not at odds with anyone enjoying himself with money he has earned legitimately. I once saw a special on CNBC where a millionaire was walking journalists through his expansive car collection that included a Bugatti (price tag exceeded $1.5 million at the time). His words struck me. He said, “I don’t want to apologize for my wealth.” I personally think it is tragic that anyone would feel compelled to do so IF he earned his money through diligent service of others.

Have fun in your command. Don’t always run at a breakneck pace. Take leave when you’ve earned it, spend time with your families.” – Colin Powell

Peace

Financial peace are two words that rarely seem to go together. It is very liberating when your decisions are your own and not that of some corporate entity, such as your lender. Financial peace means you relinquish that part of the struggle. You become wholly committed to pursuing financial excellence. You move past knowing the principles to applying them to your life. Debt freedom becomes your reality. You are competent in interpreting financial literature and can apply what you learn to your own life.

Financial peace doesn’t have to be elusive. The same steps taken to achieve financial peace  ultimately lead to abundance over the long term.

Influence

Influence matters. Positioning yourself as someone who has made it carries esteem that may be transferable to whatever you endeavor to change. For instance, a couple of years ago, a merger and acquisitions attorney turned venture capitalist decided that he wanted to improve water quality throughout the world using an entrepreneurial model. He hired a team of scientists and collaborated with thought-leaders. While his background had nothing to do with clean-water technologies, his previous success and wealth caused well-known legendary leaders and celebrities to attach their names to his project. Of course, having abundance is far from the only way to be influential, yet you may be surprised by the opportunities you have and the networks you access to after you “prove yourself.”

Protection

Money is a defense.

Money protects us in many ways. For example, certain neighborhoods have higher propensities for crime than others; to avoid them, one typically either moves further away (i.e., away from large cities) or pays more. Additionally, money can protect you via purchasing insurance and legal representation; it can even help you protect the applications of ideas. For example, when HP purchased Palm for $1.2 billion a couple years ago, it is said that it was Palm’s intellectual property that HP really valued. If Palm had not properly protected their innovations, it is doubtful they would have fetched anywhere close to that much at the time they sold. Pursuing abundance often means not allowing yourself to be robbed of your life’s work through crime, frivolous lawsuits, or unlawful adaptation.

Closing Thoughts

There are many reasons to pursue abundance, but it is unlikely that anyone will force it upon you. You don’t stuff food down the mouths of the non-hungry. I trust that you will seek increase, talk about increase, and think about increase. As your thoughts become more, you become more. Abundance is out there, so what are you waiting for?

Lastly, if you like this article, please subscribe to my FREE email updates or RSS feed (reader), Retweet it, Like It on Facebook, Tipd it, Fark it, Stumble it, and tag it on Delicious. Also, click here to receive my eBook for FREE.

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Photo Credit: Images of Money