The Money Game

Have you ever left a meeting with someone and felt really really good about your own situation in life?  I'm not writing about one in particular with this post, but over the past couple of weeks, I've had MULTIPLE instances where I leave feeling a huge sense of relief at what I'm going home to.

So, after having these experiences, my subconscious has been stirring about what exactly keeps people in a perpetual state of "stuckness".  I've gone through the conversations I've had with these folks over and over in my mind and there's a couple of things that constantly rise to the surface. 

The first is a series of really bad choices that ultimately led them to the place they currently are.  The choices are usually not thought out, unplanned, completely random happenings that lead to a very negative outcome for the person.

The second, and probably worse thing that happens to people in these situations is a feeling of, "this always happens to me" OR "I can't do anything about it now".  It's as if their minds shut down completely and it's easier to ignore the situation instead of doing something about it.

So, What's Keepin' The Man Down?  My theory is that somewhere in everyone's past there was a moment where they either decided they were in complete control over their destiny, or they weren't.  And that decision is like putting a thousand pound weight on your dreams and telling them to fly.  Or better yet, it's like how circuses train elephants.  They anchor an elephant to the ground with an 8 foot stake hammered into the earth until the elephant no longer tries to escape.  Then, even a 6 inch stake will keep an elephant in place.

Peter Senge wrote about this stake that we all have in his book The Fifth Discipline.  The stake in question is your perceived reality.  And Senge says that it's easy to achieve what you want to achieve.  You simply have to adjust your perceived reality.  Move the stake. 

So, to the people that are stuck, those that have made poor choices and believe they have to live with them, I suggest you do one thing -- change your perceived reality.

It's not that you don't make enough money to start a business, it's a matter of finding the resources, or decreasing your debt, or building it on the side.  It's not that you don't have the education to get a better job, it's a matter of changing your focus to finding someone that can help you get a better job.  It's not that you attract the wrong men or women into your life, it's that you haven't decided exactly what you want in a man or woman and once you do, they will appear before you.

What's keepin' the man down?  It's you.  It's what you are allowing your mind to tell yourself.  Your mind is a wonderful servant, but a terrible master.

To Be prosperous, you must THINK prosperous!

When I started Four Legacies Mortgage with the key people in place I had high hopes for all of us.  I knew that what we were building was going to be special, and different, and totally unique in our marketplace.  I had no idea that some of my team members would take the company to even greater heights. 

So, in this post, I'm going to feature our very own Wealth Creation Specialist, Mr. Tyler Osby.  Tyler has been writing a blog (www.wealthwithmortgage.com) for several months now and probably has more content than most professional authors 3 times his age.  Not only does he have content, he has GREAT content.  Not only does he have GREAT content, it's FREE!!!! 

Now, I'm not talking about recipe of the month, or joke of the day -- Tyler has some of the best information on the internet if you're looking to get a great loan that fits your particular situation.  He writes about what the industry is doing.  He writes about the Des Moines real estate market.  He writes about the Fed Chairman Ben Bernanke.  (Actually, we all think he's a bit obsessive about Ben Bernanke.  Just don't say anything to him about the personal shrine he's built in his office.  Still a sore subject...)

The point is, it's GREAT FREE information that could help you save money in one of the largest transactions of your life.  May I beat a dead horse?  Thanks.  If your current "advisors" aren't giving you this level of free information, it's time to start packing up your things and heading elsewhere.  We have partnered with some of the best advisors in different industries who do things the way we do.  For crying out loud, check out Art Dinkin's  A Moment on Money.  If this isn't great content, I'm Matthew Lesko!  (He's just one of our partners... there's plenty more!) (I meant Art Dinkin, not Matthew Lesko.... I digress.)

There is so much available to you now, spend an extra minute or two and learn what you can from those that are spoon feeding it to the public.  Not only is it free and incredibly well-written, there are experts who are putting hours and hours into making sure their clients (and you!) are well-informed.

To Abundance!!
Adam

There’s a game that we all play with money.  It happens every day whether you’re conscious of it or not.  And, every day while you’re playing, you are either winning the game or losing the game.  The only difference between those that are winning and those that are losing is the fact that one group knows the rules by which the game is played and the other does not.  Which group would you rather be a part of?

I thought so. 

So, let’s start with the simplest concept: you lose the game when you’re spending more than you’re making.  It’s not rocket science, but it does involve math.  If you’re a chronic over-spender the easiest way to keep track of what’s going out is to keep a spending journal every day for a month.  It doesn’t matter if it’s a 79 cent pack of gum or a 79 dollar pair of jeans.  If you spend money, write it down.  At the end of the month, add up your spending and prepare to be astonished.

The Rockefeller family, one of the wealthiest families in the United States has a tradition passed down from father to son.  The kids all receive a weekly allowance, but in order to receive their allowance the following week, they have to provide a ledger documenting every cent they spent, saved, invested, and donated.  If literally one penny is missing from the total, the child does not receive their allowance the following week.  This is the equivalent of balancing your checkbook to the penny every single time you want to get paid.  Do you do that?

Ok, so spend less than you make.  Simple enough.  Now, what you do with that money is the second step to winning the game.  It’s far too easy to spend the money that sits in your checking account.  So, setup your accounts so that a percentage of your paycheck is direct deposited into a savings or money market account.  This is what will become your save/save account.  It’s called a save/save account because the purpose is to save/save not save/spend.  Here’s the goal: have enough in your save/save account so that if you have an emergency, there’s enough there to cover it.  (And I’m not talking an emergency pizza, emergency keg, or emergency trip to Cancun !)  The bottom line is, if you don’t have the money in your save/save account when your brakes go out (and they will!) you’ll whip out the credit card and begin the debt spiral. 

While we’re on the topic of debt, let’s cover the biggies – credit cards and student loans.  While I understand they are a necessary evil to get through college, I’m also not naive to the fact that people treat them both as free money.  Let’s get this perfectly clear – they’re not.  In fact, one of the biggest expenses you’ll have in your life is the interest expense on the debt you accumulate. 

Student Loans are changing on a day-to-day basis.  If you haven’t consolidated your federal or private student loans, you’ll want to after July 1.  With recent changes in the student loan industry, more companies that once offered consolidation loans are ending those programs.  The Federal Direct Loan Program is stepping up to the plate and offering what is predicted to be the lowest consolidation rates in history.  Again, wait until after July 1, 2008 to consolidate and save massive amounts of interest!

The last piece of advice to winning the game we all play with money is the toughest of all to get, but the most worthwhile in the long run.  At some point in your life, you have to live like a poor college kid.  You’ll either do it when you’re in college, or you’ll do it when you’re a professional.  Take it from someone who lived to regret it – I ate enough Totino’s pizzas and Top Ramen right after college to feed several small villages.  And during that time I realized, if you do for two years what no one else WILL do, then you’ll be able to do for the rest of your life what most people CAN’T do. 

Play the game to win!

Also, the Forbes ranking may have you rethinking Iowa as just “the corn state”. Des Moines, ranked fourth, with its sports arena, art center and heated 3 mile skywalk, now boasts an unemployment rate of 3.4% and business costs that are 10% below the national average.

2008 Top Ten Places For Business and Careers

1. Raleigh, North Carolina (#1, 2007)

2. Boise, Idaho (#3, 2007)

3. Fort Collins, Colorado (#28, 2007)

4. Des Moines, Iowa (#4, 2007)

5. Lexington, Kentucky (#30, 2007)

6. Atlanta, Georgia (#25, 2007)

7. Richmond, Virginia (#14, 2007)

8. Olympia, Washington (#10, 2007)

9. Spokane, Washington (#20, 2007)

10. Knoxville, Tennessee (#5, 2007)

I've found one of the biggest challenges facing my clients, my parents, my in-laws (and truthfully, my wife and I) during the holiday season is limiting what is spent on children.  Here we are, 9 days away from Santa squeezing himself down my chimney, and my kids have already opened no less than 5 gifts each from neighbors, relatives, and schoolmates. 

After the kids had opened the third gift, I decided to start keeping track of what the probable retail value of each gift was so that I'd have a final total of money spent on our little rugrats over the holidays.  My total so far is approximately $75 PER KID!  One of the toys is broken already.  One gift, a stuffed animal, slept with my daughter for about three nights and then found his way to the toyroom.  It will most likely never be seen again.

All this begs the question: How do we keep the largesse in check?  I've tried talking to the grandparents -- and admittedly, they're picking up slowly on our cue to spend less on gifts and focus instead on money for college.  After all, my 2 and 4 year old won't remember how many $15 stuffed animals were bought for them.  But they will remember how generous Grandma was when they cash the 36 savings bonds she gave them over 18 years to help pay for college.  Thanks Grandma C!

There are two bottom lines here and one of them is yours.  If you make Christmas an all-out spending spree on your kids, they'll come to expect it.  And there is a direct proportion to the age of your kids and the cost of their Christmas list.  A seven year old I know is getting a $200 Nano from Santa.  Need I say more? 

The other bottom line is your kids are picking up on money cues whether you're consciously providing them or not.  Make sure you make Christmas about something more than...how full is my stocking?

I have to laugh at the VISA check card commercial that shows a circus of people going through a toy store juggling toys, paying for their purchases with one swipe, and leaving with smiling faces and bulging shopping bags.  The woman that gets out the checkbook slows the process down so much that everyone drops the toys they've been juggling.  What's the message: if you're not using your debit or credit card, you're a bane to shoppers everywhere?!

Give me a big fat break, purveyors of plastic.  I get the whole suspended disbelief notion, but seriously, half of the retail clerks I encountered over the Black Friday weekend would rather have been sipping Hee Haw and gnoshing on Doritos.  They couldn't care less what I use to buy gifts for my friends and family.  For that matter, neither do any of the other shoppers out there.  They were more concerned about why the $7 CD player sold out so fast.  And why half of the things in the ad weren't even available.

We get it.  It's easy to use your plastic devil-inspired device to mindlessly spend money.  Stop beating us over the head with it.

I still like CASH.  I like cold hard cash.  I like cash machines and trees that grow cash.  I like Johnny Cash.
Cash is indeed still king.  Long live the king.

As part of my mortgage company's best practices, we will go over our clients credit reports and ALL of their bills with them and see if there are any gigantic discrepancies that might need to be taken care of.  Usually it's something small that can be easily cleared up like medical collections or an unpaid sprint pcs bill. 

Sometimes, it's something much bigger that gets me so fired up I can't see straight.  Read on and prepare to be enraged.

A tradeline had shown up on my client's credit report under the name of Aqua Finance, Inc. in the amount of $7,051.  I assumed they'd purchased a hot tub or a pool and it probably was an installment loan of some kind.  When my clients came into the office, they were complaining about a bill that they paid every month but the balance due never seemed to go down.  So I asked what it was for --

"Right before we moved into the house, we were approached by a guy at Home Depot (not an employee) about our new house.  He asked if we'd had the water checked because homes built in those years were known for corroded pipes and bad water.  He was a little pushy, so we agreed to have him over and it felt like he wouldn't leave unless we bought the water filtration system and softener he was selling." 

The statement that this couple was receiving read like a credit card statement.  At the bottom, it had the Annual Percentage Rate and a minimum payment warning that read: Paying only the minimum payment will result in higher interest charges and take longer to pay back the total balance.  As an example, a $1,000 balance at 17.99% interest will take 93 months to payoff.

93 MONTHS!!!!  That's only for $1,000 balance -- we're talking a $7,000 balance!! (Here's where I get really P.O.'d)

The jerk who sold them this water softener made the statement that, "you'll have this paid off in no time."  I have a fairly long-term view on things, but "no time" is not how I'd describe 54 years and 4 months!!!!  That's how long it will take them to pay off this stupid water softener only paying the minimum payment. 

Oh, and the $7,051 they "paid" for the thing will actually end up being over $91,000. 

Expect to hear about a class action lawsuit against these guys.  Led by me.  The Attorney General is already investigating and I hope to find more people swindled by these con-artists.  They prey on the uninformed, lie through their teeth, and have the audacity to call frequently and ask for referrals.  I hope they call me...

Oh, and one more thing -- Aqua Finance has a tag line: "It's what we do."  I think they mean screw people.