Finally, at the end of October, and before my planned goal of December 31, 2019, I am debt free! Early this month through discussion with my wife, we agreed that I could transfer some money from my savings to accelerate the payoff of the installment loan. I transferred $2,200.00 from savings and set an interest rate of 12% with a term of 12 months for monthly payments of $195.00. I’m going to begin payments for this transfer in 2020. If you’re going to make financial decisions that impact your family, make sure you discuss it with your spouse no matter the dollar amount, because this type of communication builds trust. I’ve often talked about lending to your self in previous blogs, and I believe this scenario is one of the few where it’s ok for the borrower to be slave to the lender. This concept is from the Book of Proverbs of the Holy Bible. This translation is powerful: “The rich rule over the poor, the borrower is a slave to the lender.” Proverbs 22:7 TLV. If you borrow from yourself then the only person you will owe is you. It feels so good to no longer have to make payments to credit cards. Next month, I will re-cap how far I’ve come.
If you want to learn more about the self-lending principle or if you need a financial check-up then contact me
This month’s video is David Goggins – STAY HARD – The BEST OF Motivation – Motivational Video from the Mulligan Brothers YouTube channel.
“The LORD will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.”
The past year and this year have been filled with challenges in my life. If you’ve been coming to pursuitofexcellence.me, you’ve seen more posts concerning debt free me and articles I’ve found interesting. My source material for my blog posts is from the articles I read. I’m sharing this information so any visitor can read articles I’ve enjoyed at their convenience. Going forward, I’m going to post a blog reviewing an article or multiple articles as it happens, and the articles will be on a wide variety of topics and not focus strictly on finance at times.
Items in italics are direct quotes from the articles below
Once in a while, friends or family want to borrow money. How should you handle this? Be careful. Over the years, a hundred people asked me to borrow money from 50 bucks to tens of thousands. I have granted only two requests.
A lot of ill feelings will come up over borrowed money that isn’t paid back. It destroys relationships. Happens all the time. If you do loan money, charge a lot of interest. This person is asking to borrow money because he has exhausted all other options. The answer is no. The answer to the question “Can I borrow money?” should pretty much always be no. There are a couple of situations in which the answer is yes.
It’s very important that if you are going to lend money to friends and family that there are 3 key points to keep in mind:
1. The amount is small enough that non-repayment would not change the relationship.
2. Charge interest.
3. There is no charity — only investment.
The first point is important, and the amount can vary from person to person. If you lend money you should write it to zero immediately. Assume the money is a gift and that you will never see it again. If lending the money won’t change the relationship, then it’s ok to do it. It will degrade the relationship if done over time again and again. And here’s the thing: Even if I’m not weird about it, the borrower might be weird about it. He will be weird about it if he can’t pay you back. He will avoid you like the plague. The second point is if you do lend money, then charge a lot of interest. The point is if a traditional lender will charge a higher interest if you’re a risk of not re-paying and payday lenders will charge as high as three hundred percent then you need to also, because it is about the time value of money. It’s about the opportunity cost of not being able to take that amount and use it for something else.
The general principle here is:
a. Assume it’s a gift.
b. But pretend that it’s not.
If you do end up in a non-repayment status, then internally let it go. Finally, when you lend money, understand that you are investing. You expect something in return, which leads back to the 2nd key point. If you treat the situation like you’re investing in someone then you understand the risk, you take in lending money. With charity, you’re giving and expecting nothing in return. So I don’t give. I invest. Which is the primary reason I’m 2-for-100 on lending money. I don’t believe many people are very good investments. If someone is a good investment, he’ll show you his virtues, not flaws.
He’ll say, “You should invest in me because I’m great and you’ll get your money back.” Not, “I’m down on my luck and I’m a loser.” Pretend you are a capitalist (which you are). Invest in this guy.
Where most people typically go wrong is that they loan money when in reality it is charity. And then they expect something in return. That’s where the resentment comes in.
I’ve lent money to at least five people in my life, and currently I have one person that is currently in re-payment status with me. The above article really resonates with me. In this scenario, I get a passionate about teaching people how to self-lend and encourage the discipline of savings.
We are all Steve Martin. “I love money. I love everything about it,” he once said. “I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gas-powered turtleneck sweater. And, of course, I bought some dumb stuff, too.” Yes, like the iconic comedian, the American consumer loves to consume. Maybe an electric dog polisher and a fur sink are a bit extreme, but the U.S., with its relatively low savings rate, definitely has a spending problem. We find ourselves asking where does all the money go? The chart below in the article depicts average American spending as depicted by the Bureau of Labor Statistics. In 2018, based off the average American earning $78,635, Americans are spending 80% of their income. Obviously housing cost is a factor and eating out & entertainment has been increasing. What’s important to notice in this article is that the average American’s savings is minimal compared to their level of spending. The previous article and this article highlight the importance of leveraging the ability of self-lending to make yourself the lender.
If you need me to check your financial pulse or if there is something I can agree with you in prayer about, contact me.
This week, I’ve included David Goggins – STAY HARD – The BEST OF Motivation – Motivational Video from the Mulligan Brothers YouTube channel.
“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.”
I was thankful this month to be able to travel up to Delaware to meet my wife’s grandfather. Unfortunately, he couldn’t attend our wedding, but I enjoyed getting to meet him and see how everyone interacted with each other. I did end up using the Barclay’s Mastercard, and with Christmas approaching, I feel like I’m going to end up using the cards. If you don’t have money in savings, you may end up falling back into the cycle of charging things on credit. My advice is if you must do it then, make sure you can pay off what you charge. If you can’t then be willing to sacrifice a Christmas where you can’t buy gifts. The holidays should be about spending time together, and not about spending. If you’ve used the self-lending principle, then you’ve had the opportunity to build up your savings account at an accelerated rate.
It’s important to make small and measurable steps, and celebrate the small victories.
If you want to learn more about how I’m increasing my income, while reducing debt or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.
Also, learn more about how I use the self-lending principle through Mustard Seed in the mustard seed section.
“The LORD will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.”
Make sure you don’t try to pay off your debt on your own. This month was rather frustrating for me, and I feel like my debt reduction is too slow. Always remember that being debt free can be a slow process. When you feel overwhelmed, stop, breathe deeply, and close your eyes. Do these three steps over and over again. With your eyes closed, imagine being debt free and feel it with all your heart, mind, and strength.
If you want to learn more about how I’m increasing my income, while reducing debt or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.
Also, learn more about how I use the self-lending principle through Mustard Seed in the mustard seed section.
“The LORD will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.”
America’s Gilded Age in the late nineteenth century was famous for industrialists who amassed unimaginable wealth — such as John D. Rockefeller, Andrew Carnegie, and Cornelius Vanderbilt – and also for the era’s startling poverty. The U.S. is seeing something like that today. The booming stock market, up three-fold since the financial crisis, is no source of excitement for risk-averse small investors and savers, particularly retirees who expected to live off interest income. From 2008 through 2015, U.S. savers lost nearly $1 trillion of income from the cratering of yields on bank deposits and bonds, according to research by insurance company Swiss Re cited by the Wall Street Journal. And that’s even after adjusting for the benefit from paying lower rates on personal debt. Back in 2007 one-year CD yields were close to 4%, and currently one-year CD yields are less than 1%. Many retirees who were dependent upon these higher rates are being forced to find spare to part time work just to make ends meet. Some are moving into the stock market in the hopes of higher yields, and some can’t pay their bills. Time is a valuable tool, and to take advantage of compounding interest, a person must start early and often. A person should constantly be investing in his financial education and at the same time continue to create value for the sake of generating income and or security. I do recommend teaching yourself the self-lending principle as a means of breaking free from the cycle of consumer debt. When you buy assets, buy assets that are passive income producing that can be turned into a system and scaled. Without being creative, I argue a person could become a victim of the wealth gap that today’s current retirees are experiencing. That wealth gap is highlighted by the disparity between the pay of CEOs and their workers, which grew even wider in 2016, according to a study by consulting firm Compensation Advisory Partners, as cited in a Bloomberg story. The study looked at 42 U.S. public companies, a relatively small sampling, but it nonetheless is sure to spark debate. It found a 5.5% median pay hike for their CEOs, roughly double the 2.8% rise for the year in hourly pay for non-farm private sector workers, according to the U.S. Bureau of Labor Statistics. There is an income gap between workers and CEOs, so it’s important to work your job but also mind your business. What is your business? Your life. Every penny that comes into your bank account is your responsibility. Make your money work for you without you having to always work for it.
Robert Kiyosaki has an unusual reading recommendation for would-be entrepreneurs — one that even the most devoted fans of the “Rich Dad, Poor Dad” author might not see coming. It tells the story of a knight about to meet his death in battle. It’s written by a Hollywood movie star. For Kiyosaki, it’s become a treasured read. “Believe it or not I read a lot of spiritual books. One of the best is ‘Rules for a Knight’ by Ethan Hawke,” Kiyosaki said during a January interview, when asked if there were any books he would recommend for MarketWatch readers. “It’s so well written, talks to your soul,” he said of the book. “All my friends are entrepreneurs and they all get copies of it.” This books takes the form of a letter from a knight written to his children right before battle, and it outlines the rules for being a knight. That may not sound like fertile material for learning the secret to success in the 21st century business world, but the knight’s rules do have an aura of entrepreneurial mantra about them. The rule for humility begins, “Never announce that you are a knight, simply behave as one,” while the rule for gratitude states, “For all that has been, a knight says, ‘Thank you.’ For all that is to come, a knight says, ‘Yes!’ ” Robert Kiyosaki states that he only operates at the highest of spiritual values and seeks to do business with people with similar values. Values such as integrity, and honor are words with significant meaning. Personally, I look for a person with strong spiritual values such as transparency, integrity, and consistency. Another book he recommends is “The Untethered Soul,” by Michael A. Singe. If you prefer your reading to be more firmly rooted in the worlds of business and finance, Kiyosaki suggested two books on economics in MarketWatch’s live interview with him in August, which you can read more about here. Robert Kiyosaki’s “Rich Dad Poor Dad” is coming upon its 20th anniversary, and it is a good introduction into looking at money differently. This book was personally recommended by my good friend. His mentoring and this book helped shape in part how I look at finances. If you read that book, then you must read his second book “Cashflow Quadrant”. If you don’t enjoy reading, then I suggest the audio book version or even the short summary clips you can find on YouTube. However, reading is essential to being able to see into how a writer thinks and it’s not the same as a quick edited version. I’ve found that when I’m struggling to read a book, I read something I enjoy reading and then pick up and read from the book I’m struggling with. Block out a time even if you have to set an alarm for it to make the time to read. Your brain is a muscle and it needs a work out from time to time.
Items in italics are direct quotes from the articles above
If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.
For this week, I’ve included The Wisdom – Bruce Lee from the Absolute Motivation YouTube channel.
“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” – Proverbs 28:26MSG
Most Americans are filled with regrets — financial regrets. Fully three in four, in fact, admit they harbor financial regrets, according to a survey of more than 1,000 adults by Bankrate.com. Their biggest regret: not saving for retirement early enough (nearly one in five Americans put this in the No. 1 spot). What’s more, among those 65 and up, 27% said this was the biggest regret, compared with 17% of those aged 30 to 49. The author goes on to show the consequences of waiting to save comparing the difference of saving at age 25 vs 35. According to 2015 data from the Employee Benefit Research Institute, fully 28% of workers say they have less than $1,000 saved and 17% have between $1,000 and $9,999; meanwhile, just 14% of workers have $250,000 or more saved. That’s far too little, according to many financial advisers: Guidelines from Fidelity, for example, state that by the age of 30, you should have your entire salary saved; by 40, three times your salary saved; and, by 50, six times your salary saved. Other financial regrets include not having an emergency savings and too much student loan debt. It’s important to have a budget to know how much is coming out and when it’s coming out. Make sure you have positive cash flow at the end of the month. If you do, I recommend a simple 10-10-80 strategy and just as important starting to use the self-lending principle.
We’ve all heard the stories of young entrepreneurs who start a successful business from their parents’ basement. But how do you build a business from inside a van? Mariah Coz knows. She built a seven-figure business in a 35-square-foot van–that’s about the size of a small bathroom!–which she shared with her boyfriend as they traveled across the country. They spent about a year and a half on the road, visiting nearly every state in the continental United States. Among her favorite experiences were hiking in Yosemite, exploring Yellowstone, and seeing the Grand Canyon. Mariah took her expertise of living in her camper and turned into an online course, and began teaching business strategy through her company Femtrepreneur. She teaches others interested in freedom how to build online business and offers six important tips. The tips are: be flexible, pick one day a week and block out five to eight hours for work, figure out what chains have the best Wi-Fi and become a repeat customer, do less with more impact, set realistic expectations and goals, and focus on mobile-friendly marketing. You must be able to systematize your business so it will run with as little involvement from you as possible. The author suggests setting aside a block of time to complete all your tasks for the week which will allow focus and productivity. If you are going to use a business’s Wi-Fi I suggest that you have a good identity theft protection plan in place, because your information is on an open network and can become compromised. “When you have limited time to devote to your business, you have to focus on the high-impact activities and cut out all the rest. That means applying the 80-20 principle–focusing on the 20 percent of activities that bring in 80 percent of your revenue. Focus on just one product, one marketing channel–one thing at a time,” she says. Finally, it’s important to set realistic goals while at the same time making sure that your marketing is convenient for your needs if you are constantly traveling. Mariah believes everyone has unique life experiences and skills that can help people and can be monetized. And the good news is, it doesn’t need to take a lot of time or money to get started. As she puts it, “You can start now with what you have, where you are, no matter what situation you are in!” It’s important to act, and to not waste your days because they are measured. Ask yourself how can I take advantage of my unique gifts and knowledge, how can I reach the world and make it better, and how can I do it just once and have it accessible to the world? If you can figure out how to answer these three questions, then in my opinion you can build a business. Items in italics are direct quotes from the articles above
If you need are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.
For this week, I’ve included Retrain your Mind from the Be Inspired YouTube channel.
“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.” Proverbs 28:26 MSG
This month I celebrated my first full month living with my wife. We were fortunate enough to go to the marriage conference together at the last minute, and I was thankful that we did. Our apartment is starting to look like a home, and my wife has begun studying to take her test to be licensed as a registered nurse. This month especially is filled not just with numbers and budgeting but faith also. Faith in things not yet seen and having the will to continue to do a good work regardless of the outcome. I have the opportunity for a new position at my job and having to rely on something greater than myself to handle these new responsibilities. Either way when I get paid my process remains the same and I look to use my self-lending principle whenever I can.
I’m looking to sell as many plans as possible not just to reduce debt, but to also help protect people. My thought process remains the same: increase income, and lower expenses, look for income producing assets, and build wealth to leave a legacy. Over the next few months you should see my debt reduce significantly. My wife and I have talked about using a consolidation loan to consolidate and reduce the payments on my two installment loans which should free up more cash flow. The only drawback of an installment or term loan is the payments are set for the term of the loan unless you can convince the loan officer to re-amortize the debt.
If you want to learn more about how I’m increasing my income, while reducing debt or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.
Also, learn more about how I use the self-lending principle through Mustard Seed in the mustard seed section.
“The LORD will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.” Deuteronomy 28:12 NLT
At the close of May, I’ve decided to start setting aside more money for the wedding, and my savings account. At the same time, I’m sticking to the Process. It’s four simple steps which I’ll be glad to share when you sign up for a financial check-up. I will continue to make regular payments to reduce each credit card, but there may be months where I reduce my payments to just over the minimum payment requirement to increase retained income. At the same time, I will be looking for opportunities to increase my cash flow. It’s important to cut spending, but at the same time look to increase income.
I’m so thankful for my beautiful bride to be. In this past month, she’s picked up her activity in our spare-time business, and I couldn’t pick a better person to spend my life with. When I’m weak, she’s my strength, and when she’s weak I’m her strength. Even if you aren’t in a committed relationship, I suggest you find someone to do life with. What’s the point of living, if you can’t share it with someone?
If you need a financial check-up contact me. More details about a financial check-up is in the contact me section.
