Business advice


Do you control your money or does it control you?
May 6, 2008, 6:41 pm
Filed under: Blogroll, businness advice | Tags: , , , ,

This is a good question to ponder when the country is awaiting their economic stimulus checks with baited breath. Consumers tend to think checks are going to keep coming. If you run your life on that premise, it means that you are planning on working until the day you drop dead. If you spend your life waiting anxiously for your next check, your money controls you.

Stop presuming that checks will continue to show up in your life as they can stop for a myriad of reasons. Nowadays, even government checks can be delayed.

I know. You are shaking your head wondering how to get control when all your money disappears as you soon as you pay your bills. Getting one’s financial accounts under control is a primary goal. However, it doesn’t mean that you can’t save. Nor, does it mean that you can’t put away unexpected rewards, such as the economic stimulus check. I know several working folks who are planning to use it for a vacation or new ‘toys’ they could do without.

This type of behavior simply is saying to the universe that I will keep on working. I have absolutely no hope of ever putting my money to work. You either make a plan to put some of it to work, with more later, or you will be working until your funeral.

I know times are hard and money is stretched money is stretched to the point of snapping. My point is that you have to put money away, no matter what the circumstance. This is even more important when it comes to unexpected windfalls. You only spend that $600 on a vacation if you already have an investment plan in place.

This problem, of acting as if checks will continue is so widespread in this country that even the top-earners run up bills they will never be able to pay. They are under the illusion the good times will keep rolling forever. All you have to do to realize how nutty that idea is to look at the movie stars that have gone broke once shows were cancelled.

The lower end of the earning curve can start small. There was an interesting article in the business section of the Los Angeles Times just the other day on how one can find treasures at estate sales. Don’t shake your head until you investigate. Children start out with small stamp collections that eventually end up being passed on to the next generation. Collectibles can be a starting base for building wealth. They can be accumulated with small purchases in the beginning. Forbes used to have a section that talked about the ups and downs of the market value of various collectibles.

For the long term, one needs an investment or savings plan. Suze Orrman, the current national financial guru, continues to talk against using retirement money early. Whatever problem is bothering you currently should be dealt with other options besides taking out retirement funds. There are penalties, not to mention the loss of a nest egg for the down the road where the only sure thing may be a social security check. Once a retirement account is established, however, it can be used as collateral for a short-term loan without penalties.

Spend some time finding out how you can grow your money if you have only a small amount to play with. Online investment firms offer bank accounts which offer higher than normal interest rates. When you have enough put away, you can start trading a little at a time.

If you accumulate enough, open a CD, a certificate of deposit, and don’t crack it open, the first time something goes wrong. You can still buy United States Savings bonds and other investment bills issued by the US Treasury. Here is a link with more info:
http://www.savingsbonds.gov/indiv/research/indepth/ebonds/res_e_bonds.htm

If you feel the need to understand more about your finances, do some reading and then start a plan of action. You are losing money every day you put it off.

For more examples of my work: http://www.bellbusinessreport.com

Laura Bell
writer@well.com

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Nobody teaches you how to retire
November 7, 2007, 8:40 pm
Filed under: Business Advice | Tags: , ,

This is a new lead on a prime-time television commercial for an investment group. This is a truth that describes our society. The question is why?

My two cents is that this lack of our knowledge starts in childhood. My mother taught me enough about money that I could have been rich and ready to retire, but my husband’s mother didn’t have a clue. That’s my excuse.

We can help others before it is too late. Education about money needs to start at an early age. As our nation’s children mature, we need to explain the horrific future they will have if they take on a partner without the same ideas about money. Disaster is the reality.

My mother started me out with an allowance at 12. Nowadays, of course, kids get allowances at an earlier age. I was taught how to budget the money. I had budget envelopes. One was labeled ‘savings.’ Any time my mother checked I would be in big trouble if that envelope was empty. Just think how better off kids would be today if they had learned this simple lesson.

This is the beginning. And, it is only the beginning. Knowing how to budget and knowing that you have to save part of your cash opens the door to being a step ahead of the rest of the world, who spend their lives pay-check-to-paycheck.

Let’s start with a great axiom I learned from a stock broker who was one of my public relations clients. He used to write advice articles that I placed in local newspapers. So, I read everything. There are only three ways for you to make money during your life: working for a living; charity or putting your money to work.

Most people are not blessed enough to able to put the majority of their money to work. It doesn’t matter. If you don’t find a way to put some of your money to work, you will worry about cash flow until the day you die.

My son got the entrepreneurial bug at a young age. He put his money to work for the first time when he was eight. He took $2 and bought a bag of candy at the neighborhood convenience store on his way to school. When he got to school, he sold the candy pieces at $.50 each. His guidance counselor wasn’t too happy with his activities. I thought it was brilliant.

Many people feel daunted by trying to find an investment option that will be safe; and one they can afford without breaking their normal budget. It doesn’t have to move heaven and earth. Have friends who like to bake? Join forces using your food budget and start a catering service on the side.

The television show the “Unit” has a group of wives whose activities always involve a dilemma while their husbands are off fighting the latest terrorists. They decided to go into business for themselves one episode, buying real estate. All of them had hundreds stashed in their proverbial cookie jars. They were putting their money to work and reaping a nice profit from it.

Most can’t afford to have a stock account and wouldn’t know what to do if they did. This doesn’t have to be your only possible outlet for using your money. Put your imagination to work and you will find an answer. If, however, investing in the markets is something you see yourself doing, form an investment club. This is another example of pooling your money with others of like interest in order to make a profit .

Without putting your money to work in even the smallest of ways during your working life, you will find yourself in your alleged “Golden years’ relying on charity for your monthly needs. This is also known as Social Security.

If you put your money to work properly, you have a chance to become wealthy or accumulate wealth. I looked up a few definitions on ask.com and came across one that was the closest to what economists believe. You own an object that is accumulating value. This can be a piece of art work whose value is going up, a growing company, plots of real estate whose annual assessment shows an increase in value. Not everyone will end up wealthy. But if they learn how to put their money to work, they can obtain a resource that will accumulate value over the course of time. Bill Gates, of course, didn’t have a clue at first how valuable his rights to an universal operating system would be. The rights to DOS was the launching pad to his wealth.

Some people start off dabbling in real estate and end up with the majority of land in a region. This opens the doors to wealth for them and their heirs.

This all boils down to that ‘no one teaches us how to retire’ because no one teaches our kids how to budget, how to save and how to put their money to work. These days, when one discovers these keys, it is more or less by random happenstance.

Have kids? Got grandkids? Know friend’s kids? As long as you are still breathing, you have a chance to change their future with this knowledge.

For more examples of my work: http://www.bellbusinessreport.com

Laura Bell
writer@well.com

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