Peter Pays Paul

I will be out of the country for a couple of weeks. Don’t expect me back before August 11th. Until then…

If you use Google to search the web, as I do, then you need to read the article by the folks over at Sellsius. These great tips will make your search should help you return better results.

HT: Jeff Brown

Today, in the United States investing is assumed for those earning a regular salary. We have 401(k)’s, IRAs, brokerage accounts and more. The options for investment abound: stocks, bonds, mutual funds, hedge funds, real estate, businesses, classic cars, etcetera.

Investing is a Luxury

We frequently miss the fact that investing is a luxury. Living in one of the richest nations in the world causes us to be jaded to the realization that the majority of the world lives day to day. They do not have the luxury of saving money. Nor does the majority of the world have the added luxury of choosing the vehicle in which they invest their money.

This is not to say investing is wrong or bad. Investing needs to be treated as a luxury in our thinking and practice. Luxuries come after we have taken care of the necessities of life.

A Plan to Invest

If you are going to begin investing, here is a recommended plan to get there.

1. Live within your means. - If investing is a luxury, it means that you should be making more money than you are spending. It also means that at the end of the month you should have some money left over to save. The best way to do this is to set a monthly budget and stick to it.
2. Reduce consumer debt. - Paying interest on things that depreciate like clothes, cars, televisions, and stereos is the best way to stay broke. It is a glittery road that leads to bankruptcy. Applying any leftover money at the end of the month towards debts is the quickest way to reduce them.
3. Save for a rainy day. - God forbid an unforeseen need arise, however it does occur. Bad things do happen and it is best to be prepared. Most financial experts recommend 3 to 6 months of income in reserve.
4. Assemble a team of professionals. - Having an accountant, an attorney, and a financial planner in your corner can make all the difference in the world. Choose professionals that are also investors. Your team members should have your financial health as their goal.
5. Invest wisely and often. - After paying off consumer debt and saving for a rainy day, invest the leftovers each month. There are many options for investment. Choose an investment vehicle that is understandable and that has a comfortable level of risk. Staying awake each night sweating your investment is not worth it.

What Are Your Dreams?

Where do you want to be in 5 years? 10 years? 20 years? What kind of life do you want for yourself and your family? What do you want to enjoy in retirement?

With those dreams in mind, how will you get there? “Failure to plan is planning to fail”, the saying goes. These steps above can serve as an outline for your plan. There are many nuances and intricacies in each step, far more than can be covered in this article. Dave Ramsey, an author and radio host, has written on these and other topics. His book The Total Money Makeover is a good resource for more information.

-Peter

Better is a poor person who walks in his integrity, than one who is crooked in speech and is a fool.
A good name is to be chosen rather than great riches, and favor is is better than silver or gold. - Solomon (Proverbs 19:1; 22:1)

The Merriam-Webster dictionary defines integrity as: 1) firm adherence to a code of especially moral or artistic values - INCORRUPTIBILITY 2) an unimpaired condition - SOUNDNESS 3) the quality or state of being complete or undivided : COMPLETENESS. The third definition is extremely important to the understanding of integrity. It has the idea of not being two-faced or containing two sides. What you see is what you get.

Solomon said a good name is better than great riches. It is more valuable to be thought well of and respected than to have great wealth. Why? Because great riches will not follow a person to the grave, but a good name will. It is about legacy. How do you want to be remembered?

Earning money deceitfully is easy. It is easier to steal from your client than to earn money respectably. It is easy not to disclose that one thing, or to be a little misleading about the features of your product. It is easy because you may get an immediate reward from the dishonesty.

It is much harder to be completely honest. To disclose all things and to possibly discourage a potential buyer is hard. It is hard to focus on the long-term results of an honest and truthful career and the potential rewards that come from those choices.

A real estate agent that has integrity will warn you about your “Dream House” even if you do not want to hear it. A real estate agent with integrity will warn you about getting too big of a mortgage. A real estate agent with integrity will not lie to you and will not lie FOR you. It is part of their fiduciary duty to represent what is in your best interests.

If this sounds like someone you would like to work with, then call me at (925) 324-8626.

While watching television last night I came upon an interview with Ron Perelman on CNBC. Donny Deutsch was interviewing the CEO of MacAndrews & Forbes with the title “Blueprint to Billions” on the lower half of the screen and it caught my attention. “Ah, maybe I can glean some wisdom”, the eager student thought.

Perelman had two points that were salient. His first point was: Do not choose a career for the money, choose it because you love it. He said if you love what you do the money will follow.

This point is easily comprehensible, because passion will drive you to take initiative and motivate you to work hard.

His second point was the less obvious, but more poignant. He was talking about decisions and decision making. He said that in order to succeed a person must make decisions, because even though you may not have chosen, a decision is made. He continued to say that you might as well take part in the decision.

I may not have understood what he was saying if I had not read a book titled Manly Dominion. The book spoke about the passive tendency of many people, especially in men. The author argues that many men choose not to choose, and thus act passively towards life and life just “happens” to them.

The sad part of this is that life did not “happen” to them. The choices not made, shaped their life. They chose not to decide, and did not act to negate the forces at work in their life.

They chose to delay fixing the leak, and things were destroyed. They failed to submit their application to their dream job, and were not hired. They neglected to set aside time for their family and wonder why they spend their golden years alone. They couldn’t decide what to invest in, so they delayed investing.

What decisions are you delaying? What forces should you be combating that are acting against you? Is it your health? You do not stay healthy and strong by accident. Or is it your finances? Money does not magically appear in a savings or retirement account, it requires discipline and a budget. Are you taking care of your home? It will fall into disrepair if you leave it alone.

What are your goals and dreams? What steps are you taking to get you there?

How do you envision your retirement or future? What investment steps are necessary to have the future you imagine? What decisions did you make and actions did you take today that will shape the outcome?

Don’t allow your future to “happen” to you. Make choices, decide the course your life will take. Make a decision today that will help you achieve your future. Get a professional on your side that can assist you and direct your steps. Don’t not make decisions. Play an active role in your future.

Now I know that journalists are paid to sell newspapers, but sometimes they make absolutely no sense to me at all.

Case in point: The business section of today’s Contra Costa Times and the business section from yesterday. (more…)