Wednesday, January 2, 2554

Wayne, Burt, Willie and u can't touch this

Have you challenged yourself lately? Did take on the challenge of cash 7 days? What were the results? The feedback I've received is that most ran out of spending cash from day 4 or 5. If you started the challenge on Monday, the next weekend looked pretty bleak. This is the point behind the exercise. Want to become better acquainted with your money and where to spend consciously. That is what it spends, is where to spend it.

I recently gave a public presentation entitled "Budgeting 101." Now you know my visceral reaction to the budget speech and I was told not to make changes to your PowerPoint slides. Cringed. The slide to end all the slides, read the following: the secret of financial success is to save more and spend less. In fact, it's all I have to do to become financially secure is to follow the formula of "secret"? You know the "secret" to losing weight? You guessed it, develop a sensible eating plan and exercise more. Wow, now that our secret miracle weight loss is out millions of our society will soon become indulgent and become a fit and trim. To the right.

It all comes down to choices. It is the moment to moment choices and decisions that ultimately our lives. Choices about how we spend, where to go and if we decide to change our behavior.

What do the following people have all in common: Francis Ford Coppola, Wayne Newton, Burt Reynolds, Donald Trump, Willie Nelson and M.C. Hammer. They are from a wide variety of environments and at one time or another, icons in the worlds of entertainment and business. Give Up? They all declared bankruptcy! At one point have transported more debt than they were worth. So as someone like 90 's megastar M.C. Hammer end up with nothing after raking in tens of millions of dollars? In his case is simple. He chose to spend much more than what he was doing and eventually captured him. The ring of high-profile sports figures, film stars and tycoons who find themselves in a position to spend more than they do with the public at large is unable to understand how it happened maybe.

I find it very difficult to believe that there is a large percentage of the population who doesn't understand the basics of money. I've heard stories of individuals who did not realize that when issued a credit card were responsible for paying the balance due or the couple who bought their "dream home with no down payment and an interest only loan not realizing that it might be in over their heads. My Favorites are the stories of families who are barely making ends meet and consider whether it is time to upgrade to the new iPhone or if you have enough HD channels to go with their recently purchased. Most people fully understand what they are getting themselves into. It happens only at the pleasure of today, more than the pain of future potential.

The secret to the challenge of seven days in cash, is not whether "won" by having extra money at the end of the week, but be aware of where it is past your hard earned money. If you complete a plan for spending cash or challenge, you'll discover what elements are working affects that prevents you from achieving your financial goals. Is not magically discover that control $ 500 that you forgot to write every month, which is the little things that matter most. We as a society we are being bled financially to death. Slowly, quietly we be removed from our money.

Take a look at some of the need to "base". Over 60 million households have cable television. 43.8 million have access to high-speed internet1. There are over 270 million cell phone subscribers in the United States2. Let's combine the last three: we are now sold on the fact that high-speed video feeds on your phone are the wave of the future. Speaking of convenience, Starbucks sales exceeds 10 billion per year3. These are expenses or did not exist or no material measure 30 years ago, but which are seen as a necessity today. We're nickel and dimed, or better yet fived and treated (for regular-expression for inflation) at our expense. The line between need and desires are blurry.

Why is it that most are so eager to fall for scholarship advice or are drawn to other ways to get rich quick? It is simple. We need our incomes to achieve with our spending. Hot tip that can give us a couple of thousand extras in our pocket that will allow us to spend even more beyond our means. Spending is the key to financial success. Most understand and become consciously aware of where to spend, you have more chance of reaching your financial goals. Just ask Wayne, Burt, Willie and M.C. – is not what to do, is what you spend.

1 National Cable and Telecommunications Association
2 Federal Trade Commission Chairman Julius Genachowsk

Ed GjertsenEdward II Gjertsen, CFP ?
Mack investment securities, Inc.
Glenview, IL

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