Tag Archives: Starting Out

The ‘No New Year’s Resolution’ Resolution!

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I’ve just returned from my longest vacation-from-blogging that I’ve had in the the 3 years since I’ve been writing this blog.

Some of it had to do with poor internet access where I was traveling; it was supposed to be a ‘first world country’ but had ‘third world’ internet access. But, that was also probably a side effect of the second reason that I didn’t post: I was too damn tired/busy from touring.

I made the ‘mistake’ of agreeing to take a two week educational/discovery tour with a busload of other families from my childrens’ school: whilst educational, it was hardly a vacation! On the bus / off the bus … next historical site … on the bus / off the bus … three to four times each day. Crawl into bed each night exhausted, on the bus again by 8am the next day.

And, being a group tour, the hotels were set at the lowest common denominator: around 3 stars, hence the poor internet access.

Now, this probably sounds like fun to my main readership base (sub-30’s singles or young couples / no kids) … the rest of you are nodding in silent agreement: there comes a point where Hilton-hopping is REALLY what you need in a vacation!

Anyhow, we’re back and enjoying Resort Cartwood (i.e. home) with it’s huge landscaped and tiled 5-star surroundings, pool, tennis court, home theater, and so on … who needs a holiday away from home!

We celebrated New Year whilst away … which really means that we did nothing but had a wonderful view of the fireworks from our hotel window.

But, it did get me thinking:

Why make resolutions on New Year?

Does that mean that you wait – on average – 6 months to finally build up the courage to ‘resolve’ to do something that you already know is important for you to start doing / quit doing?

Does that mean that you put off for an average of 6 months that which you ALREADY know you must change?

Does that mean that New Year Resolutions are yet another means of justifying procrastination?

Does that mean that you build up the change to such a crescendo that by the time New Year comes and you – for some reason – fail to succeed in making the change, you’ll be too ashamed to try again (at least until 10-12 months later when the next New Year comes around and you build up the courage to ‘try’ again)?

So, why not have a New Day’s Resolution?

If you have something that you need to change, don’t wait until a New Year to resolve to change it, wait until the next day?

Well, I even have an issue with that!

You see, why delay – even a tiny bit – by RESOLVING to do anything?

Why not just DO? Now!

And, don’t even fool yourself into ‘trying’; do as Yoda says:

Try Not. Do or Do not. There is no try.

That’s why I’ve just resolved to never again make another New Year Resolution … at least, not until next year 😉

Are you still relying on your mother?

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At what age is it appropriate to take financial responsibility for your own life? Before college? During college? After college?

When is it appropriate to grow up, financially?

To help us explore this issue, here is a question that I received by e-mail from RichKidSmartKid:

I’m 29 presently in my first year of college where I used money from my inheritance that I had invested, sold and used to pay for college. I’m soon going to be broke and wont have an income and will be relying on my mother to help me financially though school.

I want to bounce back from this financial hell and increase my networth. Possibly even made some money by the time I complete univeristy. I was wondering what advice do you have?

Sounds like her name is where RKSK wants to be rather than where she is. It looks like she had money, but now it’s gone, and would like some again!

Look, with $6k cash and going to college, the reality is that she is still probably $6.5k better off than most college kids, so here is my advice:

1. Talk to other college kids and see how they do (or intend to) get by – it’s amazing how much you can learn by listening to what other people have to say – then do the opposite 😉

2. Read this post, it’s probably my best advice for college-age kids:

http://7million7years.com/2008/08/22/start-the-next-facebook/

Now, this doesn’t directly apply to RichKidSmartKid who is 29 – but, only in 1st year (good on her for finally thinking about her education, though) – but I have an issue with college kids calling themselves ‘kids’:

In most countries (other than those in the privileged west), by the time you reach college age you would be an adult, long married, with plentiful hungry children and a crop in the field.

In those countries, RichKidSmartKid would have been considered a self-supporting adult a LONG time ago!

Maybe it’s time to start thinking like one now?

Beginner’s Luck?

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I am guilty of a lot of things in writing this blog …

[AJC: I’ll let you name them in the comments below … go ahead, I can take it, and it might be fun!]

… but, one of the things that I am DEFINITELY guilty of is writing without the beginner in mind.

Since there are no ‘backlinks’ and Nate has gone to a lot of trouble to ask this question, I have to assume that it’s genuine:

Does inflation affect money invested into cds? If not then you could invest your million into a cd or many, wait a few years and you should get a pretty good turn out right? Say you did put your million into a bank and had decided to use the intrest made off of it, would that interest get taked like your income does? or would you be able to see all of it?

What I am guilty of, here, is not realizing that people still lack this most basic level of financial knowledge. And, I certainly don’t address this kind of stuff, here!

To be fair, I’ve always taken the view that if there is plenty of information available elsewhere, why post on it here? Just take a look at the incredible job that Andrew @ Money Crashers has done to put together this list of ‘top’ personal finance blogs: there are 387 in this list alone!

So, what do you think? You want ‘beginner’s info’ so go elsewhere? Or, I should cover this sort of stuff (inflation, good debt v bad debt, etc.) in this blog?

Oh, and as to Nate’s question; if you really don’t already know:

Inflation and taxes are like the police (when you have just accidentally run your first ever stop light in 20 years of driving) and death … unavoidable!

The difference between a business and a job …

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In just 6 more days, I am giving away $700 cash to one lucky reader (drawn at random) as part of my $700 in 7 Days No Strings Attached promotion. It’s free to enter simply by clicking here.

Optional: Once you enter, you will be shown fun ways to spread the word and win more free entries. Remember, the more entries you earn the more chance you have to win!

________________

You already know that I won the business lottery!

[Let’s face it, some guys have all the luck: It took me just 7 years to build a $7 million real-estate, business, and investment portfolio from worse than scratch (I was $30k in debt when I started). Then, I managed to sell my businesses (in the USA, Australia and New Zealand) just before the market crashed. On the other hand, I’m only 5 ft 4 inches tall and balding … so, things have a way of balancing themselves out.]

So, now I get lots of people who are clearly excited when they tell me that they are “also in business” … except that they aren’t!

Mostly, they’re just working 60 to 80 hours a week – on little to no pay – for the toughest boss of all: themselves.

Worse … their spouses!

Let me give you a couple of real-life examples that should help to explain:

Peter Hastings, who already owns the antiques store right next door, opens a sandwich shop at 2264 North Lincoln Avenue. A quaint sandwich shop that he decorates with many of the items from his antique store. The shop thrives and provides Peter with a nice income for the next 20 years, when he sells it. Peter, with his two little businesses, has carved out a nice niche for himself. He was careful with his money, both before and after ‘retirement’, so – after 20+ years of hard but fulfilling work – he can finally afford to take it a little easier.

Bryant Keil buys a sandwich shop; it’s uniquely (and, quaintly) decorated, it’s in a nice location, had one owner who is selling in order to wind down a little after ‘working’ the business for 20 years. Bryant buys the little shop and develops a franchise model around it. Within 10 years, Bryant has “over 200 stores, in Illinois, Indiana, Michigan, Minnesota, Ohio, Texas, Maryland, Virginia, Pennsylvania, New Jersey, Washington, D.C., Kentucky, and Wisconsin.” Bryant is now a billionaire.

So, if you own a little sandwich shop – or, the online equivalent (here’s how you spell it: B-L-O-G) – don’t bother me with the details … it’s nice that you’re keeping yourself busy, but I’ll get bored listening to your story.

But, if you’re working on the next Potbelly Sandwich Works – or, the online equivalent (F-A-C-E-B-O-O-K) – drop me a line and don’t spare the gory details … I’m listening to every single word you say!

Announcing the 5 x $100 Apple Gift Card winners!

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Speaking of contests: I have launched (in ‘stealth mode’) a new site that marries contests and social marketing. I am now looking for a team to help with the build/launch. If you love contests and if you have experience with social/viral marketing or development, then contact me immediately at ajc [at] 7million7years [dot] com. This is your opportunity to hit the big-time with a small salary (full or part-time) + a chunk of equity + your name in lights!

_________________________________________

Thanks to everybody who entered the contest inspired by Trent Hamm, from a Simple Dollar, who is giving away a book called Everything You Ever Really Needed to Know About Personal Finance On Just One Page.

If you want to find out more about the contest, click here: http://7million7years.com/2010/10/28/just-one-page/

It’s too hard to pick a “best” entry, but, I did like Mike Hunt’s stool analogy (“needs all three legs to stand up”):

Our other winners (in no particular order) are:

– Roger, the Amateur Financier certainly deserves a card for his entry: http://www.theamateurfinancier.com/blog/the-amateur-financier-one-page-financial-guide/

– Jaime @ Eventual Millionaire just got $100 closer with her gift card: http://www.eventualmillionaire.com/blog/2010/11/the-one-page-financial-system/

– Daniel is Sweating the Big stuff, but (thankfully) still had time for this: http://sweatingthebigstuff.com/put-your-system-onto-just-one-page/

… and, I’m saving the final prize for a cartoon character. Seriously!

You can see Eugene Krabs’ entry as the first comment to this Free Money Finance blog post: http://www.freemoneyfinance.com/2010/10/how-to-get-rich-quick.html

He described a formula for wealth (it’s not THE formula for wealth; this is: the key to untold wealth):

I’ve boiled what I’ve read myself down to the following equation:

Wealth = Capital + Risk + Time

(To be clear, capital is the money you have right now to make more money with.)

Technically, any one of those factors can do it for you. For example, if you have a massive amount of capital, or if you take massive amounts of risk and beat the odds, or if you have a lot of time to build your wealth, then you can still become wealthy at the expense of the other two factors.

However, there are downsides to all of these individual factors.

The best thing to do is to push on all three of these fronts at the same time, I believe you will then maximize your chances of becoming wealthy.

That’s it. As we have all have probably known for quite some time that there is no real secret to being wealthy. It’s just not easy. Bottom line, we need start now, stay fanatically focused, and be mindful of the risks involved.

The winners need to contact me via e-mail [ajc AT 7million7years DOT com] for details on how to claim their prizes; if any prize isn’t claimed I’ll donate the $100 to charity and post back here.

Thanks to everybody who entered, commented, and/or spread the word!

__________________________

Come and visit us at this week’s Carnival of Personal Finance: http://www.simplyforties.com/2010/11/carnival-of-personal-finance-283.html

The False War On Debt …

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There’s a war raging out there: it’s being fought by authors and bloggers everywhere.

But, is it the right war? Is it a just war? Or, are we just throwing ourselves, by the millions, into a hail of fire: exploding spending, rampant inflation, the death of social security?

Sure, as we sit in the relative safety of our trenches (at least, that’s what we tell ourselves, until a random mortar shell of job loss or unexpected expenses chooses to lob our way) this is not OUR future … it’s somebody else’s, or it’s too far away, or it just can’t happen …

The sad truth is that legions have jumped the wall before us and have been brutally cut down for lack of an adequate nest-egg; it’s sad to see them go over the dreaded wall of retirement (be it their time, or forced on them early) without an adequate safety net … when they do, it’s as though their grim fate had already been sealed.

Broke – or ‘just’ financially crippled – and unable (for financial reasons) to live life as they had hoped, they are a sad, sad lot.

You see, the war that they fought wasn’t – isn’t – a just war. It’s not even a war … well, it shouldn’t even be more than a skirmish.

It’s the War Against Debt!

When it comes to that war, I’m strictly a pacifist; isn’t it better to simply avoid BAD debt?

Of course, that doesn’t mean that we can’t … shouldn’t … defend ourselves.

Far from it: if we find that BAD debt has snuck through our defences, let’s keep an eye on it. And, if we find that it’s also EXPENSIVE debt, then let’s whip out the Big Guns and wipe it out. Quickly, surgically …

… but, let’s not commit Debt Genocide.

You see, unlike the well-intentioned, but largely Debt-McArthyist “ALL Debt Is Bad, So Let’s Wipe It Out” rabble out there, let’s first ask The Missing Question:

What will you do after your debt is paid off?

“Well, start investing of course!”

But, does that REALLY happen? Who better to ask than Money Reasons:

This past February 2010, I became totally debt free, but now what!

I thought that there would be a period where I would break even for a while, and then start to plow about $1,000 extra each month into investments!  So now that it’s seven months later and how much extra did I save or invest?  Not a single cent!

Hang on, the whole purpose of suiting up for battle – for going to war against debt – was so that you could start investing, right? What’s up with that, Money Reasons:

Well it’s been a matter of bad luck with equipment breaking down and needing replaced and spending too much for our past vacation to Hilton Head Island!

But it’s also been a subtle form of LifeStyle Inflation!  Thinking back now, I realize that when wants would arise, I would just go ahead and buy it.  Yeah, I thought about it a bit, but I knew that I had the cash.  Then when your car and lawn mower broke down, I had the cash too…

Money Reasons should have started investing well before all of his debt was paid off … he should have started investing as soon as his expensive debt was paid off and left his cheap debt on a regimen of minimum payments.

The problem with this war is that it’s an unjust war; as TraineeInvestor said: “Debt is a tool. Paying it off is simply choosing not to use the tool.”

Yes, becoming debt free is simply a tactic …

If you have to go and fight a war, don’t fight a war against debt …

… go and fight a war for investment 😉

Just one page …

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Yesterday, I mentioned that Trent Hamm, from a Simple Dollar is giving away a book called Everything You Ever Really Needed to Know About Personal Finance On Just One Page. You can get the eBook – for free – by clicking on that link.

But, what I really like is the first page; which you can download by clicking here => OnePage.

[click on image to enlarge]

It shows a neat summary of Trent’s thoughts on personal finance in a one page ‘system’. Sure the diagrams are hand-drawn, but everything is clear, succinct, and easy to understand.

But, I don’t agree with everything that Trent says … and, I think that there are other personal finance systems around. It’s just that nobody else has bothered to put them on one page … yet.

That’s why I announced yesterday’s giveaway!

I want to encourage others to put their thoughts on personal finance – whether those thoughts are original, or just neat encapsulations of what has been written elsewhere – into a similar ‘one page system’.

I don’t have any fixed ideas on this, but I imagine that simple diagrams and arrows with a few bullet-points sprinkled in here or there will do the trick … but, I won’t know until I see it.

Now, I have five $100 Apple Gift cards to give away to the 5 people who I think have done the best job, but only if I like what they have done. Call me sole judge, jury, and executioner 😉

But, I really do want to give all five gift cards away … that’s $500 folks … so, hit me with your best shot/s (yes, you can submit as many entries as you like)!

Remember: I’m looking for simplicity & content over appearance. Trent’s page is ‘elegant’ in its simplicity, clarity, and completeness … that’s what I want from you.

Here is a link to the giveaway page, where there are more instructions: $500 Apple Gift Card Giveaway!

Thursday November 11th is the last day for submissions, and I’ll be announcing the winners on Monday, November 15.

You can e-mail your submissions to me at ajc [at] 7million7years [dot] com – or, simply plonk a link to them in the comments of yesterday’s post (or, this one) if you’d rather publish on your own site …

… and, if you already have a blog, why not let your own readers have a one page summary of your personal finance thoughts, and win their undying gratitude … and, maybe get a $100 Apple Gift Card for your troubles? 😉

Good Luck!

AJC.

Put your system onto just one page and win a $100 Apple Gift Card!

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Trent at a Simple Dollar did something really neat: he put Everything You Ever Really Needed to Know About Personal Finance On Just One Page.

It’s such a great idea, that I want to do the same thing!

But, I’m lazy 🙁

So, here’s the deal: put everything that YOU know about personal finance on one page, and you could win a $100 Apple Gift Card.

In fact, I have FIVE of them to give away. But, it’s at my discretion as to who – if anybody – wins these (but, I really do want to give all 5 away).

The ideas could be yours, mine, (not Trent’s because he’s already published his), or anybody else’s (but, link to the source): the presentation (simplicity + completeness + usefulness … not “how pretty it looks”) is what’s important here!

All up, this is $500 of my own hard-earned money … that you get to spend on really cool apple gear … so, make this good!

You can post a link in the comments (if you really can’t link to anything, send it to me as an e-mail and/or attachment to ajc [at] 7million7years [dot] com).

Shall we say 14 days?

More details tomorrow!!!

Becoming debt-free is a tactic …

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My uncle had a wish: he wanted to stay healthy. He heard that eating apples is good for you (you know, ‘an apple a day keeps the doctor away …’), so he started eating apples.

If one apple is good, he thought, then two must be better. In fact, he started eating apples religiously. He got Vitamin A poisoning. He stopped eating apples.

There is such a thing as ‘too much of a good thing’ 😉

I sent out the tweet in the graphic at the top of this page because too many Twitterers/Bloggers – and their followers – eat too many apples.

Here’s what I mean …

If you’re healthy you get to run and run and run, just like a puppy does. Fun!

If you’re financially-free you get to do pretty much whatever your ‘freedom’ allows, and you no longer need to spend 8 hours a day (or more) at work for The Man. Whoohee!

But, being healthy and being financially-free are ‘wishes’ – something that you want. Just wanting something doesn’t mean that you’ll get it.

So, you eat an apple a day because a doctor told you it’s good for you … or you start paying off debt because a blogger told you that’s it’s good for your financial well-being.

But, the problem with these proscriptions is that there’s no prescription [AJC: yet another bad pun] … you need to be told exactly how much of a good thing is really a good thing, before you keep going and overdose!

You see, eating apples – as my uncle found – and paying down debt – as many blog-readers find out too late – can be good or bad for you, depending on how much you under- or over-do things. Eating apples and paying down debt are just tactics promising to help you get you to where you want to go.

With debt-reduction – as with apples – there’s an optimal point: it’s the point where it contributes most to your real goal.

If your wish is to become financially-free then your goal should be able to be expressed as a specific Number and a specific Date; you should apply debt reduction in such a way that it maximizes your chances of reaching that Number by that Date.

I have a hypothesis that the Number/Date bell-curve for my reader population – nay, the entire personal finance blogosphere’s readership – is well and truly centered where paying down debt only makes:

– absolute sense in the double-digits i.e. where most credit card, personal, and (many) auto loans sit today

– no sense (nonsense?) in the low-to-mid single digits i.e. roughly where home mortgage rates and student loans sit today

And, the remaining debts (say, between 5% and 10%), they can be paid off, if you have low financial aspirations but if you are aiming for $7 million in 7 years, I’m suggesting that these, too, need to be set aside for a while in favor of funding your latest startup and/or active investment.

Comfort kills!

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Yes, that is genius …

But, what does T Harv Eker mean by ‘comfort zone’? Here’s what he says in his book:

Comfort kills! If your goal in life is to be comfortable, I guarantee two things. First, you will never be rich. Second, you will never be happy. Happiness doesn’t come from living a lukewarm life, always wondering what could have been. Happiness comes as a result of being in our natural state of growth and living up to our fullest potential.

How ‘comfortable’ you want to live is up to you … but, I can help you convert that into a number: the amount of money that you need in the bank so that you can live your desired level of comfort (or, discomfort).

Then, I can help you get there!