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Money Saving Tips: The Easy Way to Save More Money Each Month

3/24/2015

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I was listening to the Dave Ramsey show the other night and Dave talked about a study that was done (I think it was by Harvard) which determined the number one indicator of a comfortable retirement was an individual’s savings rate. Many people, including Dave Ramsey, would’ve guessed that return on investment mattered the most. This is a good guess, but return doesn’t matter much if you don’t put money in your accounts.

Here’s the problem: the average American’s savings rate is dismal. As a country, we aren’t saving enough money, even though a few hundred bucks per month can lead to millions if you are patient. Many financial professionals recommend that you save at least 10% of your income, and at Personal Finance Genius, I’ll tell you that you should shoot for 20%.

I know, I know…. “20%? Are you crazy? I can barely pay my bills now.”

One of the biggest reasons that people don’t save money is a resistance to change their current lifestyle. Call it a lack of discipline if you will, but people don’t like fast change. It’s like this: if you drop a frog into a pot of boiling water, he’ll quickly jump out. Yet, if you place the frog in warm water and slowly heat it to boiling, he’ll sit there and burn to death.

Gruesome example, but it illustrates a point. You should treat your savings rate like the water slowly being heated. Try to save just 1% of your income for one month. If you bring home $36,000 per year, you should attempt to save $30 for the first month. Cut out one fast food meal per week, use a little less electricity, do whatever you have to do, but the lifestyle difference should be minimal. Trust me, you will not miss the 1%.

For your second month, try to save 2% of your income. For the third month, save 3% and so on. The key is to gradually increase your savings rate so you don’t notice an abrupt lifestyle change. It will take you all but ten months to reach the coveted 10% savings rate.

Another point I got from Dave Ramsey’s show is that you can start off with an average income, never get a raise, and still retire a millionaire. However, as Dave points out, if you work 30-plus years and never get a raise, you are a loser.

Because you’ll probably get a raise (or several) in your lifetime, I’d like to share with you something I learned from Brian Tracy that will help you save even more as your income increases. It’s called “wedging” and it involves building a wedge between your expenses and your income as your income increases.

Say you make $36,000 per year and you get a raise to $40,000. You should immediately half of your raise, but feel free to spend the other half as you please. When you get another raise, do the same thing. Save half and spend half. Over time, this will create a large wedge and a hefty savings account. 

P.S. if you want to save more money or get out of debt, check out Dave Ramsey's best-selling book, The Total Money Makeover. It's a classic. 



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How to Find a Financial Advisor You Can Trust: 4 Must-Have Qualities

3/24/2015

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Young man in a suit flashing money.Is your financial advisor providing you a professional service or are you just lining his pockets?
How can you find a financial advisor you can trust? If you're like most people, you're somewhat hesitant about having an investment advisor swoop in and take control of your money. What questions should you ask a financial advisor? How do you know if you can trust him/her? 

If you need medical help, you get a doctor. If you need legal help, you get an attorney. If you need financial help, you get a financial advisor. Advisors are just another class of professionals designed to provide you with the service necessary to help you reach your goals.

Of course, you could always become a DIY financial advisor.

However, not all financial advisors are skilled professionals, and you should never settle for sub-par service. Here are the four qualities your financial advisor must have:

Transparency. Yes, your financial advisor is getting paid. Whether it be commission, fee-based or a percentage of assets managed, your advisor is profiting from your business. But what professional isn’t? Your advisor should clearly and openly tell you the costs associated with different plans. Don’t be afraid to ask if he will be getting paid more to sell a particular financial product – just make sure that what he recommends actually matches with your goal.

Teaching ability. Clients get bored and intimidated by financial advisors who pull out numbers, graphs and jargon. Your financial advisor should understand that you don’t care too much about the details of asset allocation as long as your goals are met. You don’t ask for a biology lesson from your doctor, right? If your advisor cannot sit you down and explain concepts in simple terms, it’s time to find a new advisor. A good example of explaining concepts metaphorically is as follows:

Whenever Jim advisor meets with a client and conducts seminars, he uses a ton of jargon and complex statistical data. He outlines indicators of market noise and different ratios analyzing hypothetical portfolio activity. His clients and prospects can’t follow him, and even if they give positive feedback, the chances of them doing business with Jim Advisor are low. When a client asks Jim Advisor to explain risk and to give a recommendation as to how much risk Jim thinks he should take on, Jim pulls out his reports, studies and big words.

Joe Advisor is a great teacher, who can break down complex topics into layman’s terms. He can also explain financial concepts metaphorically. When a client asks Joe Advisor to explain market volatility and how that affects his long-term goals, Joe gives a metaphor. He says something like, “Imagine you are in the market for a car and both of them are the same price. Car 1 is a beautiful sports car that you can drive up to 100 mph towards your destination, but it breaks down frequently, so there will be times you’ll be stuck. Car 2 is a dependable compact car, which will never go as fast, but will hardly ever break down. Which would you prefer?” Obviously Car 1 would be the volatile portfolio.

Specialties. Too many financial advisors are jacks-of-all-trades, but masters of none. Don’t be fooled if an advisor tells you he’s an expert in multiple arenas. Don’t be afraid to spread your business across multiple financial advisors. Sure, they’d love to manage 100% of your assets, but if you are better served by separate specialists, do that. There’s an added bonus if your advisor has a niche market in your demographic. Some advisors focus on lawyers and are well-versed in the lifestyle patterns and needs of lawyers. If you can find an advisor that fits the needs of your demographic, stick with him. This is a priceless advantage.

Client-centered service. To many advisors, this means calling clients once per month, as is the industry norm. To me, this means, “If the client wants to be called once per month, I’ll call once per month”. A stellar advisor will seek out the needs and wants of the client to make sure they are properly served. If the client has kids, the advisor will educate him about 529 plans. If the financial advisor notices a tax break or law change that benefits the client, he will act on it. In order to do this, the advisor must be client-centered. A cookie-cutter approach to financial planning and advising does not work! Plus, going the extra mile doesn’t always mean a ton of extra work. It just means caring about clients and anticipating their problems.

Employing a financial advisor is a great way to ensure you meet your money goals, whether it’s beating market averages or making sure that your wealth is properly distributed during retirement. Just make sure that whoever you choose has these traits. 

P.S. If you happen to be a financial advisor (and you have these four superior qualities), you might want to check out these marketing and prospecting ideas. 



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The Top 10 Greatest Self-Improvement Books That Will Transform Your Life

3/12/2015

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One of the things that millionaires do differently from average people is that they spend a large amount of time on self-improvement. Finding a great self-improvement book is a way to change your life for the better. Sadly, many books in the self-improvement category are pretty much useless.

Here’s a guide that should serve to eliminate a lot of the clutter and point you in the direction of living a dramatically improved life. Click on the book's cover to take you directly to the Amazon page.



1. Maximum Achievement by Brian Tracy

I’m placing this book at #1 because out of all the self-improvement books I've read, this one has been the easiest to read, the most applicable, and filled with concise information. Brian Tracy is a superstar in the genre and is an inspirational individual. Out of 168 reviews on Amazon, 149 are 5-stars. Everything from positive affirmations to goal setting is in the book. This is by far my favorite self-improvement book and it’s the one I recommend whenever someone asks. 

I would rank this book: 10/10



2. Think and Grow Rich by Napoleon Hill

This book is almost tied with #1. It’s been changing lives for almost a hundred years and my life is no exception. This book opened my mind to exploring a definite aim in life and making purposeful decisions. These two things sound so simple but many people don’t do them. The book also opened my mind to goal setting and actually writing my goals down, or bringing them into physical existence. Napoleon Hill dedicated his life to studying successful people and if anyone can show you the way, it’s him. This book provides 13 principles of personal achievement that are sure to change the way you think… so you can grow rich.

I would rate this book: 10/10 



3. How to Win Friends and Influence People by Dale Carnegie

Even though I read this book a few years ago, I still remember the core ideas from it. Coming from someone like me, who has difficultly remembering super-specific details, it means a lot. Today, whenever I read I take notes so I can review them later and refresh my memory. With this book, it wasn’t necessary. The book is truly timeless. Carnegie held that success comes from the ability to communicate effectively and understand others. The bottom line is: you need other people to be successful. It’s hard to find a rich hermit! With this book, you can learn how to value people and help them feel appreciated. If you can make someone else feel worth a million bucks, you’re sure to get treated the same way. With almost 2,500 five-star reviews, thousands of people are ready to testify that this book is well worth the read.

I would rate this book: 9.5/10 



4. The 7 Habits of Highly Effective People by Stephen R. Covey

I actually just finished this book and I was very impressed! I loved the easy-to-read style and anecdotes (many of which involve his children) that Dr. Covey provides. The book is filled with wisdom about personal responsibility, developing good habits and creating win-win situations. He outlines a pathway for living with fairness and integrity, as well as awakening the power within us to take advantage of the opportunities in the world around us. It’s easy to see why this book has been selling so much for so long.

I would rank this book: 9/10 



5. Awaken the Giant Within by Tony Robbins

Tony Robbins wrote this best-seller in the 90s and even in 2015 he has his new “Money: Master the Game” book on the best-seller lists. His longevity should be a clue as to how well he can write and inspire others. I would have listed this book higher except for the sole reason that I have not personally read the book. The reason it’s here because it’s almost exclusively the book I get recommended when I ask about self-improvement. At 548 pages, it’s a bit long, but I’ve gotten nothing but positive feedback about this book and Tony Robbins in general.

I would rate this book: I haven’t read this book but many people tell me it’s a 10/10. 



6. He Who Thinks He Can by Orison Swett Marden

Although “He Who Thinks He Can” is just one essay in the book, it was enough to radically change my thinking. I got the book for 99 cents on Kindle and within ten minutes of reading it, I thought, “Holy crap! This is heavy stuff.” Marden talks about the importance of being a man and keeping your integrity. All his essays are filled with quotable pieces such as, “Be sure that your success will never rise higher than your confidence in yourself.” Orison Swett Marden has a ton of self-improvement books, but if I were to recommend just one, this would be it.

I would rate this book: 9/10 



7. As a Man Thinketh by James Allen

I am a big believer in the law of attraction, which states that “like attracts like” and that your positive thoughts can bring positive things into your life. Likewise, your negative thoughts (which too many of us have) can bring negative things into your life. I’ve made a big change in my personal life by eliminating most of my negative thoughts and replacing them with positive ones. I feel healthier, happier and more productive. This classic reveals how our thoughts shape our reality and how it is truly possible to master your thoughts in order to create the life you want. It’s another 99 cent book and only about 60 pages long, so take an afternoon to read it. One afternoon is a small price to pay for changing the course of your life.

I would rate this book: 8/10 



8. See You at the Top by Zig Ziglar

I’m a big fan of Zig Ziglar. I’ve listened to many of his seminars and read his books, including “Secrets of Closing The Sale”, which will make you an immensely better salesperson. But, if you want to improve your life and learn from one of the masters, look no further than “See You at the Top”. This is Ziglar’s masterpiece. It’s a little long at nearly 400 pages but it’s worth the read. Ziglar will tell you that you must improve your self-image, find the good in other people and to keep going. One of my favorite takeaways from the book is that successful people look for the good in others – Zig Ziglar reinforces the fact that you can have anything you want in life if you’re willing to help others get what they want. I also remember a cool fact about working with others to accomplish great things… geese fly 72% farther by flying together. Zig Ziglar changed my thinking and my life. I hope he can do the same for you.


I would rate this book: 8/10 


9. Man’s Search for Meaning by Victor Frankl

If you read the first habit of “The Seven Habits of Highly Effective People”, you don’t really need to read this book but it will deepen your understanding of our unique ability to choose our responses to situations. The entire world is stimulus-response, and while we can’t choose the stimuli that we encounter (for the most part), we can choose our response. Victor Frankl was a Jewish psychiatrist who witnessed the horrors of Nazi death camps. He realized that even though couldn’t avoid the suffering, he could choose how he coped with it and find meaning in it. He holds that our biggest drive in life isn’t pleasure, but the discovery and pursuit of what we find meaningful. At $2.99 on Kindle, it’s a steal for the lessons it provides.


I would rate this book: 7.5/10


10. 48 Laws of Power by Robert Greene

This is another book that I read years ago but it still has an influence on me. The title is pretty self-explanatory, as the book outlines 48 laws that will help you to achieve success in your life. A few of the laws are “always say less than necessary”, “use absence to increase respect and honor”, and “stir up waters to catch fish”. There are many online lists and YouTube videos discussing the laws but in order to get the full effect you should read the book. Once you’re done with this one, you can move on to the sequel, written by rapper 50 Cent and aptly named, “The 50th Law”.

I would rate this book: 7/10 


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