Financial Goals

April 25, 2011

April is Financial Literacy Month and I started the month talking about defining financial literacy and how to begin. Then I started to talk about the money rules. There are nine rules to the game of money that I describe in my book, Money Smart. They are absolutely critical to your success with money and its role in your life as you work to create financial freedom. Follow them and you will quickly see a positive change when it comes to money. Break them often enough and you will almost certainly insure that money ends up subtracting from your happiness rather than adding to it. So here is the second of three of the nine Rules of Money that I am sharing:

Money Rule: Be Disciplined

Discipline simply means being committed to doing what you need to do to get the things you said you wanted. To be successful with money and to be successful in life, you need to be disciplined. If you are not, you are unlikely to achieve anything like the life you wish. With a positive attitude and good discipline, your chances for success with money and in life are very good. You will find that this money rule will have an especially large impact on your chances for success. In Money Smart, I discuss strategies for boosting discipline, because it is a challenge for everyone.

I provide nine Money Rules in Money Smart; and three great money rules here to get you going on your road to success with money. The Rules are a road map to success, follow them and find your way to financial freedom. Financial Literacy Month is a great time to start.

by Ted Hunter

April 22, 2011

April is Financial Literacy Month and I started the month talking about defining financial literacy and how to begin. Then I started to talk about the money rules. There are nine rules to the game of money that I describe in my book, Money Smart. They are absolutely critical to your success with money and its role in your life as you work to create financial freedom. Follow them and you will quickly see a positive change when it comes to money. Break them often enough and you will almost certainly insure that money ends up subtracting from your happiness rather than adding to it. So here is the second of three of the nine Rules of Money that I am sharing:

Money Rule: Have a Written Financial Plan and Follow It

You must have a written financial plan that identifies what you want and how you’re going to get it. If you do not, you will have created a very high probability that you will never achieve the kind of financial freedom you desire. Your written financial plan is the map of how you will spend and save your money and reach your destination. Over the years, through talking and working with a lot of people about their personal money management, I have been stunned that most people do not really know where their money goes. Plus, half of the people who believe they live within their means do not. They just don’t know it. If you do nothing else, you absolutely must know how you actually spend your money and its impact on your life. Write down your plan and follow it. My book, Money Smart, walks you step by step through the process of creating a personal money management plan that is simple to follow. All the tools you need are there and electronic versions of the worksheets and calculators are free on www.moneysmartonline.com for your convenience.

by Ted Hunter

April 21, 2011

April is Financial Literacy Month and in the past two blogs I’ve talked about defining financial literacy and how to begin. Now I would like to talk a little bit about the rules. There are nine rules to the game of money that I describe in my book, M oney Smart. They are absolutely critical to your success with money and its role in your life. Follow them and you will quickly see a positive change when it comes to money. Break them often enough and you will almost certainly insure that money ends up subtracting from your happiness rather than adding to it. So let’s talk about the first of three of the nine Rules of Money that I will share over the next few days:

Money Rule: It Isn’t How Much You Make, But What You Do With It That Counts
There are two roads to success with money. The first is to make more money; the second is to spend more wisely. Most people focus on the first road while downplaying or outright ignoring the importance of spending wisely. However, study after study shows that for most people the overwhelming majority of financial success in their lives comes from being smart about how they spend their money. I am not suggesting that you don’t try to make more money or that you live like a pauper. I’m just asking you to recognize which purchases or expenses will really end up adding to your happiness in the long run, and which will not. I’m asking you to be reflective about your spending and make smart spending choices. If you do that and spend your money wisely, it will pretty much insure you will end up being financially successful. If you make a lot more money in the future, that’s great, but the second road, spending wisely, is pretty much a sure thing if you work at it.

by Ted Hunter

April 14, 2011

April is Financial Literacy Month. What does that mean exactly? Financial Literacy is about having the information to make informed and effective decisions about your money. Are you financially literate? And if, like most Americans you’re not as literate as you’d like to be, where do you begin?

The first step to financial literacy is to be honest about the way you have been spending money. Studies have shown that over 50% of American adults do not know where their money goes, though they think they do. Do you know where you money goes? If you don’t, you should write down every single expenditure for thirty days. I think you will be amazed and enlightened to see where all your hard earned money goes. It’s a simple exercise, a great eye-opener. and a great first step.

Another way to get honest about your finances is figuring out your net worth. You should know and track your net worth. Your net worth is the difference between what you own and what you owe. We have a net worth calculator that is very easy to use. Knowing your net worth is an important step when setting financial goals and provides a point of comparison as you move forward.

Once you have looked honestly at your finances, tracked your spending, and know your net worth, the next step in your quest for financial literacy is educating yourself on all the basics. Fill in the gaps in your education so you can be truly successful with money. Personal money management isn’t complicated. Everyone has the ability to take full control of every aspect of their personal finances. Money Smart provides that education and has the tools you need to begin. So begin. Start this month. Learn what you need to know, and then trust yourself. The truth is that everyone has the ability to become financially literate, control their personal finances and create abundance.

by Ted Hunter

April 5, 2011

Do you think about the day you can retire? Do you dream about living a different life, one without your current boundaries? I’ve always thought it was crazy to wait for retirement to start living the life you want. I don’t believe you have to wait until 65 to live the life you truly desire. Life isn’t really about how much you make, it’s what you do with it that counts. For most people, smart use of their money can give them the life they want sooner than they might think. I think we should replace the R word, retirement, with two new words, financial freedom and live the life you want to live sooner rather than later.

There are two approaches to achieving financial freedom. The first is having enough money to be totally free, which is traditional retirement. The second is to save enough so that you can earn less and live a better life sooner–or financial freedom. For a lot of people, planning for financial freedom is a better goal and a better life plan–it means choosing the most fulfilling work, deciding how many hours to dedicate to that work, living where you truly want to live, and doing it a lot sooner than sixty-five.

I think if you plan for financial freedom instead of retirement you can open your life up to anything you can dream. Focusing on financial freedom opens the gates to dreams of limited work that is gratifying and often focused on personal passions, hobbies, or giving back, rather than on making enough money to fund an entirely carefree lifestyle later on.
Let’s change the way we think of retirement. Don’t wait to shape the life you want to live. Retire the word retirement and focus on financial freedom and live the life you want.

Do you have a solid plan in place for creating financial freedom? Start here.

by Ted Hunter

April 1, 2011

Happy April Fool’s Day. This holiday got me thinking about how Americans have been fooled into thinking they can’t handle their finances. It’s just not true and that’s one of the reasons I wrote Money Smart.

Over the last forty years, the large and lucrative financial industry has convinced the public that they need to hire someone to help with their personal finances. Financial service experts are trained in and excel at sales and marketing, asset gathering, and commission generation, but not much else. It’s a myth that consumers cannot handle their own finances. The truth is that with a little understanding of the basics of finance, pretty much everyone can manage their money and do it better than an ‘expert’ is likely to.

Let’s break down the Three Myths of Money Management:

Myth #1: Always Invest for the Long Term

The standard advice of the financial service industry is that the markets will always do well over the long run: therefore, so will your money. The truth is that all markets go through long periods of substantial over- and under-pricing, creating long periods of time when you are pretty much guaranteed to make money, and others when you are pretty much guaranteed to lose.

When the stock market is significantly over-priced, the sensible thing is to sell your holdings and invest in other markets like fixed-income or real estate. If this is pointed out to people in the industry, the universal response is that nobody can time the stock market. They’re right. Nobody can, but they can sure tell when a market is significantly overpriced, and ignoring that reality usually guarantees bad results.

Myth #2: Let Us Handle Your Finances Because We Do It Better Than You Can

American’s finances were hit hard over the last ten years. The “experts” in the financial services industry did not predict or protect their clients from the events that unfolded in the stock and real estate markets. On the contrary, their failure to understand and act on the market forces at play made things worse for their clientele.

Myth #3: Money Management is Very Complicated

Over and over again the public has been told that money is a very complex subject and that you must have a huge amount of information to succeed financially. Again this is just not true. There is no reason why you can’t understand the subject of personal finance and investing, all you have to do is invest very modest amount of time to learn the basics of finance.

Don’t be Fooled–Break away from these destructive financial myths. Embrace the idea that you can manage your own finances.

The Rules of Money, A Road Map to Financial Literacy (3 of 3)

The Rules of Money, A Road Map to Financial Literacy (2 of 3)

The Rules of Money, A Road Map to Financial Literacy (1 of 3)

Where to Start… April Is Financial Literacy Month

A New Way to Think About Retirement

Don’t Be an April Fool About Finances – Three Money Myths