RELATIONSHIPS CAN SAVE YOU FINANCIALLY!

Now, I am not talking about people bailing you out or providing finances, although that can happen. I am talking about having relationships with a variety of people that can provide insight, encouragement, ideas, support, motivation etc.

What types of people: pastors, friends, business associates, co-workers, teachers, family members, etc. Let’s take a look at reality, in today’s economy:

1. Talent will not save you. A lot of talented people are unemployed.
2. More training and education will not save you.
3. The government will not save you. Buy helping you, they usually enslave you with new taxes.

Having a network of people that you can tap into for wisdom and guidance can provide a life line to you in a time of need. Also you can also be a lifeline for someone else.

A recent study of successful people revealed that they had a large network of peers that they turned to for advice in a wide variety of areas. They knew who to call for specific information and who they could trust to be upfront and sincere in their advice.

How about you? How are your contacts? Would you know who to call if you needed advice quickly for a particular problem that your are facing?

It’s never too late to start cultivating relationships, even if you feel inadequate in dealing with people or are shy and quiet.

Jacques
CreatingWealthThatLasts

SURVIVING IN TODAY’S ECONOMY OR ANY ECONOMY! RELATIONSHIPS!

The changes in today’s world are happening at an alarming rate. The news seems to go from bad to worse. What to do? Stop looking at the news is a good start. There are a lot of things out of our control but there are things we can control.

We can control the books we read and the people we hang around with. We all go through seasons in our lives-some better than others but all offer us wisdom if we can learn from them.

I have had different people come into my life and then leave. Some were meant to be short term relationships and some lifetime relationships.

A mistake I have made is to not nourish those relationships with people that have contributed into my life. We all have challenges and sometimes we lose track of what is important and neglect those things that are really important.

Relationships are important and we need to take time for these. You need discernment in this area! There are some people that are leeches and take from you and do not contribute. Be quick to recognize these and flee.

There are people who pour into your life and they nourish your spirit and contribute to you in a lot of ways. These are the keepers. You also have something to contribute to others. You have life experience in some areas that can be of benefit to others who will need guidance and support at some point in their lives.

Over the coming days I will be discussing relationships and how they intertwine in our lives and how integral a part this plays as our lives unfold.

Jacques
CreatingWealthThatLasts

TEACHING YOUR KIDS FINANCIAL LITERACY-PART II

Work is a good disciplinarian. It teaches you how to value your time, make commitments, get up when you don’t feel like it, smile when you don’t feel like it, and value the money that you are earning.

My son started working at a very young age doing lawns in the summer and removing snow in the winter. He had a paper route and did this 6 days a week for years, in 20 below degree weather!

When he was 16, he started working at a gas station and worked there all through high school. He also played sports in school while working.

My wife took my son to the bank at an early age and had him put his money in a savings account. When he graduated from high school he had over $6,000 saved.

We did the same with our daughter. She babysat, took over her brother’s paper route and worked in a nursing home while in high school. She also played sports and was involved in her church youth group at the same time.

Both our kids worked while going to college and they both graduated with good grades and have good careers at this time. The big bonus: they graduated debt free!

We where diligent in teaching them about tithing, saving, and not getting caught in the credit card trap. Pay cash, pay off all credit cards in full at the end of the month, and save!

Teaching your children a good work ethic and taking care of their money is crucial. It does not matter how much money you make if you cannot manage it. Life has enough challenges without having to be stressed by finances.

Jacques
CreatingWealthThatLasts

TEACHING YOUR KIDS FINANCIAL LITERACY-PART I

I have a B.S Degree in Business Management and none of the courses I took in college ever discussed handling personal finances. If the majority of the people in the United States are in debt and have a poor financial picture, do we expect the so called experts to have it all together?

I have learned from bitter experience how to get out of debt and stay out of debt. I now have the responsibility to teach my children. This I have done.

When do we start and what do we do? First of all our children learn from what we do and not what we say! Your actions speak louder than your words. Do you talk about finances with your children? Are they aware of the bills that need to be paid?

For your children to learn about the proper handling of finances they must be aware and informed. Let’s start with having an allowance. Is this the right thing to do or is it a form of welfare? I have read a lot on this and I will share my personal experiences.

When my kids where at home we were always in some form of debt. We started out by giving a small allowance to them and then gradually, as I started to learn about getting out of debt, I stopped.
There are always chores to do around the house and they were required to do these as part of the household (not being paid). This included taking care of their rooms, taking out the trash, washing the dishes, etc.

We did pay them for some chores: snow removal, cutting the grass, washing the cars. This was a way for them to EARN money. They tithed on this, put some in savings, and had some to spend.

Some people allow their children to spend all the money they get whether it is earned income or gifts. This gives a wrong picture. They are learning to spend money as soon as it comes in.

Your children must learn to save and put off needless expenditures. More to come!

Jacques
CreatingWealthThatLasts

FINANCES AND FAMILIES!

Be careful! If you don’t want to jeopardize your family relationships, don’t get involved in any financial issues with them.

A family member asks to borrow money. What do you do? Lend it, charge interest or not? For me, I would give the money and not expect it back. It’s a gift. Why?

Every time you see that family member, they know they owe you money and so do you. What happens if they can’t pay it back? See what I mean. It can get very complicated.

Everyone faces financial challenges at times and it is good to help out but sometimes people need to get a second job, even if it’s for a short period of time.

My experience has been that I have helped people who really did not want to help themselves. I had an uncle (since passed away) who I really liked. Life of the party but a drinker. He used to call to get money because of an emergency and I found out quickly that he was not going to pay it back-ever!

Some financial pundits advise of getting a legal contract with relatives to make sure you get paid. My advice-don’t. If you don’t have the money to give, say so and save yourself the headaches of borrowing money to lend to a relative. People do this all the time.

Be a giver! Be wise in your giving! If you do give money to a relative, tell them to return the favor to someone else!

Jacques

BEING CONSERVATIVE WITH YOUR MONEY!

I don’t know about you but at this point in my life I have realized that there is no such thing as something for nothing and getting rich quick. As they say, easy come-easy go.

If you have put aside some hard earned money, you should be conservative and protect your principal. Look at the stock market and all the pundits who knew all the answers! They are still giving advice like they know what they are doing.

If you are risk averse, consider the following:

1. CD’s: Even with the low rates of 1.5% to 2%, you are protecting your principal.

2. I am presently using a credit union that has a special plan that if you keep $25,000/mo. in your checking account they are paying 4.9% interest. They have a few requirements -like using a debit card 12 times per month and having a payment subtracted automatically from your checking account but the payout is good.

3. Money market deposit accounts: These are savings accounts that are federally insured and have check cashing privileges. They usually have a competitive interest rate but could have some monthly charges so you do need to check around. The advantage of these is that you can take your money out at any time.

4. Treasury bonds: Series I savings bonds offer a fixed rate of interest plus are adjusted for inflation. You can defer taxes on these for up to 30 years and they are exempt from state and local income taxes.

You can sleep better at night with the above!

Jacques
CreatingWealthThatLasts

HOW BANKS RIP US OFF!

If you are a banker, please don’t get offended. It’s just that at times I feel that we are paying the banks to use our money!

I had a friend of mine who had a savings account in a bank and did not use it for a period of 2 years. He had several hundred dollars in it. Would you believe that after 6 months, they had started to charge him a monthly fee of $5/mo because he was not using this account. He paid $60 a year! Do you think he is still using this bank?

Ever had a check bounce? How about a $30-$40 dollar charge for insufficient funds and maybe it was not your fault. Never write a check if you don’t have the funds to pay it. What’s involved when you send a check in the mail?

1. The bank gets the check and sends it to a central location, where it is sorted and sent to a branch of the Federal Reserve Bank.

2. If the check is good it is credited to the bank it was deposited with.

3. The check is then sent to the bank which it was drawn from.

That’s why it takes so long for a check to clear.

What about ATM charges. What a rip off! Sometimes people are charged up to $5 per transaction, even if you only took out $20. This is big business for banks. I am presently using the services of a credit union, which credits back to me any charges I incur when using an ATM.

Maybe I should be getting into the banking business? Hey, if I fail the government will bail me out!

Jacques
CreatingWealthThatLasts

LEASING Y0UR WAY INTO DEBT!

Has a car dealer tried talking you into leasing a vehicle? There is NO good reason anyone should lease a vehicle-period!

Leasing is another way to rent what your paychecks can’t purchase.

Leasing requires some type of upfront payment ( dealers tell you don’t need anything up front, put you don’t get the low payments if you don’t). You pay all maintenance and repairs, a mileage stipend for every mile you drive over the lease agreement, and at the end of the lease you don’t own the car and you have to pay an additional amount if you want to buy it.

Does it sound wise to you to be leasing a new vehicle every two to three years? Why not buy what you can afford, keep it for at least 10 years ( depends on your yearly mileage), and put away the money that you would be spending monthly on a car payment.

People are worried about the decline in the stock market and through away money on car leases!

Leasing a vehicle for three years that costs about $23,000 would run you $13,500 ( assuming you get the security deposit back). But you don’t keep the car at the end of the lease. Financing for three years costs about $26,000 but at the end of the loan period you have a vehicle worth about $14,000.

Another definition for leasing “You, too, can drive a car you can’t afford”.

Jacques
CreatingWealthThatLasts

DON’T INCUR NEEDLESS DEBT!

I drive my cars to at least 100,000 miles and if I can, my goal is 200,000 miles. Now I might not have the new, jazzy model that everyone is driving or the new convertible that the men in their 50’s are all driving with gold chains around their necks and earrings!

But guess what? I don’t have a monthly car payment. I bought a 2002 Mercury Sable that had 25,000 miles on it. I do a lot of driving in my business and I just past the 200,000 mile mark. Still runs good and looks good too!

I have a friend who bought a pickup truck for over $50,000 and his monthly payment is just under $1,000/mo. No way! It’s money down the drain. Vehicles are depreciating assets that depreciate very fast.

If it comes down to putting in $1,500 of repairs in your present vehicle versus buying another vehicle for $25,000, ask yourself which is the smaller number and you have your answer.

Here is what a consulting firm recommends about keeping your present car or buying:

“New car payments are the decisive factor. Even though the new model has a much greater trade in value after four years and you save money on repairs and maintenance, the monthly car payment more than counterbalances the other factors.” In other words, the car payments eat up any savings you’d have.

Since a car is not as asset but is taking money out of your pocket, even if it is paid for, it makes sense to take good care of it-inside and outside. I have ridden in other people’s cars that were so filthy that I would not even want a pet in it.

Again, don’t try to impress friends with a new vehicle. It’s too expensive.

Jacques
CreatingWealthThatLasts

WHAT TAX BREAK?

The experts will tell you NOT to pay off your home mortgage due to the tax benefits and they will all tell you to take any extra money ( that you would use to pay off your debt and invest it).

They all seem to use the classic “invested at 10% for 30 years and you have a million”. I don’t know about you but I haven’t able to find a safe investment that pays consistently 10% a year. The exception is if you have your own business, but that is another story.

At this point in my life I want the peace of mind of having a home that is paid off. You cannot put a price tag on peace of mind!

The longer you are paying on a home the more interest you pay and the more it is costing you. Whatever your present monthly home mortgage is, let’s say $800/mo., when your house is paid off, you now have $9,600/yr. available to you for other uses.

Cash is king. Tax breaks are one thing but cash makes all the difference.

A must have goal is to own your home outright before you get to your retirement.

Jacques
CreatingWealthThatLasts

ARE YOU HOUSE POOR?

I’ve talked about this before but it bears repeating. A house is not an asset. An asset is what puts money in your pocket. Is your house putting cash in your pocket? You are paying taxes, utilities, insurance, ect, all negative cash flow.

Real estate agents will tell you that a home will appreciate in value. Maybe over a LONG period of time. The recent real estate bust should tell us something.

Most first time home buyers overbuy. The qualify for a small or no down payment ( which they think is a good idea), but they don’t realize that they are actually financing more which means a higher monthly payment and more interest paid in.

They say that your mortgage should not be more than 28% of your monthly income. As an example, if you make $45,000/yr. your monthly mortgage payments should be no more than $1,050/mo.

Get real, who can afford a $1,050/mo. mortgage payment while only making $45,000/yr? When you factor in income taxes, credit card payments, and all other expenses-such as food, no way they can maintain that payment.

There is no room for error. You don’t eat out, you don’t buy anything else, and you hope you do not lose your job. Take about stress! The American dream can quickly turn into the American nightmare.

My next blog will discuss the sensible way to buy a home.

Jacques
CreatingWealthThatLasts

SENSIBLE HOME BUYING!

Now that you realize that you home is not as asset, what is it? It’s a place to stay and call home! You need to stay someplace right?

Remember that all banks will tell you that you can afford a bigger home. Don’t take the bait. If you are married and both husband and wife are working, buy a home that one of you could manage if the other lost their job.

Points to ponder:

1. Make sure you have cash reserves before buying a house and keep that cash on hand. Don’t spend it on expensive furniture. Believe me when I tell that circumstances will arise that will require that cash and you will be glad you have it.

2. Buy a home you can live in for several years, not a starter home with the thought that you will be looking for a bigger or better home in a few years. A house that you plan to live in for at least 10 years.

3. When calculating you home mortgage, make sure you make room for savings, credit card payments, and all other misc. expenses.

4. Be diligent in the home buying process and don’t make foolish decisions because of the excitement of buying a new home.

5. Don’t buy to impress your family and friends.

6. If you have no peace within, don’t buy.

7. Don’t buy because the seller is saying a thousand other people are looking to buy it. It’s not the only house for sale!

If you do your homework and plan ahead, you will have a place to call home that will not be a source of stress. That’s right, a home and not an asset!

Jacques
CreatingWealthThatLasts

STAYING OUT OF DEBT ON YOUR WEDDING DAY!

Most young couples starting out usually have some type of college debt and they still feel obligated to have a lavish wedding for their friends and family. I heard of a young couple with $250,000 combined debt for college loans who spent $30,000 on their wedding and put all of it on credit cards.

They then asked for cash gifts from the attendees at the wedding! If potential guests expect you to go into debt so they can have an open bar and a full buffet, they are not worth inviting. What sense does this make to start a married life buried under so much debt? Maybe they should charge admission!

If you are the parents of two young people thinking of getting married please interfere early and provide them with a sensible alternative to more debt.

This is the time of year for weddings and some of the people being invited to weddings are being told to buy gifts from certain retailers and are being given choices on what to buy. Some have even been told to put some money for the newlyweds in some type of retirement amount.

Both of the above scenarios show how far off the mark today’s society is! Go in debt or buy, buy, and buy.

If you are getting married for the right reasons, you don’t have to impress anyone and you don’t have to get into any debt!

Jacques
CreatingWealthThatLasts

THE REAL COST OF CREDIT!

Want to hear a sad but true story. We have a young man in his late twenties earning $100,000 a year with no house payment. He buys a luxury car, spends $2,000 a month eating out, and has $30,000 in credit card debt. The debt is all for non essential items: clothes, furniture, vacations, etc.

Guess what? He is laid off, can’t make his car payments or credit card payments, he declares bankruptcy and moves back in with his parents. He had no savings to whether his unexpected storm.

People have a problem with spending!

Did you hear about the man and his girlfriend who were living in cardboard boxes? The guy goes into a McDonald’s and buys a $1 item and winds up winning 1 Million dollars. Fast forward one year. He buys a motorcycle, a ring for his girlfriend, three homes, and files for bankruptcy.

Again we have spend, spend, spend! He could have banked his money and lived off of the interest.

I heard of a lady who had $150,000 in credit card debt on over 30 different credit cards. She was earning $50,000/yr. How could she do this? One credit card purchase at a time. Needless to say she had to file for bankruptcy.

If you ever have to go to bankruptcy court you will not find people happy to be getting rid of their debt. You will find teary eyed, scared individuals that are afraid that people will find out how big a fool they have become. It’s no laughing matter. It’s a serious and sad matter!

I am not out to heap condemnation on anyone. I am trying to get people to wake up to the fact that there is no free lunch. Somebody has to pay!

Jacques
CreatingWealthThatLasts

HOW DEPENDANT ARE YOU ON CREDIT?

“No man’s credit is ever as good as his money.” Edgar Howe, author.

Let’s see if you could pass this experiment. Take all of your credit cards, put them in an envelope, and put the envelope in your freezer. Do this for two months. Ouch!@!@!

What’s the point you may ask?
1. To practice paying for what you want with cash or a check.
2. To show you how much you can save when you stop using credit to live beyond your means.
3. To prove that with a credit card you spend more.

A study done at a university entitled: Leave home without it, showed that people who bought with a credit card where apt to pay up to 100% more on items that they bought.

When people buy something using a credit card they rarely think about whether or not they have the cash on hand or in a bank account to pay off the entire amount they are charging.

Let’s say that you are going to the mall to buy a $30 dollar pair of sneakers (which are on sale) and you have $35 with you. You buy the sneakers and have $5 to buy a small lunch (shopping makes you hungry!).

Let’s say instead of going shopping with cash you go just with your credit card. Same item to purchase; the $30 sneakers on sale. While you are in the store they just happen to have a special which is buy two and get the second half price. That’s an extra $15 you where not anticipating spending but your saving $15 right? Wrong , you now have another $15 in credit card debt.

If you are strong enough and determined to get out of debt, try this experiment.

You will be glad you did!

Jacques
CreatingWealthThatLasts

A GOOD DEBT IS NOT AS GOOD AS NO DEBT!

Credit can become evil when consumers become so over reliant on credit cards that is clouds their common sense. In my part of the country, it appears that one out of ten families is losing their cars and one out of ten is losing their homes!

Often times it’s not that they can’t afford the debt it’s because they overbought. Too much car or too much house for what they really could afford. I cannot stress enough how debt is the master that has no pity, mercy, or empathy.

A lot of today’s financial mess has been caused by easy credit and no self control. Debt allows people to buy what they don’t need with money they don’t have.

Spending money you haven’t earned leads to ruined marriages, spoiled kids, and a broken spirit. Most people are forced into bankruptcy due to job loss, major medical bills, and divorce with no financial reserves available. If they had had cash on hand maybe they could have weathered the storm.

The only good debt I can think of (if there is such a thing) is for a home and a college education. And then only in moderation. You can get a modest house and a good education at a state university.

Be true to yourself and you won’t have a broken spirit.

Jacques
CreatingWealthThatLasts

N0 COSIGNING FOR ANY LOAN, EVEN FOR YOUR KIDS!

I am not kidding. If your child needs to go buy a car (can’t afford to pay cash) and the bank won’t loan them money why should you? They have to learn the hard way.

If you live in a city they can take the bus. That’s right-take the bus. People today are buying their kids cars when they graduate from high school. When I graduated from high school, I had a friend who came from a family of 23 kids. What did he get for graduation? As suitcase! Hint, hint-time to move out!

When you cosign here are the facts:

1. You are being asked to guarantee this debt. If the borrower does not pay the debt-you do!
2. You may have to pay up to the full amount if the debtor does not pay. You may have to pay for late fees or collection costs.
3. The creditor can decide to collect directly from you without going to the borrower.
4. The creditor can use the same collection techniques against you that they would use against the borrower.

If you feel that you really must cosign for your kids consider the following:

1. Make sure you can repay the loan yourself.
2. Try to limit your liability with the creditor. They may be flexible with the loan.
3. Ask to be notified in writing if the borrower fails to make even one payment.
4. Make sure you get copies of all paperwork including payments and balances.

Cosigning may not seem like a big deal but it could ruin your credit forever!

Jacques
CreatingWealthThatLasts

PRACTICAL IDEA FOR SAVING ON GIFTS!

Have you ever received gifts that you either did not need or did not like. What to do? Re-Gifting!

1. When you receive something you don’t need or don’t like, use it to bless someone else. Just remember who gave it to you and don’t give it back to them!
2. Re-wrap any item you are re-gifting.
3. The gift should be in good shape. Re-gifting doesn’t mean getting rid of junk.

Does this sound like penny pinching to you? It shouldn’t. What would you normally do with a gift you don’t need or want-put? You put it in a closet and forget about it.

Keep in mind that any gift you get, whether it was bought, homemade, or re-gifted should be accepted with grace. Ralph Waldo Emmerson said: “ He is a good man who can receive a gift well”!

Give, you'll be blessed!
Jacques
CreatingWealthThatLasts

WHEN IS ENOUGH ENOUGH?

Do you have one or two T.V.’s, maybe three? How many DVD players? One or two, three cars?

We all stress ourselves out at one time or other for stuff that maybe we really don’t need after all.

“ A man is rich in proportion to the number of things which he can afford to let alone.” Henry David Thoreau

Sometimes we get obsessed with saving enough for our retirement, kid’s college, a rainy day, etc. This can be a lack of Faith or fear of lack. If you look at what you have in your home, I can guess that you have much more than your grandparents or even your parents ever had.

In 1999 a man named Bob Thompson sold his Michigan based asphalt and paving company for $422 million dollars. Do you want to know what he did? He shared $130 million of that with his 550 employees and some of them became instant millionaires. He could have easily walked away with the whole amount and nobody would have said anything. He had “higher values”.

So, how much is enough? Are you spending all your time working and you don’t have time for anything else including your family?

“The things that will destroy America are prosperity-at-any-price…the love of soft living, and the get-rich-quick theory of life.” Theodore Roosevelt.

Put your money and the pursuit of it in perspective! If you set priorities for your time and money, you will have a prosperous future and you WILL have enough.

Jacques
CreatingWealthThatLasts

STOP BLOWING YOUR MONEY!

Common definition of disposable income: The amount of income left to an individual after taxes have been paid and that is available for spending and saving. Disposable income may either be spent on consumption or saved.

Commonsense definition: Money you burn and later regret!

I have seen people trade their perfectly good car every two years because they want the newer model. Worse, they trade in the vehicle to get the new one. Talk about burning your money for your ego.

Don’t be pressured by peers or family. It’s your money and who are you trying to impress really? Who cares what they think? Most probably you are the last person they are thinking about.

1. Only one third of workers have any idea of how much money they need to retire.
2. The average social security check benefit for retired workers is about $900/mo.
3. Social security benefits represent 38% of the income of the elderly.

Where are you? Choose to save now so you don’t have to make bad decisions in the future. If you live a simple life style and are not trying to impress your neighbors you will find that you really do not need that much income to live comfortably on upon retirement -providing that you are debt free.

Every year that you procrastinate about your saving priorities is another year that you put your retirement on the back burner. By the way, retirement is not found in the Bible.
You might retire from you present work but you should be looking at being productive your entire life. That’s what life is all about.

Get started!

Jacques
CreatingWealthThatLasts

SETTING YOUR PRIORTIES WILL SAVE YOU MONEY!

People will say: I want to retire early, send my kids through college, buy a bigger home, give money to charities, etc. We all have noble and good goals, however, if we don’t set priorities, we will be a day older and deeper in debt.

If you want to pay for your kids college are you putting money aside now? Waiting for their senior year isn’t going to cut it. Early retirement-same thing, what are you putting away on a consistent basis?

If you have your goals as priorities, this will have a huge impact on how you spend your money. You will be looking to put money aside for your priorities and will not be so quick to go to the mall just because you feel like shopping.

It’s all about making the right choices. If your money is already spoken for you don’t have it to spend. Let’s use money for your children’s college as an example. They want the latest gadget, clothes, new cell phone, etc and your answer is: NO- it’s going to the college fund. How can they argue with that?

I am also a big believer in having your children work while they are in high school and while going to college. We did this with our two children and they quickly learned the value of having earned their own money and were not so quick to spend their money, let alone Mom and Dad’s money.

Set your priorities and save money!

Jacques
CreatingWealthThatLasts

WHEN IT COMES TO FINANCES-KEEP IT SIMPLE!

If you’ve read any financial magazines or newsletters, it is easy to get lost in their analysis and complicated terms. Based on what has happened on Wall Street, even the so called experts don’t seem to have a clue.

When it comes to your hard earned money, simple is never complicated or hard to understand. Save some of your hard earned money and put it in the bank. The financial pundits keep telling you to invest your money so it will earn at least 10% interest per year. Unfortunately, they never tell you WHERE to get the interest except investing in the stock market for the next 100 years.

Put your money in a savings account or CD’s. It’ safe for the time being and you don’t have to worry about exotic investment deals. Wait, the financial pundits are saying, putting your money in CD”s is not wise, you are not earning enough, look at what we can offer you: prime loan banks, sub prime mortgages, gold investments, etc.

Don’t’ fall for all those scams. That is what most of them are. Why do I say this? Because most of them will lose your money!

If you don’t know what they are talking about, hide your wallet and run! Don’t let your greed for higher returns cloud your judgment.

Jacques
CreatingWealthThatLasts