Category Archives: Growth Mindset

Conspicuous Spending and Skyrocketing Debt

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“The hard truth is: the amount of money we earn is not always directly proportional to the amount of money we save because, more often than not, the more money we make, the more we spend.” David Bach, author “The Automatic Millionaire”

Let’s face financial reality and an inconvenient truth. Whether on Main Street, Wall Street or Pennsylvania Avenue, Americans continue to have and have long had a spending problem. Government statistics and other studies show that Americans’ spending has generally risen in the years since the 2008 – 2009 Great Recession. This trend is reflected in Americans’ general pattern of consumer spending and reflected in the rising levels of consumer, corporate and public debt which has topped a whopping $75.3 trillion in 2019 according to the stats coming out of the Federal Reserve.

Moreover, Gallup found in an April 2018 poll that people “…want see themselves as fiscally responsible, to some degree.” Even Americans who admit that they are spending more than they earn over the past several months are more likely to claim this is only temporary, rather than their normal. Those who say they are spending less believe it is permanent, despite what the numbers reveal.

And Americans’ have a predilection to say that they enjoy saving more than spending, which rose dramatically between the period before and the period just after the recession, has remained in place, even as the economy has improved.

Positive Cash Flow

Asked about their spending habits, Gallup results show that Americans are as likely to say they are spending the same amount as they used to (35%) as to say they are spending less (35%). Slightly fewer, 30%, report spending more. The takeaway is that Americans’ conspicuous spending habits will not change unless they first acknowledge it as a problem.

On the other hand, most wealthy people understand and stress the importance of spending much less than their means. Spending less gives them financial freedom which then translates into various opportunities such as career mobility, flexibility to venture into activities outside of work, and of course the ability to increase their wealth.

On the other hand, if Americans are spending more than what they earn, then even with a big six-figure income, they will be excessively reliant on each of their paycheck. It is very important that they are financially independent before the time comes when they decide to become self-employed or to retire. So it’s important to start saving, investing and accumulating wealth.

Simply spending less than we earn, eliminating bad debt, managing taxes and fees, paying ourselves first, starting to save early, automatically saving and investing for the long-term, and developing smart financial habits and positive financial mindset will result in huge results over a long period of time.

References:

  1. https://www.federalreserve.gov/releases/z1/20190307/z1.pdf
  2. https://usdebtclock.org
  3. https://news.gallup.com/poll/209432/americans-say-saving-spending.aspx
  4. https://www.bea.gov/news/glance

10 Money Lessons He Wished Heard — or Listened to — When Younger | MarketWatch

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Updated: February 23, 2020

Jonathan Clements, author of “From Here to Financial Happiness” and “How to Think About Money,” and editor of HumbleDollar.com., is the former personal-finance columnist for The Wall Street Journal. He has devoted his entire adult life to learning about money.

That might sound like cruel-and-unusual punishment, but he has mostly enjoyed it. For more than three decades, he has spent his days perusing the business pages, reading finance books, scanning academic studies and talking to countless folks about their finances.

Yet, despite this intense financial education, it took him a decade or more to learn many of life’s most important money lessons and, indeed, some key insights have only come to him in recent years.

Here are 10 things he wished he’d been told in his 20s—or told more loudly, so he actually listened:

— Read on www.marketwatch.com/story/10-money-lessons-i-wish-id-listened-to-when-i-was-younger-2020-02-12

1. A small home is the key to a big portfolio. Financially, it turned out to be one of the smartest things he had ever done, because it allowed him to save great gobs of money. That’s clear to him in retrospect. But he wished he’d known it was a smart move at the time, because he wouldn’t have wasted so many hours wondering whether he should have bought a larger place.

2. Debts are negative bonds. From his first month as a homeowner, he sent in extra money with his mortgage payment, so he could pay off the loan more quickly. But it was only later that he came to view his mortgage as a negative bond—one that was costing him dearly. Indeed, paying off debt almost always garners a higher after-tax return than you can earn by investing in high-quality bonds.

3. Watching the market and your portfolio doesn’t improve performance. This has been another huge time waster. It’s a bad habit he belatedly trying to break.

4. Thirty years from now, you’ll wish you’d invested more in stocks. Yes, over five or even 10 years, there’s some chance you’ll lose money in the stock market. But over 30 years? It’s highly likely you’ll notch handsome gains, especially if you’re broadly diversified and regularly adding new money to your portfolio in good times and bad.

5. Nobody knows squat about short-term investment performance. One of the downsides of following the financial news is that you hear all kinds of smart, articulate experts offering eloquent predictions of plummeting share prices and skyrocketing interest rates that—needless to say—turn out to be hopelessly, pathetically wrong. In his early days as an investor, this was, alas, the sort of garbage that would give him pause.

6. Put retirement first. Buying a house or sending your kids to college shouldn’t be your top goal. Instead, retirement should be. It’s so expensive to retire that, if you don’t save at least a modest sum in your 20s, the math quickly becomes awfully tough—and you’ll need a huge savings rate to amass the nest egg you need.

7. You’ll end up treasuring almost nothing you buy. Over the years, he had had fleeting desires for all kinds of material goods. Most of the stuff he purchased has since been thrown away. This is an area where millennials seem far wiser than us baby boomers. They’re much more focused on experiences than possessions—a wise use of money, says happiness research.

8. Work is so much more enjoyable when you work for yourself. These days, he earn just a fraction of what he made during my six years on Wall Street, but he is having so much more fun. No meetings to attend. No employee reviews. No worries about getting to the office on time or leaving too early. he is working harder today than he ever have. But it doesn’t feel like work—because it’s his choice and it’s work he is passionate about.

9. Will our future self approve? As we make decisions today, he think this is a hugely powerful question to ask—and yet it’s only in recent years that he had learned to ask it.

When we opt not to save today, we’re expecting our future self to make up the shortfall. When we take on debt, we’re expecting our future self to repay the money borrowed. When we buy things today of lasting value, we’re expecting our future self to like what we purchase.

Pondering our future self doesn’t just improve financial decisions. It can also help us to make smarter choices about eating, drinking, exercising and more.

10. Relax, things will work out. As he watch his son, daughter and son-in-law wrestle with early adult life, he glimpse some of the anxiety that he suffered in my 20s and 30s.

When you’re starting out, there’s so much uncertainty — what sort of career you’ll have, how financial markets will perform, what misfortunes will befall you. And there will be misfortunes. he’d had my fair share.

But if you regularly take the right steps—work hard, save part of every paycheck, resist the siren song of get-rich-quick schemes—good things should happen. It isn’t guaranteed. But it’s highly likely. So, for goodness’ sake, fret less about the distant future, and focus more on doing the right things each and every day.

You can follow Jonathan Clements on Twitter @ClementsMoney and on Facebook at Jonathan Clements Money Guide.

Ideas for Frugal Living | Three Life Lessons | Fidelity

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“The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully”

Three (3) lasting lessons from my frugal parent

Frugal living can help separate the important financial expenses from the not so important. Learn helpful lessons and ideas on frugal living here.

BY JEANNE THOMPSON FROM FIDELITY – 06/07/2019

I’ll never forget my first “real” vacation.

Most of our family vacations were camping trips where we slept together in a tent or a pop-up trailer and my mom cooked for my 4 siblings and me at the campsite. But the summer after fifth grade, my father decided to take me, my mom, and my 2 older sisters with him on a business trip to California.

That trip really stood out. I remember relaxing by the pool in sunny San Diego, sipping Shirley Temples with my sisters. We were fascinated by the elevators in our big hotel and rode them up and down until we were sternly told to stop. Simply put, it was paradise.

This trip was an unusual extravagance for my parents, too. You can’t raise 5 children on a limited income without being very frugal. And my parents, who were both first-generation Americans, were used to getting by on very little. Excess was not an option. At Christmas, my mom would save nice wrapping paper and reuse it; boxes were also recycled for many holidays to come. Folding a little piece of wrapping paper in half, writing a note inside, and taping it to a gift worked just as well as buying a greeting card. She reused everything from tin foil to plastic baggies. Her approach to money and possessions was pretty consistent: “Make do with what you have.”

These habits and quirks used to make us laugh. Today, I appreciate the example my parents set. I resist spending money on big-ticket items. My car, for instance, is a 2010 model and has 150,000 miles on it. And most of the furniture in our house is at least a decade old (if not a few decades). I’m not about spending a lot on furniture —with a teenage son, our couch becomes a dumping ground for lacrosse equipment more often than not. I even save nice wrapping paper from time to time, much to the amusement of my kids. And because of the warm memories from that long-ago California trip, I’d much rather spend money on experiences my family can enjoy, like vacations, than on stuff.

Maybe it’s wishful thinking, but I like to believe that my parents’ mindful approach to spending lives on in my kids, who seem to appreciate the value of a dollar on some days at least. My college-age daughter takes pride in her 5-star rating on a ride-hailing app because it entitles her to discounts and coupons. My son, a high school senior, is already savvy about mutual funds and 401(k)s—thanks to conversations he tunes into at home and an intro to business class he takes at school. Both kids know that they need to budget for indulgences beyond the basics and that they’ll have to pay for them with money earned from their jobs.

Both of my parents are gone now, but their frugal approach to working diligently and saving money allowed them to raise kids. And not only that: They put enough away to build a nest egg that funded some retirement travel to Europe, Russia, and Alaska in their golden years. By then my father came around to reasoning: “You can’t take it with you.”

They still managed to leave something behind. The lessons they taught us about money—about not spending more than we have, saving what we can, and splurging occasionally and mindfully—are with all of us. And those occasional splurges they encouraged us to enjoy are as sweet as those long-ago Shirley Temples under the warm California sun.

— Read on www.fidelity.com/mymoney/frugal-living-ideas-and-life-lessons

A Man is What He Thinks

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“A man is literally what he thinks.” James Allen

James Allen, a British philosophical author of ‘As a Man Thinketh’, wrote, “A man is literally what he thinks, his character being the complete sum of all his thoughts. As the plant springs from, so every act of a man springs from the hidden seeds of thought, and could not have appeared without them.”

The things you choose to focus on, your thoughts, determines how you perceive the world – and influences many of the experiences you have as a result. If you focus only on the negative things in your world, the world can seem like a terrible place and your mood and outlook may suffer.

“Every one of us is the sum total of our own thoughts. We are where we are because that is exactly where we really want or feel we deserve to be, whether we’ll admit it or not.” Earl Nightingale

But when you focus on the positive things in your world, you see that the world is actually full of faith, hope, love, and joy. There is kindness and beauty that inspires people to do incredible things.  Each man holds the key to their own perception and focus, good or bad. He also hold the key to everything that enters into his life. By working patiently and intelligently upon his thoughts and focus, he may remake his life, his behaviors and transform his circumstances. 

“You are today where your thoughts have brought you; you will be tomorrow where your thoughts take you.” James Allen

Thoughts of doubt and fear never accomplished anything, and never can. They always lead to failure. Purpose, energy, power to do, and all strong thoughts cease when doubt and fear creep in.

“He who has conquered doubt and fear has conquered failure.” James Allen

The will to do springs from the knowledge that we can do. Doubt and fear are the great enemies of faith and knowledge. The people who embrace readily doubt and fear, who refuses to slay them, hinder himself at every step.

Changing the Subconscious Mind

Daily affirmations are techniques you use to begin he process of improving your life. Affirmations are simply statements that describe a goal or thought in its already completed state. Positive affirmation helps eliminate negative and limiting beliefs.

Affirmations can transform an individual’s comfort zone from a limited one keeping them trapped in mediocrity to a more expanded one where anything is possible. It helps to replace your “I can’ts” with “I cans,” and your fears and doubts with confidence and aspirations.

Affirmations are reminders to your unconscious mind to stay focused on your goals and to come up with solutions to challenges and obstacles that might get in the way.

“These things we bring on ourselves through our habitual way of thinking,”

Daily affirmations are simple, positive statements declaring specific goals in their completed states. Affirmations also hold a key to creating the life of your dreams. Successful people have long known that using willpower alone to energize their success isn’t enough.

Let go of negative beliefs

It is important to let go of and not focus on negative thoughts and images. Instead, individuals should bombard their subconscious mind with new thoughts and images that are positive and stated in the present tense.

In closing, William James said: “The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind. We need only in cold blood act as if the thing in question were real, and it will become infallibly real by growing into such a connection with our life that it will become real. It will become so knit with habit and emotion that our interests in it will be those which characterize belief.”

James also said,

”If you only care enough for a result, you will almost certainly attain it. If you wish to be rich, you will be rich. If you wish to be learned, you will be learned. If you wish to be good, you will be good – only you must, then, really wish these things, and wish them exclusively, and not wish at the same time a hundred other incompatible things just as strongly.”

References:

  1. Allen, James, As a Man Thinketh: Original 1902 Edition
  2. http://www.jamesallenlibrary.com/authors/james-allen/as-a-man-thinketh
  3. https://www.jackcanfield.com/blog/practice-daily-affirmations/
  4. https://www.jackcanfield.com/blog/become-a-millionaire-never-too-late/

The Power of Habit: Why We Do What We Do in Life and Business

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Habits are choices that you continue doing repeatedly without actually thinking about them.

The Power of Habit, written by New York Times business reporter Charles Duhigg, explains why habits exist and how they can be changed. According to Duhigg, if people can understand how behaviors became habits, they can restructure those patterns in more constructive ways.

Additionally, understanding and changing habits is one of the most important thing in developing good personal financial behaviors or eliminating bad personal financial behaviors.

https://youtu.be/W1eYrhGeffc

Source:

  1. https://charlesduhigg.com/books/the-power-of-habit/
  2. https://www.shortform.com/summary/the-power-of-habit-summary-charles-duhigg
  3. https://fastertomaster.com/the-power-of-habit-by-charles-duhigg/

37 Earl Nightingale Quotes That Will Empower You to Soar High | Inc.com

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Earl Nightingale had a passion and mission to improve the lives of other people. In his view, he concluded:

“We become what we think about”

This fact, “we become what we think about”, is the Secret Power of Mindset. We are currently and will continue to be what we think about. Essentially, he advised that we are in control of our thoughts.

Additionally, he stated that we are creatures of habit. We tend to follow, either consciously or sub-consciously, the picture or script in our minds created by our past environment, our parents, our communities and the region from which we come. For better or for worst.

Instead, we must start imagining our lives the way we want it. We must create a picture in our mind and think about that picture of our future self steadfastly all day long. We must believe it.

Once we do, we will start making different choices in line with our picture…our self-image. We will take small steps in the right direction.

“People with goals succeed because they know where they are going”

He advised that goals are the destinations or effects of our thoughts, that is what we have been thinking and always think about is what we become. Here are 6 steps Earl Nightingale recommended that will help us achieve our goals:

  1. Give yourself a definite goal.
  2. Quit running yourself down.
  3. Stop thinking of all the reasons you cannot be successful and instead, think of all the reasons why you can.
  4. Trace your attitudes back through your childhood and try to discover where you first got the idea you couldn’t be successful – if that’s the way you’ve been thinking.
  5. Change the attitude you have of yourself by writing out the description of the person you’d like to be.
  6. Act the part of the successful person you have decided to become.

“Success is the progressive realization of a worthy ideal.”

If a man is working toward a pre-determined goal and knows where he’s going, that man is a success. If he’s not doing that, he’s a failure. Success is the progressive realization of a worthy ideal.

When you have an attitude of altitude, and when you are grateful for what you have, your chances to have a meaningful and successful life are greater. Start where you are now to develop this mindset. You have the potential to do many things, even those things you may think are impossible. Broaden your vision and keep moving forward–the sky truly is the limit.

Earl Nightingale was a motivational speaker and writer. He firmly believed the key to success can be found in these six simple words: We become what we think about. And, he encouraged us to:

“Learn to enjoy every minute of your life. Be happy now. Don’t wait for something outside of yourself to make you happy in the future. Think how really precious is the time you have to spend, whether it’s at work or with your family. Every minute should be enjoyed and savored.” – Earl Nightingale

— For Earl Nightingale’s Quotes, read on www.inc.com/peter-economy/37-earl-nightingale-quotes-that-will-empower-you-to-soar-high.html

References:

  1. http://www.asamanthinketh.net/files/EN_Greatest_Discover_eBook.pdf
  2. http://wordpress.nightingale.com/articles/is-your-personal-corporation-growing/

“William James said: “The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind. We need only in cold blood act as if the thing in question were real, and it will become infallibly real by growing into such a connection with our life that it will become real. It will become so knit with habit and emotion that our interests in it will be those which characterize belief.” He also said,”If you only care enough for a result, you will almost certainly attain it. If you wish to be rich, you will be rich. If you wish to be learned, you will be learned. If you wish to be good, you will be good – only you must, then, really wish these things, and wish them exclusively, and not wish at the same time a hundred other incompatible things just as strongly.” ― Earl Nightingale

Personal Finance: 4 Ways to Save Money and Improve Your Money Management Skills | Brian Tracy

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“Believe you’re the person you must become…”

Virtually every single person in America who is financially independent started off with nothing. But they acquired good personal finance habits, learned how to save money, and improve their money management skills, eventually becoming some of the most successful people in their communities. And anything that anyone else has done, you can probably do as well.

Save Money By Using A Long Time Perspective

To save money and become financially independent you must begin living on less than you earn even if you are deeply in debt. One of the most important guarantors of your personal finance success is called “Long time perspective.”

Take the long view.

Develop a long term attitude toward yourself and your financial future and begin thinking in terms of where you want to be in five and ten years. This long-time perspective will have an inordinate impact on your personal finance habits and money management skills in the present, and will help you save money over the years.

The starting point of financial independence is described in George Klasson’s book, The Richest Man in Babylon, as “Pay yourself first.” He says that, “A part of all you earn is yours to keep.” If you just save 10% of your gross earnings every single paycheck over the course of your working lifetime, you will become financially independent and gain personal finance success. In fact, if you saved $100 per month from the time you started work at age 20 until the time you retired at age 65, and this $100 per month earned 10% per annum return, compounded, you would be worth more than $1,100,000 when you retired, in addition to social security pensions and everything else. Major take-away from The Richest Man in Babylon are – pay yourself first, live within your means, invest your money wisely, and prepare for the future.

— Read on www.briantracy.com/blog/financial-success/personal-finance-money-management-tips-save-money/

Many Americans are feeling these 3 big financial stresses – MarketWatch

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If you look only at the nation’s low, 3.7% unemployment rate, it would be easy to assume that the economy’s humming and that Americans are feeling great about their finances. But after reviewing five recent notable surveys, I believe many people are actually feeling three big financial pain points now.

Overall, according to the Bank of America Workplace Benefits Report of 996 retirement-plan participants, just 55% of employees rate their financial wellness as good or excellent, down from 61% a year ago. “That’s something to keep a close eye on,” says Lisa Margeson, head of Retirement Client Experience and Communications at Bank of America.

— Read on www.marketwatch.com/story/many-americans-are-feeling-these-3-big-financial-stresses-2019-10-02

Lifestyle changes to make if you want to get rich in 2020

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If you want to build more wealth in 2020, start with these five lifestyle changes endorsed by self-made millionaires.

If your’re looking to build more wealth in 2020, money won’t simply appear — you’re probably going to have to make some changes to reach your goals.

Here are five lifestyle changes that have helped self-made millionaires get to where they are today. If they worked for them, they could also work for you.
— Read on www.cnbc.com/2020/01/03/lifestyle-changes-to-make-if-you-want-to-get-rich-in-2020.html

The Beginner’s Guide to Intermittent Fasting

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The quote below from Dr. Michael Eades, who has tried intermittent fasting himself, on the difference between trying a diet and trying intermittent fasting.

“Diets are easy in the contemplation, difficult in the execution. Intermittent fasting is just the opposite — it’s difficult in the contemplation but easy in the execution.

Most of us have contemplated going on a diet. When we find a diet that appeals to us, it seems as if it will be a breeze to do. But when we get into the nitty gritty of it, it becomes tough. For example, I stay on a low–carb diet almost all the time. But if I think about going on a low–fat diet, it looks easy. I think about bagels, whole wheat bread and jelly, mashed potatoes, corn, bananas by the dozen, etc. — all of which sound appealing. But were I to embark on such a low–fat diet I would soon tire of it and wish I could have meat and eggs. So a diet is easy in contemplation, but not so easy in the long–term execution.

Intermittent fasting is hard in the contemplation, of that there is no doubt. “You go without food for 24 hours?” people would ask, incredulously when we explained what we were doing. “I could never do that.” But once started, it’s a snap. No worries about what and where to eat for one or two out of the three meals per day. It’s a great liberation. Your food expenditures plummet. And you’re not particularly hungry. … Although it’s tough to overcome the idea of going without food, once you begin the regimen, nothing could be easier.”

— Dr. Michael Eades

— Read on jamesclear.com/the-beginners-guide-to-intermittent-fasting