I didn't say it, the bible did. In the Contemporary English Version of Proverbs 17:18 it says, "It's stupid to guarantee someone else's loan." The bible could not be more right. This happens so often with relatives trying to 'help out' their family. Both the relative and the borrower think that they are responsible enough to pay off the loan. And the borrower has every intention of paying it off. The only one that knows they won't pay is the BANK! They know statistically that the borrower won't pay and they want someone to pay up for them. If you ever co-sign a loan make sure that you are willing to pay it because that's what will happen. In the end, co-signing for the loan doesn't help them. It hurts them. It allows them to get into a loan they shouldn't have had in the first place. So if the bank requires a co-signer for your loan then you should probably think twice about getting it because you can't afford it! On the other side, if someone asks you to co-sign for their loan, actually help them and refuse to do it! If you think they are good with their money and they really need what they are getting, just gift them some money. OR force them to wait and actually save the money for what they want. What a concept that we have forgotten in this debt laden culture, if we want something we should have the money to buy it! Millionaires don't pay interest, they make interest and that's what I go by.
--A Future Millionaire
Monday, October 31, 2011
Friday, October 28, 2011
More Millionaires!
Yahoo Finance published this article today about how the number of millionaires has increased again for the second year in a row. Phoenix Marketing International reports "in 2011, there were 5.94 million millionaire households, compared with 5.56 million households a year earlier, an increase of approximately 6.8 percent." The article also broke down which states had the most millionaires; Maryland topped the list with 7.22% of households being millionaires. The national percentage of millionaires hovers just over 5% now. Before the economic downturn in 2008, the peak percentage of millionaires in the nation was recorded at 5.25% in 2007. But I believe as the economy turns around and as we try to eliminate our debts, this percentage will be surpassed.
How they define millionaire status is a little different than my definition. I look at net worth, which is any assets you own, minus your liabilities. They only look at "investable or liquid assets" and exclude retirement accounts and real estate. If they used my formula, then I believe they would record an even higher number of millionaires. Either way, it doesn't matter how they record it, the fact of the matter is that the number of millionaires are increasing and we can be a part of this.
How they define millionaire status is a little different than my definition. I look at net worth, which is any assets you own, minus your liabilities. They only look at "investable or liquid assets" and exclude retirement accounts and real estate. If they used my formula, then I believe they would record an even higher number of millionaires. Either way, it doesn't matter how they record it, the fact of the matter is that the number of millionaires are increasing and we can be a part of this.
Think that millionaires only inherit their money? Then think again. If fact, in Thomas Stanley's book, The Millionaire Next Door, he points out that 80% of current millionaires are first generation rich! Meaning they worked their butts off and got the money all on their own. Only the "lucky" 20% inherited the money but believe me if they start doing poor people stuff they will become poor. The good news is, it works the opposite way too. If you're poor and start doing rich people stuff then you will become rich. It's not a hard concept at all! It's just hard to achieve because it takes sacrifice. To be a millionaire we must live below our means, budget, spend wisely and make good financial decisions. If we can all take these steps, the percentage of millionaires will skyrocket, all people will be more financially secure, giving will increase and the wealth of this nation will be restored and strong once again.
--A Future Millionaire
--A Future Millionaire
Wednesday, October 26, 2011
It Starts with WE not THEY
3 “Why do you look at the speck of sawdust in your brother’s eye and pay no attention to the plank in your own eye? 4 How can you say to your brother, ‘Let me take the speck out of your eye,’ when all the time there is a plank in your own eye? 5 You hypocrite, first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye. --Matthew 7:3-5
This passage sums up what is going on with the financial crisis this nation is having. How can we expect Washington to get their financial situation fixed when we are sitting at home with record amounts of debt as well? How can we demand they fix their problem while we sit back and do nothing about our own? We are so concentrated on other people's problems that we can't fix our own!!
This is when we need to step back and realize that this financial crisis is not the problem at all! It is the symptom. Our real problems are:
1) Discipline: We can't say no to debt
2) Entitlement: We are spoiled
3) Greed: We are so far in debt, we have no money left to give
We have raised a nation that was told we can have everything we want and get it now. We never realized this as a problem until we started running out of money, the housing market crashed and unemployment skyrocketed. The fact that we as individuals and us as a nation are so much in debt is not the problem and there is no real way to fix it. We need to first, discipline ourselves and realize that we simply can't have everything we want right now. Sacrifices must be made and we will see that once we start to work on these problems, our financial situation will heal as well. Mature people who want a solution look for something they can DO. Entitled people look for someone they can BLAME. Before we point fingers, let's look for a solution. Let's get our own finances under control without demanding the governments help and before we demand the government to fix their crisis. Let's pay off our debt, live on a budget, save more money and give more money. If all of us start handling our finances well, congress will follow suit.
--A Future Millionaire
P.S. A lot of this was based off a sermon by Andy Stanley, if you would like to learn more from him directly check it out here.
This passage sums up what is going on with the financial crisis this nation is having. How can we expect Washington to get their financial situation fixed when we are sitting at home with record amounts of debt as well? How can we demand they fix their problem while we sit back and do nothing about our own? We are so concentrated on other people's problems that we can't fix our own!!
This is when we need to step back and realize that this financial crisis is not the problem at all! It is the symptom. Our real problems are:
1) Discipline: We can't say no to debt
2) Entitlement: We are spoiled
3) Greed: We are so far in debt, we have no money left to give
We have raised a nation that was told we can have everything we want and get it now. We never realized this as a problem until we started running out of money, the housing market crashed and unemployment skyrocketed. The fact that we as individuals and us as a nation are so much in debt is not the problem and there is no real way to fix it. We need to first, discipline ourselves and realize that we simply can't have everything we want right now. Sacrifices must be made and we will see that once we start to work on these problems, our financial situation will heal as well. Mature people who want a solution look for something they can DO. Entitled people look for someone they can BLAME. Before we point fingers, let's look for a solution. Let's get our own finances under control without demanding the governments help and before we demand the government to fix their crisis. Let's pay off our debt, live on a budget, save more money and give more money. If all of us start handling our finances well, congress will follow suit.
--A Future Millionaire
P.S. A lot of this was based off a sermon by Andy Stanley, if you would like to learn more from him directly check it out here.
Monday, October 24, 2011
Gambling and the Lottery
I think gambling is fun and exciting especially at a really nice casino. While some people may like to go to a movie and spend $10, I'd rather go to a casino and use it to gamble. BUT entertainment is all gambling is good for. It is most certainly NOT a way to get rich, it is a way of becoming broke. Gambling can be addicting and can destroy your finances. A casino can eat your cash fast but the lottery is even worse. It is the absolute worst place you can spend your money. At least in roulette if you put your money on black or red, you have a 47% chance of doubling it (not saying I recommend it). The lottery has drastically worst odds and basically becomes a tax on the poor and people that can't do math. I can guarantee that the majority of millionaires do not play the lottery. Now you might say, "that's because they don't need too play the lottery because they already have a lot of money." I say that they became millionaires because they stayed away from the lottery! Let's play out a scenario where instead of wasting your money playing the lottery, you put it in a good growth stock mutual fund...
Let's say the average person that plays the lottery spends $30 a month, that's $360 a year. They have about a 1 in 13,983,816 chance of hitting the jackpot and becoming a millionaire. If instead of using the money on the lottery, you put it in a good growth stock mutual fund your whole working life (from age 20 to age 70) you will have $1,183,467.69 EVERY TIME!!! Why give your hard earned money away to the government when instead you could literally become a millionaire with that money?
Welcome to the wonderful world of mathematics! This is a real world application that every non-math minded person can understand.
--A Future Millionaire
Let's say the average person that plays the lottery spends $30 a month, that's $360 a year. They have about a 1 in 13,983,816 chance of hitting the jackpot and becoming a millionaire. If instead of using the money on the lottery, you put it in a good growth stock mutual fund your whole working life (from age 20 to age 70) you will have $1,183,467.69 EVERY TIME!!! Why give your hard earned money away to the government when instead you could literally become a millionaire with that money?
Welcome to the wonderful world of mathematics! This is a real world application that every non-math minded person can understand.
--A Future Millionaire
Friday, October 21, 2011
Get Hydrated and Save Money
One of the little things I do that saves me money, also happens to make me healthier. When I go to eat at a restaurant, which is budget busting already, I always ask for just tap water (unless of course we are celebrating and I need a beer!). This does two things, the first of which is saves money! If you want to have a coke don't buy it from a restaurant. They mark up the price of soda so much, in fact i can be marked up as high as 2000%! Now that is good for the restaurant but bad for you. "A family of four that dines out twice per week will save nearly $1,000 per year by skipping the soda pop and instead going with water."(Source) That is huge saving that can be applied to debt or saved to buy something you need. Why waste it on soda, which is just liquid calories and does nothing for you nutritionally? Water is also so abundant in our body and it needs to be replaced, so for me this is a win-win-win situation. Save money, cut out calories and hydrate our body all at the same time.
--A Future Millionaire
--A Future Millionaire
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