Friday, July 31, 2009

Personal Finance in One Page – Part 3


Live Frugal

1. Maximize Every Dollar

Every time you spend money, you make a decision. Only you can decide what a dollar is worth and therefore make a value trade. The real key in maximizing your dollar is to raise your definition of what a dollar is worth.

Here is a list of a few tactics for reducing your spending and saving more money. See e-book for full list of 100. These are some of the main ones that stood out when I read through them. Great points to consider here.

i. Switch your bank accounts to a bank that respects you.

ii. Turn off the television.

iii. Master the thirty day rule. When you’re considering making an unnecessary purchase, wait thirty days and then ask yourself if you still want that item.

iv. Write a list before you go shopping and stick to it.

v. Invite friends over instead of going out.

vi. Give up expensive habits, like cigarettes, alcohol and drugs.

vii. Turn off lights before you leave.

viii. Install CFL or LED bulbs wherever it makes sense.

ix. Hide your credit cards.

x. Do a price comparison – and find a cheaper grocery store.

xi. Don’t spend money just to de-stress.

xii. Cancel unused club memberships.

xiii.  Do holiday shopping right after the holidays.

xiv. Try generic brands of items you buy regularly.

xv. Prepare some meals at home.

xvi. Go for reliability and fuel efficiency when buying a car.

xvii. Learn how to dress minimally.

xviii. Look for a cheaper place to live.

xix. Hit the library, hard.

xx. Find out about all the benefits of your job.

xxi. Read more.

xxii. Set up automatic debt repayment on your student loans.

xxiii. Exercise more.

xxiv. Always keep looking ahead.

xxv. Never give up.


2. Break Your Bad Habits

Spend some time looking at where you spend a lot of money and cut these routines out. Do you really need to buy a $5.00 cup of coffee every morning of the workweek. That adds up. Look at the things you do every day that requires you to spend a lot of money and make a decision whether or not they are necessary or could be replaced.

3. Master the 10 Second Rule

Whenever you pick up an item to add it to your cart, stop for 10 seconds and ask yourself why you are buying it and whether you actually need it or not. If you can’t find a good answer, put the item back. This helps with impulse buying.

4. Don’t Make Yourself Miserable

Don’t cut down on spending to the expense of the present. If you feel something is worthwhile, then do it. The main objective is to cut down on the unnecessary, not drive yourself crazy saving.

5. Don’t Forget the Big Picture

Because you have money, that does not mean that you should purchase an item. Consider your ultimate financial goal and determine what is a need to what is a fleeting desire.


Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.


Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Wednesday, July 29, 2009

Personal Finance in One Page – Part 2


Earn More

1. Get Educated – Learn new things, read a book, take evening classes to get certified in a certain area, get a masters’ degree. Warren Buffett said the best investment one can make is in oneself; the return on this investment is usually ten-fold. Spend time on your personal and professional development.

2. Develop More Income Streams – Look for ways to make more money. Maybe you can use a hobby or skill that you have to make some extra cash; photography, writing, tutoring, designing etc. Maybe you have some extra cash that you can invest.

3. Start a Side Business – If you have some extra time after work, why not start a business? Write a blog with some ads, or design web pages, write programs or fix computers if you are good at it. There are a lot of opportunities right now and the startup costs have been drastically reduced because of the Internet. If you want to start a business for cheap, now is the time.

4. Move towards your Passions – Whenever opportunities present themselves, gravitate towards things that excite you. How do you know if you are passionate about something? How do you feel about it? No one can tell you this, only you would know. Think about what you are passionate about, writing code, leading others, drawing, photography, anything and just DO IT.

5. Don’t Burn Bridges – You never know when a relationship in your past might come in handy later on, even the ones you don’t expect. Never spread a negative word about anyone, it never helps. Avoid gossip, resist it. One thing I have learned is that your connection to others is what helps you get to where you want to go.

6. Keep in Touch -  When you build a bridge with someone, don’t let it get old and worn out. Spend the time to keep in touch with that person. Email or call them every once in a while to see what they are up to. When it is clear that they need help and you can easily provide it, always provide it.

Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.



Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Monday, July 27, 2009

Personal Finance in One Page – Part 1


Spend Less Than You Earn
This is a fundamental rule in personal finance. Any personal finance book that you read will indicate this. It is the only way to generate savings, as this is the definition of savings; your income must be greater than your expenditure. The ‘gap’ as the image above indicates, is your savings and the goal is to make this gap as big as possible. It is this ‘gap’ that you will eventually put to use, in retirement accounts, 529 plans, investment accounts, real estate, savings accounts and so forth, that will eventually work for you. This ‘gap’ plus the power of compounding will allow you to achieve financial security, by your own definition.

What are we to do now?
The first step to take is to start tracking our expenses. How else would we know what how much our income and expenditures are? Therefore, to increase the ‘gap’ or savings, we would either have to increase our income, or reduce our spending. Tracking both helps us to know what falls in both those categories.

I recommend or Quicken Online, now that Microsoft Money is no longer being supported by Microsoft. I have tried both applications and they are both great. There are others as well, so use one that you are comfortable with. I prefer

Thank you for Trent of the Simple Dollar for allowing the free distribution of this e-book. For the entire e-book, click on link below. 

Everything you ever really needed to know about personal finance in one page, by Trent Hamm.



Personal Finance in One Page: Part 1
Personal Finance in One Page: Part 2
Personal Finance in One Page: Part 3
Personal Finance in One Page: Part 4
Personal Finance in One Page: Part 5

Saturday, July 25, 2009

10 Habits to Create Wealth

This is a great post done by Christian PF. These are the 10 habits.

1. Make it your daily mission to find your true financial purpose.
Know exactly what you want to achieve financially. Is it financial independence, zero debt or a new home? Set goals, know what you are saving for, why you are saving and what meaning the end results would have.

2. Make new choices daily.
To create wealth requires a change of habit. More attention must be paid to each dollar; every dollar must be seen as valuable. It is not that you are being extremely frugal, but it is a mindset that must be created that embeds in your consciousness the value of money. Now the choices you make will automatically be influenced. For example, you will choose to make lunch at home to take to work instead of spending $10 a day dining out.

3. Associate with positive, like-minded individuals.
Minimize your exposure to negative people. It is amazing the effect they can have on you. Connect more with people who are positive and motivating. These people can make you believe that anything is achievable, and this is an important step in creating wealth; first believing that you can.

4. Educate yourself daily.
Attempt to learn more about finances. It may sound overwhelming or challenging, but it is really not. Any topic that you are not familiar with may seem intimidating. So all that is really needed is familiarity. Familiarize yourself with topics of personal finance and investing so that you will be knowledgeable about it. It does take time and effort. Subscribe to a personal finance or investing blog that you like and read it daily. Every little bit of knowledge helps. Trust me.

5. Practice self-control.
Do not act on impulse. With this new mindset in #2, every decision to purchase is evaluated based on need and priority. Yes, there are times where you treat yourself, but even those times are evaluated, because financial independence, by your own definition, is what your main priority is. So you develop the ability to defer gratification as independence is more important than getting the latest gadget that is released.

6. Hire a team of advisors.
The knowledge that you can get from these advisors is priceless. Right now, I am self-educated and do a lot of reading myself, but I do understand the importance of experience that a tax planner, or accountant may bring.

7. Develop the habit of analyzing your expected return on each investment you make.
For every investment you make, consider what your return is. Profit is highly dependent on the purchase price not the sale price. Pay a low enough price for an asset, and the high return would be automatic. The best investment you can make is in yourself, so dedicate a lot of time to self-improvement and self-development; the return on this investment will usually be ten-fold.

8. Don’t try to look wealthy, look to become wealthy.
This is an obvious point that is overlooked. I thank ChristianPF for mentioning this. Focus on your assets and not your liabilities. Assets create value for you. Liabilities, on the other hand, take value from you; that is, they require you to make payments. Liabilities are also items that you buy that do not add any value, but lose value over time as well. However, know that they can serve beneficial purposes; keep that in mind. For example, books bought to educate yourself on personal finance lose value over time, but do give you a lot of knowledge. Minimize your payments you make and increase the payments coming to you.

9. Give generously to others. Share your time, money, and assets.
Most wealthy individuals understand the importance of giving. Giving can be done in different capacities; giving of knowledge, time, money or resources. The realization that one has the capacity to help others achieve what they want is a great advance of consciousness. Dr. Wayne Dyer said that the best way to achieve what one wants in life is to give it to others. I totally agree with this. By giving it away to others, you would realize that you had it all along. I wrote a recent article on the importance of giving. It is one of my favorites. Check it out. Wealth and Charitable Donations

10. Most important, Always stay true to your principles.
Warren Buffett said that if something seems too good to be true, then it usually is. Always stick to what you understand and do not chase after get rich quick schemes. Once you stick to what you understand, you will be clear as to what the risks are and the surprises will be minimum. This becomes so very important when you start investing.

Inspired by a great post from ChristianPF.


Friday, July 24, 2009

Warren Buffett Cartoon coming to AOL

secret-millionaires-club-logoThe interview below shows a clip of the Warren Buffett cartoon that will be coming to AOL soon. These new webisodes will aim to teach young people about finance, investing, science and the environment.


I think this is a great idea and I am sure you can agree with me if you take a look at the clip below. Warren Buffett also talks about the inflationary environment that can be expected as a result of the high spending of the administration today. As always, a wealth of information from this 18 minute clip.


Monday, July 20, 2009

Jamie Dimon speaks at Harvard Business School

Great speech on leadership by Jamie Dimon, C.E.O. of JP Morgan Chase.


Sunday, July 19, 2009

U.S. Bancorp CEO, Richard Davis on Banking

Thanks to Noise Free Investing for finding this video.
One of my favorite banks in the U.S., US Bancorp, C.E.O. talks about banking in the 21st Century.

Saturday, July 11, 2009

Wealth and Charitable donations

Kiva - loans that change lives

A recent conversation with a friend inspired me to write this. Many of us, at some point, would love to give back to charity for a variety of reasons.

i. It means that we are financially secure and in a position where we can give back. That alone says a lot.

ii. It allows us to feel good about the act as we know that we are helping others.

iii. We feel good about ourselves for doing so.

However, I think we really underestimate the importance of charitable giving. Why do I think it so important?

Success is a field that one creates

Many do not realize that material or financial success is the result of a state that is created. It is the result of an energy field of abundance that one generates. Contemplate on this for a moment; if you think that you lack something, there is no other way for that to be interpreted by the Universe; it recognizes that as lack. Therefore, if you say you do not have money to give, then that is precisely the experience you will have and continue to have. You merely have to think it and that will be your experience. We all know how powerful our thoughts are.


What you hold in mind tends to manifest

This idea may sound familiar to you; it is often referred to it as the law of attraction or the law of abundance. These laws are right; what you think about tends to manifest. For those who understand quantum mechanics and the Heisenberg Principle, it refers to the idea that once you think of something (once the concept is observed by the observer), you collapse the wave function, and now potentiality can become actuality. Essentially, once an idea is held in mind, you increase the possibility of it occurring. This can be a positive idea, or a negative idea.

A typical example is that of a negative person. It is usually the case that this person will have a negative view of the world that is seemingly justified by experience. What is unfortunate is the person does not realize that they are in essence creating their negative experience that just reinforces their thoughts, and it is not the experience that is the cause of the negative feelings. As soon as this realization occurs, the person will witness the experience changing as a result of having a different perception; a different way of seeing and thinking about things.


The rich get richer and the poor gets poorer

It is no coincidence that the poor get poorer and rich get richer. The poor tends to creates a field of energy that emanates poverty, debt, unemployment, lack and so forth. By the law of attraction, these experiences are drawn towards them and they end up in a never-ending cycle of lack. On the other hand, the wealthy and successful exhibit different qualities. They emanate energies that are aligned to abundance, opportunity, employment and so forth, and therefore attract those sort of experiences. This is why many charitable models or programs that choose to give money to poor neighborhoods are not successful because the existing energy field is not influenced. Similar behaviors are still exhibited when the impoverished are given money and the money will inevitably be wasted. However, if funds are instead directed to education, or provide facilities to them, they are soon able to rise out of it and help themselves. This has proven to be more successful.


Give now, don’t wait.

In order to create an energy field of abundance around you today, give today. If you think that you do not have enough to give now, then you are exhibiting lack of abundance and this is what your experience will be. Establish a mentality where giving is habitual and you will see how different your experience is. Give now, why wait? Giving in any capacity now says to the Universe that you already have abundance and you will therefore attract abundance. The only way to influence an energy field is to be the energy field.

Considerations when making charitable donations

1. Give to an organization or cause that you are passionate about. This makes the feeling much better. Once you feel better, you automatically generate a different energy.

2. Give any amount. Many believe that you have to give large amount to have an impact, but every little amount helps. Imagine if everyone gave a little, how much would that be? I donate to monthly and I love it. I read up on the stories of people starting businesses worldwide and help someone I really feel for. It is a great way to help others help themselves.

3. Give consistently in order to establish this as a habit. It becomes easier with time. The effects are enormous.


Monday, July 6, 2009

Five things to do if I were graduating in May

The ideas from The Social Path were very interesting and not what you would normally see. It does suit this age of technology and social media.

These are the points mentioned:

1. Adjust Facebook privacy settings.

2. Start a new blog for professional life.

3. Google myself. Then scramble to improve the results.

4. Spend a lot more time on my virtual portfolio.

5. Focus on finding a job where initiative won’t go to waste.

See details at