Friday, July 29, 2011

Credit Cards & Debt

According to a new Associated Press-GfK poll. 1 in 5 adults worries about debt most if not all of the time. These consumers say that if they bought an item on a credit card in the past month, more than one third will not pay it off when the bill comes.

The individuals that suffer the most anxiety over their debt are at risk for stress-related illnesses, such as depression, ulcers or heart attacks.

The poll indicates that more than 40 million Americans are feeling serious stress due to the money they owe, whether it's for credit cards or other forms of debt.

The AP-GfK poll stated that the median credit card debt in June was $800. Approximately 4 in 10 people surveyed owe more than $1,000 in credit card debt. 1 in every 10 owes $10,000 or more.

Americans who reported the highest stress levels were more likely than others to say they had debt due to medical bills, that their financial situation was "very poor," that they purchase things on their credit card that they know they cannot pay in full when the bill arrives.  These victims also stated that they don't trust themselves to manage their credit cards.  They are pessimistic about their future because of their personal finances. 

The AP-GfK poll was conducted June 16-20 by GfK Roper Public Affairs and Corporate Communications. 1001 adults nationwide were interviewed through cell phones and landlines.  Results for the full sample have a margin of sampling error of plus or minus 4.1 percentage points.

Monday, July 25, 2011


At some point we all feel that we don't have control of our lives or that the freedom we once had has been taken away.  People work a 9 to 5 yet they may feel undervalued or underpaid.  Or they may feel miserable in their current position but feel that they have no other choice but to stay.  Otherwise they will end up in the street and in debt. 

There is always hope all you have to do is take control and stop whatever it is that binds you.  The good thing is that we don't need to do it alone there are family and friends that are willing to help us.  If the person you need is not at your reach go and look for them.  If your job is the problem then get better educated in whatever field you want to move into.  If you don't know how to handle your finances  attend conferences and seminars.  Register for a class that will help you take control of your finances.

The point of creating wealth is to find freedom. Start being happy the moment you take that first step.  Don't let money become your new worry to a point where you are enslaved to the almighty dollar.

F.W. Woolworth lived his whole life trying to establish a good name and fit in with the cream of the crop.  His granddaughter ended up losing the wealth he so diligently worked for.  Your wealth will most likely only go down a few generations that is why philanthropy is a great way to preserve it.  Through philanthropy it will serve a greater purpose, evade its destruction and help those in need.

Wednesday, July 20, 2011


Some people view risk as something dangerous, they might picture someone in a motorcycle doing a stunt or a skydiver flying off a plane.  Yes, both are risk takers but risk can me manifested in many other forms.  Being stagnant is a form of risk it can be of the worst kind. People who don't go to the doctor or take care of their health also take a big risk.  The patient that knows he has high blood pressure and refuses to change his lifestyle.  The cancer patient that will not get treatment.  The innovator who fails to take his idea to the market or get it patented.  These are all forms of risk and all of them involve taking no action.

In the security business, risk is what gives you the opportunity to make a profit.  The more risk one takes the better reward one should be able to get.  The opportunities to make easy money are out there but it is the risk that holds a lot of people back.  Risk averse individuals won't take on risky investments they prefer to leave their money in a CD or savings account.  Once you become better at investing you find ways of managing risk and protecting yourself from taking on too much of it.  One way to protect yourself is to educate yourself on what can go wrong and how to evade those circumstances and develop an exit plan. 

The "No Dutch Book" assumption states that people won't lay down bets that will certainly result in a loss to them. 

One should not hold back ones life by evading risk or fearing it, unless one is positive that taking that risk will surely result in a loss.

Monday, July 18, 2011

Financial Questions We Should Ask Ourselves

Can I afford to buy that? Can I live without that?

Should I buy a home or rent? Is it always better to own a home?

Should I give a big down payment? If I have the money to pay for the house in full should I do so?

Am I living above my means? Am I living below my means? Am I trying to act wealthy?

Can I afford to take a vacation? Should I put in on my credit card?

What is the financially responsible way to use a credit card?

Is my money gaining interest? Is it keeping up with inflation? How do I fight inflation?

Do I know what is going on with my 403B? 401K? do I feel confident with the ratio in which my money is being diversified in my retirement fund? Should I be contributing tax free money to my account?

Would it be better for me to invest on my own?

Am I ready to start a family?

Saturday, July 16, 2011

What If I'm Poor?

The same road of success is available to anyone but if you are at the bottom you have to be ready to take the short and narrow.  For example if you are poor the contacts may not be there and the educational level you have received has been inferior.  But these are not excuses just obstacles.  The principle behind creating wealth is the same for a poor or middle class person. Let us suppose that a poor man has a great idea and wants to start an online business to sell his new product, he may not have the money to do so.  That may be true for the middle class person as well but in his case he is wondering if he should leave his job to pursue this venture and if he does so he may end up losing his home.  In that sense the middle class man has more to lose and the poor man has nothing but opportunity. 

The poor man can use a credit card to pay for the business to make it grow, he may work for a while and save and then start the venture on credit and have his saved money as a back up or to buy inventory.  The problem with this is that sometimes economically disadvantaged people don't feel comfortable with these ideas because they have never had much money or ever used a loan in a strategic way.  Some people are used to spending more than they can afford.  Most people don't feel confident with money because they have not acquired good money skills.  When I first started working I didn't view credit the way I see it now, the more money you have the more comfortable you feel with loans and using them in strategic ways.  The point is that although you have the money to pay for the venture you don't pay for it with your own money, you use credit and let the business pay for itself.

In the stock market credit this is called leverage you get a margin account and you utilize the firm's money to multiply yours and increase your position (amount of stock held).  In the stock market this can be dangerous if you do not know what you are doing.  From my experience traders that are wealthy don't have the same level of panic that a novice and underfunded trader has because the underfunded trader knows if something goes wrong he will not have the money to correct his mistake and his position will be closed before he has made money therefore it will lead to losses. Having money gives you confidence and experience to a point where even if you lose it you know how to make it back.  Each time it becomes easier to a point where people will help you because of the knowledge you possess.  Therefore if I wanted to create wealth I could do so with a job at burger king and a small loan. The knowledge is what gives me the ability to create wealth. But it took a lot of work and experience to get that confidence and knowledge. So if you are poor all you have to do is learn how to save and take risk.  Mimic the strategies of those that are wealthy build your confidence through other peoples stories and testimonies.  All you have to know is that it is possible.

Thursday, July 14, 2011


Why is it important to network?

 It is obvious that in this tough economy most of your job leads will come from friends or physically present people not from ads or online applications solely.  Yes ads and online applications may land you a job but your odds are much better when you meet with people or have actually met the person recruiting. It is not only about landing a job, networking can also be used for other purposes.  Networking can open the door for you to publish your book or to get your dream home.  Whomever it is you are looking for they can be reached within six degrees of separation.  So you may not know a literary agent but from your pool of friends and contacts all you need to do is look to your friends' friends and so on.  Most people are introduced to their future spouse; only a small percentage of the population will get married to someone by introducing themselves to a stranger. Therefore it is important to keep a good network not only for business purposes.

It is not necessary to have a huge amount of friends on your social network but quality and good relationships are important.  For marketing purposes it may be to your advantage to have thousands of friends on fb or twitter.  I view networking in a different way, to me it is not enough to have great contacts but what really matters is if you know how to use them to your advantage.  I view it as a game of chess. Sometimes just one single piece may be necesssary to guard against disaster and eliminating that piece can lead to ruin.

When you have something to offer that gives you more bargaining power and makes you stand out to others in the network.  This is where you have to flex a little bit of muscle.  This is when your skills must be shown to persuade your contact to help you. It is important to note that the people at the top of our network are aware of it.  For that reason they may need a bit more courting to get them to cooperate.  Networking will work out best if you see it as a two way stream where you offer help to others and in return they will help you.