Wednesday, January 10, 2007

Get in Line – getting rich as a life goal

I am not in the habit of reading USA Today but today’s cover story about GenNext caught my eye. The article reports that “eighty-one percent of 18- to 25-year olds surveyed in a Pew Research Center poll said getting rich is their generation’s most important or second-most-important life goal.” Any wonder why there are so many personal finance blogs??

We all know that it is statistically impossible for more than half of any population to be better than average. Don’t let this distract you from your goal. In my opinion, it just makes the game more interesting. Just like the challenge of getting into a top school, achieving this goal will require you to be at the top of your game. Recognize that you don’t have an original thought and make sure you have a plan to succeed.

One plan that I think works is to follow the “Lessons to Live By” (shown in the sidebar). Let me go out on a limb – embrace these seven lessons and it will be impossible not to achieve your financial goals. But, you do need to work each of these lessons – a focus on one or two is unlikely to do the trick. All you need to do is:

  1. Find good teachers and mentors

  2. Become financially literate

  3. Budget & understand your income and expenses

  4. Pay yourself – save 10% of your earnings.

  5. Borrow cautiously.

  6. Invest prudently

  7. Be charitable to the less fortunate.

Still not clear? Well stay tuned. My next posts will address each of these seven topics one by one.

And don’t worry about that average thing. As President John F. Kennedy said, “a rising tide lifts all boats.” This focus of GenNext could have good implications for the broader society if properly channeled. You may be average but if we raise the average, both in America and worldwide, we will all be better off!

Tuesday, January 9, 2007

If You Don’t Know Where You Are Going, Any Road Will Take You There – the importance of setting goals

Did you have some thoughts about setting goals for the New Year but let them pass? My experience is that having these goals are one of the most important steps in achieving financial independence. This is a good time to focus on your main goal for this year and your long-term goal.

I spent the first 10 years or so of my business career focused on doing what it took to deliver excellent service to my clients. Then I had a wake up call (a denied promotion) that got me to focus on dedicating my effects more to my financial situation than my clients'. I call it my Johnny Paycheck moment. If you don’t know what I am talking about, you are missing a great song. Have a little listen to Take This Job And Shove It

With that as my theme song, I became determined that I would put myself into a position where I would never have to work again. I figured out the “number” I needed to make me my own boss. My husband was not as sold on this goal but agreed to go along for the ride. Up until this time, we did the bare minimum in taking care of our financials, we had no debt to speak of and had some retirement savings. In order to achieve my goal, however, I knew that I would need to do better than that. We needed to start saving/investing on a after-tax (non-retirement) basis.

We reached our goal within 10 years. Yes, once he saw it was achievable, my husband started to become a believer. Sure we had some lucky breaks along the way such as promotions and good returns on our investments. My view, however, was that “the harder I worked, the luckier I got.” I achieved this goal because it was a primary focus in my life. For those of you familiar with The Secret, you could even say I attracted it.

It is easy to say you have a goal. What you really need to do is to make sure that you have the proper tools to make that goal achievable. I found an article by Bruce Wares, entitled, The Importance of Setting Goals, that says it better than I can. Have a read.

Mr. Ware’s article should help you in your goal setting. Remember, effective goals are conceivable, believable, achievable, measurable, controllable and have a singleness of purpose. Ensure your success by writing down your goals. Keep reminding yourself of the goal. Whenever, I started to go off course, the lyrics “take this job and shove it, I ain’t working here no more” came into my head!! Find a similar way to motivate yourself to success.

Monday, January 8, 2007

Book Review - Altas Shrugged by Ayn Rand

I first read Atlas Shrugged when I was about 17 years old. It was recommended to me by the manager of a Denny’s Restaurant during a job interview. I still find a certain amount of irony in that but I am forever grateful for his recommendation (even through I can’t remember his name).

Atlas Shrugged and Ayn Rand’s other book, The Fountain Head, really shaped my thinking about my purpose in life and capitalism. You might also be interested in knowing that
Alan Greenspan, the former fed chairman, was a close friend of Ayn Rand and author of articles published in her books and magazines. My own personal view is that this should be required reading before anyone could register to vote. Fat chance but I can dream can’t I?

Ayn Rand had a unique place in history that, in my opinion, provided her with some interesting insight into political and economic systems. She was born in czarist Russia. As a teenager she was an eyewitness to the Kerensky and Bolshevik Revolutions. In her early twenties, she lived under communism in Crimea. After that, she moved to America.

Objectivism Reference Center provides a good summary of the book. Rather than create my own, I have noted their summary:

“The plot is framed as a mystery story, but with strong elements of romance and science fiction, as well as Rand's trademark philosophical ideas. There are actually two mysteries: one about why so many of the world's most productive minds are disappearing, the other about who invented a revolutionary new kind of motor. As you might guess, the solutions to the two mysteries are closely related. Readers follow the struggles of Dagny Taggart, a railroad executive, and Hank Rearden, a steel magnate, as they attempt to answer both of these questions and stave off the collapse of an increasingly irrational and collectivist society.”

The book really does have an interesting story line but it can be a bit heavy with Ms. Rand’s discourses on her philosophy. I’ll confess that I skimmed over these parts. Just understanding the plot, enables you to understand this philosophy, Objectivism, well enough. For a first read, I wouldn’t focus too much on trying to fully understand Objectivism. If you are looking to understand this better, I suggest you go to
The Ayn Rand Institute web page which includes Ayn Rand’s discussion on Objectivism in her own words. She said that Objectivism, holds that:

  1. Reality exists as an objective absolute—facts are facts, independent of man's feelings, wishes, hopes or fears.
  2. Reason (the faculty which identifies and integrates the material provided by man's senses) is man's only means of perceiving reality, his only source of knowledge, his only guide to action, and his basic means of survival.
  3. Man—every man—is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.
  4. The ideal political-economic system is laissez-faire capitalism. It is a system where men deal with one another, not as victims and executioners, nor as masters and slaves, but as traders, by free, voluntary exchange to mutual benefit. It is a system where no man may obtain any values from others by resorting to physical force, and no man may initiate the use of physical force against others. The government acts only as a policeman that protects man's rights; it uses physical force only in retaliation and only against those who initiate its use, such as criminals or foreign invaders. In a system of full capitalism, there should be (but, historically, has not yet been) a complete separation of state and economics, in the same way and for the same reasons as the separation of state and church.

While I don’t subscribe fully to Objectivism, the points about every man being an end in himself and capitalism as the ideal political-economic system made so much sense to me as I absorbed the story of Atlas Shrugged. The book discusses many headlines of the day. As you read the headlines in the book you might be amazed at how they mirror the headlines of today. In my opinion, Atlas Shrugged also makes it easy to see how government interference can result in negative consequences.

I recently reread this book as I was concerned that it’s “me” focus was inconsistent with my faith. I found that it really wasn’t. I think that as you focus on doing what is right for yourself, you also end up doing right by others. Take my life as an example. I came out of college hell-bent on making money. And, to be honest, it was my singular focus for many years. During this time, I never lost sight of my personal values and once I achieved my goals, I started to focus on how I could give back to society. I think I have contributed more to society by focusing on my own goals first.

Looking for Some Quality Time? -- Speaking Engagements

As you read my blog, I hope you can see that I am passionate about these subjects. I have an important message to deliver and want to reach people while they are young. The earlier you start thinking about these topics, the easier it will be to become financially independent.

My goal is to empower as many people as possible. I intend on using a number of tools including this blog, public speaking and perhaps books or recorded presentatons down the road. I believe that my own story is a powerful testament. With the proper education, motiviation and discipline people can become financially independent. There is no need for get rich quick schemes!

I am available to speak at your events -- small or large -- on any of these topics. I can deliver one of my standard presentations or tailor the presentation to your specific group. If you would like further infomation please contact me at