The “B” Word
by Beau Henderson
Last week we talked about the Master Investment of Hard/Easy. This is the timeless principal of choosing to do the hard work now so that you can enjoy the easy later. I asked the question:
What would happen if you committed yourself for ONE YEAR to mastering the principal of Hard/Easy?
This means making the choice to pay off your debt, delay gratification, and living within a spending plan or budget. I know the word budget makes a lot of people cringe, but remember to keep the bigger picture in mind!
It is by applying tools such as a budget that your definition of a RichLife becomes possible!
You can position yourself for an EASY 30 years down the road by making the choice to do the HARD now. Welcome to RichLife boot camp!
What does doing the hard now look like?
Outlined below is a formula to help you get from where you are now to where you want to be. These are basic, simple steps, but if you buckle down and do the hard work now, you will see results! And your future will be a lot easier.
- Pay yourself first: set aside an amount to save every week, every paycheck, or once a month. Have it automatically deducted if you can. This will become your emergency fund. Even if you can only tuck away $10, DO IT! The key here is to get into the habit NOW.
I know that saving is hard. I was recently reminded how important it is to have an emergency fund when the transmission on my truck went out.
Had I not been applying my own advice, I wouldn’t have been able to get my truck out of the shop!
An unexpected expense like that can take you out of the game if you aren’t prepared. As I’ve said before, life happens. The AC breaks down the same week your kid is in the hospital. So be prepared! Do the hard now of paying yourself first, and you’ll see that $10 start to build and get a momentum behind it. Pretty soon, it becomes $20, and then $50.
But it will never become anything if you don’t start now!
- Envelope budgeting: this is how you will find that extra $10 a month! It can actually be fun because there are two kinds of expenses:
1. Those that are set in stone and cannot be changed (Example: the monthly rent or mortgage).
2. Those that can be changed by you (Example: the amount you spend eating out or going to the movies).
Now I’m not saying you should never go out and enjoy yourself. I am suggesting that if you look closely at those expenses you can control, you might find opportunities to beat your budget!
By setting aside just a little extra money every month, you can have the peace of mind that comes from knowing
your money is working for your future!
- Give back even when times are tight: Giving back is another way of investing in your future. It makes our communities better, our hearts bigger, and, believe it or not, it can even fatten your wallet. How is that possible?
Because what you put out in the world
eventually comes back to you.
This can be a hard thing to remember when times are tight, but it works. Make giving a habit now, even if all you can give is your time. This practice will insure that riches continue to flow into your future.
The advice offered here and the practice of hard/easy is not a get rich quick gimmick or trick. These are timeless principals that when applied, can lead to cold hard cash if you use it. Most people aren’t willing to do the work now.
Are you willing? Ask yourself, do you want to live a rich, fulfilled life?
Our MONEY QUESTION for this week came from Alice in Gainesville. She asked:
“How do I know who to trust?”
Alice’s question comes on the heels of a local story about a professional who hurt a lot of people by skipping town with their money. I’m sure this same question has been on a lot of people’s mind, so thanks for taking the time to send it in, Alice! Here are THREE things to keep in mind when deciding whether or not to give your business to a professional:
- Make sure they are answering YOUR questions and not just circling back around to their own agenda. Keep asking your questions until they are answered. At a first meeting, the professional should be trying to get to know you, not to sell you their products.
- This is a BIG one: never ever ever ever (and one more never, just for added emphasis) write a check to an individual or their company. All funds should be directed to a third party custodian, not the name of the financial planner with whom you are meeting. Your quarterly statements should also come to you in your name from the third party custodian.
- Look for longevity and experience. Over 90% of financial planners don’t make it past their 3rd year. It’s a tough business, so you want to make sure you find somebody who has been doing it successfully for several years. Don’t be afraid to ask for and contact references. Find out how they did during both good times and bad.
So, to recap – First step: make sure the meeting is about you and that you get your questions answered, never write a check to an individual or their company, and look for someone with longevity and experience.
By keeping those 3 things in mind, you will increase your chances of finding a professional whom you can trust!
Have you worked with a professional lately who went out of their way to leave you a valuable experiences? I'd love to hear about it!! Drop me a line – they could be featured in our next RichLife story spotlight!