Finances

15 Minutes to Success

I was going to call this article the 15 minute rule, but then I realized there was a book by the same title, which I have not read. Can 15 minutes make a difference to your success? Here’s my view of how it can:

It Gets You Started

Almost everything takes longer than 15 minutes to accomplish, which is the plain truth. However, if you say that you will spend just 15 minutes on a task, it helps you to get started rather than always putting off the important. Can you imagine all of the tasks that would help out your finances if you eventually started working on them? This is why there are such similarities between money and health. Commit small amounts of time and you will see drastic results over a long period of time. Ignore both and you will see dismal results over a long period of time.

You Can Get Something Done

Although 15 minutes is a short amount of time, you are usually pleasantly surprised by how much you can accomplish in such a short period of time. This is especially true if you commit 15 minutes over and over again. Before you know it, you are working your way towards accomplishment.

It Beats the Procrastination Drag

No one feels good when they procrastinate. Once a task gets started it will give you an emotional boost to continue and the procrastination bug will disappear.

Give a shot and see what you can accomplish in 15 minutes. You may end up writing a blog article!

 

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Do You Want a Free Credit Report?

Anytime you hear the word “Free” there is usually a catch and the free item isn’t really free. Surprisingly, you can receive a free credit report by doing this:

Type annualcreditreport.com into your browser, click on “Request your free credit reports,” and start the process. It will take you less than 10 minutes and it is completely free. Federal law requires each of the three consumer credit reporting companies, Equifax, Experian, and TransUnion, to give you a free credit report every 12 months if you request it. Technically, you can receive 3 each year if you obtain one from a different credit reporting company every 4 months.

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5 Risks to be Aware of that Will Hurt Your Finances

There are ups and downs in life, good times and bad, and everything in between. Unfortunately, some events can hurt your finances in a significant way and may even be beyond your control. What are some of these risks to be aware of and what can you control?

Health Issues

As we become older, there are more chances of having a serious health issue. What is not commonly thought of is that family members, such as spouses, elderly parents, and children can develop health issues, both physical and mental. We have a responsibility to take care of our family, and the time spent will take time away from our job or business, which will eventually lower our earnings. While you cannot control the health of others, you can take charge of your own health and that of your children by living a healthy lifestyle.

Addictions

Do not think that you are immune to addictions. Aside from alcohol, illegal drugs, and gambling addictions, there are other destructive addictions that will ruin your finances such as prescription drugs, video games, and pornography/sex. The statistics on who has these addictions, how they start, age groups, and the impact on your brain are alarming. Be aware of these addictions and do your best to stop them before they start.

Divorce

Aside from paying legal fees, there are statistics that show that divorced women experience a prolonged loss of earnings and lower standard of living after divorce, even though various studies show that approximately 70% of women initiate divorce. Surprisingly, statistics show that a man’s earnings increase significantly after divorce. Focus on a healthy marriage and your finances will be stronger, plus some studies show that divorce does not lead to a better life.

High Income then Low Income

Inconsistent income patterns can hurt your finances in multiple ways. The first is that if your income is very high in one year, then your spending will probably increase, and once your income drops, your spending will probably not drop as quickly, if at all. Second, if you have a very good year in your business and don’t set aside a reserve for taxes, then you won’t have the money to pay your tax bill, especially if your income is lower in the following year. I have seen this situation happen repeatedly.

Expense Creep

Expenses have a way of increasing faster than your income and are hard to lower once they do. A good rule is to increase your savings in the same proportion as your income, and do not incur additional debt. This way, it does not really matter what you spend, and yes, I really did say that, because mathematically it does not matter. It’s putting first things first.

 

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What Will Your Business Look Like and What Changes Can You Make?

Eventually things will open up fully and business activity will be flowing better than it is right now. What will your business look like and what are some changes you can make?

Technology

The use of virtual meeting technology has skyrocketed with apps like Zoom and Google Meet. This pandemic has forced businesses to be nimbler and integrate technology as an essential aspect of business operations. Other technologies that can and should be used include remote servers, cloud-based software, virtual phone systems, and electronic payment processing.

Time Management

Doesn’t the week seem like one big blur? Even though you can have a Zoom meeting with a client at 10:30 PM, doesn’t mean that you should. It is good to keep some structure in place as best as possible. This includes start times, stop times, meeting times, checking and responding to emails, and telephone calls.

Method of Delivery

If you sold products through retail, including restaurants, then now is the time to ramp up your online sales and distribution capabilities. It doesn’t mean that you need to abandon your store front, but online sales and distribution cannot be ignored. The same goes for providing services virtually to your clients. Delivering services online, such as therapy or professional services, has been widely accepted. Rethink if you need to open that second office or if you can be more virtual.

Financial Cushion

Having a financial cushion for your business and also personally is absolutely essential. The weaker businesses will struggle to be up and running quickly, while the stronger businesses can do so easier and may even be able to take advantages of expansion. How much should you set aside? A cushion of 3 months of expenses is a good minimum. It will take a while to do so, so start saving little by little until you get there.

Keep Healthy

There is a great temptation to eat more and exercise less, but this will catch up with you and rob you of your energy and clarity to make good decisions. Don’t ignore your health because it will have a direct impact on your business and ultimately on your finances.

There is so much that is unknown at this time, and it would be great to have all of the answers.

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Wanna Be More Comfortable Financially?

Isn’t this what everyone says, that they want to be more comfortable financially? There are two ironies that are common with this thought, but you can do something about it.

Scenario #1

In this scenario you are making a good living, saving plenty, built up a good portfolio of assets, and have little to no debts. You should feel secure and comfortable, but yet you do not. Due to the fact that finances are very, very emotions based would be the reason for this, but I’ll let the psychologists figure out the exact reason. Whatever the reason may be, there may be two solutions to help change your perspective in this case: be thankful for your strong finances and be more generous with your giving. Remember, you can’t take it with you at the end, and there are others that can use some help right now.

Scenario #2

This is probably a more common scenario, but also relates to everything else in life. You need to make more money, save more, pay off your debts, and make your finances more secure and comfortable. Ironically, every action you take is in direct contradiction to obtaining healthier finances, from impulsive spending, failing to save, purchasing on credit, and a lack of serious actions to make more money. Maybe the reason is because you’re getting by, although not in a financially healthy manner, or maybe you feel like you are being restricted if you save a purchase for another day. Either way, it’s not working out well and you need to make changes. Even if the changes are very, very small changes, such as saving just 1% of your income, you will be surprised by how effective this can be to get the momentum going.

Last Thought

I’m not sure which scenario is better or which one is easier to fix. Would you rather think you are not financially comfortable, but really are, or not be comfortable, but prevent yourself from getting there?

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The Differences Between How Men and Women Manage a Business

There are differences between how men and women manage their business, their employees, and their finances. What are these differences and does it matter?

Do you really think that I am brave enough (or foolish enough) to write an article with a topic like this?!

Maybe for another day.

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Do These 6 Things Differently than Others if You Want to Get Ahead Financially

Do you ever wonder what the difference is between those who get ahead and those who are constantly struggling? There is a pattern of actions that are taken repeatedly by those who get ahead, while the opposite is true of those who struggle.

Action #1: Delayed Gratification

The financial impact of delaying gratification for future success is astounding. The best example is an expensive car or high-end home. These things are great, but if you know that you will be stretched to purchase them, then give it some time before doing so. Once your finances enable you to comfortably purchase these items then go for it if it fits into your overall financial goals.

Action #2: Seek Advice from the Right People and Listen to Them

It is always a good idea to seek the advice of those we trust, but they must also have competence to provide you with the proper advice. Do not ask your brother in law that has declared bankruptcy twice and is reckless with money for financial advice. On second thought, you may want to ask for his advice and do the exact opposite! Also, seek the advice of a qualified professional or successful mentor who has relevant experience.

Another, related aspect of seeking advice knowing who is trying to work with you and who is working against you. Don’t beat up the people that are on your side and don’t let the bad fruits in the gate.

Action #3: Save and Invest Constantly

Even a small amount of saving/investing can add up over time. Also, investing does not have to only be in the stock market, but can consist of growing your business to make it more valuable, purchasing rental properties, investing in or purchasing other businesses, etc.

Action #4: Be Cautious When Incurring Debt

Debt has its proper place, but it is misused quite often. Many of us are lured into large, unnecessary purchases or poor investments because we can finance them over. Even if the debt is helpful for the production of income, it still may not be the best course of action. Debt also makes us lazy, meaning that it is easy for us to make decisions without really thinking them through fully.

Action #5: Have Endurance

Don’t give up too easily. It may take several tries to get where you want to go, but you need to keep on getting back up when you falter. Yes, it hurts when you get derailed, financially or otherwise, as life happens, but keep on moving forward.

Action #6: Don’t Make Decisions Based Solely on Emotions

Just because someone made you angry doesn’t mean that you need to let them go. Can you imagine telling off your boss (very bad move), or firing a key employee or vendor because you overreacted to a non-fatal mistake that they made? Trust me, you will suffer financially for this.

To Sum it Up

Did you notice that most of the above are based upon emotions and relationships? Healthy emotions and relationships will help you to be get ahead and make the journey more pleasant, while knee-jerk reactions, seeking instant gratification, and unhealthy relationships will create a roadblock to getting ahead.

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An Alternative to Setting Goals

Setting goals can become very frustrating and produce anxiety when we realize that they aren’t being achieved. Should you set goals that are very likely to happen or goals that are very difficult to reach? What if you miss your goal by a minor amount or the outcome was good, but not what you expected? Alternatively, there is a much less stressful, and possibly more effective alternative to setting goals and achieving your desired outcomes.

The truth about goal setting: The truth is that they are all guesses, estimates, arbitrary, and do not tell the whole story of what you are trying to accomplish. Ironically, you may achieve a better outcome than your goal, but still fail to achieve that goal because you didn’t make the numbers. For example, if you want to lose 20 pounds, but only lose 15 pounds because you also gained lean muscle mass, then you just failed at your goal. You may be healthier, are in better shape, look better, and are stronger, but according to your goal, you just lost. This doesn’t make sense, does it?

Think about the general direction you want to move towards: Do you want to lose weight, make more money, or save more money? Know the direction that you want to go in, but do not specify an exact number. However, it is still important for you to take measurements before, during, and at the end of the year.

Form habits: Goals are not accomplished without actions, which is why your energy should focus on your habits. If you want to lose weight, then start exercising on a daily basis, even if just for 20 minutes a day. If you want to increase sales, then spend 30 minutes a day on marketing activities. Devise a plan of which actions you need to take and then keep repeating them until you build momentum and start seeing results. Tweak as necessary.

Intensity should be based upon desired outcome: If you want to achieve dramatic results, then there should be a direct correlation between the size of the desired outcome and the amount of intensity and effort to achieve that outcome. A desire to increase sales significantly should spark you to spend more than 30 minutes a day on marketing activities, and quite possibly double or triple that.

The bottom line is to set actions instead of goals to achieve desired results.

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Are Traditional, Low-Tech Ways of Handling Your Finances Better than Modern Ways?

Electronic banking, ATM and credit cards, leasing, online shopping, installment plans and subscriptions, and anything else electronic is the way to handle your personal finances nowadays, but is this better? In some ways yes, but many ways not so much.

Transactions are too easy to make nowadays, which causes us to be more impulsive. It’s not just Amazon that makes it easy to purchase products, but even your local grocery store has online capabilities to place orders at 3:00 AM. The problem with this approach is that you do not feel, either physically or mentally, that you are making purchases, especially when using ATM and credit cards, which in turn, makes you spend more money. Traditional ways required more effort to both purchase items and to pay for them.

In the past, you had to wait until you received your bank statement in the mail to see what your bank balance was. Because of this, you were forced to record each transaction that you made in a paper check register to know what your real balance was. Most likely, you actually reconciled your checkbook to your bank statements on a monthly basis. Ironically, since it is now so easy to check balances and transfer funds, most people tend to pay less attention to the details.

Almost everything can be purchased or rented with small or no down payments and monthly payments. You can finance your iPhone and also that cute little puppy. You  can also cut your cable service to save money, but use 23 different, $9.99/month services and spend more money. It might seem minor, but it really doesn’t make sense.

Please let me know if you still save up to make substantial purchases. Substantial is relative to your situation, but most likely you will take out a loan or use a credit card. Tell your friends and family that you paid cash for your car and they will ask a lot of questions to determine your mental health. Today’s mentality is that if you want something then you should have it immediately. The tactic of delaying purchases is very effective if you want to have strong finances.

I don’t think that we need to go back to the way things were not too long ago, but we should consider combining the best of traditional ways and modern ways. Automatic savings is a perfect example of combining the new with the old. Can you think of others?

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Are You Too Financially Cautious?

Is it possible to be too financially cautious?  Cautious does not mean that you are just conservative or frugal with your money, but that you are too afraid to spend your money wisely. You may not even be aware that you are too cautious and here are some examples:

Hesitate to make the right investments: Aside from traditional investments, you may be too cautious to invest in your own education and knowledge, spend the money for new equipment and technology, marketing, or spending money on employees.

Too cautious about wasting money: If you are so concerned that you will waste your resources then you will end up spending too much time trying to save a nickel, but it ends up costing you a dollar. For example, you don’t want to spend the money to keep track of your finances in QuickBooks or even Quicken for personal use, but yet you incur hundreds of dollars of insufficient funds charges each month. I have seen clients spend approximately $10,000 for insufficient funds fees.

Not taking a loan when you should: I am not an advocate of borrowing money excessively or foolishly, nor do I think that borrowing should be avoided at all times, which some pundits advocate each position strongly for. However, sometimes you need to have a line of credit to smooth out some bumps or to take advantage of low-risk opportunities that arise. Alternatively, if you pay off all of your debts too quickly then you may not have any cash available.

Time versus money: Using your time productively strongly dictates your financial success. However, if you spend your time on $10 per hour activities that drive you crazy instead of paying someone to perform them, while you can be making $200 per hour, then that is a poor use of your time and financial resources.

Money before relationships: If you are too financially cautious then you will probably never want to get married, and if you do, then you will worry about not having enough money for your children and will probably not have any.

Another way of saying financially cautious is to be penny wise and pound foolish. Don’t try to save your pennies, but make dollars!

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