March 2008

I was watching a “how to sell” video presented by a guy named Blair Singer, who is the author of a book called “Sales Dogs“. Not only is he a great salesman, but he’s also really good at teaching others to sell and getting over mental blocks. While watching the training video, there was something that really stuck with me.

After talking a little about doing everything you can for your customer and the importance of making sure you ask for the sale, Blair Singer goes on to say that you need to ASK for something in return, otherwise “You breed what I call criminal behavior and you’re actually conditioning people to get something for nothing.”

Mmmm, let’s think about it. He may have a point there. There are many parents that may disagree with me, but I still want to make a point that I do not believe that children should be given spending allowance just for existing, or for doing things they are supposed to do as a member of the household. How would I teach my kids to deal with being responsible for money? Glad you asked, here are my 5 suggestions:

1. At the beginning of the week, give your kids all the money they need for the week for things they must spend money on to survive daily, like lunch money. Be clear what the money is for and that if they lose it, they will have to find their own way to get lunch. Show them the breakdown of what each penny is for,
2. Tell them chores are a requirement for living in the household, not for payment of allowance. If they do not do their chores, they lose privileges or get grounded. What ever means you normally do for punishment. If extra chores are done that are above and beyond normal household necessities, then payment can be made and extra things get done.
3. Require that all allowance be earned by extra chores only and that 10% be put toward saving and 10% to tithing. Make this a habit and you won’t regret it the earlier you start. These are habits that can be created that can save your children in the future.
4. Have them learn what types of things you have to pay for and how you make your money. Explain the benefits to them of saving and tithing (or giving to charity).
5. Lastly, and probably the most important, when you hear that they want something, sit them down and ask them how they can earn enough to get it. Let them think of ways they can create an income. You’ll be amazed at what they think of!

Remember, it takes effort to “earn” something. Don’t let your kids grow up with such a “something for nothing” mentality that they don’t end up doing anything for themselves. I see it around me everyday…Parents who give into their kids whining, when they should be disciplining them. There are lot of great kids out there, and one thing I noticed about those who are really good kids, they know if they do something wrong there will be consequences to pay from their parents… It’s how it should be.

My mother once apologized to me that she was sorry she could not help my sister and I more financially while we were in college. With a sad tone in her voice, she explained how bad she felt that she had to make a decision to save for her retirement over helping me pay for my education. Honestly, when it comes to decisions she’s made with regards to her finances, I think it was the best decision she ever made. My sister and I have a lot of college debt, so what, at least we don’t have to worry about supporting my mother (like many families today who are supporting both their kids and parents today). I personally have over $25,000 in student loans and I am glad that my mother never helped me with my college expenses and decided to secure her financial future first. Working 60+ hours while going to school was one of the best life lessons I could have ever received about how tough life can be, but also how much I can personally accomplish on my own. My mother would not have been able to take an early retirement and enjoy her free time today with her grandkids had she spent her retirement helping me through college. She has some medical issues that made her work painful for her, and if she had to stay employed with all that pain, it would’ve deeply saddened me. My mother instinctively knew that she could potentially become a financial burden to her children if she didn’t position herself well for retirement. Perhaps it was because she was never handed anything and raised 3 children all by herself.

Two years ago I was heavy into educating people on financial matters and understanding money. While doing seminars, meeting with people privately, and even co-hosting a financial education radio show I focused a lot of my financial teachings on helping parents understand that college is a huge expense that must be planned for early together with their kids and that it should be secondary to their retirement planning. As a Certified College Planning Specialist (back in 2006) learning the in’s and out’s of how to position and educate parents for the high expenses of their children’s education, time after time I found that many parents were putting themselves in positions where they would be hurting their retirement years in order to get their kids through college, without knowing the potential consequences.

If you are a parent, there are things you need to realize:

1. If you spend your retirement on your children’s education, you may end up needing them to support you in your retirement years. Think about what could happen if they had a spouse and kids and a portion of their income had to help you survive?
2. If your child does not know what they want to major in, send them to a community college to get their core classes out of the way, or don’t send them at all till they are ready to. Let them have the “real world” education and emotionally support them in whatever they decide to do. Encourage them to learn about how investing works and making their money work for them, instead of them working for it.
3. Something like 70% of college grads do not work in the field they got their degree in. Don’t expect too much $ value nowadays for a college degree if they are just getting one to get out into the real world without thought, because an “easy to get” bachelors degree doesn’t seem to hold much weight anymore, statistically speaking. I personally strongly believe that a college education is important  to help in growing up as a well rounded adult, but there is enough evidence to show that many times experience and good communication skills can out do a college education.
4. Let your kids learn the value of money by making them learn to earn it. This means, force them to get jobs if they want spending money. Getting into the workforce early teaches great lifetime skills on how to relate with others. Hopefully they also learn other valuable lessons like taxes will rob you of most of your wages and working for others is not going to make them rich.
5. I personally think that getting”let go”or “laid off” can sometimes be one of the best life lessons a young adult can experience. An experience like that can teach them early that they should never rely on anyone else to feed them, and when they recover, they will realize that it isn’t the end of the world. They need to learn to set things up that will secure their future.
6. Lastly, your teen children will need to be told that they are expected to help with college expenses while still in high school by:
   1. Planning ahead and committing to doing well (starting from the 9th grade).
   2. Taking as many college courses while still in high school.
   3. Getting good grades and work hard to get scholarships.
   4. Saving to help with some of the expected college expenses outside of tuition, like books and supplies. (computers aren’t cheap, but a definite necessity today)
   5. Working while in high school. (I know this is controversial amongst parents depending on your upbringing, but I have personally have seen many benefits when high school students used to work for me.)

Bottom line…I feel the best way to let your kids experience being an adult is letting them support themselves. Especially through the college years.

In an office discussion this morning, our subject turned to realizing the amazing parallels on what is needed to do well in the 4 key areas of many peoples lives.

1. Religion (God)
2. Relationships (Family)
3. Personal Finance (Money)
4. Business (Work)

The interesting thing about all 4 key life areas is that they all require the same types of actions to be successful in them.

Commitment – Each key area need a form of commitment made to it. God needs your commitment, your family needs your commitment to them, your personal finances takes commitments, and of course your work needs your commitment to it. Be a person that takes commitments seriously.

Planning – All four areas need planning, yes even growing in your religion. Planning your future on how you want to grow in your church is as important as planning your family’s future. Proper planning of your finances for retirement and also how you want it to be structured for your heirs will prevent a lot chaos. With regards to business, you’re almost assured failure without a plan to go by. Put a plan together and commit to making it work in each area.

Communication – Growing in all 4 areas takes strong communication skills with others who are involved with each part of your life. Religion requires prayer and listening to God. Strong growth in relationships and family takes a lot of open communication. This means that listening is equally, if not more important than just speaking your mind and telling. Personal finance takes communication with all who have an effect on your finances. If you are married and have kids, they need to be involved in what is going on with the families finances. Lastly, in business, effective communication can be the key reason for success or failure. Employees, management, and everyone involved needs to be on the same page, which is done through good communication.

Sacrifice – All areas will require sacrifice for proper growth and success. God requires you to sacrifice your “fleshy” desires that are not in-line with him. Family and relationships require sacrifice of yourself to fulfill your role in the family (just ask any parent). To grow your personal finances and to secure your future requires you to sacrifice not buying everything you want today. Even if can afford it. Business requires sacrifice in all areas with regards to time and money. Many business owners sacrifice many hours to build a strong business foundation.

There are many other things that all 4 life areas can show a strong parallel. To me, these are just the beginning. Understanding the foundational concepts of PUDG (Prosperity Using Delayed Gratification) and PLUM (Preparing for Life’s Unexpected Messes) can help everyone in all aspects of our lives. Think about it…

Take a look at this article. It says everything you need to know to understand that we cannot stop the problem because the numbers just don’t lie.

http://www.payvand.com/news/08/mar/1183.html

I am so blown away with the news that an 80+ year old company needed to be bailed out and sold off for 87% of its value. The Bear Sterns, which was our country’s 5th largest investment banking firm, now has its employees going through and experiencing what many Enron employees did. This was a company that survived the 1930′s depression and has a large portion of its company (something like 30%) owned by its employees. Imagine having your retirement depreciate nearly 90% in a day! Poor management of company assets lead to bad investments that made the company near the brink of bankruptcy. Unlike Enron, this wasn’t money “technically” stolen by the company leaders, but it might as well have been. I GUARANTEE we will see officers of the company being investigated for criminal activity, hopefully all of them will be clear and innocent.

Read closely to what history has told us in the past… Our dollar is in immediate jeopardy, and it will soon go into hiding in a big way. Start moving your funds into assets that will not free fall when this happens.  I heard a comment from someone say that they are leaving 40% of their retirement in the stock market and they are willing to let that money ride the next downturn for 20 years…  Are you thinking the same thing?

Get educated, think different…

Alright…been struggling over making a logo that i think will be able to brand me. Love to hear your thoughts!

Click here for Pudg and Plum logo

Did you know that you can get automatically emailed anytime this blog is updated?!? Ha ha! You can read me everyday if you want! I love this technology. I’ll post how this can be done as soon as I figure it out.