Financial Wellness
Women with Crossed Fingers

Pay Yourself First

In 1926, George Clausen, publisher of the first road atlas of the United States, wrote a slim volume of parables about Babylonia, once the wealthiest city in the world. The Richest Man in Babylon has become a modern classic that some people, including me, consider among the best finance books ever written.

When we first meet the richest man in Babylon, he is telling friends the secret to his fortune.
“I found the road to wealth,” he tells them, “when I decided that a part of all I earn is mine to keep.” The men look at him incredulously.

“Is that all?” one asks, insisting that of course everything he makes is his to keep.

The wealthy man just shakes his head. “You fool, you pay everyone but yourself,” he cries, pointing to the clothing sellers, sandal makers, and wine merchants. Instead, the rich man counsels them, pay yourself first. “For every 10 coins thou places in thy purse, take out for use but nine.”

This is the way of the wealth builders. They pay themselves first, knowing that a part of all they earn goes into their personal savings on a regular basis.

Are you living that way?

Sacred Success

How Do You Know When You’re Really RICH?

Here’s an interesting question. How much money does it take to be rich? What would you say?

Of course, you may argue, there’s more to being rich than having money—there’s love, health, freedom, etc. All true. But for the purpose of research, let’s stick with a specific figure. How much money do you think you need to feel rich?

Despite a myriad of studies, no one can agree on a single number. The responses range from a mere $1.4 million to a whopping $100 million…and everything in between.

One thing that struck me. The amount is always more than the respondent had. As one researcher put it, “People always give a number that is twice their current net worth or income. Those with $100,000 in income say $200,000, while those worth $5 million say $10 million.”

This got me thinking. There’s no universal number because ‘rich’ is an attitude, not an amount. When you can say “I have enough to live my life on my own terms,” you can, indeed, call yourself rich.

The Real Meaning of “Risk”

Ask a novice investor to define risk, and most will say losing money. They look at market fluctuations and all they see is the likelihood of loss.

An educated investor, however, looks at those same market fluctuations and sees opportunity for gain.

The truth is, our biggest financial risk is not market volatility. Our biggest risk is to do nothing at all.

Sure the market’s ups and downs are scary. But you can dramatically cut your losses with due diligence, a long term approach, and good diversification.

On the other hand, if all your cash is sitting in the bank, your purchasing power will shrink like a wool sweater in a hot dryer.

At least a portion of your savings needs to be in assets that grow faster than inflation and taxes eat it away.

Otherwise your greatest risk, as a woman, is that you’ll outlive your money.

Spending Exercise: Part 1

 

Track Spending

Here’s a powerful exercise to get clarity on your finances as well as your quality of life. For at least a month, track your spending.

In a small notebook or empty checkbook register, write down every single penny you spend. Whether you pay cash, check, or credit, write down the item and the amount.

If you forget to jot some things down, don’t let that be an excuse to quit. Just start again and record each expense.

As you do this, notice what you’re buying, how you’re feeling at the moment, and any other observations you may have. Also notice how your spending patterns reflect your values and priorities. The question is, do you like what you see?

Be Done With Debt!

Over the years, I’ve witnessed an inverse correlation between earnings and debt. As debt goes down, income increases. And vice versa.

Perhaps it’s because, as one person explained, “Now that I’m not worrying about how I’ll pay my bills, it’s like I’ve freed up all this energy to be so much more creative, strategic and successful in my career.”

Want more success? Tear up your credit cards and start paying them off. Then watch what happens!

Problems are Starting Points

Problems Are Your Starting Points

Financial achievement is often preceded by a financial challenge. Problems have a purpose. They’re trying to get our attention.

The place to begin is admitting what’s not working in your life. It could be anything from bankruptcy or burn out; from feeling undervalued or overworked; from getting a divorce, or desperately wanting one.

No matter how subtle, how small, or how sizable and scary, your willingness to face the problem head on the first step to breaking through it.

Facing a problem means looking it straight in the eye, even if you haven’t a clue what to do about it…especially if you haven’t a clue. Face it without shame blame or judgment. Face it even without a solution in sight.

6 Things To Do Before Your Spouse Dies – Part 1

I heard from a woman whose husband was just diagnosed with terminal cancer.  Her question to me:  What should a woman do before her husband dies?

My heart went out to her,  along with my admiration.  Instead of going into denial, she went into action.  Death is not easy to talk about,  let alone prepare for.  What would you do in her situation?  After all,  most women will face a similar dilemma at some point.

I’ll never forget,  when my father got ill,  I went to  my mother.  “Do you know what Daddy has planned for you when he dies?” I asked.

“Oh yes,” she replied quickly, but when I pressed her for details, she couldn’t tell me.  She also made it abundantly clear:  this was not a conversation she wanted to have.  I made it even clearer:  avoidance was not an option.  Here’s what we did:

1.       We had “the talk.” I had my Mom sit down with my Dad and we looked at all the financial documents:  bank statements, investments, estate planning, etc.  This was not, by any means, an easy conversation.  Dealing with death is emotionally excruciating, at least it was for us.  Nerves were frayed.  My Mom glazed over.  My Dad lost patience.  I kept scratching my wrist (a nervous habit) until it bled.  But by the end,  my Mom knew where every penny was and what arrangements he had made… and hadn’t made.

2.       We assembled “ the team.” My Dad was very much a do-it-yourselfer.   I wanted my Mom to have her own team of professionals to support and guide her (during and after).  First on our list was to hire an estate lawyer… we found one (through my sister).  Mom, my sisters and I met with him first, brought in my father, and together my parents created a very good, tax efficient estate plan… which my Mom not only understood, but had a big  role in creating.

3.       We updated documents.  We made sure the Will, Power of Attorney, EVERYTHING reflected their latest info and current wishes.

As I said, not an easy process.  Sadly, many of us will go through this.  But being prepared, financially, will make it a little easier.

In my next post, I’ll list the final 3 steps you need to take, to prepare yourself.  Stay tuned.

Barbara Stanny

The leading authority on women & money
[email protected]
www.barbarastanny.com

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6 Things To Do Before Your Spouse Dies – Part 2

As I mentioned in my Part-1 blog  on this difficult topic several days ago; I had heard from a woman whose husband was just diagnosed with terminal cancer.  Her question to me: “What should a woman do before her husband dies”?

Her question caused me to recall the agony my mother and I went through when my father became ill, forcing us to make difficult decisions and plans at an already difficult time.

In Part-1, I outlined steps 1 through 3.  Here I’ll finish the series, with steps 4 through 6:

4.       We envisioned a future without Dad.  My mom started thinking about living single: how much money she’d need to live on (a lot…  she wasn’t going to work nor did she have to, but she did like to spend), how she wanted her money invested (very conservatively), and who would assist her with this.  The whole family helped her find an investment advisor (we interviewed 3).  She also hired a CPA – after a while, it became clear he wasn’t a good fit, so she recently hired someone else.  She meets with her “team” on a regular basis to this day.

5.       We had  regular family meetings. These meetings, though often emotional, were absolutely wonderful in getting everyone on the same page while Dad was still alive.  Meetings included my sisters, spouses, and all the grandchildren (we eventually had great grandkids crawling around too).  My Dad let everyone know what his wishes were, especially for philanthropy, and enrolled the whole family to the board of his foundation.  These meetings drew us closer in many ways.

6.       Mom talked to friends.   She’d had several friends who lost their husband’s, so she talked to them at length. They gave her great advice which really helped her see life goes on, happily so.

Having done these things, by the time my father died, all my mother had to do was grieve.  Every detail was in order.  There were no surprises.  All papers signed.  All major decisions made.  Her team was in place.  Practically speaking, his passing was seamless.

Barbara Stanny

The leading authority on women & money
[email protected]
www.barbarastanny.com

Sign up for Barbara’s free newsletter at

https://www.barbara-huson.com/inner-circle-join.html

Twitter Barbara at: http://twitter.com/barbarastanny

Start Reading The Wall Street Journal, Now!

Note to financial neophytes—don’t let theStart Reading The Wall Street Journal - Now! Wall Street Journal intimidate you.  It’s a fabulous learning tool…and offers some fascinating reading… for everyone, no matter how much, or how little, you know.  http://online.wsj.com/home-page

Sure it’s full of, what may appear to some, as indecipherable gobbly-gook, written in ‘broker-speak.’  But the WSJ is a very powerful resource, so ignore all of that and focus on the following:

1.      Peruse the front page.  Every once in a while there are some great human interest stories about the good, bad, and especially the greedy.  Plus, the side-bar on the left is like “Current Events for Dummies”… a collection of news snippets giving you a speedy update  to the latest news (financial and otherwise).

2.      Glance over the following two sections: Marketplace and Money& Investing.  A quick peek is all you need. You’ll be amazed at how much you’ll pick up just by osmosis.

3.      Savor the fourth section (called by different names depending on the day of the week): Personal Journal (Tuesday-Friday); The Journal Report (Monday);  Weekend Journal (Saturday).  This section is loaded with easy-to-read,  often fascinating,  and always useful  tidbits….everything from fashion, sports and personal finance to restaurant, wine and  book reviews.

Let’s take Monday’s WSJ’s Journal Report (theme for this report was “Your Money Matters”).  The front page article was Best Online Tools for Personal Finance, and it was chock full of excellent (and free) website recommendations.

Even if the only thing you do is glance at the Wall Street Journal everyday for 3 months, you’ll be amazed at how much you learn!  Don’t be intimated.  The Wall Street Journal is a great resource, and a must read if you’re serious about upping your personal “financial awareness quotient”!   Try it and report back.

Can The “Secret” Really Work?

I’m a big fan of The Secret.  I’ve watched the DVD at least 50 times.  This wildly successful video and book introduced the “Law of Attraction” (LOA) to millions of people.   And that’s a very good thing…to a point.Can the Secret really work?

Simply put, the Law of Attraction says:  Our thoughts create our reality.  What we focus on expands.  In other words, if you want to be rich, don’t focus on lack of wealth.

But here’s where it gets confusing.  How many people (you, maybe?) really want wealth,  and refuse to focus on anything but abundance… yet still,  nothing changes.   Their bills pile up while their bank balance shrivels.

What the Secret failed to mention is that the LOA is only part of the equation for creating wealth.  What’s missing are the other 2 Laws:

1.       The Law of Discipline
2.       The Law of Congruency

#1. The Law of Discipline.  Discipline — consistent activity in the direction of your desire — is the root of all success.  You can visualize flowers blooming, hitting a hole in one, or wads of cash,  but unless you exercise disciplined effort and pull the weeds, practice your putt, or follow the rules of money (spend less, save more, invest wisely), you’re not going to succeed at anything.

#2.  The Law of Congruency.  You get what you want not what you ask for.   For example, you may say “I want to be rich,” but if you distrust wealthy people, don’t believe you deserve wealth, or see money as the root of all evil, then wealth isn’t really what you want.  This inner discord explains why affirmations or positive thinking, as powerful as they are, don’t always work… your spoken goals are in conflict with your true desires, and deep down, you don’t actually want what you’re asking for.

Whenever I’m wondering why I’m not attracting something, I always ask myself 2 questions, in this order:

1.       Why don’t I want it?

2.       What am I not doing, that I need to be doing?

Try it, and let me know what you think!  And for more help and support in achieving your financial and personal desires, check out the schedule of Seminars listed on my website!

Meet Barbara Huson

When a devastating financial crisis rocked her world, Barbara Huson knew she had to get smart about money… and she did. Now, she wants to empower every women to take charge of their money and take charge of their lives! She’s doing just that with her best-selling books, life changing retreats and private financial coaching.

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