3 Lies You Tell Yourself Quite Often

“Don't let the noise of others' opinions drown out your own inner voice.” 

– Steve Jobs

Last week I finished facilitating a two-month training for a company in Southern California. I trained approximately 25 managers on topics such as leadership, management, communication and coaching. The managers embarked on a journey to become better managers to lead their teams to their full potential.

During our coaching session, we discussed ways to properly train, motivate and engage a team. During one of our discussions, one of the managers shared with me that he has trouble motivating people because he’s not a good motivator. In that same session, another manager said how difficult it was to train her employees because she has no patience.

These comments are very typical for managers to say and are comments we tell ourselves quite often. I responded to these comments from the managers with a simple question: ”who told you that?”

Many times we convince ourselves that we are a certain way or we can’t do a certain thing. We think other people believe these things about us and we unfortunately use other people’s comments to confirm what we already believed about ourselves. These are lies, though. Time and time again I see people breakthrough these lies. Below are three common lies that hold us back.

I am not good enough

Many times, managers (or people in general) make comments such as “I am not a good motivator,” “I am not a good public speaker,” or “I’m just not good with numbers.” People are just not born motivating others or knowing how to speak in public. These are skills that can be learned and applied with time. Instead of telling yourself lies, ask yourself these questions:  

• How can I become better
• What can I change about myself to become better?
• How can I change? Am I willing to change?

You are good enough. In fact, I can guarantee that you’re better than you think. There is a lot of untapped talent and potential if you just get passed those lies you invented.

I can’t do that

The word can’t is one of the worst words you can use in your vocabulary. “I can’t resist chocolate,” “I can’t find time to go to the gym,” and “I can’t make it on time because I live far,” are the most common lies you can tell yourself. These are our favorite excuses and the word can’t is supposed to make it seem as though there is an external force out of our control that won’t allow us to overcome these obstacles.

Instead of always relying on the word ‘can’t’, substitute that word for the question, “How can I…?” For example, “how can I lose 15 lbs?”, or “how can I make time to go to the gym.”

Force yourself to find solutions instead of making excuses. You can do anything and I can, once again, guarantee that you have overcome obstacles in the past that not too many people could. You are stronger than you think.

That’s just not me

By now, you have a pre-conceived notion of who you are and who you are not. You have convinced yourself that you are not patient, you are not a leader, you are not assertive or that you are not joyful. I believe we have all these qualities inside of us and many times we actually utilize these qualities. For example, have you ever waited an hour in LA traffic? That’s patience! Yes, some people are more patient than others, but many times we are the ones that choose what quality we do or don’t exercise. Therefore, any time that our job or our family requires our patience, for example, we tend to run away and choose not to exercise our patience.

You possess great qualities in a human. You have the power to think, act and become anything. You can be a strong leaders, a patient parent, a loving boss, a joyful employee, an assertive project leader and an empathetic colleague. You just choose not to focus on those qualities you need. You can become anything you want, but you must convince yourself first.

Sometimes are jobs or our personal lives force us to be something we’re not. Perhaps you weren’t so responsible before but your career forced you to be responsible. I can guarantee (my last guarantee) that who you are now is not the same person who you were 5 years ago, and it won’t be the same person who you will 5 years from now. Who do you want to be? Do you want to be extraordinary or a person who keeps believing your own lies?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.  

Thinking About Investing? This One Single Investment Can Give You The Most Return On Your Investment

"Average people would rather be entertained than educated. Rich people would rather be educated than entertained"

- Steve Siebold

Since last year I've been taking investments courses to learn more about how to trade, invest, and retire. The instructor did something clever during one of the retirement courses.  He asked the class (which mainly consisted of middle class folks between the ages of 35-50) if anyone had a retirement plan. About half of the class raised their hand. He then asked questions to every single person who raised their hand about their retirement plan: what type of retirement plan is it? which plan do you have? how much money has it made you? what has been your ROI? As he asked these questions, most people responded with "I don't know." Out of the 20 people he asked, only one person was able to answer all of the instructor's questions.

The instructor then stepped back thought for a second and then gave us the following scenario. 

"Let's say," he said, "I have this plan that will make you money and I want you to be part of my master plan. Who's in?"

The class looked a little confused. One person raised her hand and asked, "Well, what are you going to do with our money?"

The instructor quickly answered, "I don't know."

Another person raised his hand and questioned the instructor, "Well, how much money are we going to make?"

"Don't know," the instructor immediately responded.

After a few of my classmates asked a few more questions and received the same response from the instructor of "I don't know," one person raised her hand and exclaimed, "then, why should we give you our money?"

The instructor then smiled and responded with another question, "Well, why are you giving part of your paycheck to someone when you don't even know where that money is going, how much you're making or who you're investing with?"

We all fall in the same trap. We don't really want to do our homework so we'd rather "trust" and pay someone else to do the homework for us. Some of  us might just think that all this "investment talk" is complicated so we don't want to deal with that. Some of us might just underestimate ourselves and feel as though we will never get to retire, or that we're just not smart enough to make important life decisions. Instead, we get lazy and never do anything about it. Others will just follow along with the herd.

Time to time I have people approach me or call me and ask me what I think they should do with their money. In other words, they want to know where they should invest. Should they put their money in real estate or in the stock market? They heard a buzz about gold or the Euro, should they put their money there? I will then give my so-called expert advice and try to lead them in the right direction. However, there is always one type of investment that people fail to understand that can give them the most return on their investment. If you're thinking about investing in someone, invest on this:

Yourself.

I don't mean, go to college (unless that's what you want to do) or buy a bigger house. I'm recommending that you either invest some money or time in yourself to get educated about money. Retirement, investments, your hard-earned money are very important life decisions and the best thing that I feel you can do is start there. Buy a few books (but read them), or do what I did and get some audio books and listen to them on your commute to and from work. Your skills will improve and you'll be a lot more valuable. Learn from people that do the work you want to do or are interested in doing. Look at youtube videos to get ideas or subscribe to a few blogs or articles to enhance your knowledge. This will help you really understand what you're getting yourself into if you're planning on buying investment property, or if you're planning on putting your money on a start-up company or if you want to buy stocks for a certain company. 

Some people might have the money to invest in themselves but might just not have the time. I have also 'been there, done that.' However, if this is something you really want to do or deem important, then I know you'll find a way. Get educated. Invest in yourself. 

Any thoughts? 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

How Much Money Do You Really Need To Retire?

"Don't simply retire from something; have something to retire to."
- Harry Emerson Fosdick

The picture are all the same. You and your spouse are older with white hair and a big smile. You are at a beach wearing white walking around with no problems. I'm not quite sure why you would be wearing white. Do people all of a sudden decide to wear white after they retire? Maybe that will be my next research project.

The pictures look really nice. All institutions that sell you 401ks or IRAs have a picture of this sort in the brochure or folder they give you. The crazy thing is that when we think of retirement, that's pretty much the first picture that comes to mind. However, there's a lot to consider when thinking about retirement. Most people automatically get a 401k from their job because they offer it, but there is no set plan or idea about what retirement really means. The most important element about retirement is knowing how much money you actually need to retire comfortably. 

According to US News Week, the federal government estimates that 12% of women and 7% of men over the age of 65 live in poverty. Why would this be? How could this happen? The research didn't necessarily say why, but according to the Transamerica Center for Retirement Studies, only 1 in 10 people have calculated how much money they need in the bank to comfortably retire. I want us to be that 10% so let's start making some calculations. 

Financial advisers recommend that after retirement you should be able to replace 80% of your income. This means during the year that you retire, if you make $65,000 annually, let's say when you're 65, then you will need  $52,000 a year for the rest of your years. This means that you will need some money coming from somewhere that equates to $52,000 a year or $4,333 a month. If you want enough money to last you for 20 years of retirement, then multiply that by 20 and you'll need roughly about $1 million dollars. I haven't even accounted for inflation which is about 3% a year. For those that might get a bit confused with my math, I found a great retirement calculator from CNN money. 

My goal is not to scare you at all. My goal is to have you face reality if you haven't yet made these calculations. My goal is also not to make you believe that it is impossible to retire with $1MM. The way I think about it is simple. I am currently 30 and have 35 years to figure out how to generate enough consistent cash flow to last me through retirement. It all starts now. We need to plan the seed now rather than later. We need to have our money working for us now if we really want to enjoy our later years without any financial worries. Whatever dreams ans aspirations you might have for retirement, I believe you can achieve them. The question is: do you believe you can achieve them?

Although I am definitely thinking and researching about retirement plans and options (which I will discuss in my next blogs), I would personally want to be on the beach with my loved one (with our black hair) living comfortably now. That's why I stress the importance of money management, cash flow, investments, budgeting and discipline. I personally love to work. The question I ask myself is more: what would I like to do for work when I'm 65? My goal is not to have to work for a paycheck, and that can start now. 

This way, my love and I can wear our white clothes now instead of later. Any thoughts? Share. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Still Trying To Figure Out What To Do With Your Money? Here Are Some Suggestions

"If you want to live a happy life, tie it to a goal. Not to people or things."
- Albert Einstein

I came up with a realization this weekend. As I have been sitting down with friends, family, clients and couples, I realized that I am actually not a financial adviser or a financial planner. As I reflected on all the sessions I had with people, I realized one important thing that I didn't realize before. I've been advising on money now for almost a year and this theory just clicked recently. This is my realization:

I'm not a financial adviser, I'm a life adviser. I'm not a financial planner, I'm a life planner.

As I reflect back on the sessions I had with people, I try to quantify the the type of conversations we have during our sessions. Most of our conversations are about goals, dreams or about the things we want out of life. The main reason I see people struggling with saving, debt and budgeting is because there is no clear vision to what they want in life. There is no plan. When there is no plan to follow, no goals to accomplish, the money just disappears. Before your money continues to disappear, I want to dedicate some time to hopefully help you discover what you want to do with your money. 

Everything we do in life has a price. Most of our goals and dreams have a price tag. However, most people don't take the time to calculate the actual price of their dream or goals and many people don't set plans or personal targets for themselves. I write with the hope that this can help you figure out a few things. 

Ask Yourself A Few Questions
Take two hours of your day, of your life to ponder about your life and your future. Grab a piece of paper, a notebook or a diary and a pen or pencil and start answering these questions:

• Where do I see myself next year? In 3 years? In 5 years? Where do I want to see myself?
• What have I accomplished these past 5 years? What do I want to accomplish in the next 5 years?
• What are my goals in life?
• If money wasn't an issue, what would I be doing with my time?

There is no right or wrong answer here. There are no limits to what you can dream or imagine. There is nothing that is impossible when doing this exercise. 

Do Some Research
When I ask people what they want to accomplish, I get a few typical answers: 'I want to open up a 401k to retire' or 'I want to get out of debt.' I definitely respect the goals of my clients, but my goal is to make them happy and to really think about what they want out of life. However, I personally think that there are other accomplishments to think about than just getting old and paying off bills and creditors. I take my time to educate and help people think things through. For example, I ask the question, 'do you know that a 401k really is and how it works'? Or 'do you know how much money you'll need to retire for 20 years?' What about 'Have you thought about how you could potentially retire younger and what it takes to make that happen?'

I propose that everyone goes online and just does some research. You can google pretty much anything. Here are some questions you might want to google:

• What's a 401k?
• What should I do when I'm 30?
• How to start a business
• How much is a farm?
• How to invest in Real Estate?
• Where should I travel?
• Where should I take my family?

You'd be surprised how attainable your goals might be after doing some research. I recommend you research about things you love, you wish to do, and things that matter to you the most. 

Set A Few Goals
Goal setting is key to life. I would personally prefer to be 70 years old and not retired but knowing that I accomplished 95% of all my life's goals and dreams than be 70 years old, retired and not knowing what the heck I did with my life. I set daily, weekly, monthly and yearly goals. We've all done this to some extent. We typically call these 'New Year's resolutions.' Here are some suggestions to get started:

• Choose a deadline that is realistic
• Make sure that your goal is measurable
• Hold yourself, or have someone hold you, accountable

If you want to learn more about goal setting, research this: SMART goals. Start with a goal for this week. Begin to gain discipline. Discipline is one of the key factors to accomplishing goals. 

Be Encouraged
Does this blog seem draining? Too bad. We can't expect to be encouraged every single second, or to have someone push us on every single time we encounter hardships. I suggest that you develop the discipline to be self-motivated. If you've never been the self-motivated type, then you should hang around very driven and motivated people. If you think it's impossible to travel to Europe because it's a lot of money, then talk to someone who will encourage you. If you hang around people that always tell you that you're doing things wrong or that you can't do something, then it's time to start hanging around a different crowd. Encouragement comes a long way.

Stay the course and believe. The biggest obstacle is yourself. If you can overcome your personal barriers, then you can accomplish anything. Any thoughts?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Avoid These Mistakes When Trying To Pay Off Your Debt

"Debt is the worst poverty."
- Thomas Fuller

Today, I will complete our discussion about debt by suggesting to avoid certain mistakes when trying to pay it off. Before I give the actual list of suggestions, I ask you, once again, to look back at why you wouldn't even need to borrow money in the first place.

Most people borrow money for the wrong reasons. Did you borrow money to have enough cash to invest so that your money can grow and you can start generating passive income? Did you borrow money because you wanted to open up your business and you just needed start-up capital? Or did you borrow money because you wanted a nicer car? Did you borrow money to buy a new TV, get a fancy phone and live above your means?

My goal is to make you reflect on your decisions. Some people might be struggling to pay off the money they borrowed and are caught in a hamster wheel, just trying to make ends meet. Depending on your situation, I would advise you to avoid these four traps when trying to pay off debt. 

Don't use any payday loans
If you like to be caught in a trap, get a payday loan. Before I met with a few of my clients, I honestly never knew what a payday loan was. It's a very clever lender, however, if you're the lender's customer you will be trapped for some time. The payday loans give you quick cash but they charge you a fee to take out that cash and they have access to your bank account so they will take your money regardless. Most people who get payday loans think it will only be a 'one time' thing. They believe they will only take out a loan just once, pay it off and forget that it ever happened. However, most people will get caught trying to get more cash and it becomes an endless cycle. Most people don't have the discipline to only borrow once. If you don't have the discipline to borrow money, don't borrow money. 

Don't get caught up with 0% interest
People love free stuff. When people see '0% interest,' it's like they're getting something for free. People get excited knowing that they have a whole year to pay off a loan before it begins to accumulate interest. However, going back to my first suggestion, most people aren't that disciplined. If you take out a $5,000 loan and you're trying to pay that off in six months, before the interest kick in, you'll have to pay on average $833.33 a month to make that happen. Before you take out a loan of any kind, work out the numbers. Don't be afraid of doing some math on your own. Educate yourself before you get yourself in a whole.

Avoid getting loans to pay off other loans
Let's say you owe some money to a few credit card companies. You think the best solution is to take out another loan to pay off those credit cards. Your idea gets even better when you find out that you don't have to pay interest for the first 6 months on the loan you're planning on taking. This is a huge trap! Again, most people don't have much discipline and will continue to take out loan after loan to pay off other loans which they took to pay off other loans and this cycle won't stop for a very long time. At the same time, do the math. If you owed a total of $5,000 on those two credit cards, and now you're thinking of getting a $5,000 loan with no interest for six months to pay it off, guess what you're getting yourself into. A trap. 

Don't use all your tax return to pay off your debt
A few years ago I had a great idea: I'll use the money I receive from my state and federal tax returns to pay off my debt. So one year, I used that money immediately to pay off some debt. By the end of the year, I was living paycheck to paycheck trying to figure out where all my money is going. It was still going to paying off debt! So then, I got another genius idea: I'll use the money I receive from my state and federal tax returns to pay off my debt. This happened so frequently for a few years, that I no longer was living paycheck to paycheck. Instead, I was living refund check to refund check! (Read Before You Spend Your State Or Federal Refund Check, Read This!). Although it might seem like a good idea to use this money to pay off debt, it is not. Pay yourself first and read all my blogs so that you know which route is best for you. 

Most of what I recommend is really from experience and research that I had to do. In other ways, I had to learn the hard way. Some of you  might be learning the hard way right now. For those that aren't in any trap, follow my advice and don't try to learn anything the hard way. Good luck to all and enjoy your weekend. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

When Is The Right Time To Pay Off Your Debt?

"Bad debt is sacrificing your future day needs for your present day desires."
- Suze Orman

Yesterday I gave a few reasons why paying off debt at once is the wrong way to go (Read Don't Pay Off Your Debt and Read This Instead). I figured the question would come up on when would it be the best time to pay off all debt and this will be the topic of today's discussion. 

Before I give my reply, I want you to take a look back on why you attained debt in the first place and ask yourself a few questions:

• Did you put yourself in debt because of necessity, or was it for pleasure?
• Was it worth it?
• How much in debt do you currently owe now?
• How much stress has it caused you?

These questions are important to ask because I'm sure you don't want to make the same mistake twice. These questions should apply to any kind of debt: your house mortgage, your student loan, your car loan, etc. The final question to ask yourself is: would you do it again?

As I meet with multiple clients a week, I find out a few interesting things. First of all, most people don't know what is the total amount of their debt. Secondly, the debt is not a small number, its typically tens of thousands of dollars. Finally, most (and in some cases all) of the money from someone's paycheck goes to pay off bills and debt with hardly any money to put in a savings account. So when is the best time to pay off the debt all at once? My simple answer is never, but the answer I'll give today is 'it depends.'

The only time where I believe it might be wise to pay off some debt is when you have negative cash flow on a consistent monthly basis. In many instances, the only solution some people see is to take a bigger loan to pay off the smaller loans. Debt is a complicated thing that requires an even more complex solution. In a blog last week, I gave some tips on how to change your negative cash flow to positive cash flow (Read How To Turn Your Cash Flow From Negative to Positive). The only complex solution I can give you consist of two words: sacrifice and discipline. 

If you are experiencing negative cash flow and it's mainly due to high amounts of debt, it's time to make some personal sacrifices. Sell your possessions. Sell your car, your big screen TV, your clothes, but start selling something so you can have cash in hand. Stop borrowing money and make money. Last year, I made $1,300 in 4 months just by selling my stuff on ebay. I sold DVDs, a broken guitar (yes, people will buy broken things online), mariachi attire that hasn't fit me since high school, and books that have just been collecting dust. I sacrificed my possessions. However, the hard part was the discipline. I took pictures of almost all things I had and tried to make them look nice. I was careful in my descriptions and tried to make the ebay pages look professional. I made sure that the items were shipped withing 48 hours. Was it a lot of work? Not really, it just seems like a lot of work when you list it out but my end result was there.

In conclusion, stop borrowing money and make money instead. Any thoughts?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Don't Pay Off Your Debt and Read This Instead

"I invested all my money in debt."
- Hamish Linklater

I recently had a conversation with a relative of mine and was sharing information in regards to my student loan. It turns out that I finally owe less than $2,000 in my student loan and in a few years I will no longer have that loan under my name. 

"If I only owed $2,000 on my student loan," my relative said to me,"I would pay it all off right now and get it over with." Most people would probably say the same to me. The 'peace of mind' that comes after paying off your car loan or your student loan is priceless, right? Well, it's actually not priceless, it cost you the amount of the loan plus interest. 

There's a few reasons why I won't be paying off my student loan this upcoming month. I do have $2,000 in one of my accounts, but that money won't be going anywhere near the Department of Education. Here are my reasons:

My focus is positive cash flow

Throughout my blogs, the theme on positive cash flow is evident (Read Why How Much Money You Make Doesn't Matter). My goal is to pay myself first and then pay 'the man.' For the last few years I have cut down on my expenses and focused on maintaining a positive cash flow every month. I was able to achieve that without having to pay off all of my loans. I currently now pay $78 a month for my student loan. If I pay off the $2,000 of my hard-earned money to the US Department of Education so that I won't have to worry about my loan again, I only increase my monthly cash flow by $78. In my eyes, that's not where I want my money to go. I'd rather put that money to work so that my cash flow increases a lot more with my $2,000 investment. 

If I have $2,000, why would I give it to someone else?

There's a few things that are coming up in my life. One of them has to do with a few investments I have and the other 'thing' is a trip I'm planning. I have three options: Option 1 - add $2,000 to my current investments; Option 2 - use the $2,000 for the trip I'm planning in the fall; Option 3 - pay 'the man.' 

If I pay off my student loan, I will have $2,000 less in my hands. I already have a positive monthly cash flow, so a $78 increase might be nice, but it's not something I have my heart set on. I'd rather pay myself and choose one of the first two options. I don't mind paying $78 for a few more years. I do mind, however, giving $2,000 off-the-bat with very little return.

So when should you pay off your debt entirely? That will be our next discussion.

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Keep The End In Mind: Remember Your Dreams

"Begin with the end in mind."
- Stephen Covey (author of The Seven Habits of Highly Effective People)

When I was a little kid, I used to love science. I use to look up at the sky and stare at the stars and the moon for hours. I owned a toy telescope and imagined that one day I would be an astronomer and would discover a meteor that I would name "Allen." By the time I got to college, I hated science. During my years at UC Riverside, I tried to avoid any science classes. My interests seemed to change as I got older.

One of my earliest blogs (Read What Do You Want To Be When You Grow Up?) discussed the difficulty many adults still have when deciding what they want to do in the near (or not so near) future. During the first financial planning session I have with my clients, I typically ask my clients what are their goals and many of them have difficulty answering me. During my upcoming blogs, I will continue to write about money, but will elaborate more on cash flow, retirement plans and investments. However, before I continue with the 'money discussion,' I want to make sure that we back up a little and think about our goals, our dreams.

A picture is worth a thousand words

"The first thing I want you to do," I ask my client (who we will call), William, during our first financial planning session, "is draw a picture of what your future will look like." I then give William a box of crayons and leave him alone for a few minutes. Williams gives me a look of disbelief, but moves forward with the assignment as soon as he realizes that I wasn't kidding. 

I recommend that everyone who read my blogs does the same assignment. Hang it on your fridge if you want to, but draw out what you envision your future looking like. If you have a spouse, I recommend that you and your spouse do this assignment separately, and then come together to discuss your picture. You will be surprised how the conversation about your future just 'never came up'. I see this all the time when I meet with couples.

What would you do with your time if money wasn't an issue?

Most people think their dreams are silly. After drawing their picture and explaining to me what they drew, they'll follow up with comments like "but this was just an assignment," or "these are just dreams, you said I can draw anything." Most people think their dreams are an impossible thing. They give up on their dream before they even begin dreaming. I say, keep dreaming and imagine money wasn't an issue. Strive to keep dreaming and don't forget that dream. You can overcome the 'money' obstacle if you really try, but you must believe that your dream is a possibility. As soon as you believe that your dream is a possibility, 'money' will no longer be an obstacle. 

Write down your goals

Many people keep their personal goals in their head and a few might share them with someone here and there. Write down your personal goals and I will guarantee that they will align with your financial goals. Most of the goals people write down have a dollar sign attach to it (i.e. traveling, buying a home, etc.). After you write down your goals, put a deadline on it. Napoleon Hill once said, "A goal is a dream with a deadline." Writing your goals will help you remember what your shooting for. 

There will be people that will help you along the way. There will be challenges you will face. There will be times when you feel you'll never get to the end result. Just keep believing in yourself, in your ability to make your dreams happen. Your ability to make your dreams come true are strongly tied to your will to make things happen and the will to believe in yourself.

Share your thoughts and good luck accomplishing your dreams. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Remember...You Can't Take Your Money With You When You Die

"You'll never see a U-Haul behind a hearse...I can't take it with me and neither can you. It's not how much you have but what you do with what you have."
 - Denzel Washington

Recently, I had a conversation with someone who reads my blogs. This person asked why I talked about money so much in my blogs. This person was under the impression that I was completely obsessed with money and he confirmed this when he told me, "Allen, you can't take your money with you when you die."

I completely agree with that statement. It is definitely true, you won't be able to take any wealth with you when you die. So why try, right? Perhaps it might be better for me to explain why I even write these blogs on money in the first place. Secondly, I want to explain why I truly feel that money is important. Finally, I want to explain what, I believe, you do take with you when you die.

Why do I write blogs on money?
I am not rich. I don't consider myself wealthy, either. However, I do consider myself blessed. God has given me the strength to learn quickly, apply what I learn, be brave, work hard, persevere, believe and achieve. Although I have not yet accomplished all of my goals in life, I have accomplished most of them. Although I am not financially independent yet, I have made great strives to get there. Over the last three years I have read books, watched videos, attended conferences and was mentored by others about money, finance, leadership, management, investments, etc. I have accumulated (and am still accumulating) an abundant amount of knowledge about many topics - money being one of them. I write blogs on money to share information and knowledge to those that might be struggling personally. I write about money because I know there are many people around me, people in my family, close friends that do struggle financially. I write about money to help people. I write about money to teach people how they can change their situation. I write about money to share my experiences with others. I write about money because I care about you. I don't want to live in a world where I achieve all my dreams and those that I love do not. 

Why is money important?
Unfortunately, we need money. We need money to provide for our family. We need money to pay rent, bills and our debt. We need money to attain the things that we really like. We need money almost every day. However, my philosophy on money is different. My intention is not to get rich. My intention is not to become the next top billionaire and buy a private jet. I believe money is important because it can lead to financial independence. If I am able to make proper investments, have a consistent positive cash flow and control my expenses, then I can achieve financial independence. To me, financial independence simply means that you do not have to depend on a paycheck or someone or something else to have money in your pocket. Instead of working for money, I would rather have money working for me. The only reason I want to achieve financial freedom is to have the ability to design my lifestyle. What would you do with your time, with your life, if you never had to worry about money? What would you do with your life if your investments took care of you? If I achieve financial independence by having enough passive income, I would spend my days helping people, spending time with my loved ones and trying to make a difference in the lives of others. I would wake up on Monday morning ready to go take care of my niece's kids so that she can take care of her errands. On Tuesday, I would go to an orphanage and spend time volunteering. You get the point. To me, money is a way to get to that ultimate goal.

What do we take with us when we die?
Nothing. Nothing tangible, that is. We can't take our money with us. We can't take our wedding rings with us. We can't take anything. Yet, we have been given life. Life is not a video game where we have 5 lives to live and then we can press the 'restart' button. Every minute is precious. Every moment counts. My goal is not to get rich. My goal is not to try to make a fortune so I can take it with me. My goal is to touch as many lives as possible while I'm alive. I can't take my pride, my glory, my accomplishments with me when I die either. I can, however, leave many things behind for others to have - from smiles, to money, to knowledge and assets. I'm not worried about what I'll be taking with me when I die. God will take care of that. I'm concerned with what I will leave behind. 

My intention was not to try to defend myself in this blog. My sole purpose for writing this piece was simply to give you an idea of what my true goals in life are. It's all embedded with a purpose. What is your purpose in life? Have you thought about it? Share. Comment. Have a great three day weekend. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

How To Turn Your Cash Flow From Negative To Positive

"Discipline is doing what you know needs to be done, even though you don't want to."
- Unknown

Yesterday, I began to tell my story (Read How I Survived With $11 In My Pocket). Let me pick up where I left off...

So I finally got a job and things started to look a lot better. However, if you remember the story, I was still deep in debt, I received a lawsuit, shortly after a sheriff came to my office to let me know that my wages were going to be garnished, and I still had some bill collectors calling me consistently. 

It took me a few years to get out of this financial hole. This is not easy to do, but yet I was able to do it and I wanted to share the two main ways I was able to turn things around. At the time, I felt as though i was living paycheck to paycheck and most of my money went to paying bills, debt and other people with little or no money staying in my bank account. I had negative cash flow every single month for years. This is how I eventually got out. 

Sacrifice
I used to hate the word sacrifice. It pretty much means that you give up things that you like. Most people kind of want to change their situation, but they don't really want to do anything about it. Most people worry that they're in a financial hole but they don't want to give up anything to get out. I'm sorry to put it this way, but the most effective way to get out of a financial hole is by committing to sacrifices.

In order to prioritize my life and financial goals I gave up quite a few things that were not easy to give up. For five years I didn't own a television. This meant that I also didn't have cable. I had to be content with the car that I drove that was falling apart. I drove that car until (literally) the wheels fell off. For three years I didn't have a bed, just two mattresses on the floor. Beds are expensive and so are cars. If you add up the total amount you would spend on a TV and on monthly cable, it also begins to be expensive to have those luxuries. The phone I had was never new. In fact, I was trying to downgrade at one point but T-Mobile wouldn't let me. I bought clothes maybe once or twice a year and tried to take care of them so that they would last me for five more years. I also gave up going out so much so I can save a little on gas and dining out.

Discipline
As I mentioned before, none of this was easy. Most people feel that they need to reward themselves immediately after they receive a paycheck. Some people I know spend half of their paycheck the Friday they get paid. 

If you really think about it, I didn't have enough money left over (positive cash flow) to buy a new TV. Most people buy things with money they don't really have. I strategically put money aside every month for the bigger goals in life. For over four years I tracked my income and expenses on a spreadsheet (until I learned about mint.com three years ago.) Every month, I sat down for hours to look at where I needed to cut, what other sacrifices I needed to make and stuck to my plan. I also made sure that if I had money, I didn't spend it. the biggest discipline I attained was the ability not to spend money when I had it. I read tons of books and articles about managing expenses, investments, getting out of debt, how to save, how to develop better habits, how to become more disciplined, time management, all read to help me achieve my goals. I read (or listened to) a book every month. I read articles every single week. I forced myself to wake up earlier every morning although I convinced myself in college that I wasn't a morning person. I even gave up french fries for 9 months and eventually became vegetarian. People ask me why I became vegetarian and my simple answer is that I just wanted to see how long I could do it. It's now been five years. 

Throughout this experience, the money I made had nothing to do with me getting out of a hole (read Why How Much Money You Make Doesn't Matter). It was truly the discipline I developed and the sacrifices that I made that eventually helped me reach my goals. What was the end result? Now, I have a TV ( and I do have cable but I just bought it to watch the World Cup games - I'm about to cancel it) and a better car. However, I'm more proud of the fact that I have no loans, no credit cards, positive cash flow and I have been able to reward myself lately with trips to Hawaii, Cancun and Orlando. It also takes discipline to reward yourself at the end. 

Warren Buffet once said, "The most important thing to do if you find yourself in a hole is to stop digging." Can you stop digging?

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

How I Survived With $11 In My Pocket

"The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."
- Martin Luther King Jr.  

I humbly write these blogs to help encourage others and help people understand that whatever financial situation they might be in, whether they're in a hole or not, that they can improve their circumstances. Yesterday I received great feedback from my Interested In Improving Your Monthly Cash Flow? Follow These 5 Steps... blog. I received a few emails and some text messages about this blog with a few folks wanting to know more about my story. I decided to take a quick detour with my blogs and introduce to you my story as it pertains to my finances. This is not a "How I got rich quick" story. It's more of a survival story.

Most financial planners that I have met might know a great deal about 401Ks or investments. However, most of them might have never struggled to make ends meet, had to live paycheck to paycheck or had bill collectors calling them every day. Therefore, many of them might not be able to tell you how you can get out of your tough financial situation. I feel as though most people can relate to my story and this is why I encourage others to keep pushing. Here's my story...

During the recession of 2008 I found myself jobless. After working for multiple education companies and trying to become a substitute teacher, I was once again applying for unemployment and applying to jobs only a teenager would apply for during the summer. I was a college graduate with a business degree and a huge appetite for success but at the time no one gave me a chance to prove myself. I had two bill collectors harassing me, a warrant for a failure to appear in court (which to this day I still can't remember why I had to go to court in the first place) and a car that kept breaking down.

One day, in late May, I closed my bank account before they charged me again with overdraft fees. I decided that I would just live off of the $300 or so I had left and whatever I received from unemployment I would use for rent. At the time, I lived in a small two bedroom house in Fontana with my nephew. That day I told my nephew I couldn't pay rent anymore so I called the landlord and gave the 30 day notice. I had no clue where I would go or what I would do. In the meantime, my goal was to find any job to have enough money to last me through this.

I took any job that came my way. At the time I also played in a band but we were lucky if we even got money for gas when we performed. I painted a house (or tried to paint a house) for a few bucks, I put strings on guitars for a music store for a few dollars and I babysat here and there. Once a week I tutored my friend's daughter in reading and since she didn't have money to pay me, she blessed me with shrimp tacos every time we ended a lesson. On Tuesdays, I drove to San Bernardino to teach a kid's mariachi group how to play mariachi music. The families would pitch in to give me $20 for gas. In no way did I complain about my situation. Yes, it was tough and I would get sad at times but my mom taught me to be happy for what I do have. I cheered loudly even if I only received $20. 

Shortly after, my cash was low and I had to move out of my house so I began to sell my possessions: microwave, toaster oven, TV, etc. I made a few hundred dollars but now I only had four boxes left with my name on them filled with books, clothes and a few memories. I was close to selling my guitar but some of my bandmates didn't let me. I was lucky enough to have a brother that let me stay with him. I was happy to just sleep on the floor so that I didn't have to sleep in my car. I stayed with my brother for a few months as I continued to apply for jobs every day. I interviewed with so many companies but felt as though I had the worst luck in the world. I didn't have a suit to properly present myself so I always wore the nicest shirt I had (which had a small hole that I had to cover during interviews). I didn't know why no one would hire me. 

I finally received a call in early August from a company that called me a week before to tell me that I didn't get the job. This was an education company that did SES tutoring and they offered me a 3-month assignment as an independent contractor. If I met certain targets in three months, I would be able to stay with the company. If I failed, I was out. I had no choice. The day I received that call I only had $11 and had to decide whether I used those $11 for gas or for food. I used the money for gas and hoped that I would somehow survive until I received a paycheck. I started work on a Wednesday and, by an act of God, I received a small paycheck on Friday for my first three days of work. At that point, I knew things were going to change...

To be continued...

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

5 Easy Steps To Follow...For Those Struggling With Finances

"Too many people spend money they haven't earned to buy things they don't need, to impress people they don't like."

 - Will Smith

Some people call me the accidental Financial Planner. Well, actually, no one calls me that but I thought it was a catchy name for my informal title. Since last November, I have gladly spent numerous hours helping people trying to get their finances together. My goal has always been to help people control their expenses so they can have enough money to not worry about money. (Don't worry - I won't be disclosing any names!)

Interestingly enough, I found myself giving the same tips to different people over and over again. These tips are essentially very basic and simple and will make a huge difference with the way you handle your money. If you properly follow these 5 steps, you will learn a lot about they way you handle your money, where your money actually goes and what changes you need to make to ensure financial health for yourself and  your family. 

1. Track Your Expenses
The first question I typically ask someone when I meet with them is, "what do you spend your money on?" The most common response I get from parents is: "on the kids." However, after fully reviewing all expenditures, it always turns out that perhaps less than 15% of the total expenses are spent on the kids. Other people can't remember or don't even know how much they spent on their phone bill or that they had a gym membership. It is important for everyone to track their expenses. There are many free tools out there that will actually do this for you. Most banks have online banking but a great tool for those that might have multiple accounts, and my favorite tool, is mint.com.

2. Use Less Cash
Cash is bad for a few reasons. One reason: if you have cash, you will spend it. If you don't have cash, you won't have something to spend. Another reason cash is bad: most people who heavily use cash to make transactions, payments or to buy things don't track their expenses. Many people have the habit of cashing their paychecks or going to the ATM frequently to take out cash. Unless you are writing down why you took out $100 on July 2nd of 2014, you will never know where your money went. Use your debit card to make transactions instead so that your transaction can be tracked and you can truly find out what you're spending your money on. 

3. Tag Your Expenses
Most people are lazy. They want a program or their online banking system to track perfectly what they spent when they went to Target. I have yet to find a system that will read your mind. It's impossible for a program to know that on August 2nd, you went to Target to buy groceries and that on August 8th you went to Target to buy clothes. Most people don't want to tag the expenses appropriately. Spend two to three days a week looking at your account and making the appropriate adjustments to your transactions. 

4. Review Your Expenses
Usually, after I meet with someone for the first time to go over their finances, the individual is excited about making changes to their financial habits. They leave with a mint.com account and with some financial knowledge about where their money went. However, when we meet a month later, I ask the question, "how many times did you look at your mint.com account?" The typical answer is one to three times. If you're only looking at your bank statements or checking your budget one to three times a month, you are doomed to repeat the same financial mistakes. It's of no value if you have online banking or a program that tracks for your expenses if you're never looking at your numbers. Try looking at the numbers at least once weekly, and then get in the habit of looking at them twice a week. I personally look at my mint.com account three times a week. 

5. Create a Budget
Most people are scared of the word "budget". When I told a certain individual that we needed to get her on a budget, her response was, "A budget? A budget will just tell me that I can't spend my money!" This is actually not true. A budget is a way for your to plan how you want to spend  your money. So, if you deemed it valuable to spend your money on video games every month, then you can definitely do that as long as you create a budget and a plan to execute that budget. I personally love going to the movies so I have a budget every month allotted to going to the movies. A budget really helps you decide where you want to put your money. 

Taking control of your finances will not happen over night. This will take time and discipline. Many of us were never taught about budgets, expenses and money. I hope to educate those that might be struggling taking control of their money. Am I an expert? Absolutely not. However, those of you that know me well, also know that at one point, I was also living pay check to pay check, getting deeper in debt, having collections calling me and a law suit from a credit card company. If you're in a hole - trust me - you can get out. Anything is possible. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.

Are Your Habits Making You Rich Or Poor?

"Bad habits are like a comfortable bed, easy to get into but hard to get out of"-Anonymous

What did I do last week? What did I accomplish? How did I spend my time? These are questions I ask myself at the end of every week. For the last few years, I made it a habit to always evaluate my days and weeks, never keeping my eyes off of my goals and dreams. However, not everyone asks these questions on a consistent basis.

A few months ago I wrote a blog called Do You Have What It Takes To Be Wealthy?, discussing a study done about successful people. The study carefully examined the habits of successful people and it compared them to the habits of the poor. Your daily habits will determine your success in life. Thomas Corley spent five years studying the lives of both rich people (defined as having an annual income of $160,000 or more and a liquid net worth of $3.2 million or more) and those of poor people (defined as having an annual income of $35,000 or less and a liquid net worth of $5,000 or less). Below are some of the results of Corley's study.

"I maintain a daily to-do list"

• Rich people who agree: 81%
• Poor people who agree: 19%

"I love reading"

• Rich people who agree: 86%
• Poor people who agree: 26%

"I do more than my job requires"

• Rich people who agree: 81%
• Poor people who agree: 17%

"I focus on my goals every day"

• Rich people who agree: 62%
• Poor people who agree: 6%

"I watch reality shows on TV"

• Rich people who agree: 6%
• Poor people who agree: 78%

"I play the lottery regularly"

• Rich people who agree: 6%
• Poor people who agree: 77%

Next week we'll go over these results in a lot more detail. It's important to study the habits that might be keeping us from achieving some of our goals. The purpose of this study is not to come up with ways to get rich, but to compare how rich and poor spend their time and energy. Becoming rich might not be your goal, or my goal, but achieving certain financial goals, dreams, or aspirations might. 

Ask yourself these questions from the study. Which comments do you agree with? 
Share. 

Don't forget to share this blog so you can encourage others: family, co-workers, friends. Give them something to get motivated! You never know what they might be going through. A few words of encouragement can go a long way.