5 Key Savings Strategies

1. Pay off high-cost debt. The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. For example, if you have a $3,000 credit card balance at 19.8%, and you pay the required minimum balance of 2% of the balance or $15, whichever is greater, it will take 39 years to pay off the loan. And you will pay more than $10,000 in interest charges.  2. Buy a home and pay off the mortgage before you retire. The largest asset of most middle-income families is their home equity. Once these families have made their last mortgage payment, they have far lower housing expenses. They also have an asset that can be borrowed on in emergencies or converted into cash through sale of the home.  3. Participate in a work-related retirement program. Many employees turn down free money from their employer by not signing up for a work-related retirement program such as a 401(k) plan. If they did participate, with a dollar-for-dollar match they would likely receive an annual yield of greater than 100% on their investment.  4. Outside of work, save monthly through an automatic transfer from checking to savings. These savings will provide funds for emergencies, home purchase, school tuition, or even retirement. Almost all banking institutions will, on request, automatically transfer funds monthly from your checking account to a savings account, U.S. Savings Bond, or stock mutual fund. What you don't see, you will probably not miss.  5. Calculate your risk and return. If you earn 4% interest, your money will double in less than 15 years; at 7% it will double in about 10 years and at 10% it will double in 7%. Use Asset Allocation to reduce your overall risk.

Top 5 Questions to Ask Yourself when Starting Out on Your Own

 Have I done the right amount of research?

The excitement of starting a new business can cause small business entrepreneurs to be too hasty. Often driven by the mistaken belief that some imaginary boat will be missed if the business isn't started NOW, this haste can result in the cutting of corners, particularly in the area of research.

Research - whether into potential markets, the activities of competitors, the mechanics of the business, financial projections or methods of marketing - is essential when completing a realistic and comprehensive business plan.

On a contrary note, too much research can signal and fuel procrastination. Many prospective business owners remain just that - prospective - rendered motionless under the weight and anxieties caused by research excess.

How do you find the happy medium? Draft a research plan by listing the headings that you feel need attention. Then discuss this with 2 or 3 business friends or associates and gather their opinions (and no, not the ones who you know will agree with everything you say!).

 Have I been realistic about the pitfalls?

Read any book about entrepreneurs and you'll find the word 'risk' somewhere near the beginning. Every new business has an element of risk, often it's risk that precedes revolution and it's revolution that can bring huge success.

However, there's a distinction between risk and irresponsibility. In a nutshell, risk is not usually terminal. Sure the business itself might fail, but the possibility of loss will have been foreseen and personal disaster will generally have been avoided. Irresponsibility on the other hand generally indicates that pitfalls have been blatantly ignored.

When risks takers don't pull it off, it's onto the next. When the irresponsible fail, it's lose everything and head back to employment.

A classic scenario is the entrepreneur fired-up with the most unique, groundbreaking business idea ever. "It's what the World has been waiting for?' we hear, "no-one has ever done it like this!" Er, why?

Unique, groundbreaking ideas are fabulous, alas they seldom translate into successful businesses. Far better to do what others have done, learn from their lessons and do it better.

 Am I cut out to working on my own?

Working for yourself sounds like bliss and to many it is. To others, however, it's lonely, isolating and downright destructive.

Before starting out on your own, take a good look at your strengths and weaknesses. Ask yourself these questions as a starter:

· In what way may my behaviours sabotage my business?

· Am I a good problem solver?

· Will I interact with enough people during the week?

· How will I delineate between work and play?

 Can I handle administrative tasks AND develop my business?

'How did I get here?' is a far too common complaint of the small business entrepreneur. Just a few months into the business and the optimism of the pre-launch period has been replaced with mountains of paperwork and endless action lists. At this point, days go by where little is achieved other than a run to the Post Office or a drop off to the bank.

This can be due to insufficient thought being given to the mechanics of the business, insufficient notice taken of early signals or (most commonly) a lack of formulating procedures.

Michael Gerber's book, The E-Myth, is a great introduction to this topic and followed closely, can be a good support through the jungle.
This is the part of starting out on your own that few people envisage. Don't let it defeat you. Conquer this effectively and you'll be back in control with a business that's better equipped. If you need external help, consider retaining a coach for a short period.

 Do I have sufficient financial reserves?

Commonly, start-ups are under funded. There's simply insufficient reserve to survive the development period. Here we see the new owner opting for the "she'll be right" seat of the pants approach to business - not a sensible strategy.

Of course occasionally we hear of an under-capitalised business that launches and succeeds effortlessly. But ever wondered why it's so newsworthy?

Imagine trying to promote, market and network your business when you're anxious about whether you'll meet the next rent payment. Not only is it very personally draining, it becomes very apparent to others that you're in difficulty.

It's a harsh reality, but few want to give custom to a business that appears to be failing. Make sure you have the funds to ride out the storm.

In conclusion, much is spoken of the high percentage of small businesses that fail. Don't let yours become a statistic. Do your preparation and get ready for the best journey of your life!

25 Signs That Show You Know How to Handle Money

The ability to master your money is not something that just happens. It takes time, training, and temperament. Whatever praise or criticism you may direct at the American public school system, one thing must be acknowledged: The handling of personal financial affairs is not a subject to which much attention is devoted. Whatever the average citizen knows about saving and investing did not come from the classroom. This is understandable, of course, if only because the typical classroom teacher is equally mystified by the world of money. Nonetheless, there are those among us who have figured out how it all works, and what it takes to prosper.

Are you one of those persons that has managed somehow to get the hang of it? If you recognize yourself in most of the twenty-five following scenarios, then you can confidently answer "yes" to that question.

1. Your credit card bill is paid in full each month with never a penny in interest incurred.

2. You understand that the variable annuity in which your neighbor just invested will prove to be a sad mistake.

3. Despite orchestrated furor by the media, you recognize that the $30 it costs to fill your vehicle’s gas tank is cheaper in today’s dollar that the $15 it cost 20 years ago.

4. You enjoy financial talk shows for their entertainment value while knowing that 95% of what’s said is nonsense.

5. The only type of life insurance that you’d ever consider purchasing is a term policy.

6. You’re not tempted to invest in something because of a hot tip you get from a friend or relative.

7. You have serious doubts that the 3-unit course in basic English composition offered at Eleganté University for $900 is any better than a similar course conducted at Midtown Community College for $60.

8. You are sufficiently sophisticated in real estate to know that the worst house in the best neighborhood beats the best house in the worst neighborhood.

9. You owe nothing on the vehicle you drive.

10. You have a pretty good idea by mid-November how much your income tax obligation for the current year will be.

11. When hearing that the S&P 500 Index just hit an all-time high, you are not inclined to call your broker with a buy order.

12. It’s beyond your comprehension why anyone not certifiably insane would purchase a timeshare property.

13. Your checking account balance never drops below the minimum limit that triggers a monthly service charge.

14. You’re aware that an option to pay your auto insurance premium in two installments, with a "modest convenience fee" instead of a single payment, probably works out as a loan at about a 25% interest rate.

15. Although you thoroughly enjoy the home in which you live, it’s considerably less expensive than you can afford.

16. You know practically nothing about the option market—and intend to keep it that way.

17. You feel instinctively that every dollar you contribute in FICA taxes to the Social Security system is a dollar lost to you forever.

18. Whenever you’re negotiating a purchase and qualify to receive a discount, you do not hesitate to ask for it.

19. You entertain no illusions that a financial advisor will provide sound counsel merely because of the Certified Financial Planner (CFP) designation held.

20. You make the maximum possible contribution to your retirement funds.

21. Whether your choice of wristwatch is a top-of-the-line Rolex, a fashionable Cartier, a respectable Bulova, or an economy Timex, you recognize that all are battery-operated, with a similar quartz movement, and none fail to keep excellent time.

22. You find it baffling why anyone would buy a lottery ticket.

23. You cannot remember when you last borrowed money for an unexpected emergency.

24. The newspaper advertisement offering a half-pound silver commemorative medallion from The Perfidious Mint, at the "special advance price of only 139 dollars," forces you to suppress a laugh.

25. You have no confidence in the concept of "Investor Confidence."

If the sentiments expressed in most of those situations do not reflect your thinking, you’re not in control of your financial destiny. In that case, you can use a little guidance. 

Money Saving Truths

Becoming financially secure is a goal of many of us, yet most of us still live from pay to pay and just scrape by. The basic rules of becoming financially free are really quite simple and can be learnt by anyone, but it's the implementation of these rules week after week, year after year that is the challenging part. Below is a list of simple truths to set you up for financial freedom.
Knowledge and Information

If you are going to be successful in business or investing you have to acquire as much knowledge as you can. That doesn't mean you have to spend six hours everyday watching the stockmarket or going to university to get a business degree, it simply means you should have a good general knowledge of the basics which will give you more intelligent options to choose from. As you learn to earn you will also learn to avoid making poor decisions that cost you money.

Patience and Time

With time anyone can get rich and the earlier you start putting money aside the better. Most financial advisors rave about the magic of compounding interest because it is so effective. Compound Interest is where your earnings from investments are reinvested. So when you are first getting started your reinvested earnings will be quite small, but over time they begin to create a snowball effect. The secret is to get started and be patient!

Persistence and Discipline

Despite what many "get rich quick" peddlers would like you to believe, it's generally not easy to get rich and it will not happen overnight, unless you're extremely lucky and win the lottery. Getting rich is about taking many mall disciplined steps over a long period of time

Goals and Flexibility

Having a set of financial goals will give you strength and give you a clear target to head towards when things get tough. Get clear about where you are now and where you want to be in 12 months, 5 years, 10, and even 20 years. Keep reviewing your goals regularly and be prepared to be flexible and change things if circumstances change. A good financial advisor that has been recommended by a friend can help with some of the financial details of this step.
It's important to get the basic money making steps right in the beginning. Once you have a solid foundation built for creating wealth and are putting away a percentage of your income each week, set about learning a little more about finance and investing everyday. Keep up to date with the business news and learn about different investment products and services. But most importantly, keep moving a little bit closer towards your goal each week and do not ever give up!

The Top Six Ways to Stay Motivated

I receive many emails from people that basically ask the same question: How can I keep myself motivated long term? This seems to be quite a common dilemma for many people so I want to address it because it can be done! Here are my tips for staying motivated:

 Get motivated every day.

Mr. ABC was once confronted about being a “motivational speaker.” The guy said to him, “You guys come and get people hyped up and then you leave and the self motivation goes away. It doesn’t last, and then you have to get motivated again.” Zig reminded the gentleman that baths are the same way but we think it is a good idea to take a bath every day!

It is true that motivation doesn’t last. We have to renew it each and every day. That is okay. It doesn’t make motivation a bad thing. We simply have to realize that if we want to stay motivated over the long term, it is something we will have to apply to ourselves each and every day.

 Have a vision for your life.

The root word of motivation is “motive.” The definition of motive is, “A reason to act.” This is the cognitive or rational side of motivation. It is your vision. You have to have a vision that is big enough to motivate you. If you are making $50,000 a year, it isn’t going to motivate you to set your goal at $52,000 a year. You just won’t get motivated for that because the reward isn’t enough. Maybe $70,000 a year would work for you. Set out a vision and a strategy for getting there. Have a plan and work the plan.

 Fuel your passion.

Much of motivation is emotional. I don’t know quite how it works but I do know THAT it works. Emotion is a powerful force in getting us going. Passion is an emotion, so fuel your passion. “Well, I like to work on logic,” you may say. Great, now work on your passion. Set yourself on a course to have a consuming desire for your goal, whatever it is. Do whatever you can to feel the emotion and use it to your advantage!

 Work hard enough to get results.

You can build on your motivation by getting results. The harder you work, the more results you will get and the more results you get, the more you will be motivated to get more. These things all build on one another. If you want to lose weight, then lose the first few pounds. When the belt moves to the next notch you will get fired up to get it to the notch beyond that!

 Put good materials into your mind.

I can’t say this enough – listen to tapes. I still listen to tapes regularly. I buy tape clubs from other speakers and I learn and grow. Their successes motivate me to get my own successes! Read good books. Read books that teach you new ideas and skills. Read books that tell the stories of successful people. Buy them, read them, and get motivated! Buy great music and listen to it. I just did a spinning class at the club today. Whenever a good song came on I was actually able to get motivated to ride faster! It gets you going and motivates you!

 Ride the momentum when it comes.

Sometimes you will just be clicking and sometimes you won’t. That is okay. It is the cycle of life. When you aren’t clicking, plug away. When you are clicking, pour it on because momentum will help you get larger gains in a shorter period of time with less energy. That is the Momentum Equation! When you are feeling good about how your work is going, ride the momentum and get as much out of it as you can! 

These are the top six ways to stay motivated: 

• Get motivated every day.
• Have a vision for your life.
• Fuel your passion.
• Work hard enough to get results.
• Put good materials into your mind.
• Ride the momentum when it comes.
• These are simple principles, that when you put them to work regularly, will change your life by keeping you motivated all the time! Get going!

Five things to consider before starting your own business

Getting free from dominating bosses and the possibility to make your own decisions is one of the lures of starting your own business. As attractive as it looks, not everyone is suited for self-employment. Before you go ahead with any plan to start a business it is important to take a close look at yourself and ask yourself some important questions.

 1. Do you have enough start-up capital and a back-up income?

It takes money to make money, even if it is only a home business. Make sure that you have enough funds to equip yourself and begin marketing before taking the plunge. Also, don't expect to make a lot of money in the early stages of your business. You will need to set aside enough money to provide for you and your family during the initial start-up period for your business. Consult with other similar businesses and find out how long it took them to become viable.

 2. Are you a self-moving person?

This is the key quality that separates an employee from and entrepreneur. If you need to wait around and be told what to do, then you would find it easier to get a job with a company rather than to launch your own business. On the other hand, if you are able to think of an idea and carry it out without prodding from someone else, then you may be able to succeed in your own business.

 3. Are you willing to work more than a standard 9-5 day? 

When you work for someone else you are contracted to work a certain schedule. At the end of the day, you can often able to just forget about the job, go home and relax. When you have your own business you carry a load of responsibility on your shoulders and you will often end up working longer hours than a normal salaried employee. If you like what you are doing and if your business is financially rewarding then you may not mind putting in a lot of extra hours and working when other people are resting. Once again, there is no "right" or "wrong" here. It is just a question of looking deeply at yourself and finding out what you are best cut out to do.

 4. Is your family ready to back you up?

You may have a great idea for your own business, but before you begin you have to see if your family is ready to support your ideas. If you start your own business there may be an element of risk and an increased demand on your time. Owning your own business and having a lot of responsibility can also be very stressful. It is crucial that your closest loved one, the ones who share your life, also share your vision and will provide the emotional support and understanding that you need in order to be successful.

 5. Are you passionate about the business that you want to set up?

In order to be successful in your own enterprise you will have to be self-moving and you may have to work harder than an employee in someone else's firm. If you do not really like what you are doing you will find it hard to get the inspiration and drive that is required for such a task. Choose an activity that you know something about and choose an activity that you enjoy doing. The ideal business would be one where you have some prior knowledge and something which you enjoy doing.

One thing to remember, there is nothing wrong with being an employee and working for someone else. There are a lot of advantages in terms of job security, steady income, standard hours and other benefits. It is just a question of looking at your total situation and making the right choice. On the other hand, if you do possess the qualities of an entrepreneur and really have a good idea backed by adequate capital and expertise, then starting your own business may be the best thing you will ever do. 

Business Success

Success, they say, is "where preparation and opportunity meet." But how do you define and measure success in your business? How do you know if your business is a success? Can you tell if you are on or off course? If you are off course, what corrective action(s) can be taken?

An important part of planning your business entails knowing the key things that can tell you when you have reached your goals. Called key success factors, these are indicators or milestones that measure your business achievements and help determine how well you are progressing towards your goals and objectives.

Without determining your key success factors, you run the risk of needing to make expensive changes of direction later on as you have not aligned your objectives to the success of your business. You must sit down and think what you really need to do to make your dream business a success.

The process of setting up your key success factors need not be tedious or difficult. Simply ask the question: "What are the key things that, if you do them well, will ensure your success as a business?" Then fill in the blanks the sentence: "If I ______________________, then I will be successful."

Your business plan must contain a list of key success factors for your business. As a small and home business owner, understanding what you must do to make your business a success is the first step to your path to entrepreneurial success.