Archive for the ‘Economic motivation’ Category

Plant Your Tree Today

Take the narrow road- Be wise!
By
Mike Haswell, founder Storing Treasures

“The wise man saves for the future but the foolish man spends whatever he gets.” Proverbs 21:20

I recently counseled with a couple that recently graduated from college and were getting married. It was a real blessing to be able to talk to a couple that had a blank slate when it came to their finances. We had an opportunity to discuss how decisions they make today will impact, positively or negatively, their impact on themselves and their world tomorrow. One of the main areas in which this is so true is the importance of saving for their future.

According to the Employee Benefit Research Institute, 46% of all Americans have less than $10,000 saved for retirement and 33% of all households end up completely dependent on Social Security.

The good news is we don’t have to become those statistics. Let’s consider three key principles that are taught and how it affects us in our financial planning:

1. Steady plodding. Being diligent with your finances means to allow it to grow over time. A systematic savings plan allows compounding to grow your savings and time is the key ingredient for success. Consider these statistics: Person #1- One 21 year old person invests $1,000 for eight years and stops at the age of 28. The investment: $8,000. Person #2 begins investing at the age of 28 and invests for 37 years until the age of 65. The investment- $37,000. When they both turn 65, who has the most money in the bank? Incredibly, person #1 has $50,000 (assuming an 8% return) more than person #2. Start saving now- it is never too late!

2. Diversification- Ensuring that you do not have all of your eggs in one basket is crucial. First, do not have all of your funds in either short, medium, or long range investments. You should have each of these types of funds in your financial plan. Secondly, do not have much of your assets tied up in your company stock… not only would your investment plan be tied up in one set of investments but a downturn in that sector could cost you your job as well. Finally, get involved in different sectors in the economy to diversity your portfolio.

3. Avoid risky investments- A good financial planner clearly points out the danger of speculation while investing. Marriages and families have been destroyed over the violation of this principle. There are two clear guidelines. First, if you do not understand the investment, do not participate in it. Secondly, if you must do it quickly, run away from it. You can make many more mistakes by acting quickly than as a prudent saver or investor.

Small amounts can grow significantly over time and we can sleep easier at night knowing we are following a basic tenet of good stewardship and preparing for our family’s future!

For more information on how to analyze your expenses and financial principles, contact us at: www.storingtreasures.com

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Taking the Plunge

There was an interesting article recently from Steven Pressfield called “Poof Goes the Middle Class”, an interesting excerpt. “People are becoming entrepreneurs”, the mind-set of the employee is vanishing like the factory where it was born. It has to. We’ll all die if we wait for some force outside ourselves- business or government- to bring us jobs or teach us who we are or how we ought to live. We have to invent our own ways, and that’s just what we are doing.”

That really got me thinking. I’ve counseled many people on taking the plunge as we review their financial situation. Not all of us are looking to leave our steady paycheck but it always pays to keep our options open. As we enter the holidays and review where we are and where we want to go, here are some practical steps to exploring going out on your own.

WHAT is your passion? That is really the driver. Get a book entitled, “What color is your parachute” by Richard Bolles and begin investigating your strengths, skills, and abilities. Don’t make assumptions that you have nothing to offer. Read about what you love… is anyone else doing it? How can you bring a unique perspective to it?

ASK- Go to potential customers first and make sure that there is a need to fill. Take it from my early mistake- creating something that you just hope will fill a need is a recipe for disaster. Go to ten potential clients/customers and see if your idea both fills a need AND is unique. If you get a positive response, you are on the right track.

START on the side- Don’t quit your day job. Go to Score.org on putting some meat behind your plans. Build contacts and test drive your new idea. Don’t be in conflict with your current job… your current employer deserves better than that. But, taking your free time to create this on your own is a great way to get started.

BUILD up some savings. You will need a runway. Planning is key. Luke 14:28 says it best.”Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it?” Set up a business plan, reduce expenses, and set goals for yourself, ie; “In one year, I want my side business to be making at least 50% of my expenses and have 6 months of business and personal expenses in the bank before taking the plunge.” Remember- if you fail to plan, then you plan to fail.

BUILD family support- If you have a family, make sure your spouse and kids are on board with you. This is an important step and requires a lot of hard work and sacrifice… especially if you are doing it as a side business and testing the waters.

BUILD a very solid contact base- this is where your business will come from at the onset. Build credibility, a good reputation and fill a need.

If you are looking at considering going out on your own, I’d enjoy hearing from you about some of your own personal excitement and challenges.

Mike Haswell
President
Storing Treasures
mike@storingtreasures.com

Your Economic Motivation

 

motivation  

The American Psychological Association completed a study about issues that cause significant stress in our lives. An incredible 76% of those surveyed indicated money was at the top of the list of significant stresses and relationships were second at 55%.  So, how do we begin to tackle the first rung of the ladder to become motivated to make positive financial changes in our lives and then SUSTAIN that momentum over the long term?
 
Motivation is a term that refers to a process that elicits, controls, and sustains certain behaviors.  I have had the opportunity to financially counsel singles and couples for over 20 years and have learned both the importance of motivation and key principles to stay engaged over the long haul. Listed below are seven of the most important  principles to remain financially motivated.

 

1. Understanding your role-  Have you ever worked at a job where you were confused about your role and seemed unable to motivate yourself to perform at a high level?  Understanding our role as stewards  can be one of the most rewarding and motivating aspects of the Christian walk. Take a moment and read Matthew 25: 14-30. MT 25: 14 states “The kingdom of God is just like a man about to go on a journey; who called his own servants and entrusted his possessions to them.” 
– We are managers and not owners.
– God has entrusted us with resources (talents).
– We are expected to manage those resources based on HIS principles.
 
Once a stewardship mentality is understood, motivation to make changes becomes an important part of our daily lives.
 

2.  Understanding your financial personality-  In my years of counseling, I have yet to find a more powerful motivator to improving financial success than understanding financial personality. The focus here is on grasping our unique wiring and then realizing how we think and behave matters in being a good steward and reaching our financial goals. We need to eradicate the shame, guilt, frustration, (put your word here) by moving past what we SHOULD do and focus on WHO we are. More to come next week on this topic in “Your Economic Identity.”

3. Focus on the “why”. The first step is to focus on the “why” of our values and goals instead of the “how. Julia Belyavsky Bayuk, an assistant professor at the University of Delaware, cites research that planning exactly how you will reach a goal, such as paying down debt, can actually make it harder to reach that goal if you dismiss the “why” behind it. For example, if you run off to complete a budget because you are overspending but do not focus on “why” you overspend, the positive effect and motivation to continue will be short-lived. The budget is just a tool…nothing more. Your first focus should be on your behavior. As you are getting started, focus on the motivation behind a goal first before the goal itself.    

 

4.  Dream- Begin with the end in mind- Take a few moments and answer this question. “10 years from now, the dream for my family’s finances is _____________.  Take some time and list out some of your dreams for your family finances. Include your spouse (if married) and complete a list together. Think big- don’t be constrained by where you are today. Then, post that list of dreams in a place that will inspire you to reach for the stars. Vision is one of the most important motivators we have…lets use it with our money!

   
5.   Embrace your circumstances- Circumstances in our lives can be a very powerful motivator to making changes. It could be the realization that you cannot do this any longer; it could be a bankruptcy or foreclosure; it could be that you are just tired of living paycheck to paycheck. Pain can be a very powerful motivator….if this is your story, embrace it and use it to make long lasting changes.  Your finances may not be in trouble but just on autopilot and you want to change your financial life for the better. Many of us have seen financial freedom modeled by friends or family and a simple motivation may be reaching out to that person for some support.
 
 6.  Create milestones and goals-    If you want to stay motivated to succeed with your finances, goal-setting is a must. Without goals, you lack focus and direction. Goal setting allows you to take control of your life’s direction and purpose. Luke 14:28-30 clearly states the importance of goal-setting. The key point is to do this by understanding your unique wiring. Goal setting and financial personality is an important part of our teaching so contact us if this is an area you want to explore. Remember- there are plenty of tools that help you set goals….our focus is on the behavior that will allow you to stay motivated long term.
 
7.    Track your progress-  Think of changes to your financial health as a marathon and not a sprint. Many of us did not get into financial strain over night and we will not get out of it that quickly either. However, the long term benefits to realizing your dreams and being financially free is an awesome journey you will never regret. So, how is this done?  One of the best ways to evaluate the long term impact of your financial focus is your net worth. List your assets and liabilities today and calculate that number. Then, estimate where you will be a year from now based on the changes you are implementing in your life. Continue evaluating where you are at least twice a year to see if you are moving forward.
 
“An object in motion will remain in motion and an object at rest will remain at rest unless acted upon by an unbalanced force.”  You are that force- get motivated to make a difference!
 
We’d like to hear from you- how do you get motivated in the area of money?
 
 
Looking forward to sharing about Economic Identity next week.
 
Blessings,
 
Mike