Dealing With Unexpected Expenses (Hint: You NEED an emergency fund)

FF_Tires$714.20! That’s how much new tires cost on my wife’s vehicle yesterday. Not too long ago we would have had to put the tires on the credit card and pay them off over time…a few years time. By then the tires would have cost over $800 when you add credit card interest.

Fortunately, we now have plenty of money set aside in a bank account for just such an occasion. No panic. No worries. Just a “What a bummer” and on with the day. We do still charge the expense on the credit card (don’t want to miss out on Discover Card’s cash back). The difference is we pay our card off in full every month so there’s never any interest.

The thing about unexpected expenses is…you kind of have to expect them. Maybe unplanned is a better word. Life is unpredictable. When it comes to a house, car, pets, kids or health—things break. And then they need repaired or replaced. And either solution costs money. Having a cushion of cash won’t protect you from everything life throws at you, but it does allow you more options.

A little trivia:

Talking about credit cards and automobiles got me all nostalgic. Becky and I bought our first car as a married couple on a credit card. We didn’t have any money saved up(in fact we were deep in debt as we worked our way through college). But we received one of those credit card offers for one year at 1.9% or something like that. The card had a limit of $5,000. When our only car(my first) broke down for good, our friends drove us to the Honda dealer and we picked out a car that we liked—and that was in the ballpark of our limit. The sales manager had to squeeze the card pretty tight to get the whole car plus taxes onto that card. And off we went…$5,000 deeper in debt with a used Honda Accord to get us to classes and jobs.

So glad we don’t have to squeeze purchases on to a credit card any more. After a lot of work and MANY lessons learned the hard way, we have a pile of money in the bank that we can use to cover the unexpected bills and also take advantage of unexpected opportunities (like the 2008-2009 stock market—but that’s another story).

One of the biggest money mistakes people make is not building an emergency fund. If you don’t have one, start today…buy a frozen pizza instead of takeout and put the $10 difference in a separate savings account. You’ll begin to taste financial freedom immediately.

Alternative Education

Education of a Wandering ManMy brother Seth recommended a book to me recently, which I then read and thoroughly enjoyed. The book was Education of a Wandering Man by the author of so many great Western books, Louis L’Amour.

Throughout Education of a Wandering Man, L’Amour tells stories of his “education” and how he came to be such a good writer. His qualifications didn’t include a college degree or even a high school diploma. Education doesn’t only come from school. In fact, many things are best learned outside of school.

L’Amour dropped out of school at 15 years of age and traveled the world. He picked up any odd jobs he could to earn money along the way—not an easy thing in the 1920’s and 30’s. Since he was able and willing he found work as a ranch hand, miner, sailor and sometimes amateur boxer. He traveled extensively in the western part of the United States as well as overseas. He often asked locals about the history of the area wherever he was. He listened to the gunfighters, lawmen and cowboys who had lived the stories of the Old West firsthand. He explored the towns, mountains and country sides of those old stories. This level of immersion into history and geography helped him write incredible, page-turning novels later in his life. L’Amour said, “No matter where you go, east, west, north, and south, there are stories. People are forever asking me where I get my ideas, but one has only to look, and to live with awareness. All men look, but so few can see.”

Another way L’Amour continued his education was reading. He had books with him wherever he went. He frequented libraries and also spent some of whatever money he earned along the way to buy books. He often read over 100 books per year. By the time he wrote Education of a Wandering Man he had amassed a personal library of over 10,000 of his favorite books. Of course he also wrote 86 novels, 16 short story collections and 3 nonfiction books of his own! Not bad for a high school dropout.

Here are a few more Louis L’Amour quotes to think about this week:

  • “A book is less important for what it says than for what it makes you think.”
  • “One becomes a writer by writing.”
  • “I do not believe the human mind has any limits but those we impose ourselves.”

As you probably know by now, I’m a huge advocate of books, lifelong learning and self-education. I partially credit Louis L’Amour books for my love of reading. I read many of his novels in high school. I also read the Narnia books, Hardy boys, Nancy Drew and a smattering of non-fiction. Any kind of books are useful to get a person into the habit. I now read a ton of non-fiction(18 books so far this year). I’d like to tell you that I gained my financial freedom by reading books. But sadly, I dragged my wife through many lessons the hard way. Don’t follow my path, follow my advice. Read the books. There are MUCH easier ways to financial freedom than the challenges I took on. As L’Amour says of learning the hard way, “I believe adventure is nothing but a romantic name for trouble.”

Productivity Tip #22: Choose Your Friends Carefully

Ben Franklin's Guide To ProductivityThe following is an excerpt from Ben Franklin’s Guide To Productivity–the new book I posted on Kindle this week. I hope you find it useful food for thought.

Choose your friends carefully

The rotten Apple spoils his Companion. [Poor Richard’s Almanack, 1736]

Just as one rotten apple in a bushel basket will soon cause other apples to become rotten, so one rotten person will soon cause other people around him to be rotten.

This affects our productivity more than we realize. If we hang around successful people who are busy improving the world or at least their world, we’ll be more motivated and likely to be busy improving our world. If those we hang out with aren’t very motivated, optimistic, or hard working, it will be very hard to stay motivated, optimistic and on task. We won’t receive encouragement to keep up the good fight. Quite the contrary. They won’t understand why you would want to work hard or why you don’t share their perspective on things. Slowly and often subconsciously, we begin to adopt the viewpoints of our peers.

Stay away from rotten apples. Instead, intentionally seek out like-minded people to spend time with. You’ll advance your career much faster and have more fun in the process. You’ll get far more done, and your new friends will help keep you on track by challenging you to work on your most important and valuable priorities.

As Jim Rohn said, “You are the average of the five people you spend the most time with.”

Action: List your current five closest friends. Are they helping you move toward your goals? List the five people – you may not know them yet, so feel free to list the characteristics – you need to surround yourself with to be more productive. If your two lists match, congratulations. If not, figure out how to spend more time with people on the second list.

At long last…another book

Ben Franklin's Guide To ProductivityI’m not starting the year as quickly as I had hoped in the writing area. I’ve had this little book written for a few months and finally got it cleaned up and uploaded to Amazon. Same format as Ben Franklin’s Guide to Financial Freedom. Short chapters to give some food for thought each day. If you haven’t read that one, shame on you! Just kidding. Your procrastination paid off. This week (Monday through Friday) Ben Franklin’s Guide to Financial Freedom kindle version is free on Amazon.

While you’re at it spend the $.99 for Ben Franklin’s Guide To Productivity and let me know what you think. Better yet, leave a review on Amazon and let everyone know what you think.

Have a great week!

Don’t Be A Dabbler!

Adam Trent picture

I finally found my theme for 2016. While watching an Inside Quest video this morning, I heard Tony Robbins say “don’t be an f’n dabbler!” and I was instantly convicted. If that quote offends you, try this one from the Bible…”whatever thy hand finds to do, do it with all thy might.”

In other words, don’t be a “jack of all trades, master of none.” I’m guilty of this WAY TOO OFTEN!

In this same interview Tony Robbins goes on to say “There’s a power in mastery.” He talks about how progress equals happiness. If we stop every time something gets difficult and don’t continue progressing toward mastery we’ll never find happiness. Mastery takes real work. Real work keeps going past the easy parts. Hours upon hours upon hours of practice.

Last night I had the privilege of watching someone who has mastered his craft. My family sat in the front row at an Adam Trent show. Adam is a very talented illusionist and entertainer. Adam has been practicing his craft for years and years. One result is that he captured the attention of hundreds of people in the audience. Ninety minutes seemed to fly by in an instant. Another result of his hours and hours of practice was that his slight of hand acts truly seemed magical. As I watched trick after trick from only 15 feet away I couldn’t figure most of them out. Even the ones where I knew what he was doing were nearly impossible to detect. In fact, in one act I was right on stage with him with the cards in my own pocket and missed the switch. The number of hours required to pull those tricks off and then more hours necessary to be an entertaining presence on stage are mind boggling. He did say he didn’t have girlfriends in high school. He wasn’t dabbling in magic. He was and is all in. Sacrifice is required to be a master of anything. But there are rewards. A line of people after the show wanted pictures with him. They waited so they could thank him and buy his DVD’s. And that was just in our little town. He’s on Broadway now.

What will you master?

  1. Find something worth throwing yourself into. Something you’ll stick with through the tough parts.
  2. Model the best. Who has mastered something you respect? How did they get there? Personal development philosopher Jim Rohn said, “success leaves clues.”
  3. Stay at it. Keep progressing. Bill Gates says, “most people overestimate what they can do in one year and underestimate what they can do in ten years.”

What will you work on that will move you closer to financial freedom and living the life you choose?

New Year’s Resolutions…Easier Said Than Done!

Happy New Year (1)This week I’m working to finalize my next little book, Ben Franklin’s Guide to Productivity. The following is an excerpt from one of the chapters:

Easier said than Done

‘Tis easy to frame a good bold resolution;
But hard is the task that concerns execution. (Poor Richards Almanack, 1743)

New Year’s resolutions have become a joke in many circles. We have the best intentions when we make the list of tasks we’ll accomplish, the amount weight we’ll lose, the books we’ll read, and the people we’ll meet. Sadly, by February most of us have completely given up and forgotten all about those resolutions.

If you struggle with implementing your New Years’ resolutions list, try the following at the start of a new year—or at any time of year.

I start by choosing the one thing on my list that would mean the most to accomplish, and which I can accomplish in a relatively short period of time. I have big goals like becoming a millionaire, rearing kids who grow to be well-adjusted, independent adults, and spending winters in Florida, but most of those big goals make lousy New Year’s resolutions because they can’t be accomplished within a few months!

Sometimes I have a few goals for my career, my finances, my family, etc. Some people use complex philosophies or formulas to select goals for different areas of their lives. They then pick goals for each. This is too much for me. I find more than three goals at a time is too distracting. One main goal is best for me.

I like using the SMART acronym for testing my goal:

Having pictured a successful outcome and assigned a timeline, I dive in. Ideally the goal is something I can take action on at least once a week. If possible, break tasks down to daily actions. This keeps positive momentum going. Do at least one thing to move your project forward each day.

The other tip that works well for me is to have someone you can talk to at least once a week who will encourage you, sometimes kick your butt, but never discourage you from finishing your quest. You have to be very careful about this. Even your best friends can get jealous if you’re taking on new challenges and growing. They may not intend to, but they may say things that will cause you to lose excitement about your goal. If you ever find that happening, IMMEDIATELY find someone else to keep you on task. You can talk with that person about other things, but you have to know who will push you forward and who—even subconsciously—wants you to stay where you are and who you are. This has been a big one for me. Seems like so many people have a vested interest, directly or indirectly, in our decisions. Listen politely, but trust only yourself.

If you pick resolutions you are passionate about, you CAN and WILL execute. After you have a few of these under your belt, it may begin to be addictive. You will be a Get It Done person!

Action: Take the time to think through some things that you’ve been wanting to do. What would move your big goals forward? Pick something that would push you to get it done in less than a year, but that is realistic. Now come up with a plan to make that project happen by your due date. Break it down into milestones if necessary. How will you celebrate achieving this goal? Take action!

Six-month Goals

Thank you so much for taking the survey and replying to my question last week about whether or not to share goals publicly. The overwhelming response was “share selectively.” Specific comments included:

  • “Sharing gives you support and accountability. But with those you have relationships with, not the world.”
  • “It depends on the goals. Some it helps to be more open with (weight loss), some it may be better to keep closer to your vest (some financial info, some personal goals or family goals).”
  • “’Test market’ your ideas to people you trust, get feedback, refine, and then test again to a larger audience.”
  • “If you’ve agreed with another individual(s) to tell each other your goals and hold each other accountable for achievement of those goals, it seems like a good idea. Otherwise, it does open the door for unwanted criticism beforehand or loss of credibility afterward if you fail to attain announced goals.”

Based on your feedback, I’ve decided to test by posting a couple of my six-month goals here. Six-months is a timeframe that allows realistic, achievable goals. I have ideas about what I’d like to accomplish or where I’d like to be in five years, but life happens in unexpected ways. It’s difficult to follow that long a path step by step(at least for me). So here are a couple of my six-month goals…

In six months I will have:

  1. Written and published 5 mini-books. Having spent so many years in the publishing industry, it’s been fun to begin experiencing the author side of the publishing equation.
    • I’ve already put one out…Ben Franklin’s Guide to Financial Freedom
    • The second will be available this month…Ben Franklin’s Guide to Productivity
    • That leaves 3 more to write and publish in the next 6 months. A doable goal. Now that I’ve told you, I’ll be sure to hit that goal.
  2. Written for 6 blogs or magazines. One strategy for gaining credibility as a writer as well as growing the list of people to communicate with regularly is to write for other blogs, magazines and websites.
    • This will be more of a stretch. At this point I’ve written for exactly 0 outside of my own blog.
    • I’ve learned some different tactics from Sue Anne Dunlevie and Kimanzi Constable. Now I’m ready to practice what they teach.

What goals are you working on? At least the ones you’re comfortable sharing.

Goals: Public or Private?

In reviewing 2015 goals and laying out 2016 goals, I’m hearing and reading many respected business people say that publicly stating your goal provides motivation and accountability. I’ve also read that the opposite is true—that if you tell people your goals they’ll shoot holes in your ideas and discourage you from moving forward. I’m debating which tactic is best. In fact, I had a blogpost written outlining some of my six-month goals, but didn’t pull the trigger to post it.

Question for you—is it better to share with the world or keep your goals to yourself?

Create your own user feedback survey

The Dark Side of the Holidays

Devouring the pie

In the midst of all the holiday cheer, an evil lurks. A villain awaits, knowing you’ll slip up on your diet, your budget or the new habits you’ve worked so hard to set up this year. The enemy will be there to remind you each time you slip. The nagging will begin during the long Thanksgiving weekend. At first the voice will sound comforting, like a friend saying, “with the incessant commercials and sales fliers and feasts, of course you ate a little extra and spent a little too much.” And “how could anyone avoid spending money on Black Friday and Cyber Monday.” And suddenly we’re in December, life is a blur of holiday parties, decorating, shopping, baking, eating and gifting. No time to catch our breath, no time to reset our habits.

One morning in early January we look in the mirror, our checkbook or scheduling calendar and feel terrible. That voice in our head is now telling us, “see this happens every year. You just don’t have what it takes to be healthy and wealthy. Give it up.” We fight back by making a list of what we’ll accomplish or change in the new year. Unfortunately, most of our New Years Resolutions don’t make it past March.

Sorry for the downer heading into Thanksgiving. But it’s true, right?! What can be done?

  1. Know this WILL happen. You know it will. It’s a month and a half of events and visiting and emotions. Walk through in your mind the temptations you’ll be up against before each event. If you know that the enemy will be there you can prepare to win.
  2. Plan ahead of time which parts of the party mean the most to you. If you have a soft spot for pumpkin pie, rather than fight it, plan to have a piece. Look forward to it all day. If you love spoiling your kid with gifts, pick one that you know she’ll be ecstatic about and decide to spend money on it. You flip the program in your head when you consciously decide to do something. By planning it out ahead of time, you shut down that nagging question of “should I or shouldn’t I?”
  3. You’ve been looking forward to the pie. You’ve decided to indulge. Savor every bite. Don’t feel guilty. You’re not breaking a commitment. You’ve made a conscious exception. Don’t just enjoy the pie. Enjoy the whole day. Be present with your friends and family. You might just learn something.
  4. Positive self-talk. The thing about that internal grinch that interrupts the holiday magic with well-timed jabs about how terrible we are at keeping our promises is that we can convert him. We can get his heart to grow a few sizes. Continually feed your mind positive quotes, inspirational books and reminders of the best parts of who you are and who you are becoming.

Remember that most of us overestimate what we can achieve in the short-term and underestimate what can be done long-term. Your decision to be financially free or physically fit is a lifestyle decision. You won’t become wealthy or fit in an instant. Small decisions over time define us, shape our bodies and determine our financial status. We WILL frequently slip up, get off course and make mistakes. When this happens take a deep breath, forgive yourself for being human and get back on track. Long-term you’re on track for financial freedom. You ARE on the path to living the life you choose. Don’t give in to the dark side!

Oh, and enjoy Thanksgiving, Christmas, Hanukkah and New Years!

15 Tips if You’re Starting Your Own Business

Zig Ziglar quote on EntrepreneurshipIn the past few weeks I’ve had several conversations with friends who are starting their own businesses. I think that’s fantastic and always have ideas for them. These tips are for people who have already jumped in. If you told me you were just considering your own business I’d have a different set of tips. When run correctly, businesses can provide their owners tremendous financial freedom. Run badly, they can suck up time and money. Here are a handful of tips to get you started on the right foot. I can go deeper and give detailed examples on any of these if you’d like. Comment below for further discussion.

  1. Getting Profitable Sales is your #1 priority. Invest your time accordingly. All other activities take a back seat to getting sales. Profitable sales. No time to surf the net. No time to watch cat videos on Facebook. You need sales to fund your new business.
  2. Build a website. You need something simple that describes who your prospect is, what you do to help them and how to sign up to learn more. Your website is your hub for collecting leads and disseminating information. Having a Facebook page is fine, but you don’t own that. Facebook changes the rules often. Don’t get caught not being able to communicate with your customers and prospects. You need a website on your own domain and you need a customer list that you own.
  3. Be clear and effective, not just fancy. This goes for your website as well as your fonts, logo, business cards, signs, office space, advertising, etc. It’s not about being artistic. It’s about profitable sales. After you’ve grown, if you want to spend frivolously on vanity signs and business cards for “branding” be my guest. Just don’t show me. I have an aversion to money being flushed down the toilet.
  4. Use a lead magnet. Lead magnets are used in online marketing to attract readers to sign up for an email list. A prospect will give you their email address in exchange for a report, infographic, video or ebook that you’ve developed to as a valuable tool for them. The same concept works offline. Create an informative video, report, etc. for those who come to your website or request a mailing. Then use a one page flyer or even a business card to attract physical contacts to your website where they sign up for the free gift.
  5. Set up a follow-up process for your prospects. Load their contact information into your spreadsheet or Customer Relationship Management (CRM) software. Send them the Lead Magnet. Then follow up with an email or letter. Give valued information several times before pitching a sale.
  6. Create ongoing relationships with your customers. Just as you scripted out a sequence of follow-ups with your prospects, you’ll want to add value to your customers. Put them on a regular mailing list to receive valuable information in a newsletter. Thank them for their business. Maybe a hand-written postcard. Birthday cards. Donuts. Or some other care package. The little, consistent touches mean a lot.
  7. Consider a reduced rate for guinea pigs. You’ll need to test your systems, find the flaws and streamline before you roll out your product or service in a big way. Find a few folks who will let you test on them as your first customers. Then give them your best. Give them extra love.
  8. Deliver amazing customer experiences. How can you go above and beyond what’s expected to delight your customer? Do that.
  9. Collect endorsements. Social proof is extremely persuasive when a prospect considers your offer. Now the extra care you gave your guinea pigs will come back. Get well-scripted endorsements from clients as quickly as you can. Highlight them on your website and in all your marketing.
  10. Publish content that your prospect finds valuable. Videos, podcasts, articles, even social media posts will work. The key is finding your ideal customer and posting content in places she’ll find it. You can probably reach your prospect through one of these channels: chamber of commerce newsletter, rotary club meetings, newspaper articles, trade journals, complimentary websites or blogs. Remember the content must add value to your specific prospect.
  11. Only spend marketing dollars in high-return venues. That means direct response advertising, not branding. If you use billboard advertising it must have a clear call to action (CTA) and you must measure the results against the cost.
  12. Test everything before rolling out (or nixing). Must businesses won’t get great ROI from billboard advertising. But that doesn’t mean you shouldn’t try. Test a unique CTA, measure and you might be surprised. Test newspaper ads. How many responded? What was your profit on those sales vs. the cost of the newspaper ad? If it was a successful test, put ads in other newspapers. Test the ideas you have that you “know” won’t work AND test the ideas that you “know” will be successful. Sometimes the exact opposite of what you thought works. You’ll be glad you tested before rolling out an expensive campaign.
  13. Find or form a mastermind group. Being around other ambitious entrepreneurs is motivating. Entrepreneurship can be lonely and non-entrepreneurs don’t understand what you’re going through. As I mentioned in the Mentoring article, be discerning. Not everyone in business is optimistic, helpful or strategic.
  14. Stay focused. Commit to 12 months of eliminating distractions and prioritizing success. Go all in on your new venture. Evaluate periodically but don’t get distracted before you’ve given all you have to THIS venture.
  15. Watch your checkbook. You didn’t think I’d skip the money part, did you? It’s easy to get caught up in the daily activities and ignore the unpleasant (for most) task of keeping up with the money flowing in and out of the business. Just remember…Cash IS King.

Best wishes on your new business. May it enhance your financial freedom and the life you choose to live. If you have specific challenges or struggles, feel free to bounce them off me. I love talking to entrepreneurs about their businesses!

Also, comment below if you have tips to add or questions about the ones I’ve listed.