There Was a Moment When I Thought This Business Ruined My Life – Among Other Things

I have an acquaintance who is living the high life in a big west-coast city. Recently they were forced to make a decision that nearly all of us face at one point or another. The 2008 vehicle they were driving no longer cut it, obviously they needed to up-grade. After all, what do you have if you don’t have appearances? <I hope you are catching my sarcasm, I’m  lay’n it on pretty thick>

Oh decisions, decisions! Will it be the Range Rover? The BMW, the Mercedes, what about an Audi? Ultimately, after long debate, they ended up with the Mercedes.

I have to be honest, I heard about this and I was more than a little jealous.

After all, I am a red blooded man and I happen to have an affinity for automobiles! I started asking myself that age old question that everyone has asked once or twice. I said, “I work hard, how is it that they can get a sweet new car and I can’t?!” It’s not that I didn’t know the answer. The truth is, I know exactly how they can afford it. It’s called a lease.

At this point I was fairly certain that being in the business of wealth coaching had pretty much sucked all the potential happiness out of my life. I can’t go sign a lease because I know it is one of the worst financial mistakes a young person can make!

About the only time a person should ever lease a vehicle is if they can roll up hundred dollar bills and throw them out the window of their leased car while speeding down the highway.

I was feeling bad because I couldn’t use ignorance as an excuse to make bad financial decisions any more. I couldn’t live “the high life” with cool leased toys… I have to own the toys now. I think most of you know why leasing is raw deal. However, If you want to see the math on why a lease is less than wise, let me know. As always, I would be more than happy to break it down for you.

After I stopped wallowing in self pity, the clouds cleared and I realized:

HEY! Knowledge is power! 

Who am I kidding, I have a great life and very nice stuff. Do I have a brand new Mercedes? No but better yet, I get to spread the good news about finding peace with your finances and improving your financial Wellbeing.

If you guys are interested in increasing your knowledge I would love to help. We going to start offering some How-To classes and Financial Peace University here at the office later this summer. I would love to hear from you if you are interested in getting involved in something like this. Let me know!

What if I do Nothing?

I was recently turned on to entrepreneur/writer/speaker Jonathan Fields. He is a former private equity attorney turned lifestyle-entrepreneur and wrote a book in 2009 called Career Renegade: How to Make a Great Living Doing What You Love. Check out his website and read his blog at www.JonathanFields.com.

Obviously Jonathan Fields focuses on entrepreneurship, which I think is cool – but you might be asking yourself what does that have to do with personal finance? A lot actually! You are all entrepreneurs with your finances, think of your financial situation as a small business!

Fields spoke last week at TEDx - Carnegie Mellon University, on turning fear into fuel. Pay close attention to the section where he answers the question “What if I do nothing?” Here is the video of his presentation:

What if you doing nothing about your financial future? It will be a disaster! I love Fields’ quote: “Life applies friction, there is no sideways; there is up and down.”

Project out what life will be like if you do nothing with your finances for 5, 10, and 15 years. Is that scary? You bet it is!

Don’t let your fear of failure, or even your fear of success paralyze you from getting started. Take the first step and start making changes with your personal finances!

Developing Future Leaders

Stew Friedman of the Wharton School posted a fantastic article this morning on the Harvard Business Review blog:

How Are You Developing Future Leaders?

Go check it out!

Learning Algebra

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.”

-Leo Tolstoy

I recently started reading “The Big Short” by Michael Lewis, a book about the collapse of the American economy in 2008. The quote above is found on the first page. It really blew me away, it is so simple yet terribly profound.

I remember my first day of Algebra in 7th grade. Mr. Nylin, who still teaches at my old school, melted my mind with ideas of polynomial functions and quadratic equations. Before Algebra all I knew was arithmetic, I had mastered the multiplication tables and I could do long division with the best of them. All these new rules were completely foreign to me! My mind was moldable and I could accept the information that was being taught because I had no prior understanding of what was going on.

It’s too bad that they don’t start teaching personal financial management in 7th grade.

I got my first job in 8th grade, I was a bagger at the local grocery store. It was the first time I had my own money – it wasn’t much, but it was mine. This was where my first experience managing money started.

They didn’t offer a class at school on how to set up a budget, no one told me why I should save some of the money that I earned, and I didn’t have the internet to get some tips on improving my financial position. Until I was in college, everything I knew about money, I learned from making my own mistakes and watching other people make mistakes.

I get to chat with people everyday about their financial decisions. It has become clear that, in general, when someone has some experience managing their finances they become set in their ways - even when a change could serve them well. It is a challenge to convince people that it would be a good idea to change the way they have been managing their money… for the last 20 years.

It is important to know what you know and know that you know it - but the world wasn’t flat.

Be moldable, when someone is presenting you with some new information that contradicts what you have thought or done for the last 20 years, give it a chance. At a minimum you will be able to get a better understanding on your current process and who knows, maybe you will be able to improve your current situation!