MoneyWatch101

Failure is not an Option Series II

In this series you remember I said to first try something and if you fail then your a better improved version of yourself. See previous post-Failure Series I Why you ask? Because you attempted something that was out of your comfort zone, you didn’t settle with the usual and that is what sparks improvement from within.

Granted nobody wants to fail in life and I would never wish failure upon someone, but without entering the game you will not know if you will succeed or not. What I am attempting to express to everyone with this sports metaphor is that time is ticking and it will not stop for you. Every second wasted not applying yourself towards your future desires / goals is a travesty in disguise.

Why is it in disguise because if you do not attempt it nobody will ever know the idea you wanted to take that is still stuck in your mind. I have been hearing the word legacy lately and it is filled with massive pressure being placed on many individuals to make something out of their lives as they were destined to do. Every attempt you make towards your dreams is a step closer to a better more improved you. This can be applied to any area of life for example, financial, relationships, career wise, etc. How am I doing all that can be done to avoid failing? By doing the baby steps towards all my goals and by coaching others to do better for themselves. See below my 5 steps on how to help others in this failure is not an option mentality.

One of my dreams is to help others realize their hidden potential. Why you ask?

1. It is a part of who I am. Teacher at heart for anything relating to finance and self improvement.
2. Success breeds more Success- If I share with you something that can potentially make you successful then my efforts will someway be reciprocated back to me. (Sort of like Karma)
3. I honestly like being a part of success stories and if I contributed to that then I am better for it.
4. If I am open with you then I hope a more successful person will be open with me and share some of their past success stories.
5. It feels great to help others. Especially educate others on avoiding major errors you once made in life.

Comment if you relate to this failure is not a option mentality. I would ask you to also offer up any ideas of your own on how to avoid losing it all and failing at life.

RichUncle EL

Friday Financial Quotes IV

I wanted to share with you a few quotes today and hopefully this will get you motivated to start the weekend right. These financial quotes will help you get motivation in your life, whether it may be you are working a part-time / side job, looking at growing a business, taking care of a real estate property, or attempting to save a number of pesos this weekend by not making it rain in the clubs. Either way I wanted to share with you these excellent quotes and you guys can take the message any which way your mind desires.

Friday’s Best Quotes:

1-Money is easy to control, but do not let it control you. – RichUncle EL

2-With every passing year you have lived, If you do not have at least a thousand per year saved then you are behind. – RichUncle EL

3-That is where the power, opportunity, and choice come from-when you have money. Money equals opportunity. There is no question.-Billie Jean King

4-With the money I’m making, I should be playing two positions.-Pete Rose

These quotes are all great in my opinion because they invoke the good and bad side of money management. A lot of people who have means to do better for themselves do not go about handling money the right way for example Pete Rose stated the last quote. If you recall about a few years ago he admitted to gambling away a large portion of his nest egg and if he was really smart he would have his whole family set for life, but unfortunately he mismanaged it by not doing right by his money. He is now banned from the Hall of fame for his actions. I hope you can see how powerful quotes can be eventhough a quote might not be relevant to your life it could be to somebody elses life. That single spark of motivation can come from when you least expect it.

Friday Favoite Posts of the Week:

-Making Sense of Cents-Dollar and Cents (Guest Post by Me) http://www.makingsenseofcents.com/2012/06/dollars-and-cents.html

-Mr. Money Mustache-I just gave up 4000…http://www.mrmoneymustache.com/2012/06/21/i-just-gave-up-4000-per-month-to-keep-my-freedom-of-speech/

-Dividend Growth Investor: Crossover Point http://www.dividendgrowthinvestor.com/2012/06/my-dividend-crossover-point.html

Happy Friday and I hope you can find the motivation to keep up with your goals no matter what life throws your way.

Always watch your money because somebody has to do it.

RichUncle EL

Top 10 things that Impede Money Growth

Top Ten List:

1-Not having a budget

2-Having a shopping addiction

3-Spending more than you earn

4-Having a Gambling problem

5-Not changing bad money habits

6-Being addicted to vices (alcohol, cigarettes, drugs)

7-Having a small vision mind frame

8-Not investing in a retirement plan

9-Debt

10-Keeping up with the Joneses

All of these things will stop any inkling or possibility of growing your piggy bank. Money as I have mentioned before is a vehicle that needs to be steered in the right direction. A wise man once told me to see the big picture of everything and also that the little things in life add up to make a big difference. For example I know some people who do not invest or increase gradually their 401K employers retirement account because they feel that somehow the government will restrict full access to this money in the future. That is in my opinion somebody not seeing the vision compared to a financially minded person. Granted we can not predict the future but I can bet that the people will not let the government just raid our retirement accounts. (Social Security is another topic and could get crossed out of the retirement equation in a decade if they do not fix the system.)

If you notice the list above you will see all the negative barriers that we sometimes place on ourselves for various reasons. If you can successfully go through each list item and not be affected by any of the ten things then you are definitely winning in the money game. Just to get a bit personal and disclose to all of you the list items I have overcome as I used to mismanage my money for a few years. I am guilty of list items 1, 2, 9, 10, but now I am cured. The problem I remember I had was that I didn’t really feel like nothing was wrong with me because if I spent money most of the time I saved money on the flip side, thus being in denial. I was always a saver even though I was a shopaholic of watches and sneakers. Two wrongs don’t make a right and I had four wrongs.

If you could be so kind, let us know what list items you have been plagued by or guilty of and have been cured of in a comment below.

Watch your Money !

RichUncle EL

Would you rather a house or a condo?

Lately I have been talking to several people and they have asked me this question over and over. I tell them the same thing, It depends on your situation and how you want to live. Let me further explain and break down my own consideration analysis based on the question above.

House or Condo Considerations:

1.   What lifestyle do you want to lead? (A plot of land with a house or apartment in a building?)
2.   Take into consideration maintenance fees for both situations. (One is forced on you and the other is at your leisure)
3.   Cheaper Price or more Square Footage? (Condos cheaper and houses more living space)
4.   Have to consider all the rules and regulations associated with Condo Living. (Rules or no rules)
5.   Do you entertain a lot? (Another negative for condo living as neighbors might knock on your door)
6.   Hate to cut grass or shovel snow? (A negative for house purchases)
7.   If you move how easy would it be to resell or rent out the property? (1000 monthly maintenance= hard sell)
8.   Do you require a lot of Storage needs? (Condos do not come with Basements)
9.   Additional costs for a Condo: Parking, Laundry-Coin Operated, Staff Bonuses, and Gym Memberships. (If not included in maintenance fees)
10.  Additional Costs for a house: Taxes are higher, Utilities higher, Water expense is based on your consumption, if something breaks then you are fully responsible for replacement costs.

These are the major considerations that should be weighed to determine if a house is for you or if a condo is best for you. People with demanding schedules and high work related stressed individuals prefer condo living above house living for obvious reasons. Do you have to fly constantly for work and live alone ? I would suggest a condo for this type of person. One Caveat is any new bylaws or regulations the board decides to place on the building then you have to abide by it. Are you single but would like extra income from renters? A house will get you the best bang for your buck. Do you want to be in the an urban area in close proximity to entertainment? Condo living is best for that type of person.

I guess I am a bit biased as I am a family man with a desire to buy a house, but anybody considering making a huge purchase like this should look at the list above and make their own determinations based on the answers from the questions above. I found a good article that gives non-biased advice for would by buyers see link -, Realtor Site. I am more inclined to buy a house, but it has to be a good location, with average taxes and it has to have the precise charm and square footage I desire. Obviously the pic above is a mansion which I would never own because of my frugal ways and only reserved for multi millionaires, but what a better way to shoot for stars and get motivated than to show you a MC mansion that you can possibly one day own if you read my blog and want to live like a NBA player. HA HA.

Resources for Buyers:

Best Places to Live Statistics

Walk Score

Flood Check

CNN Money Best Places

Rent or Buy

Deciding what type of home to live in before jumping into it is a great way to watch your money.

Cheapest Cities List

Recently CNN Money ran a article of the most Affordable cities for Americans to live in.(Cheapest Cities List) I always enjoy these articles because it gives great information as to median income, median home price, and an overall affordability score for each city. In my opinion I would only consider a few of them on the list as possible destinations to live at, but one of the most important factors that they mentioned in some but not all is the unemployment % for the cities. I believe that is one of the most important factors to consider when moving to a different state or area. They mention a few tidbits of employment related swings in some of the cities but come on CNN we need the actual facts not here say. See below for the cheapest mix of metro/suburban areas to live in.

Cheapest Cities List:

– Indianapolis, Indiana – 95.8 Affordability Score
– Dayton, Ohio – 8.2 Unemployment Rate
– Lakeland, Florida – 9.5% Unemployment Rate
– Modesto, CA – 17.4% Unemployment Rate
– Grand Rapids, Mich. – 100K Median Home Price
– Buffalo, NY – 66K Median Income
– Ogden, Utah – 91.1 % Affordability Score
– Syracuse, NY- 90.6 % Affordability Score
– Akron, Ohio – 96K Median Home Price
– Cincinnati, Ohio – 71K Median Income

There you have it, if you can transfer to any of these cities with an income of 60K or better you will have a ton of cash flow every month due to housing being so cheap. They even mention in one of the the descriptions that with a 20% down payment the average mortgage in one of the cities would be $400 dollars a month. Wow thats some cheap living right there. Due to taxes being so low and the affordability being so favorable you would live like a king if you have a good income. Doctors in these areas must be smiling all the way to the bank as they are one of the highest paid professions in any area.

I get the whole affordability aspect of all these cities mentioned, but in your eyes would affordability, a higher income, a bigger house would all of these make it worth while to move away from where you grew up and where most of your family is located? Its a tough trade off initially I would assume, but in the area I live in it is something I have considered more than once. High taxes, expensive housing, exorbitant cost of food, tough job market just to be near family and near the great city of NYC. Just reading this article and writing it has me thinking of a great dilemma I will face in the future in regards to establishing home ownership in a cost effective city.

The states I might consider in the future are: Ohio, Florida, North / South Carolina, Delaware.

Given the facts shown above would you move to any of these cities? What would sway you to move more than affordability?

Pic located in CNN article link provided above.

CD Ladder

I wanted all of my readers to get a better understanding of how you can make some dollars doing a CD ladder strategy. CD’s come in many different time frames and this very fact can be used to play a game with the rates offered. The longer the time invested the higher the interest rate you will get. The trick comes into play when you might need some of the money and the solution is to do a CD ladder. Basically you will have access to an equal portion of your money every year with this strategy.

For the sake of this example I will only use the 1, 2, 3, 4, 5 year maturity terms for each CD. The rates can be obtained from many sources but if you run your own calculations feel free to use bankrate.com.

After the first CD of 12 months matures you immediately reinvest in another 5 year CD at the five year going rate (unless you need the funds) and this CD will mature in year 6 of your plan. Keep this going with every year, you will add 5 year CD’s from this point on and continue the same cycle forever as one of your CD’s will mature once a year. Form this point on you will continue to build up assets as with each CD maturity you will add more money every year as the accounts compound interest. After the first three years you might say to yourself this is not paying enough, but on average things start to eventually pay a lot more after the fifth year and so forth.

Also this money will be part of your liquid emergency funds as to diversify and compliment your retirement and stock investment accounts. You do not want all your eggs in the stock market as the markets might collapse. In addition to the funds growing for you risk free (FDIC Insured), after the initial account openings of 5 accounts this system will not take much of your time. The only time you have to invest is to go back to the branch once a year to renew the maturing CD to the next 5 year CD and hopefully the rates will be higher than the current 5 year rate of 1.79% when you started the accounts. (Which means you will earn more than my example)

Also something to consider is if you had another sure fire risk free way to make more than 1.79% on your initial investment than it should be considered and favored over the CD Strategy as these rates are very low. Very Important fact to consider: if inflation is more than the rates you are earning then you are losing purchasing power on your money. But it still is more economical than a standard savings account or under the mattress strategy.

*CD’s have a fee if you withdraw prior to the maturity date usually its 3 months of interest as a penalty. All CD’s are protected by FDIC for up to 250 thousand dollars so there’s no need to worry, no risk and all reward. (Even though the reward is less than other investments)

*FYI-These rates on CD’s were offered by Ally Bank which is an online bank and not a regular branch that you can walk into.

*The bank you are giving your funds to will pay you this low rate and loan it out for a much higher yield and that is the reason why banks still offer these types of products. As the economy improves so will these rates and then that will be the optimal time frame to get CD’s.

Another alternative and fun way to watch and make more money.

Friday Financial Quotes III

Quotes-

-My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time. – Steve Jobs

-Never spend your money before you have earned it. – Thomas Jefferson

-If you incur debt you will soon walk the poor man’s Trail. – RichUncle EL

The first quote is so powerful as it clearly explains how limited our greatest resource is, Time. Take advantage of the time you have because you do not want to be the one stating 30 years from now, I should have could have would have done that. The next two quotes are about the debt monster as in life people do not realize how important it is to be free of owing money. I guess I am in the great company of Thomas Jefferson, LOL as we both want you to avoid debt at all cost, while living a stress free life doing the things you want.

Random Posts I recommend reading:

-52 Best Money Tips- Free Money Finance

-J.Money’s Net Worth- Budgets Are Sexy

–Retired at 30– Mr. Money Mustache

These three posts are by the three blog authors I read often as a way to motivate myself. Feel free to get some financial knowledge by checking these posts out for yourself. The first one is about money tips which we can always use. The second post is about a guy who is obsessed with budgets and happened to amass a good Net Worth at a young age. The third is about a retired 30’s something guy who doesn’t hold back his tongue but let’s you see his inner scorecard mentality on how he makes his money work for him.

Well now that you have been enriched with my financially related wisdom, do you feel like commenting? Yes you do. Maybe you feel like writing your own quote, send me an email to Moneywatch101(at) Gmail (Dot) com and I will post it here next week or sometime in the future. Obviously with your permission. LOL.

Watch Your Money!

Even in Music Series IV

I have come to enjoy these posts as I decipher what some of the artists in today’s music world are saying about money and how they can influence younger generations to either spend or save their hard earned money. Kanye West is the next artist that his lyrics will be dissected to see if his message is positive or negative. The song is called: “Can’t Tell Me Nothing” from the album titled, Graduation released in 2007.

What did Mr. Kanye Say?

Verse 1

I had a dream I could buy my way to heaven

When I awoke I spent that on a necklace

I told God I’d be back in a second

Man, it’s so hard not to act reckless

Verse 2

Bought more jewelry, more Louis V

My momma couldn’t get through to me

OK let’s break this down and decipher what the message is in a financial aspect. He wants to have more money to buy anything he desires, he then goes on to state he spent it all on a necklace, but then he regrets the purchase. This is an example of classic buyer’s remorse feelings. The Chorus in my opinion is the most confusing message to listeners, “Wait till I get my money right” is repeated over and over. But he continues to talk about splurging on Louis V and jewelry. The only mature person is Kanye’s mother who as he states was attempting to help him save those bucks. Did he take her advice? I doubt it.

I actually like the song as it is catchy and makes me think of money. But the message is clearly not good for the audience as he is reckless with the negative uses of monetary instruments AKA Dollars. He clearly has major dilemmas in his life, as he wants to be successful while doing things right but then struggles to keep his mind focused. As he repeats in each verse how he spent rampant amounts of dollars possibly down at Canal Street. LOL. In any event Mr. West can definitely afford to spend a few bucks as he is worth about $90 million dollars.

When you try hard is when you die hard. This is the only good advice within the song’s lyrics that can actually motivate others to achieve a better work ethic. Hard work never turned out bad for me because the effort given equals the best results achieved. Even if I didn’t get paid to do something, in the end I either learned something new, or I felt a sense of pride by helping others. What can you do to give back in your own capacity? Maybe you have extra time in your week where you can teach somebody a skill you possess. Maybe you can ask someone you care about if they need help in any way?

Financial influence is everywhere and sometimes it is delivered mostly in a negative context! He gets 1 point for 1 positive reference.

Better yourself and strive for a new mentality of preserving what you have and growing it every day.

Update: Kanye West has an estimated Net Worth of about 90 million and growing. On that figure if invested in an account or business earning at least 4% he makes $ 3.6 million a year just in interest. See this link: Kanye for more detailed information regarding his Net worth and other business dealings. Given the fact that he is now a more business oriented person when this song came out he had a different mind frame. So the song is based on his financial references to money back when it was released and it may not pertain to how he feels about money now. Kanye is involved in several foundations that benefit our society as reported by the press.

Pic taken at Tribecca Film Festival: DS