The two biggest areas people are in constant search of gratification are in regards to money and looks.  For the purpose of this post we’re going to focus on weight and physically fitness in regards to looks.  Then for money we are going to looking financial situation or your financial health.

Development

an early age our perceptions of money and health take shape mostly for us.  We learn our thoughts and feelings regarding these areas from the major influences in our lives.  It might be your parents, teachers, friends, other family members.  It could be things you learn or things you can experience.  There are numerous ways in which your relationships with money and health grow over the years.  The key is to realize that your thoughts and feelings are a learned behavior because of this they can just as easily be unlearned or changed.

Our Society

Today we are a society that is struggling, to say the least, in these two areas.  There are people everywhere saddled with debt.  They don’t have the savings they need.  They become reliant on jobs and the income they provide.  To make matters worse, the economy is bad and unemployment is up.  Just as we struggle with money we struggle with weight.  Obesity in America is out of control.  We love what’s not good for us, maybe because it’s easier or maybe because it tastes better.  We don’t have time to exercise.  We also spend more time sitting than ever.  We sit at our job, in our car and in front of our televisions.

Caught in the Middle

Everywhere you look you are bombarded with extremes.  You are shown rich or poor, fat or skinny.  The in between has essential been buried in our society.  What fun are they?  They are boring right?  Who wants to be boring?  So you constantly deal with cognitive dissonance.  This creates a sense and feeling of being uncomfortable.  These extremes make it very difficult to change.  It’s almost as though you have to be one or the other.  So then if your are not rich, you must be poor and if you are not skinny you must be fat.

This creates a constant battle, a mountain to climb.  How do we respond to this?  We don’t have the patience or the time.  Some may argue that we are lazy.  We struggle with the lack of understanding of exactly what to do or where to start.  We seek out the quick fix.  We want to be rich and skinny now.  Isn’t that what we are suppose to be?  Isn’t that what is in the news and the magazines and on tv?

Quick Fixes

There are the diet pills and the lottery.  They advertise everywhere.  This one pill will make you skinny.  You don’t have to be fat, just as the lottery makes you rich.  We throw money at these get rich and get skinny schemes.  These two sections are in every grocery store across American.  The place to buy your lottery tickets and the section that has the diet pills.

Next we are faced with an overwhelming number of ways to get rich and skinny.  There is too much information, too many ways to make it work.  So we look around in our own worlds.  We scratch and claw to find someone who has had a bit of success so we know who to copy or follow.  Oh this diet plan or pill or book worked for so-and-so it will work for me.  I read about this on the internet or saw it on tv.  Maybe there is truth there I will try it.  We offset our constant struggles with constant little efforts.  It’s as if we just try a bit maybe something will happen to fix everything.  Or maybe we’ve come to accept that we are failing in these areas.  That would be scary, acceptance?

Last Resort

We are left with our final option, Bankruptcy or Gastric Bypass.  They are one in the same aren’t they?  Start over with a clean slate.  Wipe the fat and debt away.  Does it work?  It definitely can.  What it doesn’t address is the root of the problem.  The money issues you were dealing with first and the eating issues are still there.  They need to be fixed.  What it does is shrink the mountain.  Things become less overwhelming when you don’t have to go it alone and figure things out by yourself.

It Doesn’t Have to be This Way

That’s what I’m hear to tell you.  There is help.  You are the norm.  The majority of people our there are struggling with the same money and health issues you are.  Just because they don’t put them for you to see doesn’t mean they are not there.  There is help for you.  There are financial planners and personal trainers.  There are bloggers and information everywhere.  This can continue to be overwhelming so focus on three.   Three great services or people that can help and teach you.  You need to take the leap of faith and now that things will get better.

Your Chance to Fix It

Focus on the next 30 days.  Go out and follow your 3 things that are going to change your life in the next 30 days.  It might be a book, a blog and a personal trainer..  Maybe it’s a friend, a financial planner and/or Financial Samurai.  Whatever works for you.  Don’t worry about if it’s the best, find something you trust and stick with it for 30 days.  Maybe it’s an exercise video from BeachBody or a great book from Amazon or someone you were introduced to.  I promise it will make a difference.

Change

We’ve come to talk about how we as a society got here.  It’s okay to be here.  It is normal to be here.  But you don’t have to.  You do, however, have to want to change.  There is a reason for this.  There is a purpose to change.  It’s different for everyone.  Now is your opportunity.  30 days is all I ask for.  So ask yourself two questions…

1. Why do I want to change?
2. What will be my 3 things for the next 30 days?

No related posts.

Make sure you read the title.  Read it again.

I turned on the Biggest Loser tonight just in time to see Jillian Michaels at the top of her game.  The green contestant was not opening up and not exercising.  The funniest thing about the show is that if you really watch the trainers on the show they aren’t worried about the exercise.  Yes, they get people to work out a lot.  Yes, they teach them how to eat right.

They give the contestants to tools to succeed.  They teach the contestants how to work out by teaching them how to do each exercise.  They teach them about proper form and what muscle groups the exercise targets.  Then they teach them about calorie burning.  They teach what to eat and how to eat.  These are the tools necessary to being physically fit, to being healthy.  But those tools are NOT enough.

With your money, you can learn to budget.  You can learn how to spend your money.  You can learn when to spend your money and what to spend your money on.  That won’t make you rich.  You can take it a step further.  You can learn where to put your money, what the best investments are and the best financial tools for you.  That will still NOT make you rich.

There is a whole other level.  There is the mentality.  The people on the biggest loser have the mentality to be fat.  They have the mindset to be fat.  It’s a coping mechanism for most of them.  The truth is it’s a learned behavior most of the time.  Fat parents have fat kids.  Broke parents have broke kids.  The best part about is that it can be unlearned.  Fat parents don’t have to have fat kids or you could go one step further and teach fat parents to lead healthy lives and they will teach their kids to lead healthy lives.

Just as you can develop, learn or pick up the habits of being fat, you can develop, learn or pick up the habits of being broke.  This means that no matter what you do, you will continue to be broke unless you change your mentality.  Why do you think professional athletes and actors go broke?  Why do lottery winners still end up penniless?  They don’t change their mentality, they don’t change their thought process.

So called, ‘professionals’ that focus on dollars or weight are useless.  It is NOT about numbers.  Yes, your obesity can be measured by a scale.  You can argue that your wealth can be measured by your net worth.  However, this doesn’t tell you how you got there.  It doesn’t tell you why.

Are you happy?  Do you want to change? Then it starts with your mind.  It starts with your thinking.  If you can’t change the way you think about food or money, then you can’t change.  You might make progress.  Just enough to tease you.  Fake ‘professionals’ will help you make a little progress.  If you don’t change the way you think, in the end you will be fatter and more broke.

Jillian said on the show tonight, “emotions are a compass“.  If you are upset about being fat or spending money, you have to deal with it you can’t just hide it.  It’s your body and minds way of telling you something is wrong.  The emotions are there to guide you and point you in a direction.  They tell you something needs to change.  There is no better time than now.

Here are the two best books I know of for changing your mindset about money.  It’s a great place to start.

Anyone else have some recommendations?

Related posts:

1. Is it time to be happy yet?
2. Throwing Money Stones
3. Search for Instant Gratification

Has your financial advisor every asked you…

What are the three things you want your money to provide for you in the future?

If yes, how did you answer that?  If no, get a new adviser.  How simple is this question?  Let’s start here.  What do you want your money to provide for you in the future?  What is the purpose of your money?  Money is not a goal or an outcome.

If I told you I will give you $1 million the day you retire would that make all your hopes and dreams come true?  Would that money provide you purpose in life?  It might or might not.  More likely, we have no idea.  We don’t know the value of $1 million at some arbitrary point in the future.  So why do we as individuals target a number?  Or maybe a better question is why do financial people push you to a number?  So many financial people I meet equate everything to numbers.  Numbers are guesses.  They are simple things that financial people can do to try to make the abstract concrete.  Don’t fall for it.

Instead ask yourself why you want that million dollars.  What would you do with it?

• Travel - Where is the first place you would go?  Why?  What do you like about Italy (or Hawaii or Massachusetts, etc)?
• Vacation home – Where would it be?  Would it be just for you or for the family to come visit?
• Grandchildren - What would you like to give them?  Time, money, both?  How? Trips, entertainment, college funding?
• Hobbies - What do you love to do that you never have enough time for?  What does it take to get it done?  Do it!

These are just a few things to get you started.  Start to brainstorm and write things down.  The best part is you are allowed to change these things.  By writing it down it allows you to review your list once a year.  Writing it down helps you visualize it.  You might just make something happen long before you thought possible.

Take these 5 Steps to your outcome:

1. Ask yourself, “What are the three things you want your money to provide for you in the future?”
2. Brainstorm on a pad of paper.  Jot down what comes to mind.  If you are married first brainstorm individually and then together.  You might just share more than you thought.
3. Focus on why.  When you have your ideas jotted down look at them individually and focus on why they are important to you.
4. Write it down.  Make your list and put it to paper.  Better yet, get pictures that go along with your 3 things.
5. Make it visible.  Put your list somewhere where you can see it.  Let those whom you care about know.  Tell them and talk about what your wrote and why.

Once you have done this you begin to give your money purpose.  Money itself, or some arbitrary dollar amount, is not an outcome.  It probably is going to help you reach the outcome you desire but not necessary.  It most likely will play a large roll so it is important.  Why the money is important can vary greatly from person to person.  Why is money important for you?

Related posts:

1. Throwing Money Stones

A hungry donkey walks into a barn in search of food.  He finds two identical haystacks at opposite ends of the barn.  The donkey stands in the middle of the barn between the two haystacks, not knowing which one to choose.  Hours, then days go by, but the donkey just can’t seem to make up his mind.  Unable to decide, he dies of starvation.

This is my version of a story that originated with Aristotle and was later reinterated by the French philosopher Jean Buridan.

I would argue that the financial world is full of donkeys.  You might say politics more so but I’m not a very political person.  People know they need to save for retirement but get hung up on the details of doing so.  They end up not saving.  You might know you need insurance but which type, kind, policy, amount is right for you.  So you go without.  Congress needs to pass a bill to address a big picture problem in America, they just can’t seem to decide on the minor details.  They become stuck in the middle.  You want to purchase a new tv so you go online to research the perfect tv.  Thinking you know what you want, you go to the store to find that they have two tvs with identical features for the same price.  Unsure of which is better to go home to continue your research.  Maybe you buy a tv a few months later.

What do all of these examples have in common?  They didn’t take into account the consequences of not deciding.  For the donkey it meant death.  For the person not saving for retirement it might mean a lower standard of living and/or a drain on their family and society.  For Congress, the problem persists for much longer than necessary, who knows how many people become affected by it.

• What have you been putting off that you know needs to get done?
• Are you dealing with cognitive dissonance?
• Do you know you need insurance?
• Need to save more in an emergency fund or for retirement?

Or should the question I ask be..Are you prepared for the consequences of procrastination?

No related posts.

I came across an interesting interview with Garrett Gunderson.  I found out about Garrett through social media and an associate of his Chris Miles.  I think it was LinkedIn that we first met through but I can’t quite remember.  Anyways, I was intrigued by some of the things I saw on LinkedIn and on his website, FireYourFinancialAdviser.com.  So Chris and I had a conversation.  That conversation led me to buy Garret’s book, Killing Sacred Cows.  Don’t you love the name?

Now the purpose of this post is not to review the book.  If you are interested in hearing about the book you can find it as well as reviews at Amazon.com.  I will tell you that I enjoyed reading the book and it does have a very powerful message that I’m sure I will continue to touch upon in future posts.

What made me write was this interview titled Unusual Business Tips.  (I apologize for not being much of a tech guy because I can’t figure out how to inlay it in this post.)

Here are Garrett Gunderson’s 6 tips for business owners:

1. Raise Salaries: His reasoning here is for a vote of confidence for your employees.  Focus on the people and the productivity.  This will remove any anxiety and get them motivated.

2. Spend More: People are cutting spending in the wrong spots.  Do you want to grab more market share?  There’s a huge opportunity out there because everyone else is cutting back in their marketing efforts.  You will make more money.

3. Meet Less: Have you ever left a meeting wondering what the purpose of that was?  Focus on purpose and productivity.  Brief meetings can be a lot more productive.  Get rid of reactive meetings.  Know the purpose and outcome of your meetings.  Eliminate all others.

4. Stop Saving for Retirement: People don’t know or understand where they are putting their money or what’s going to happen to it.  There are too many unknowns.  He calls in gambling.  The rough 2008 beat down people’s confidence and made them less productive in other areas of their lives.  Invest first in yourself and focus on effectiveness of your dollars.

5. Put All Of Your Eggs in One Basket: Entrepreneurs over diversify themselves.  He calls it de-worse-ification.  People diversify because they don’t know what will work.  They spread themselves thin.  So instead focus on what you do know and what you are committed to.  It is better to invest in a business that you do know and have passion for.

6. Go Back to School: Continue to invest in your education and learning.  Don’t cut spending in the areas of furthering your knowledge.

I love a person that thinks outside the box and is not afraid to go against what people believe.  The biggest point here that I think he is trying to make is to have faith and confidence in something.  What better than yourself?  If you can believe in what you do and what you know it will make you more productive and happier.  I couldn’t agree more with this sentiment as I’ve seen it in my own life.  We all have down days or bad days here or there.  Do you get as much work done on those days?  What is the quality of your work on those days?  If you can build and grow the confidence and faith in yourself then you can drastically reduce your non-productive time and you might just surprise yourself in what you are able to accomplish.

Now I purposely did not add my commentary into Garret’s tips.  They are his tips and I wanted to keep that intact without my opinions of them.  I want to open this up to you.  What do you think of what he has said?  Do you think it can work?  Does or will anyone actually do these 6 things?

No related posts.

Have you ever heard of cognitive dissonance?  This is how Wikipedia defines it:

Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously. The “ideas” or “cognitions” in question may include attitudes and beliefs, the awareness of one’s behavior, and facts. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by changing their attitudes, beliefs, and behaviors, or by justifying or rationalizing their attitudes, beliefs, and behaviors.

So what exactly does this mean?  This means that at points in your life you are going to feel uncomfortable about things that you do and/or believe.  The reason you feel uncomfortable is because you behaviors and your beliefs aren’t lined up.  They aren’t balanced.  You’ll be sitting on a seesaw and won’t be flat.  So what are you going to do?

Have you ever been stuck at the top of a seesaw?  It happened to me when I was a little kid.  I didn’t know what to do and I definitely didn’t like it.  This is cognitive dissonance.  You believe that gravity will pull you down.  However, you realize that you’re stuck up in the air.  You’re uncomfortable because your feet are off the ground.  I know I don’t like that.  You begin feeling nervous and it’s getting worse.  So, you try to squirm or struggle a bit to see if you can get the thing moving.  It shakes a little and nothing happens.

Now you have two choices.  You either convince yourself that you are up there for a reason.  By doing this you are actually modifying or changing your belief that gravity should be pulling you down.  This would then make you feel more comfortable about being stuck up in the air on one end of a seesaw.  Does this actually make your situation better?  Maybe it makes you feel better about it but it doesn’t fix anything.  You’re still stuck.

Your other option is to do something drastic to get down.  Squirming didn’t work so we know it’s going to have to be drastic.  Maybe you jump.  There is a risk in jumping.  You might get hurt.  It’s a long way down.  The difference is if you jump, if you make a drastic change, things get fixed.  You’re not just figuring out how to deal with the problem, you are fixing it.  You don’t have to deal with being stuck on a seesaw anymore, you’re off that seesaw.

How does this relate to personal finances you may ask?  Well I’m writing this at night.  The time you go in to kiss your little girl or little boy goodnight, I want you to look them in the eye and tell them the truth about your life insurance.  Then tell them the truth about your disability insurance.  Climb into bed with your spouse and tell them the truth.  Tell them the truth about your retirement.  Do you know the truth?  Tell them what you know and how you feel.

It will probably go something like this:

“(your child’s name here) I just want you to know that I have no life insurance (or not enough) because I’ve convinced myself that I will live a long and happy life.  I’m convinced that I will have plenty of time to make the tough decisions about dealing with something bad happening.  The truth is though (remember I told you to tell the truth) that when something does happen, it will be too late.  And because I’ve become comfortable with this, you will NOT be financially prepared for when something bad happens to me.”

Could you say that?  Could you repeat those words?  How about to your spouse about the two of you’s retirement?  Then do something about it.  Jump off of that seesaw.  If you ask the right person they will even help you down so you don’t have to jump.  I’m right here.

Related posts:

1. Technological Change

You can read anywhere and everywhere about how so and so lost x amount of money in their 401k or retirement accounts.  How much did you lose?  Is it done 10s of thousands?  100s of thousands of dollars?  I wonder, if someone came to you and said I can give you a safety net on your investment but it will cost you a percentage of your return, what percentage would you pay for that, if any?  Would you give up 1% per year to guarantee a safety net of 6%?  What if that safety net only cost you 0.5% per year?

No one can predict the future of the market.  They will always try and someone will guess right but no one knows for sure.  I find that as people get closer and closer to retirement they become more and more cautious of their investment losses.  Makes sense right?  Would they sleep better knowing that they had a safety net?

You might say why not just invest in safe investments.  My response to that is opportunity cost.  How much do you give up over the long term by moving to safe investments.  In todays environment you’re lucky to get a 2% rate of return from your 1-year CD.  According to the AllFinancialMatters the 20-year return for the S&P 500 from 1989-2008 is 8.41%  That gives an opportunity cost between the two of about 6%.  This gap is as big now as it has ever been due to interest rates being at historic lows.

What if you can have your cake and eat it to?  Let’s say your 55 or so years old.  You are very likely to live another 20 years if not 30 or more.  You plan on retiring in about 10 years and you’re a bit nervous about being invested in the market yet you need some returns on your money to retire comfortably.  You might even have a financial planner that showed you a nice compound interest curve.  Maybe you even realized that as your asset allocation gets more conservative you just might be Destroying Your Compound Interest.  What if someone offered a safety net?  Now it’s not free.  You get a guarantee that your account won’t earn less than 6%.  Meanwhile the account still stays fully (or as much as you choose) in the market.  The cost is that your fee comes out of your return.  So that if you earn 9% you would only see an 8 or 8.5% rate of return depending on your fee for this safety net.

There’s a lot more details to this obviously but I’m just wondering what fee would you be willing to pay.  Would you pay 1%?  Would you pay less?  I also understand that your answer might be different today than it would have been in 1999 or even in 2007.  That’s why I’m asking you today.  If you want clarification or you have questions, e-mail me.

No related posts.

No related posts.

Have you ever been into a Lululemon Athletica store?  When I’ve gone in there with the woman in my life I am always intrigued by what they hang on the walls.  They hang the goals of each employee in the store.  I could stand there and read the hopes and dreams of their employees for as long as the shopping takes.  It’s my favor part of going to the mall.  I find it extremely inspirational.

I commend Lululemon.  They don’t want to just be a job.  They know there is more to life than working and making money.  They focus on the work life balance.  More importantly, through their website they are extending this to everyone.  Go fill out their Goaltender.  Read about their purpose behind goal setting.  It might just inspire you to set some goals for yourself.  You never know you might just surpass them.

Related posts:

1. A True Advocate
2. Building Your Business, Network, Finances and Health

I’ve be seeing the word frugal a lot lately it seems.  There are a lot of blogs out there referencing frugality in the financial world.  I’m wondering if the word is taking on a new meaning?  Maybe it’s connotation has changed?

The Merriam-Webster definition of frugal: “characterized by or reflecting economy in the use of resources”.  What I think is even more important is the word origin.  It’s from Latin frugalis meaning virtuous from frux- meaning value.

To me this hints at a person who is great at finding value.  Is that what it is today?  What does a frugal person look like?  How do they act?  I see the blogs based on being frugal and they are focused on how you can save money.  They advertise these different deals you get at banks and credit cards.  They push coupons.  I’m missing the focus on value.  These blogs are becoming cheap.  They are getting away from enjoying your money.  Isn’t there a balance?  Can’t you find value and happiness from your money?   Are they getting away from the root and origin of the word that focuses on value?

To me, to this blog, value is king.  I want this to be a frugal blog in the original meaning of the word.  A blog focusing on the value and the virtuous use of economical resources.  This will be our definition of frugal.  What is yours?  What is your connotation of the word?  Will you let us help you change it?  Do you have an open mind? 

No related posts.