Diversified income

Diversifying our investments is VERY important to keeping our money safe. We know to keep all of our eggs out of the same basket. By having All our money in the same place we can quickly lose it. Having it spread around in different types of investments we may still lose some, but not all.
If this is a simple, but important concept to understand why do we completely disregard it when it comes to our working income? We earn ALL of our money from one place. We go to work, get a paycheck, get the weekend off, then go back to the same place. Over and Over- Week after Week- Year after Year we Gamble that our Income will not be lost. We place all of our earning eggs in the same basket, but even worse, we let someone ELSE carry it! Our employers have no obligation to us. We are at their mercy. One move and it's game over.
I have had the unfortunate privilege of not having work for over a month. This is potentially devastating to a family. With out income one cannot pay the mortgage, utility bills, or buy groceries. Very quickly we can find ourselves hungry and in a cold house without heat. (of course most of us will have found a way to keep the netfilx coming). For a person who has spent most of their career working for the same company it may takes months or even years to find a replacement job, and with today's unemployment rate who knows if one will be found at all!
But what if we had diversified our income? What if per chance I had a second, or third source of income I could use to pay my bills? What if the income we were using to "win in the margins" could cover our basic needs? Life would be much better. We would be much safer.
It only makes sense that if we want to have a safer income, just as a safer investment, that we diversify it. We must not gather all our eggs from the same Hen.
As we begin to diversify our income it may start rather slow. We may not earn much at all. but with some time our little side incomes may begin to pay for small things like a tank of gas (not in my truck of course), then maybe the phone bill, then the utilities, then the mortgage, THEN maybe even fill my truck! The potential is endless. But most important we have created a security net to catch us when we fall.
What are some ways to diversify our income? Some sources that have helped me are:
-Auto Repair from my home
-Snow Removal
-Handyman Work
-finding free junk to sell on KSL
-I even skinned mink for a season

What are some ways that you have diversified, or will now begin to diversify, your income?

Decide to be Wealthy

What does it mean to be wealthy? Is there a dollar amount that suggests wealth? Is there a measuring stick to determine who is or isn't wealthy?
According to various online dictionaries to be wealthy means to have a large abundance, or have a much greater amount than the average person in an society.
I think that wealth is an intimate relationship between physical, emotional, and spiritual desires. Wealth cannot simply come by riches alone. Wealth, in the physical aspect, may vary greatly for each of us. I have put a lot of thought in to what I believe my life will look like when I am wealthy. I'll share my wealth indicators with you in hopes that they may help in your plans to become wealthy.

Wealth Indicator #1 : Mortgage free property. I feel that my first step to wealth is not owing a single person money. By having NO debt, including my home, I have completed the first side of my Wealth Triangle. This also provides a safe place for my family, no matter what the economy, job situation, or other factors may bring.

Wealth Indicator #2 : $100,000/yr in PASSIVE income. This is a great figure for an income. It should provide an adequate amount to allow for family recreation, Paying for schooling or church missions, and sharing with others less fortunate. It also provides a sufficient amount of income in case I could, for some reason, be unable to provide for my family.

Wealth Indicator #3 : $100,000/yr in self produced income. This is the third side to my wealth triangle. This is money I need to earn each year, as a self employed person, working with out a boss. This can be through what ever means I feel appropriate at the time, but it may be through owning a few businesses, Appraisal Work, Rental properties, etc. This will keep me busy, and teach my children that daddy knows how to work, and will hopefully teach them good work ethics. It will also help to to maintain a perspective on the value of money, and that it requires an effort to earn and control.

Each of us must determine what we think it means to be wealthy. We must envision our own wealth filled life. What does it mean for you? Can you see what you need for security? Can you see what you want for your family? Only after we can SEE what we desire can we begin to work towards that goal.
Wealthy people are just a small percentage of the population. In order to have what most people do not, We must be willing to do things that most people do not. We must set ourselves apart from the wasteful spending, Credit Card Use, and inability to save that permeates our society.
We must set clear, measurable goals and be willing to stick to them.
We must determine to be wealthy. This is the first, and most important step. Unfortunately it is also a very overlooked step. Plenty of people would like to be wealthy, but very few will take the actions required.
Determine now to be wealthy! Write down your goals and dreams to become so. Together we will become some of the few who truly enjoy wealth.
If you feel like sharing, post in the comments your goals of wealth.

Winning in the margins....

Even though we follow our budgets, we don't spend out of control, and we save every penny we can, it seems that sometimes we just can't get ahead. We need just a little more money to really make the difference. What can be done? Most of us used to be able to increase our hours at work, but most no longer have that option. If our budget is right then there probably isn't anything to cut out that would help.. It's time to "win in the margins" or to do a little extra. It is hard to create an additional income, right? I don't think so. Just a thought and a little effort and extra money will start to come. I prefer to use a hobby as an extra income (Never would I use a hobby for full time income, as it will destroy the hobby. but for a little income it will be fine)
I use recreational vehicles, from motorcycles to ATVs to camper trailers, to whatever else peaks my interest for the day. You may want to use your vinyl cutter, or sewing machine, or computer skills, or what ever your hobby is.
I often times receive requests from people I know, or people I don't to fix a problem they are having with a machine. I have done bikes, quads, cars, snow blowers, and just about anything with a motor. I charge a good fee for myself, but less than half of a typical shop. I have made thousands over the years, but it usually comes $20-$60 at a time. It does not interfere with my real job, and doesn't cause me stress (because it is a hobby) and it puts some extra in the pocket.
I also buy, then improve, and sell many motorized toys. This usually takes more time and effort but it pays out much more. I have also made many dollars in this extra area.
A friend of mine has started her own way to win in the margins. With a simple blog and a few pictures she has turned a hobby into extra cash! http://cuddlebugbynatalie.blogspot.com/ (hope thats ok Nat!)
Another friend has started selling vinyl stickers she cuts. It may not be making millions, but she can more than pay for her own expenses in doing her own hobby.
So the question is.. What can you do today?

It's time for all of us to be winning in the margins.

With a little extra effort we will be well on our way to a secure financial future!

Spread the wealth

I recently read a letter from a person whom I admire highly. This letter had many important subjects in it, some of which I agree and other that make my stomach ache in distress. One of the subjects in this letter talked about the need to "spread the wealth", or to take what the rich have and give it to those who do not have money. At a first glance one may like this Idea. The majority of the people are "poor", so naturally most of us would benefit from taking from the rich. It could be a real Robin Hood adventure! Only the rich would be negatively effected, so it' s not a big deal, Right? For those of us on the bottom it is easy to look up and say that these rich folk are somehow hording the money, and are too selfish to share.
According to a survey released by the Federal Reserve, only 4% of the American population have achieved Millionaire status. This would include anyone who has a $1,000,000 in the bank, or in stocks, real estate, or other form of wealth. 80% of these Horrible millionaires are first time millionaires. Meaning they earned their own money, it was not handed down through the family.
I have had personal experience with those who receive "free money" taken from those who earn it. Let me share with you what I have witnessed, both here in Utah and other states I have been.
When a person or population receives free money over a period of time they learn to expect it. There becomes this sense of entitlement that makes them feel others owe it to them. It becomes easier to not earn and to live for free off the earnings of others. Crime rates go up, attitudes are negative, and progression ceases. When this sense of entitlement comes about it can spread like a wild fire, and soon there are no earners, and only receivers. (ever been to Mississippi?)
When some one receives something they did not earn, someone earned something they did not receive.
"spreading the wealth" can only lead to our destruction.
There is a solution to the huge poor/rich contrast we have in America. If we can learn to handle our money, and live on less than we earn, then it naturally follows that we have Extra money, and can begin to build our own wealth!
We can't all be rich can we? where would the money come from?
Because I am around real estate often I will use an example of a home.
If I own a piece of land that I want to build a home on, I would hire a builder. I pay this builder $150,000 to build my home. He is now 150k more wealthy. but what about me? I just spent my retirement, right? No. I now have 150k in paid for real estate, and my land is now worth more for having a home on it! So I have increased in my wealth, as did the builder! we BOTH are better off.
Providing a service is providing a value. As we provide a service we add value, and both parties profit. If each person in the population continues to add a service, or value, then there continues to be prosperity. When we take from those adding value and give it to those who add no value, then we are setting up the failure of our country.
The solution to poverty, again, is not to TAKE, But to teach each person to ADD value, and then to be RESPONSIBLE with their earnings. When this is accomplished we will all be able to prosper in the great country of America.

Good Debt vs Bad Debt

What is the difference between "Good Debt" and "Bad Debt"? Is there a Difference? How can we tell? I shall attempt to answer these questions.
Lets start with the bad debt. We all know what this is. Credit Cards are the first thing to come to mind, followed by personal loans, car loans, title loans, etc. We should avoid these debts, and do our best to pay off what we have quickly.
Good Debt: I have been taught about this good debt, and about how it can help further you financially. I was taught about it's ability to make you wealthy. I've been taught how to manage it, and make it go farther. I have been taught how to leverage it and make it multiply. I am talking about a mortgages, home equity line of credit, or second mortgages, etc.
These are wonderful! you can buy a house - on credit - make it nicer - on credit- borrow money against it (credit) and get another home - on credit -! the process is easy! and with in a few short years you can have multiple properties! Money will fall from the heavens, someone else will pay your bills, nice cars will always be in your driveway- life will be good!-Right?
WRONG!!! Good debt is a myth! There is NO SUCH THING AS GOOD DEBT!
I have debt, Don't think I am perfect. In fact I have close to 1/2 a million dollars of this "Good Debt" and I could easily double it this year if I desired. But I don't desire.
I have been taught wrong in the past. I believed good debt was ok to have. I believed it would make my life better.
I know many people (once my friends, mentors, and associates) who have gobs of this good debt in the form or real estate, as I do. Now they have gobs of problems.
I know just a handful of people (now my friends, mentors, and associates) who also have much real estate. But they have it with out the "good debt". They have it because they OWN it. no payments, no debt, nothing. Just own it.
So, What is the difference between good debt and bad debt? Nothing. It's a trick question. We should not obtain any type of debt.
But Brian, how do I buy a house? How do I go to school? I am not a die hard no debt at all person. We all need a place to live. Weather you rent or buy, we should only pay 25-30% of our income to our home. If you can purchase a home and not spend more than 30%of your monthly income, then go for it. If not, save until your down payment makes the mortgage small enough that you can. If you need to go to school, do it as cheap as possible, and pay it back quickly.
But Brian, how do I buy a nice car? You need a car, but get one you can pay cash for. Save some money, look for a good deal, and buy it.
If we avoid all types of debt, then we truly become free. We will owe no one. We will be controlled by no one. We can live life to the fullest!

Pay yourself FIRST

When we do not have extra money coming in, and barely enough to even pay the bills, how are we to build a savings? In the last blog it was said that we should keep an egg in our basket, What if you don't even have enough eggs for breakfast?! How can you leave even 1 if you need more?!
The answer to this is to pay yourself first! What do I mean by this?
Many of you reading this blog are faithful members of some sort of christian religion, what ever it be. We are expected to pay tithes. Would you go with out paying your tithes if things get tight financially? Of course not. You believe that if you pay, then you will receive blessings. And right you are.
The same is true for paying ourselves. The fist thing you do with your money is pay your tithes, then immediately pay yourself. I prefer the 10% method as well for myself as I do tithe. Put your money somewhere safe, and DON'T TOUCH IT!!! You will quickly find that you do not miss the money, and for some reason things seem to work themselves out.
We are prone to spend all we have. By paying ourselves first, and keeping that money "sacred", we will not spend it. We can begin our savings. We will be able to keep an egg in the basket with out missing it at the breakfast table.
I have a friend who is committed to saving a certain amount of money. He told me just recently that he has added over $2,000 to his account in just over a month. No big deal, anyone could do that, right? The kicker is that my friend does not have a job, has an empty tank in his truck, and is looking for his next meal any where he can. However, he has kept his commitment to himself to save a certain amount each month. My friend may be the extreme example, but a good one to follow.
What is keeping us from reaching our savings goal?



as a side note: if there is a topic you would like to discuss, please let me know and I will do my best to cover it.

The "B" word

What makes it such a foul word? Why do we shun the very thought of it? Why must it torment us so much? How can we conquer the fear of it? Yes, my friends, I speak of a BUDGET...
Budgets are so restrictive, they control us, they don't let us have any fun. They are kind of like a nagging wife, always there in the back of your head telling you how you need to improve (I speak not of my wife, of course. She is far from a nagger). Can a budget be something else? Can it be a teacher, a helper, or even a friend? I say YES!
What does a budget do for us? A budget helps us to see where our money is at all times. If we know how much money we have then we know how much we can spend, and on what it should be spent.
A budget helps us realize our priorities. By knowing how much money we have we can make better decisions on what is important to us, and on what we would like to spend our money. For example: I will NEVER have cable tv. I don't own a tv worth watching, and I think it is a waste of time and money. But you may never own a truck that gets only 10 mpg and runs on expensive diesel fuel. We each have our priorities, and a budget helps us realize them.
Who should budget? I had a close friend tell me the other day that she will budget when she has enough money to budget. She doesn't have enough income, and to many bills to worry about it right now. While I agree that only people with money have a budget, it is also true that only people with a budget have money.
Money is a funny creature. It can be very controlling. However it can also be very controlled. It has been written that one will never have enough money if he does not control it well. We are programed from early in life to spend and borrow on everything we want, and somethings we don't want. We are prone to spend every penny we have. Unless we take aggressive action to be in control of our money, it will control us.
The big secret to having money is that you have to spend LESS than you make. Wow! what a concept. George S. Clason said in The Richest Man In Babylon that if every day we gather a basket of eggs, and take out all but 1, that with in a short period our basket will be full of the left over eggs. Our money follows suit, if we keep but a small portion we will build a reserve.
As we develop a budget we will begin to control our money. We can begin to keep a portion of what we earn and use it to fill our own baskets. We will realize our priorities, and set them in place.