Nosce te ipsum

Know thyself.

Something I think that everyone should strive toward. Something I’ve come to terms with is that, as much as I’d like to be a writer / blogger and have a site with some following, at my current point in life I don’t have the time (or I’m not making the time) to really make this successful.

We’ll see what 2010 has in store. Best of luck and have a good year!

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Some people are smarter than you, and its ok

Sometimes it can be hard to admit that someone else is smarter than you.  I have yet to meet someone that knew everything or was good at everything (I’ve met a lot of people that thought they were and at time’s have acted that way myself, but who hasn’t).  When you’re sick you go to a doctor because he or she is smarter than you, not because you don’t have the capacity to understand something, but because they went to medical school and you didn’t.  No one thinks twice about having to ask a doctor questions.  Why do people have issues going to financial advisers or lawyers for help?

One of the great things about the information age is the a problem in itself, there are a lot of free resources for setting up your own company as well as investing or trading and many other things.  The point is that you aren’t always capable of having the time research the difference between retirement accounts, the difference between an ETF and a mutual fund, why you should buy a specific stock, or even why you should bother.  When starting a company its really easy to get online and register a name, it relatively simple to start an S-Corp or an LCC, but its not always clear as to which one you should use for your business.

I firmly believe that “In the counsel of many, there is wisdom.” (Proverbs 15:22)  So learn as much as you can when you can, but sometimes you have to hire someone that is ’smarter than you’ to point you in the right direction.  Sometimes its just a matter of hiring someone to teach you how to do things correctly.

The smartest and most successful people build teams of people that are smarter than them in different areas.  I recommend building your own team, it will totally be worth it in the long run.

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Procrastination Kills

Avoid perfectionism, especially on first drafts. Just get it on paper. It’s far easier to revise your way to perfection than to generate it out of thin air.

Embrace discipline. Intelligence and discipline are the biggest factors distinguishing successful people from unsuccessful people. What does discipline mean? A few examples:

• Be willing to stay focused on a task, taking breaks only when necessary, until the task or a component of it is complete.

• Be willing to fight past the discomfort of not knowing: Struggle to master something, be willing to expose your deficiencies by asking a co-worker a question, or hire a tutor or mentor to accelerate your learning.

• Work longer hours. We tend to repress the obvious truth that the longer you work at your profession or avocation, the better you’ll get.

I read a great article on Kiplinger.com this morning, the article was about 10 ways to conquer procrastination.  There were some great ideas on ways to get past one the problems that everyone has, procrastination.

This is a problem that I usually have as well.  I have great ideas and I say “I’ll get to it tomorrow” or “Next week would be better’.  Everyone does this, especially with investing, savings and personal finance.  “I’ll look into it when the economy gets  better…”  I believe that overcoming these attitudes will help everyone with personal finance as well as work related items or personal projects.

Pick one thing that has been on your list of “to-do’s” for a while and do it this week.

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Free Resouce: eBook from Get Rich Slowly

Check out www.getrichslowly.org or go directly to http://www.getrichslowly.org/blog/2009/09/20/free-ebook-the-get-rich-slowly-guide-to-roth-iras/

This is great free resource for someone just getting started.

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

The Man is Smart

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Don’t tell me you can’t!

There are so many people that find excuses to not save, not invest or just generally not prepare for their future.  One of the most common excuses right now, especially for the younger generation, is that they need to wait for the economy to get better before they can start saving.  NO NO NO!  Now has been the best time for young people to invest.  And there is NEVER a bad time to save!

Check out this article on the Digerati Life.  There is no excuse to not be saving something.  Using CD’s you can have a money making more money.  It’s very simple, just do it!

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Compounding Interest Simplified

Interest is a fee paid on borrowed assets.

The fee is usually measured as a percent of the amount borrowed or loaned.  In the case we are talking about, compounding interest, we are talking about a fee, or percentage, that is being paid to someone who has either deposited money into a bank account or has invested in stocks or bonds paying a dividend.

When you deposit your money into a savings account you should be receiving interest on your money.  For ease of the explanation lets pretend you can get a 5% interest rate on your savings account.  If you deposited $1000 and you were getting a 5% return after one year you would have about $1050.

Compounding interest is when you let that $50 that you gained the first year stay in the account and earn 5% as well as the original $1000.  So in the second year instead of earning $50 in interest you would earn $52.50.  That doesn’t sound like a big difference but if you let this go for 20 years, that $1000 would grow to around $2,653.30.  Now imagine adding to that on a regular basis, because it’s a habit now, over time you begin to earn much more interest than the money you are putting in.

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Why starting early matters

A lot of people come up with reasons to avoid savings or investing.  There is a very wide range of excuses and there isn’t really a point to get into them.  The benefits of starting to save as early in life as possible can be incredible.  Once again this is a simple concept that goes right along with the concept of paying yourself first.  Here are two benefits of starting to save early, first and most important is compounding interest and second is making saving or investing a habit.

When you make something a habit you are used to it, you embrace it (for the most part) and you always do it.  When you start a new job or your first job with benefits, make sure you take the time to set up a 401k, 403b or similar retirement account.  By doing this when you first start your job you will make it a habit, you will be used to the amount of money you get in your pay check each month or each week.  Most people wait to set these accounts up until they start getting a match from their employer, when you wait its much harder to make that adjustment.

Compounding interesting is very simple concept that most people don’t get.  The next post will focus on compounding interest and ilustrate why it makes sense to take advantage of it.

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Pay Yourself First

Really?  That’s what I would be asking myself as well.  Is he really writing about paying yourself first?  Yes unfortunately I am.

This is by far the simplest piece of financial advice anywhere.  Pay yourself first.  It’s really not complicated, it is exactly what it sounds like, pay yourself first.  I think I have belabored the point, but a lot of people miss it.  I have been reading financial articles in newspapers, magazines, blogs and books for quite a while now and this statement is by far the most common thing that I have read.  I assume that it is part of establishing yourself as a financial writer (hence the reason I’m writing about it first).

The real question becomes, what does pay yourself first really mean?  It does not mean that if you run a company you should pay yourself first and then if there is money left pay your employees.  It does not mean go out and buy a bunch of new gadgets and toys when you get paid.  It simply means before paying your bills, before paying your mortgage, before buying that new X, Y or Z put some of the money that you’ve worked hard for into savings or some sort of investment vehicle (stocks, bonds, cds, mutual funds, ETFs, 401k, 403b, IRA, Roth, etc).

Most people don’t pay themselves first, they get their monthly paycheck and they pay the bank (mortgage), they pay Visa, Mastercard or Discover, they pay electric, cable, and on down the line.  After paying all the bills they say well I want to spend some of this money because I’ve earned it and I want to reward myself and by the end of the month there is nothing left to save, invest or use in an emergency.  By doing what everyone says to do and paying yourself first you make sure that you’ve saved something before doing everything else.

There are many ways to pay yourself first and most of them are extremely simple.  Here are a couple ideas:

  1. Take advantage of 401Ks, 403Bs, or IRAs when you can.  Most employers provide these accounts now and the money is taken directly out of your paycheck, before you get it.  You don’t have to think about it, plan for it, or do anything other than set it up and let your money grow.
  2. Most banks will allow you to set up automatic monthly transfers or transfers whenever your check is deposited.  Set up a secondary savings account and every time your receive your paycheck have the bank transfer $20, $50, $100 (whatever number doesn’t keep you from paying your bills) into the new savings account.  After it is set up, pretend like you can’t use that money for anything.
  3. Fill in the blank, there are countless ways to pay yourself first, be creative and have some fun with it, if you can.

I wish you the best of luck with paying yourself first!  Feel free to leave ideas or comments.

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter

Welcome to Millionaire Logic

First of all welcome and thanks for checking out my blog.  I have been working on a plan and ideas for topics for quite a while now.  I originally started Millionaire Logic in 2007 and have tried to make a habit of writing posts regularly, so far this has not happened.  I have spent a lot of time creating designs and then redesigning the site and not really focusing on the content.  Other than adding in features that are needed or requested the design of the site is ‘locked’ for the next year.  I will focus on publishing at least one post a week and I will target two posts a week starting in 2010.

I am not a financial planner, I have no certifications and am currently working at a university so I have no insider knowledge of any company I may or may not mention.  I have no intention of publishing my stock picks, but I’m sure the companies I like will slip into posts from time to time.  I will publish any comments that are not spam or offensive.

I am a very analytical person, I tend to argue with myself until I come to a conclusion that I feel is correct or at least correct for me.  I tend to play the devil’s advocate when I can, so there will be plenty of questions, sarcastic comments and internal debates to some of my posts.  I will do my best to not just copy the trendy topics on all of the other financial blogs or personal finance blogs that are out there.

I hope this gives you an idea of the direction that I intend to go with the blog.  Feel free to leave comments or questions.

  • del.icio.us
  • Digg
  • Facebook
  • Google Bookmarks
  • LinkedIn
  • Twitter
You don't have to be a millionaire to think like one