The $500 Coffee Mug With 12% Interest

I love my bank. It is small, locally owned, has free Atm withdrawals no matter the network, and I have a small beef with them. Whenever I come in to withdrawal cash for my families weekly expenses I am solicited for a new credit card. I must preface that the people that know me in the bank don't offer this because they know my debt assassin stance. But, every now and then I have a new teller help me. Today was one of those days.

"Mr. Williams would you like to open a new credit card today?",  I say no thanks. She immediately responds with, "You get a free coffee mug when you do". I politely tell her I appreciate the offer of a $500 coffee mug with 12% interest but today I will pass. The teller responds to me saying that she can't believe people actually do open the account just to get the free mug.  I have to tell you I was one of those people before becoming a debt assassin.

I would sign up for all kinds of cards just to get free junk. Probably the worst thing I ever got was when I was in college,it was a $500 beach towel with the Visa logo on the towel. My towel eventually cost me about a grand over a five year period. What is the dumbest thing you ever received for signing up for a credit card, and how much did that "free gift" cost you in the long run?  Post in the comments and let me know.

Repentance And Debt (Part 2)

© Cheivan | Stock Free Images & Dreamstime Stock Photos

In the first part of this two part post found here, I covered the first 3 parts of repentance and debt.

1. A deadly stabbing of the inner man.
2. A pronounced awareness of guilt.
3. An unashamed admission of ignorance and or inability.

In this last part I will cover the last three parts.

1. A humble cry for help:
1. This cry for help was not as loud for me as it should have been.  I should have been shouting to people who loved me and knew would want to help me through this.  Instead my wife and I kept it to ourselves and after we were sure of the direction we were headed we started to talk to others about our plan.  As I said in part 1 the person we asked for help was Dave Ramsey (Affiliate Link), and of course we turned this dilemma over to God through prayer as well.

2. A timely arrival of self distrust:
1. Knowing that I could not trust in what I was doing financially Amy and I had to set up controls that held each other accountable.  We set up a budget each month and each of us had an allowance.  This also meant that we used cash for most of our purchases.  Things like gas we still used debit cards.  This really made tracking easy and allowed both of us to know what was in our account and what money would be coming out.  This also eliminated over draft fees which averaged around $200 a month when we were not using this system.

3. A refreshing absence of excuses:
1. When we had over draft fees, or missed a bill payment, we often would make excuses on why it would happen.  We would blame a company for not processing a payment in a timely manner, or the bank for allowing us to overdraft our account when there was actually no money in it, but the worst thing of all we would do was to blame each other.  By pointing the finger at each other no one was accountable for our financial mess and this type of thinking led to a lot of fights.  When God switched on the light of repentance over our financial sin the excuses and finger pointing ceased.  This helped Amy and I to really put the pieces of our financial lives back together and renewed our marriage as well.  Instead of making each other the enemy we made debt our enemy.

Repentance and Debt (Part 1)

I have to give my pastor Dr. Scott Maxwell credit for providing inspiration for this post.  He did an awesome sermon on repentance that you can play here.  I never really thought about the steps spiritually it took for me to come to grips with the sin of poorly stewarding over God’s provisions until I heard Dr. Scott’s message.  The sermon is outlining Acts 2:37-47.

1. A deadly stabbing of the inner man.
• For me this stabbing was realizing that I was living a life that was not in line with what God had intended.  Even though I was saved from my sin this was an area of my life that God had not chosen to reveal to me.  I was spending more than I made and was not keeping track of what God had blessed me with.  
2. A pronounced awareness of guilt.
1. I was definitely ashamed of how I was living.  Not only was I guilt ridden but I was so ashamed that I could not tell people that were close to me (church leadership, close friends, and mentors).  Just because you feel guilty it does not mean that you should not seek help from those people that are in the church.  Church goers and leaders should never be shocked or surprised that a fellow brother has fallen into sin.  It is the church’s job to help sinners understand that Jesus died so all sins can be forgiven.
3. An unashamed admission of ignorance and or inability.
1. This is where I started to turn the corner.  Knowing you don’t know how to accomplish or start something is a very freeing feeling.  I knew I needed help which meant I would start searching for people who had gone through what I was going through.  Spiritually it meant I was going to depend on God.  Physically I knew that I needed someone to help get me financial house in order.  That person turned out to be Dave Ramsey.

In my next post I will close with Scott’s other 3 points and how they relate to my poor stewardship of money.

You Can Never Have Too Many Resources

Here is a link to some well known links and some not so well known links that will help educate you on debt and personal finance matters.

http://debtresources.org/top-50-debt-resources/

There is also only one week left in the NFL season (sad).  However Peyton Manning might be coming to my Arizona Cardinals (beyond happy).  I know this is a personal finance blog, but it is my blog and I thought you should know.

This Is Art?

At an event for work and it is being held at the Phoenix Art Museum.  I have no idea what this is.

What I Learned In 2011

1. That development is solely my responsibility. No one is going to invest in my success more than I will. Which means that personal development needs to be built into my monthly budget and the payoff is exponential.
2. Small consistent steps are better than big ones. It is a simple, and often a forgoten phrase that slow and steady wins the race.
3. That in order to succeed I need to get out of my own way. This is a hard principle to grasp but we let our own thoughts betray what we can ultimately accomplish.
4. Comfort is the cousin to complacency and stagnation.
5. Jobs are not honorable or dishonorable but the people who do them are.
6. I need to talk less and listen more.
7. God’s word is to be applied to my life in every way.
8. Failure is only bad if you quit something because of it. Failure is awesome as long as you learn from it and don’t let it defeat you.
9. What you feed your mind is as important, or more important as what you feed your body.
10. That I am grateful for the new people I have gotten to know by writing this blog.

A Funny Blog Post From Perkstreet

As you probably already know I love Perkstreet online bank.  They have no fee checking, give you up to 2% cash back on purchases, and really understand customer service.

Here is a funny blog post from them.

http://blog.perkstreet.com/dont-get-a-perkstreet-account-if/

A Weird Side Effect

When I started to clean up my financial life and give up using credit, and loans something strange happened.  The more people I told what Amy and I were doing, the more we discovered people were shocked, and some even wanted to argue with what we were doing.

Using credit to make purchases is fine for some people.  For Amy and I it was not a viable option because we had shown through past behavior that we could not handle it.  When we started sharing our goal with others it was almost like people took offense to what we were doing.  They started saying things like, "why on earth would you not use credit card or a loan", "we only use credit cards for emergencies", "we get miles from it so that is why we use credit cards", or my favorite, "we get a 0% interest rate".  All of these responses were in response to us changing our buying habits and sharing it with people.  These unsolicited responses were people protecting what they knew was wrong for them but ultimately did not know any other way to live.

It was like we were breaking away from the crowd and the crowd desperately wanted us to stay with them to prove they were right.  I had heard of stories of things like this happening where you make changes in your life, and people that love, and care about you, become uncomfortable with what you are doing, but we were actually living it!  This type of thing also happened when Amy and I were adopted by Christ.  All of a sudden we were telling people of what had happened in our lives, and we got luke warm to hostile responses from long time friends.  Please don't take this as a complaint because it is not.  We are blessed to have changed our lives financially, and even more blessed to be adopted by Christ.  My point is that sometimes the things that we change for the better will alienate those around us that are comfortable with the status quo.  You can't be afraid to break away from the crowd and do what is right for you.   Someone else's discomfort can't be your concern when making changes in your life.  Examples might be eating habits, smoking, drugs, alcohol, loans, watching TV, how you dress, and even a sinful society.

The other weird side effect was that the people that we might have lost as friends, or stopped being close with, were replaced with friends that shared our new goals which we became even closer to.

Weird!

Chop Wood And Carry Water

Back when resources did not come out of a faucet or electrical socket people pumped water from wells, and went out and chopped wood first thing in the morning.  The reason for this was because wood and water were the basics and had to be used to do most activities throughout the day.  

Water was used to quench the thirst of the people and also the livestock.  Water was also used to cook and prepare foods with.  People used water to create building materials like mud and other binding agents.  Without water in the morning things would have come to a halt throughout the workday.

Wood was also a main resource that was needed when the day started.  Wood was used for heat.  A cooking source, a building material for homes and also to provide heat to shape metal.

Fast forward to today and I still have to chop wood and carry water but they are a little different.  To get my day kicked off I have two things I do.  I workout when I first get out of bed and then I hit my bible for reading and prayer.  

Working out wakes me up my body and helps to relieve any stress I have physically.  It also keeps my body in shape so I don’t get run down or become sick frequently.  Working out clears my head and helps me to think of new ideas and absorb concepts I come across throughout the day.

Reading my bible and praying prepares me for the roller coaster of dealing with people and prepares my heart to work and live for God.  Without doing this I will not treat people in a godly way.  I will also have less patience and also become easily irritated.

What is the water you carry and the wood you have to chop to start your day?

Weapons Of A Debt Assassin

To celebrate the blogs thousandth visitor I decided to show some of the tools I use to assassinate debt.

Google Docs

This is probably one of the best web based applications ever invented.  You can do word type documents, spreadsheets, drawings, and presentations and it is all free.  This is where I keep my budget and you can access it as well.  Just be sure you open your own account and copy and paste it there.  The best part is you don't have to install anything and don't need any software.  All you need is your internet browser.

PerkStreet


PerkStreet is an online bank that pays you up to 2% cash back on all your debit purchases.  PerkStreet even offers you 5% on some purchases depending on the vendor.  PerkStreet offers  you everything a big bank would offer except they are online and they actually give you money.  I got fed up with large traditional banks and all the fees they charge for me to use my money.  It is a hassle to change banks, and that is what most big banks count on so you won't move, but you must vote with your feet in order to change things.  PerkStreet made that change easy for me but look around first and find a bank that is right for you.

Mint

Mint is an online financial tracking software.  I like mint for its simplicity in set up.  You simply type in your bank info, investment accounts, and the finanical software starts catagorizing everything for you.  It really gives a great look at all your spending in some great graphic formats.  The drawback to Mint is that the info is not up to date that it pulls from your account.  The information lags about a day.  I use Mint mainly as a look back into previous months to see how my spending and savings are trending.

Really Simple Syndication (RSS) Reader

I have spoken about the use of this tool before and it does take some time to setup but once you do it is a great time saver and helps to block out noise to achieve your goals.  The RSS Readers enable you to pick the information that is useful to accomplishing your goals instead of digging through multiple articles for it.  Think of it as having the food (good information) that is useful to you delivered fresh instead of having to rummage through the entire garbage can (main stream media) trying to find a useful morsel.  I use the Google Reader but there are hundreds of good readers out there on the market that will keep you focused on the things that are important to your goals.

The Bible

This is the most important tool for me in killing debt and also doing anything in my life.  Without the Bible this blog would not exist and I would not be writing to you at all.  I would still be struggling with my financial health, living for myself instead of for God and celebrating Christ dying on the cross for my sins.

On The Road Again

At a conference in San Francisco.  I know I am in San Francisco because only here would a man have a dog collar on and another man is leading him around by a leech.

I do love this city though.  Great food and the weather right now is very nice.

Costco Is A War Zone

This is just playing dirty to someone like me who loves to cook.

Step Right Up!

This past week I attended a so called free “educational seminar” about how to invest in the stock market put on by a company called Rich Dad.  Rich Dad is a spin-off from Robert Kiyosaki, who wrote a book called Rich Dad Poor Dad (I initially liked this book but have found some of the ideas go against my no debt opinions).  I am big on self education and finding ways to broaden my knowledge but this seminar I went to was one big sales pitch.

I am in sales and I understand the need to sell products but what is completely underhanded about this “educational seminar” was that there was a lot of selling and no education.  As I was sitting in the audience and listening to this guy scream at us, doing all kinds of gyrations, and getting people to raise their hands.  I couldn't help but think back to a book I read about educating yourself and not falling into the traps of so called new techniques promising fame and fortune quickly.  The only way to have sustained success is a process that promotes consistent little steps that ultimately accomplish a big long term goal.

The circus barker at the seminar was playing on the emotions of people who had lost hope or never had it.  Even though financial education is what was being sold, the people in the audience were not financially educated to recognize a con when they saw one.  

There are many people and organizations out there that want to separate you from your money.  You must be able to recognize them from the legitimate businesses that are truly trying to help you.

Here are some tips to tell the difference:

1. Any legitimate business or business person is not going to pressure you into a sale right on the spot.  If a company tells you that they have a rate for now that won’t be available later, then you should probably walk.  Or, if someone actually tells you, you can’t think it over also walk.
2. They don’t allow questions to be asked in the group that are being talked to.  This helps to keep the people thinking that everyone agrees with what is being said usually.  
3. The old saying “if it is to good to be true it probably is”, should be etched in stone in your brain.  I am not saying don’t take risks but do your research either before or after (preferably both) prior to committing any money to an investment or purchase.
4. Finally, you are the first, last, and only line of defense against being taken advantage of.  You must educate yourself on what are sound investments even when they seem to be benefiting you such as these stock educational classes that were being peddled.

I actually walked out of the presentation about an hour and 20 minutes in because I recognized that the circus barker was trying to manipulate instead of educating me on purchasing stocks (which is what was promised).  In the past I probably would have fallen for this con.  When I got home, I started to research this group and found out they sell classes for $200 only to try and sell you more classes during that time in the tens of thousands of dollars.

 

What Marketing 101 Should Have Been

(Affiliate Link)

Here is a book I recently read for those of you trying to earn some extra cash by starting your own business.

Whether you are in business for yourself, work at a small company, or work in a large company, in sales or marketing everyone should read this book.  Not only does Jay Levinson teach you about marketing in general, he teaches you what you should be doing step by step to grow your business.

I have always looked on marketing as voodoo but after reading this book I have come to realize that was due to dealing with people that did not know how to market.  Every piece of marketing should be tested, measured, and repeated if successful.  The problem I have seen with most marketing plans is that there is not a proper formula that is followed.  Jay gives you a plan to follow and one that works.  

The book starts you off talking about the basics of any marketing campaign.  Making sure you have the right targets based on your current customer profile, what is your measure for success, what are you wanting your prospect to do.  After these basics are laid out then it is time to talk tactics.  What types of marketing are good for your business.  Is it your business event driven, television, radio, Internet, magazine, or a combo of differing types.  Along the way Jay has tons of examples of how to use these mediums of influence successfully, and how to save money when you use them.

Jay also talks about what your marketing materials should look like.  From your business cards, to your brochures Jay gives you great tips on what you should be trying to accomplish with each marketing tool.  Jay also delves into what each of these things says about you to a customer.

Overall this book is great and should be read by anyone that works in a company or owns a business (Did I leave anyone out?).  I loved the simple approaches and many examples of how to market yourself and your business.  Jay also gives you a list of other books, articles, and websites, that he finds useful.

3 Ways Planning/Budgeting Helps You

The plans of the diligent surely lead to advantage, but everyone who is hasty comes surely to poverty.  Proverbs 21:5

I love this verse when counseling about planning/budgeting, and how it protects us and what happens when we don’t budget.

1. Planning or budgeting helps to lay a foundation for us to depend on in times of need.  A financial emergency happens to everyone.  When we don’t have a savings though or plan, that emergency turns into a catastrophe that sometimes can’t be recovered from.
2. When we don’t have a financial foundation and get into an emergency we don’t think logically.  We only think about solving the problem in front of us. That problem is to pay for the emergency at hand.  This illogical thinking means that emotions take over (fear), and we tend to make bad decisions.  Budgeting will prevent us from acting on emotions and instead use a preplanned attack that won’t hurt us in the long run.
3. When we make emotional decisions we turn to poor short term instruments to pay for emergencies because we are not thinking rationally.  We use things like high interest credit cards, lines of credit, payday loans, title loans, pawn shops, or even worse.  Many people use these instruments because they fail to make a plan/budget.

God wants us to depend on Him.  That is really hard when we fall into a financial bind.    Planning/budgeting helps to prevent financial strife.  That does not mean that we can’t fall into financially hard times, because God might want that for us as well (It brings us closer to Him).  But, that does not mean we should not plan or budget for our future.

Scarcity Creates Abundance

I will keep this brief.  

During my financial time of abundance I spent more money, got deeper in debt, did not keep a budget, and ultimately spent more than I made, which made me broke (scarcity of money).  When I made a budget and lived on less than I made, I saved more money, paid off more debt, and realized just how creatively I could spend $100 to entertain my family during a month.

Successful businesses have realized this as well.  Companies like 37 Signals.  They offer less features, had less money, and less people.  Yet they became a great company, that offered a great product, to some great companies.

Ideas work off of scarcity also.  When was the last time you created something great when you had a ton of options available?  When was the last time you enjoyed a meal that had so many flavors nothing stood out?  But, you take some flour, water, yeast, salt, olive oil and a little rosemary and execute it correctly and you can have a loaf of bread that will rival what is made in most local stores and restaurants today.

Want to have abundance, then scale something down in your life.

Start Now, Start Small

When Amy and I started on our journey to get out of debt ($120K) it was an overwhelming task.  What really helped though was taking it in steps that were doable in the short term yet could show we were making progress.

• Track expenses daily.  This does not need to be fancy just carry around a small notebook and write down what you spend when you make a purchase. (We started this immediately)
• Organize your debt.  (We did this in the first week of deciding to do something about our dilemma)
• Cut back on spending a little bit at a time. 1% per month and add an extra 1% each of the following months after that.  (We were aggressive here, we cut back 10% in our first month, and ended with almost  40% cut back in a year)
• Open a new savings account either online or at a separate bank. (We did this in the first day of our journey)

These are just some examples of what we did to kick start paying down our debt.  Pick just one and start tonight.  After doing one well, check it off your list and start a new milestone.  By starting small you will see immediate and beneficial progress that is manageable for the long journey.  You might surprise yourself as we did and find out you want to do so much more.

Opinion Vs. Conviction

More than any other time in history we have an unlimited ability to be able speak to an audience.  Blogs, YouTube, forums, and many other mediums help to spread our message.  For years I have been labeled as opinionated (go figure).  In the past I was okay with this label because I was, and actually took pride in being so.  However being opinionated is nothing more than a big mouth that is actually discontent with everything surrounding them.

You can have an opinion of food, politics, what way to take to get to the airport, or even which cell phone is better the IPhone or Android.  Your opinions should not keep you from trying something that is new or different.  Your opinions can be many and varied.

Convictions are things that you would be willing to die for to protect or defend.  My ability to worship God and read my Bible, and to keep my wife and kids safe are both convictions I have.  You have to determine what your convictions are, but this list should be extremely small and the list should be at the top of how you run your life.

The next time you are sharing an idea in a business meeting, or you are trying to convince someone that you should go to a certain restaurant, remember, it is a conviction and not an opinion that you should die for.  

Contentment

When stewarding over God’s blessings (money) you won’t have a chance of doing it correctly if you think God has not already given you all you need.

Contentment is something that has over the years become a word synonymous with settling.  Settling though would be the complete opposite of what contentment means from a biblical perspective.

Contentment comes from the Hebrew term Ya’al which translated means, to show willingness, to undertake, or to agree or accept.  The Greek translation is Arkeo which means to be possessed of unfailing strength, to be strong, to suffice, to be enough.  In the context of Biblical contentment I will focus on the last meaning in each of the translations - to agree or accept, and to be enough.

We see throughout the entire Bible that contentment is something that man can’t sustain on his own.  Examples like Adam and Eve thirsting to be like God, the Israelites being led out of Egypt but complaining that they don’t have certain provisions, Solomon in Ecclesiastes always wanting more wealth, and Paul warning us in Philippians to be able to live on a little or a lot.  God’s heart is clear in all of these circumstances.  We need to accept that what God has given us is enough.  God does not promise us anything except His Son and eternal salvation.  We need to be content in that promise, be thankful, and turn towards the Holy Spirit for help.

That is not to say that we can’t strive for better, or earn more, but we must look at these things as blessings and not something deserved.  We can jump through many moral hoops to justify our means to acquiring material bobbles if we think we deserve them.  

Here are some tips to help you cultivate a content spirit daily.

1. Begin your day by writing down what you are thankful for.  This will keep you focused on what you have and appreciate it.
2. Cut down on your exposure to outside advertising influence. Even if it means turning down commercials, or opting out of email advertisements, you won't be continually reminded of what you supposedly are missing out on.
3. Call or write to someone that you care about and tell them you appreciate their friendship.

Stop Being An Employee And Become A Brand

If you are wanting to revamp your personal brand and step out of the shadow of being an employee then this is the book for you.  Tom Peters doesn't mince words and paints a picture of what we should all be doing in our professional lives.  Peters says that the projects we do should be outward appearances of the passion we have for our work.  Peters lays out some guidelines though for these projects, one of which is to make sure we are taking on projects that are the very best of what we have to offer.  No matter how small a task, we should take it and make it our own in every way.  Assess your strengths, hang out with people outside of your usual comfort zone, and develop what you do as it relates to helping your customers.  

Tom can be irreverent and down right rude in some instances so beware.  Tom’s book is not for the timid, he demands that you stretch yourself in many unconventional ways.  For someone like me who has taken the safe, steady, non-rewarding path for years there were many things I needed to change based on the suggestions in Tom’s book.  If you like reading guys such as Gitomer, or Godin, you will love Peters.  I can tell that Gitomer and Godin not only studied Tom’s books but borrowed some ideas as well.   I am glad that one of my mentors recommended this book to me and I can’t wait to read some more of Tom’s work.