Financial Crisis

It appears the United States Government is going to try to stabilize the financial markets by putting the tax payers on the hook for over $700 Billion. This is the classic definition of a "government bailout". Private firms took the risk for profit with the risk of loss eliminated since the taxpayer ends up compensating for the loss. Is this a good plan or not? Heck if I know. The world of high end macroeconomics is something that is past my level of comprehension. However, I do see a huge lesson in it.

The natural question in this situation is "who caused it?". We want to know who is at fault. I think this is a reasonable request from the taxpayers. Of course, anyone watching the media knows that no answer is coming anytime soon. Nancy Pelosi responded that Congress held no responsibility for the financial mess. I am certain President Bush is not going to say it is his fault. Is the Bernake and the Fed the cause? How about Greenspan? He led it through much of the housing bubble. Someone please tell me if anyone is owning up to their part in this crisis because I do not see that occurring.

We can extend this conversation to the heads of the financial institutions, the real estate speculators, or the mortgage brokers. The truth is that blame lies at every level. However, responsibility is something that most avoid. We prefer to play the blame game. This is nothing new. People are always complaining about the boss, spouse, educational system, or government for their woes. It is an easy way to approach life. Nevertheless, the victim mindset never succeeds. This is the fundamental flaw in this mess.

So, who is responsible for the financial crisis. I AM!!! You read that properly. I am one of the participants in the creation of this entire affair. Everyone can blame me for the loss of their portfolios over the last few weeks. If a family ends up on the street, I am at fault. The increase in the national debt also lays at my doorstep. I am responsible for all that occurs in my life.

How can I be the one to take the heat when I am not a political leader, head of a financial institution, or major Wall Street player? I do so because I am unwilling to play the victim. And, I am one of the people who stood by while others who are in position of power failed to take responsibility for their actions. We should all be outraged by these people. They all let the general public down in pursuit of their own self interest. Now the blame game begins.

Sadly, this attitude is not relegated to the powerful. Many of the readers of this blog fall into the same category. It is time to grow up and take responsibility for your life. If you do not like what is transpiring, change it. You are the only one who can. The entire nation needs people who are willing to step up. Tell all who will listen that you are responsible. Take ownership for it all even if it is not your fault. The habit is crucial to your future success.

Will this change in mindset influence the global economy? Probably not. It will, however, alter the effects on your life. By taking responsibility, you are then able to change what is ailing in your life. This is a radical difference as compared to giving all your power to another. With this situation, you need to change the other person to have an effect. This is impossible. The only one you can change is you. Therefore, proclaim that you are responsible for all that occurs in your life. Give yourself the opportunity to succeed. It starts with taking your power back.
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Success Key: Thrift

Thriftiness is not something that is valued as an admirable quality in this era. We live in the age of consumerism. The "me" generation is also adept at living for the moment. Buy now, pay later is the common motto. Easy credit on items such as cars, appliances, houses, and electronics creates the habit making impulse purchases. We are a society that is rapidly burying ourselves with debt.

Those who succeed have the ability to be thrifty. Two of America's greatest (and most successful) men emphasized this trait. John D. Rockefeller was legendary for his penny-pinching ways. His "Ledger A" is the most famous bookkeeping journal in history. At the same time, Benjamin Franklin espoused the virtue of thriftiness. He felt that one who lack financial discipline also lacked it in all areas. Both of these men were extremely wealthy when they died.

The Millionaire Next Door tells about the success of this mindset. In the book, it details how the average millionaire is not living in a mansion while driving an exotic sports car. Instead, the typical millionaire drives a used car. He or she resides in a middle class neighborhood. Whatever the profession, that person usually owns a business since wealth is accumulated through ownership. However, they are more likely to own a "blue collar" company as be involved in the world of high finance. As you can see, thrift is one of the basic components to wealth building for these people.

Recently, the world saw what happens when people go beyond their financial means. It matters little whether one is referring to a personal budget or a multinational corporation. When people enter into excess without a plan for savings, disaster is the result. Borrowing instead of saving is a fatal habit for any entity regardless of size. The devastation to our financial institutions prove this point.

It is time for each of us to take control of our financial condition. Thrift needs to be the new mantra. Borrowing against our assets to satisfy a internal lack will cause further problems in your life. It is time to reel in your expenses. Start by eating meals at home as opposed to spending money eating out. Put the money into the car repairs to get another 12-24 months out of it. Cancel the yard service and cut your own lawn. A $75 lawnmower is paid for usually in a couple of months. Make thrift a central part of your lifestyle. I am here to tell you that the consumerism of the last few decades is coming to an end. Those who continue to behave in such a manner will ultimately pay for those habits. There are fewer places to turn for bailing people out. As a nation we need to do this. Yet, this is something that starts at home. It is up to you to take control.

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5 Things The Average Millionaire Avoids

The word millionaire conjures up thoughts of extravagant wealth. While that was true in years past, being a millionaire today means that one is enjoying much less of a lifestyle. A millionaire does not live in a huge mansion while driving fancy exotic cars. Instead, as was summed up in The Millionaire Next Door, this person lives a rather modest lifestyle. He or she is financially free because the expenses are kept in check. This person values putting more money into the portfolio as compared to engaging in poor habits which cost a lot.

Here are 5 things that your average millionaire does not do. If you want to enjoy the lifestyle of the affluent, implement these into your life.

1. Buying or leasing a new car every few years.

A new car is the worst investment that you can make. It is no secret that you lose thousands of dollars the second you drive off the car lot. If you are in need of an upgrade of your old vehicle, consider purchasing a quality used car that is a couple of years old. This vehicle already went through the major depreciation and, if it has low mileage, will deliver years of service to you.

2. Purchasing a new one when the old can be fixed

A little handiwork goes a long way. Often, when items are broken, the fix is simple and inexpensive. Yet, many choose to purchase a new item instead of fixing the old one. I once had a light that stopped working due to a loose cord. It took less then 10 minutes to fix it. This saved $30 for a new light. That equates to an hourly rate of $180 per hour. Not a bad return.

This example shows how a single item will not determine success or failure. However, it is the habit that is important. Millionaires seek to maximize their return on everything. If you can spend a few dollars on an item while getting another year usage, that is improving the return on your money.

3. Buy name brands

Have you ever noticed that the store brand cough medicine has the same ingredients as the name brand. The difference is about $3.00 a bottle. That equates to 45% of the purchase price. We see the same situation with clothing. Why buy name brand when a large percentage of the purchase price is the marketing dollars spent to make the name a household word? It does not make the product work any better.

The exception to this is with quality. Paying a bit more for quality is often a wise investment since the overall cost is less with the increase in longevity. A prime example of this is with shoes. Usually, an $80 pair of loafers will last substantially longer than a $30 pair. The length of usage makes it a better deal over the life of the item.

4. Eating out a lot

Food offers the nourishment that is required for us to survive. However, it is something that ends up in the same place regardless of how much it cost. Dinner at a nice restaurant can easily run $40+ a person. The same meal can be prepared at home for under $10. Those who reach the level of millionaire realize this fact and choose to eat at home. The same mindset is applicable to lunch. With the average lunch going for $6-$8, one can slash 75% off that amount by packing one. Brown bagging is a way to affluence.

5. Paying for lawn care

When I moved into my house, I checked into getting a lawn service to take care of the yard. When I got the estimate, I almost fell over. They want $75 a week for something that would take them less than 30 minutes to do. Instead of paying that, I purchased a used lawn mower for $75 and do it myself. This gets me out of the house for a little exercise while allowing me to enhance my investment portfolio. The extra money that I save is invested on a monthly basis.

The average millionaire knows exactly what his or her time is worth. Mowing the lawn may seem like a waste of valuable resources. Again, when I notice that it takes me 45 minutes to do my entire yard, I realize that I am earning $100 per hour. This is a terrific return for most people.

Here are 5 things that your average millionaire will avoid doing. Controlling one's expenses is a key part of amassing wealth. Start implementing these simple ideas into your life. Keep track of the monthly savings and invest it. This way, you are paying yourself instead of a particular vendor.

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Success Starts In Your Head

What is it that makes Donald Trump different than everyone else? Why is he more successful than most even though he encountered his share of difficulties over the years? Simply, because he believes that he will come out on top. The factor that separates him from most others is the thoughts that he consistently maintains in his head.

Let me ask you: how excited would Donald Trump be to make $1,000 on a deal? To him, this is not something to get excited about. He has a mindset that is set at a much higher level. How about you? What are you beliefs about this? Is your mind set at a level of minimal value? If you are like most, it is.

Success is a result of your thinking. Norman Vincent Peale revealed this concept to us in the middle of the last century. Thinking is what determines out thinking because it is the one thing that is responsible for the action we take. Positive thoughts will lead you to take positive action. However, the reverse is also true. It is one's negative thinking which prevents the taking of action.

Do you want to be a success? If so, break the stranglehold on the thinking that causes self doubt. Society has a way of telling us that we are not worthy. We compound this by believing that failure is possible. It is not. There is no such thing as failure; only results. We can achieve one of two things in any situation. Success is one outcome: the other is a learning experience. Notice how there is no failure there. If things do not work out the way we want, we can learn from the situation. It is all a matter of perspective. Decide today what type of life you want to lead.
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Ben Franklin's Rules To Wealth

Originally published in 1758, Ben Franklin’s Way to Wealth offers advice that is as true today as it was then.

Industry (1-39) - Energetic devotion to a task or an endeavor; diligence.

1. Early to bed, and early to rise, makes a man healthy, wealthy and wise
2. Diligence is the mother of good luck
3. God helps them that help themselves
4. Sloth, like rust, consumes faster than labor wears, while the used key is always bright
5. Dost thou love life, then do not squander time, for that's the stuff life is made of
6. Lost time is never found again
7. He that riseth late, must trot all day, and shall scarce overtake his business at night
8. Drive thy business, let not that drive thee
9. Industry need not wish
10. He that lives upon hope will die fasting
11. There are no gains, without pains
12. Plough deep, while sluggards sleep, and you shall have corn to sell and to keep
13. One today is worth two tomorrows
14. Have you somewhat to do tomorrow, do it today
15. Be ashamed to catch yourself idle
16. Let not the sun look down and say, inglorious here he lies
17. He that hath a trade hath an estate
18. He that hath a calling hath an office of profit and honor
19. At the working man's house hunger looks in, but dares not enter
20. For industry pays debts, while despair encreaseth them
21. Constant dropping wears away stones
22. By diligence and patience the mouse ate in two the cable
23. Little strokes fell great oaks
24. Employ thy time well if thou meanest to gain leisure
25. Since thou art not sure of a minute, throw not away an hour
26. A life of leisure and a life of laziness are two things. Do you imagine that sloth will afford you more comfort than labor?
27. Trouble springs from idleness, and grievous toil from needless ease.
28. Many without labor would live by their wits only, but they break for want of stock
29. Industry gives comfort, and plenty, and respect: fly pleasures, and they'll follow you
30. Keep the shop, and thy shop will keep thee
31. If you would have your business done, go; if not, send
32. He that by the plough would thrive, Himself must either hold or drive.
33. The eye of a master will do more work than both his hands
34. Want of care does us more damage than want of knowledge
35. Not to oversee workmen is to leave them your purse open
36. In the affairs of this world men are saved not by faith, but by the want of it
37. Learning is to the studious, and riches to the careful, as well as power to the bold, and Heaven to the virtuous
38. If you would have a faithful servant, and one that you like, serve yourself
39. For want of a nail the shoe was lost; for want of a shoe the horse was lost, and for want of a horse the rider was lost

Frugality (40-78) - Prudent economy; that careful management of anything valuable which expends nothing unnecessarily, and applies what is used to a profitable purpose; thrift; — opposed to extravagance.

1. A man may, if he knows not how to save as he gets, keep his nose all his life to the grindstone, and die not worth a groat at last
2. Beware of little expenses; a small leak will sink a great ship
3. Buy what thou hast no need of, and before long thou shalt sell thy necessaries
4. A fat kitchen makes a lean will
5. Many estates are spent in the getting, Since women for tea forsook spinning and knitting, And men for punch forsook hewing and splitting.
6. Think of saving as well as of getting: the Indies have not made Spain rich, because her outgoes are greater than her incomes
7. Women and wine, game and deceit, Make the wealth small, and the wants great.
8. What maintains one vice, would bring up two children
9. Who dainties love, shall beggars prove
10. Fools make Feasts, and wise men eat them
11. Buy what thou hast no need of, and before long thou shalt sell thy necessaries
12. Wise men learn by other's harms, fools scarcely by their own
13. Silks and satins, scarlet and velvets, put out the kitchen fire
14. A ploughman on his legs is higher than a gentleman on his knees
15. Always taking out of the meal-tub, and never putting in, soon comes to the bottom
16. When the well's dry, they know the worth of water
17. If you would know the value of money, go and try to borrow some
18. He that goes a borrowing goes a sorrowing
19. Fond pride of dress, is sure a very curse; E'er fancy you consult, consult your purse.
20. Pride is as loud a beggar as want, and a great deal more saucy.
21. When you have bought one fine thing you must buy ten more, that your appearance maybe all of a piece
22. Tis easier to suppress the first desire than to satisfy all that follow it
23. Great estates may venture more, But little boats should keep near shore.
24. Pride that dines on vanity sups on contempt
25. Pride breakfasted with plenty, dined with poverty, and supped with infamy
26. But what madness must it be to run in debt for these superfluities!
27. When you run in debt; you give to another power over your liberty
28. The second vice is lying, the first is running in debt
29. Lying rides upon debt’s back
30. Poverty often deprives a man of all spirit and virtue: it is hard for an empty bag to stand upright
31. Creditors are a superstitious sect, great observers of set days and times
32. Those have a short Lent who owe money to be paid at Easter
33. The borrower is a slave to the lender, and the debtor to the creditor
34. Disdain the chain, preserve your freedom; and maintain your independency: be industrious and free; be frugal and free
35. For age and want, save while you may; No morning sun lasts a whole day
36. Gain may be temporary and uncertain, but ever while you live, expense is constant and certain
37. Tis easier to build two chimneys than to keep one in fuel
38. Rather go to bed supperless than rise in debt.
39. Get what you can, and what you get hold; It is the stone that will turn all your lead into go

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17 Wealth Principles of the Poor

1 Poor People believe "Life happens to me"

2 Poor people play the money game not to lose

3 Poor people want to be rich

4 Poor people think small

5 Poor people focus on obstacles

6 Poor people resent rich and successful people

7 Poor people associate with negative or unsuccessful people

8 Poor people think negatively about selling and promotion

9 Poor people are smaller than their problems

10 Poor people are poor receivers

11 Poor people choose to get paid based upon time

12 Poor people think "either/or"

13 Poor people focus on their working income

14 Poor people mismanage their money well

15 Poor people work hard for their money

16 Poor people let fear stop them

17 Poor people think they already know
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17 Wealth Principles of Rich People

RICH PEOPLE
1 Rich people believe "I create my life"

2 Rich people play the money game to win

3 Rich people are committed to being rich

4 Rich people think big

5 Rich people focus on opportunities

6 Rich people admire other rich and successful people

7 Rich people associate with positive, successful people

8 Rich people are willing to promote themselves and their value

9 Rich people are bigger than their problems

10 Rich people are excellent receivers

11 Rich people choose to get paid based upon results

12 Rich people think "both"

13 Rich people focus on their net worth

14 Rich people manage their money well

15 Rich people have their money work hard for them

16 Rich people act in spite of fear

17 Rich people constantly learn and grow
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