Young people seem to be confusing assets and debt. Some are implementing potentially dangerous thoughts regarding credit as it relates to creating debt. While at a car wash the other day, a young man and I struck up a conversation about credit.

He was wondering if I knew » Read more…

The cash advance business is growing at enormous rates. You’ve seen these places popping up in all types of neighborhoods. These are relatively clean, well lit, innocent looking establishments. The new, improved breed of quick-cash ‘til payday operations look great on the outside. The personnel working in them are dressed professionally. But the usury style of business is the same as it’s always been.

Typically, they are offering very short-term loans to people, already in debt, who find themselves in a bind. Since they require no credit check, it can be a convenient way for » Read more…

Certain laws exist which we can accept or reject. When we choose to accept these laws, the knowledge and use of the law works to our benefit. When we aren’t aware or ignore the existence of the laws, it’s like fighting the current of a river in a boat.

Take Isaac Newton and his observance of gravity. Here is old Newton sitting under a tree. An apple falls onto his head. He observes gravity. He thinks and ponders this phenomenon, writes about » Read more…

Q. We have $12,000 in our “emergency fund” and about that much in high interest credit card debt. Should we pay off the credit cards gradually? Should we use the cash and pay the debt off? My spouse insists we should consider a home equity to pay off the card debt in » Read more…

One reason, our debt is growing so quickly, is we moved from the service based society to a service and information and communication based society. The computer has made information and knowledge move so much faster than it did fifty years ago. The people of the world want information.

Things are moving so quickly, in our efforts to keep pace, we’re not watching what’s really happening to us financially. We are just not watching.

The speed of technology and information is resulting » Read more…

A few weeks ago I had the opportunity to speak with a group of young couples and I discovered something I’d suspected but never really knew to be true.

During that evening we discussed at length the importance of using guidelines for their necessary expenses. We’d been talking about how to eventually get to living debt-free. Over half the room hadn’t heard about housing expense being no more than twenty-five percent of your take home pay. They were simply unaware.

As explained in length on page eighty-eight of No Balance Due, you can choose to use the old twenty-five percent number or not. I’ve tried it both ways. Life simply goes easier when we haven’t spent over the twenty-five percent guideline.

It’s been around for centuries. And that’s the point. Even though television and sometimes even the lenders tell us we could spend more, it’s best not to.

After this talk, the nicest young man came up to speak with me. He announced that he knew his grand-parents owned their home free of debt during their retirement. He also stated he thought his parents would probably be able to pay for their home by the time they retired.

He emphatically professed that his generation wasn’t going to be able to do that. He said I wasn’t aware of the reality of how life is for young families in America economy.

After a few minutes of visiting with him we discovered a few things he hadn’t remembered too well. I asked him about what size home he’d grown up in. He said he thought it was about a 1200 square foot home with three small bedrooms and one and one-half bathrooms.

He also remembered that his mom cooked on an oven-stove combo and they had an older model refrigerator. Next he volunteered that their wasn’t much counter space to prepare meals and they used the stove top to do a lot of that.

I next asked him what size home he and his family were in. He proudly told me they were in a twenty-nine hundred square foot, four bedroom home with a thirty-five thousand dollar custom built kitchen that they are only using three or four times a week because they are dining out the rest of the time.

All of a sudden it hit him. I didn’t say much. I could see his expressions and his tone changed. He said they’d been so busy creating their dream life-style they were putting themselves into their own debt troubles. All of a sudden he realized it had taken his parents over a quarter century to have the nice home and appliances and vehicles they have now.

He said he’d simply forgotten. I told him there are always less expensive alternatives in any given school district for their children. He admitted they are so busy keeping up with everybody else, they simply weren’t thinking about their future.

It doesn’t matter what everybody else does. My mother used to tell me something your’s may have told you. Just because so and so jumps off a cliff, does that mean you have to do it too?

Housing expense should not exceed twenty-five percent of your take home pay. One weeks pay for housing. That’s the way my father-in-law told his children. The other weeks are for you to live. Check out the first part of Chapter eight of No Balance Due.

We were on a trip with some friends a few years ago when the subject of budgets, consumer debt and credit cards came up. We talked about this for hours.

We stopped for lunch and as we were paying, my friend Mike asked me about paying for lunch with a credit card. We had no idea the subject of credit cards was to take the twist it did.

A Quick Tip: Click inside the screen below.

Mike said, he and his wife Lee Anne, had accidentally realized something about their credit cards » Read more…

Adopting the following concepts will help you get on the fast track to being debt free.

One. Get around people that have no debt. Folks that are debt free usually confronted a lot of debt in their life experience. They can help you with ideas to develop a plan of your own. They had to conquer the same issues you are presently facing.

Two. The sooner you discover, using cash instead » Read more…

During the course of running some errands a few days ago, we ran into some friends, Ken & Patti, and took some time to have lunch. Knowing my passion is this personal debt issue, a story about these people’s daughter and son-in-law came up.

Apparently this young couple had come over to our friends’ house to watch the Super Bowl game. During the course of the evening the young couple announced that they had eliminated all of their debt.

As the story unfolded, they had taken a home equity loan and » Read more…

It’s always fun to look at the difference between how we think things are and the way they really are. The way most of us think debt-free, asset-based wealthy folks live, act and play is really so different from what they really do and how they really live.

According to Thomas J. Stanley, the author of The Millionaire Mind and The Millionaire Next Door, they are a mid-fifties couple, still married to the same spouse and they have three children. Most of them run everyday businesses.

Some own small manufacturing plants. Most drive older, American made vehicles and buy their expensive clothes at J.C. Penney.

They work between forty-five and fifty-five hours per week. They live frugally. On average they invest twenty percent of their annualized income. Most of them never inherited any money.

The majority are first generation millionaires. They are not gamblers and they believe the harder you work, the luckier you’ll be. Most are not living the lifestyle of the millionaires portrayed in the movies and on television.

Our television millionaires wear the finest clothes, drive the nicest, newest, foreign vehicles and live in mini-mansions. Because if they don’t, we’ll change the channel and the show will be canceled. The television producers decided long ago to give us what we wanted. They show us our perception of the rich, the way our minds say it should be.

In reality, the wealthy are simple, common, ordinary people, who save their money and build their wealth week after week, month after month and year after year. For the most part, they’re not the movers and shakers of our society.

Since most of them aren’t corporate executives or professionals, they have no need to dress the part. They use that money to invest. They have no need to impress anyone with the sports car image, so they invest that money, too.

The wealthy don’t have a keep up with the Joneses’ attitude about life. They have asset-based wealth. Many have good years and bad years regarding their incomes. Most of them didn’t attend university. Many are concerned about their children, who are attending.

Many professionals such as attorneys and doctors, live a lifestyle equal to or a bit greater than their high incomes. The wealthy know the rented condominiums and the leased vehicles are a drain on people’s assets. This can create debt.

The wealthy worry their children may fall into this show lifestyle. They know living luxuriously, and having a zero or negative, asset-based net worth, will tend to have a negative aspect on most areas of their children’s lives.

What do the wealthy do for fun, enjoyment and entertainment? Our television image of them is weekending on the yacht, summering in Europe and skiing weekends during the winter. What they really do is spend time socializing with their children and grandchildren. They have their friends over to play cards or domino’s. Not what you expected?

The wealthy don’t associate dollars with their concept of fun, when spending time with their friends. They realize good friends don’t have to be impressed with the boat or the trip to Las Vegas. They don’t equate money with making new or keeping longtime friends. They’d rather watch or help coach their children or grandchildren playing sports.

Isn’t their lifestyle just boring when you think about it? No. It makes perfect sense. The way they live and their activities actually help build more assets every day, every month and every year. Along the way, they trained themselves to be happy, living a frugal lifestyle they enjoy immensely.