Tag Archives: Jim Rohn

Financial Independence, Saving, Wealth

Forget casinos, bet on yourself

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“There is a gigantic difference between earning a great deal of money and being rich.” —Marlene Dietrich

You bet there is. I am a firm believer in being rich in assets. Those are the things that will help you build wealth. They attract money to you.

I once read a wealthy gentleman online state he wants to be cash poor and asset rich.

Basically, he is looking to have more assets than a fat paycheck. He knows money can slip through your fingers. Assets do not easily slip away.

The bigger the paycheck means the higher the taxes you pay Uncle Sam. In contrast, assets usually go up in value and earn interest over time. Capital gains tax is lower than income taxes.

So, if you want to bet the farm, then put it all on staying in the black and not the red.

CASINOS ARE NOT WHERE THE WEALTHY ARE

I know you see all the television shows and advertisements telling you to go to Vegas. However, that is just a way to get you there to spend money. Most wealthy folks are not rolling the dice with their finances.

Casinos are designed to separate you from your money. Just like subscriptions. Read my posts Do not cash out your retirement accounts and  America is the land of subscriptions.

I have read enough blogs and books to know that you must hang around like-minded people.

Motivational speaker Jim Rohn said, “You’re the average of the five people spend the most time with.” And so is your net worth.

We are influenced by those we associate with. These relationships over time can have a profound effect on our lives.

Therefore, you must choose wisely when it comes to friends, business partners, and spouses.

The wealthy are about building assets. Therefore, you are not likely to see them at the casino at four o’clock on a Monday afternoon. They are out volunteering, networking, and closing business deals.

HOW DO CASINOS MAKE MONEY

A Canadian study stated that 75% of customers provide only 4% of casino revenues. It’s the habitual gambler that keeps the casino in business.

If you ever saw Mark Wahlberg in The Gambler, then you know who I’m talking about.

Computer gaming and slot machines are all the rage when it comes to gambling.

Most players lose more than they win. I don’t like those odds. Therefore, I do not gamble.

That means people with gambling addictions are the most vulnerable. Or you can become addicted after getting a taste of winning like in the film 21.

Slot machines are, like credit, addictive. Casinos actually can make you poorer. This exacerbates inequality.

CASINOS WILL HELP THE ECONOMY RIGHT?

Not so fast. Let’s take a look at Atlantic City.

Back in 1977, casino advocates made promises that casinos would help give the economy a boost by providing jobs. Don’t get me wrong, they did provide jobs. However, the surrounding local business owners did not get the foot traffic coming into the casinos.

The money that casinos make, stays with them.

Many local businesses had to close up shop. The retail economy collapsed all around Atlantic Avenue in New Jersey. Several casinos have actually shut down since 2014. That means jobs were lost not gained.

HOW TO BET ON YOURSELF

Devote all your time, money, and resources into yourself.

Use your hard earned money to invest in your education, training, and business.

When I was watching David Tutera plan those weddings on television, I learned he wasn’t doing this for, in the illustrious words of Sia, cheap thrills. He did it for a living. And earned good enough money to have a nice home, wardrobe, and chauffeur.

David started party planning and entertaining over 20 years ago. He just invested his time and money into himself. Eventually, he found what he was good at and then he just stuck with it.

There are countless tales of people out there that have found a skill they are good at, practiced and developed it, then went out and started earning a living at it.

Read up on some biographies. See for yourself. I recommend reading anyone you have an interest in or trailblazers such as Gloria Steinem, Arnold Schwarzenegger, Franklin Roosevelt, Charlie Chaplin, Oprah Winfrey, Winston Churchill, or Nelson Mandela.

WHAT CAN YOU DO NOW?

First, I feel people need to assess their situation. For example, when I was growing up I noticed that a lot of kids were not very into studying and really focused on their academics. However, many wealthy people I saw on television always advocated for education.

I figured, why not listen to other successful people?

I started studying and reading more. Especially, thanks to shows like Reading Rainbow hosted by Star Trek’s Next Generation alum LaVar Burton. I would go to the Book Mobile and get tons of books.

Much of my focus was less on having fun and more on learning. Saturday mornings were spent reading on my parent’s couch. Sunday afternoons were spent reading the comics and learning new things and vocabulary words.

I invested lots of time and money into my education and health.

And all of this paid off in spades.

I have four retirement accounts, a home, a car (no monthly payment), and save and invest upwards of 50% of my income.

It took me over a decade to build those things. But it all started with getting an education.

Sure, college helped, but it was sheer grit, discipline and determination that got me where I am today.

THE FUTURE MR. OR MRS. FI

If you want to have a chance at financial independence, I suggest you do the following:

  • Focus on learning more about money and finance
  • Stay away from debt
  • Get a good education (the best you can afford)
  • Pay for cars and appliances in cash
  • Opt for a 15-year mortgage
  • Stay away from vices (narcotics, alcohol, gambling, shopping)
  • Hang around like-minded people
  • Save 20% or more of your income
  • Invest 15% or more of your income

If you can do at least two of the items listed here, you have got a shot at making it into the top 10% of households and becoming financially independent.

College, Financial Independence, Saving

Why the Rents shouldn’t pay your rent

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Financial independence is the ability to live from the income of your own personal resources. – Jim Rohn

Reading headlines in the news about how boomerang kids are returning home in droves is quite alarming.

When I was growing up, I saw lots of young adults leave home and never return. They got jobs and worked their way up to where they were trying to go.

However, a couple decades have changed all that.

One of the biggest culprits: student loans.

The cost of college has outpaced inflation. Therefore, it is now up to families to find affordable ways to get a college degree.

Otherwise, your kids may just end up back in your basement, or worse, in their childhood rooms that they could hardly keep clean when they were debt-free teenagers. Gulp!

The reason that so many millennial’s need parental assistance in paying their rent is because they shoulder the bulk of the $1.4 trillion in student loan debt.

However, borrowing or taking out deposits from the bank of Mom and Dad is not a good idea and can have lingering consequences for the parents as well as the kids and future generations.

Here are the reasons why young adults should stop relying on their parents and become independent as fast as they can.

FINANCIAL INDEPENDENCE WILL TAKE LONGER TO REACH

We are living in a time when more people discuss this phenomenon called FIRE (financial independence retire early).

Although, this should be taken with a grain of salt, as many people will need to save 50% or more of their income for a decade or two to make this dream a reality. And that is not always possible or feasible to do, to say the least.

That being said, the decision is always yours whether or not you retire at 42 or 62. The point is to be able to one day have the option to retire.

When you lean on your parents (the Rents) to pay your bills, it can delay the transition into adulthood.

I have noticed when people have no safety net, they are a lot more resilient and cautious about what they do and spend.

For example, to rely less on Mom and Dad later in life as an adult, you could do the following:

  • Live with a couple roommates
  • Pick a smaller apartment to live in (say 700 square ft.)
  • Go without a car or at least buy a smaller, more affordable one
  • Commute to college and save by not paying room and board; therefore, requiring less or no student loans

It seems to be the people that get off their parent’s payroll ASAP are the ones that are able to become financially independent the fastest because they have no other choice.

When the only option is self-reliance, then you learn to live lean really quick. And low fixed expenses are how you will be able to start saving money.

A SUBSIDY SHOULD HAVE LIMITS

For those that may not know, right now the Direct Stafford Loans offer a three-year subsidy (you may have to ask your loan servicer if your loan has this feature) for students entering repayment.

Those funds give graduates time to find suitable employment and create a budget for their lifestyles in order to repay what they owe.

This cushion is a great way to help young people get on more solid financial footing.

What you may or may not have noticed is that there is a three-year window and then it closes shut.

And do you know why? It is because when you offer people a crutch, then unless they have the drive, perseverance, determination and the will to be self-sufficient, they are likely to use the crutch forever.

You have to limit aid, otherwise, people come to rely on it for all their days.

This includes the funds from your parents.

Get off their bankroll as fast as you can, or you may come to depend on it for the rest of your life.

Let’s be honest. Nothing lasts forever. Even milk, has an expiration date.

You would rather have the option of saying no than hearing the words: We’re cutting you off.

RELYING ON SELF GETS BETTER RESULTS

I know that having help is at times necessary to keep a roof over your head. I would not tell parents not to help their children. I am asking children to tell their parents, that they no longer would like their financial assistance.

Therefore, you become the adult or hero in your own life and story.

If you read any number of stories about the rich and successful, you will notice that many did not pull themselves up by their bootstraps, but had just enough help to get things running and then go it alone.

When you allow someone to write you a check, you are also giving them some form of say so in your life. This de facto control you are giving up every time you cash that check, has far reaching and lasting consequences.

You may want to live in SoHo, but the parents say they are only willing to pay for something closer work or at a specific dollar amount. Thereby, giving them more control over your life.

When you write the check, you have all control. You say when, where, and how much.

No need to wait on anyone to give you the green-light or hand you the money. You can make decisions for yourself and might I add, faster than if you had to wait for help or other form of assistance.

Thereby, causing you to not miss opportunities because you can say yes without having to check in with anyone else.

You can say yes to that job, internship, business opportunity, apartment lease, car purchase, or vacation.

Just something to think about.

INDEPENDENCE IS ATTRACTIVE

Independence, especially financial independence, is attractive.

When you are an adult, you do not have to tell anyone you are one.

They can see it in your actions.

Are you out at the bar every night? Or are you at home, working on that new app your developing to earn enough money for a down payment on a house?

Do you spend with reckless abandon? Or are you cognizant of what you are spending, and where your money is going?

People are drawn to confident people. It is an attractive quality. They say like attracts like.

Nothing exudes confidence like someone who is in control of their money and time.

Are you looking for a partner? If so, ask yourself what qualities are you looking for in one.

For instance, do you want someone who buys everything in three’s, likes to lease cars, and maxes out their credit cards every month?

If the answer is no, then you may want to make sure you are not doing any of those things as well.

Everyone wants to date up, but they forget that they too need to get themselves together in order to attract someone worthy of their time and vice versa.

When you are independent, people want to be around you. You attract jobs, opportunities, people, and money when you have your own.

GENERATIONAL WEALTH INTERFERENCE

The New York Times has reported that 40% f people in their early 20s receive financial assistance from their parents.

Parents are paying for everything from rent to car insurance.

According to CNBC, this is what parents are paying for.

The problem with this is that every dollar that parents give their children, is money that is not working for them in building their financial house and keeping it secure.

If parents have the money to give their children for a down payment or college education, then I am all for it. By all means, help the kids out.

However, what many kids may or may not know is that Mom and Dad cannot afford some of these expenses.

It is one thing to help someone with a one-time expense, like a down payment on a home.

It is another thing entirely to help pay someone’s rent or mortgage every month with no end or deadline in sight.

Many baby boomers are going into retirement unprepared. Therefore, they usually do not have the funds to give the kids or grand-kids because they need that money themselves.

How do I know? Well, I ask people. And many have said that their are finances precarious and funds are limited. Many give until it hurts. However, it not just hurts them, but also their heirs.

The Sandwich Generation is a generation of people who care for their aging parents while supporting their own children.

By not taking or limiting financial help from parents, it limits the help you may need to give your own parents when you are raising your kids.

Let me share with you this story for some perspective.

I read an article about a man who decided to become writer. While he did pretty well for himself, the family still struggled financially.

This is what happened during the course of their lives:

  • His wife quit working and became a stay at home mom
  • Their daughters were given the option to go to the private colleges of their choice, even though the family could not truly afford it
  • His father helped them pay for college for the kids; thereby, making him forfeit any future inheritance for him or his children for the sake of present conveniences
  • They also paid for their two daughters weddings out-of-pocket, with empty pockets
  • His wife has been out of the workforce so long she is unable to find reasonably paid work
  • He works 7 days a week
  • They have no savings and NO RETIREMENT

From the example above, you can see how paying for present pleasure or not planning for expenses can harm you and your family down the line.

This is scary stuff. Their inability to say no and set firm limits on what they were willing to spend has caused long-term consequences. They may have to rely on their children for financial assistance in their old age as opposed to passing on wealth.

I urge you to reconsider.

Let this post be your wake up call.  A call to arms, if you will. A call to financial arms. To arm yourself with financial knowledge, so that nothing can stop you from working toward your goals and building a solid financial future; independently.