Best Small Business Ideas 2010 And Beyond

What are the best small business ideas for 2010?  Did you know they are right in front of you? The following is a guest post by Joel, a Certified Financial Planner™. He is the owner of a website with a unique credit card finder, a and a website for comparing car insurance rates.

It seems that many entrepreneurs have a knack for seeing the world a different way. Where most people will see a problem or an annoyance in life the entrepreneur will constantly be thinking of ways to solve a particular problem or meet a market demand. While of course we can’t all be like Thomas Edison  I do think that maybe we can all agree that simply by attempting to look at things around us in new ways that maybe we can begin to solve some problems and find solutions that people will want to pay money to have.

best small business ideas

photo by Fab O Lens, Flikr

This article will be very common sense but I think very potent if we can all try to apply some of the practical things from below into our everyday perspective and then maybe even find a gem of an idea to use as the basis for starting a new business of our own (if you do then be sure to read the article from Neal titled “6 Mistakes I Made When I Opened My Business” first). Here are some common mindsets in the forms of questions or statements that no doubt all of us find ourselves thinking and an accompanying uncommon question or statement that many with an entrepreneurial mindset would think as they try to tune in to the entrepreneur opportunities that are all around us on a daily basis.

One personal example was when I was fresh out of school and working at my first job I was under the impression that the group health insurance offered through my employer was the only health insurance that was available to me even though I later found out that the cost of the employer group health insurance was about twice as much as a similar individual health insurance plan that I could have purchased out on my own from the exact same company (Aetna)! That experience along with others gave me the idea to start a website for comparing many different options for health insurance. Here are three common scenarios that we all have come across at least once in our life. Do you act the “normal” way or do you see the potential entrepreneur opportunities and learning experiences that are all around you?

The Best Small Business Ideas Are Right In Front Of You

Waiting in Long Lines

Instead of saying, “Why is this line so long? Ugh! I hate this! I have so many things to do!” ask yourself: “What is this store doing right/wrong to make so many people wait in line to buy from them? Is there a competing good or service that could offer something better? What is a complementary good or service that many of these same people waiting in line would likely also be interested in purchasing?”

Getting Really Bad Customer Service

Instead of saying, “This company has horrible customer service!” ask yourself: “Why does this company have horrible customer service? Is is the way that the customer service process is set up? Is the customer service center understaffed or poorly trained? Do the owners of the company even realize what is going wrong? If I were the owner how would I be able to improve customer service and monitor their performance? Is their poor customer service consistently so poor that maybe it opens the door to a new competitor that can compete with them based on the key differentiator of superior customer service (and be able to charge higher prices)?”

Finding a Great Out of the Way Restaurant

Instead of saying, “Wow, this restaurant is great! I never even know that this place existed and it’s only a mile away from my house!” ask yourself: “Why have I never heard about this restaurant before? How could the restaurant owner have gotten my attention in a cost efficient way? Is this small restaurant operation easily scalable into a larger operation or into a franchise model? If I were the owner how would I go about getting new customers to try my food?”

*Want to hear a horrible idea that I had while working as a waiter at a buffet in high school? I got the wonderful idea to buy a small wall mounted antacid/heartburn pill dispenser off of eBay and I attempted to convince my restaurant manager to let me place it on the wall of the restaurant. Needless to say, the restaurant manager (and probably 99.9999% of all restaurant managers) were not so thrilled with the idea of placing a machine that dispenses heartburn pills right next to the door of their restaurant. Oh well, some ideas you happen to see are good ones and some are just downright horrible.

What are the best small business ideas you have come up with?

What are some common scenarios that YOU find yourself in where you have noticed either the entrepreneur learning experience or the entrepreneur opportunity that is right in front of you?

Like this article? You will love getting my free brilliant financial updates! No spam, and I won't give your email address to any other person or company. That's a personal promise. Neal Frankle, Certified Financial Planner, Los Angeles, California.

Mar 15, 2010 | 1 comment | View Post

How To Teach Kids About Money

teach kids about money

teach kids about money

This is a guest post from Daniel Packer over at Sweating The Big Stuff. Daniel writes about negotiating, saving, and conscious spending while attempting to maintain a high quality of life. To read more, subscribe to his feed or follow him on twitter.

First of all, I’d like to congratulate Neal on his nominations in the Plutus Awards! If you haven’t done so yet, go vote right now!

Most kids don’t want to talk about personal finance. That’s because they don’t know that they will have to make lots of personal finance decisions in the future. They decide how they spend their money, where they go to college, and how much to save up for big trips. Talking to them now will help them a lot in the future.

Last Wednesday, Neal wrote about teaching your kids about money. He outlined two ways to teach kids, but I’d like to add a specific topic for three different age groups.  It’s important to start young.  The longer you wait, the greater chance you take of them having to learn about money through a crisis or 3rd party financial intervention.

Teach Kids About Money

Ages 13-16

I have always been one to delay gratification, but I have heard my generation referred to as the “instant gratification” generation. Teach your kids about saving today and planning for tomorrow. They budget their money when they decide that they’ll see a movie at the expense of getting a new video game. Limit the cash supply and they’ll learn an important lesson about spending money wisely.

Ages 16-20

I didn’t know much about student loans until I realized that I would actually have to pay them back. I knew they were helpful, but I didn’t know any of the specifics until my junior year of college. All I remember is filling out a sheet for my guidance counselor and I checked the box “money is not an important factor in my decision.” My father looked over this and nearly tore his hair out. I didn’t know anything at the time and maybe I would have benefited from learning a bit more about student loans and my responsibility.

Ages 20+

It may sound like a million years away, but describe the process you went through to plan for retirement, what you did wrong, and what you could have changed. Let them know what your financial situation is and what they can expect. The most important lesson they can learn is that before they pay any other bills, they should pay themselves first. If they don’t put money aside early and often, they’ll have a longer list of mistakes to explain to their kids. Plus, if they are on the right track, you may end up in a nicer retirement home!

Have That Conversation Today

They may not be eager to learn at first, but it’s very easy to have a casual conversation about money. For the younger kids, ask them how they decide to spend their money. Then explain the impact of their decisions. For the older teens, describe what their responsibility will be and when choosing a college and make it clear how it will be paid for. For the ones nearing or out of college, drill it home that planning now will save them a lot of worry in the future.

Learning from experience is great, except that the experiences sometimes aren’t pleasant. Do your kids a favor and let them learn from your experiences.

Neal here. The following posts may help you learn about money and thereby increase your ability to teach the youngsters.  Enjoy

Mental to Physical Connection –  This particular post really got me thinking.  Well worth your time.

Is it OK to copy your kids’ DVDs? This should make for a great discussion around the breakfast table.

Where does the money go when share prices drop? That’s a question my kids ask me all the time…

Can plummeting real estate prices be good?  Yes!

Customer Service – Something every kid should understand.

Tell me.  So far….is there one single post that your kids wouldn’t learn something from?  And I haven’t even gotten started!

Are Babies Expensive.  You could have fooled me…

Improve Your Memory — This will help out around test time.

US Historical Asset Class Returns OK…this one might be a tough sell to those under age 6.

Be a minimalist – a must kids of all ages!

The Rise of the Woman Bread Winner -   Suffragette City!

Ninja Turtles Do Battle With Debt - What kid doesn’t love the Ninja’s?

One Car Family This Week We went through this ourselves this week and found it wasn’t all that bad.

Giving People Handouts – Tell me this isn’t something you should talk about with the kids?

Downsizing Party! This author is super interesting.  Make sure to subscribe to his blog.

Saving Money One of my favorite blogging buddies.  Great reading.

How should we help the poor?

Can I Retire Young?

Sam Walton

What is financial literacy?

Keeping Up With The Joneses

Pilgrim sightings:

Carnival of Personal Finance

Mar 12, 2010 | 6 comments | View Post

Simple Ideas for a Balanced Life

Simple Ideas for a Balanced Life

photo by Spendtrails, Flikr

Are you looking for simple ideas for a balanced life?

If so, I have a very counter-intuitive idea.

Unautomate it.

I know this idea may surprise you.

After all, automation is supposed to be a good thing….right?

You set it and forget it.  Automation saves lots of time and lots of money.  What could be less complicated than that?  How could having less automation give you a more balanced life?

Well I’ll admit that I value automation.

In fact, if it were not for the ability to automate a variety of functions, I would not have been able to build my business.

When you put some task on automatic, you know it’s going to get done and (if your systems are set up correctly) get done right.

So how could anyone have an issue with automation?

That’s where Adam Baker comes in.

He thinks we have gone too far in automating our lives and he’s written an e-book about it.  Even though I love automation, I’d like you to consider purchasing this e-book for a few reasons.  Before I go into this in detail, I must disclose that Adam is one of my core blogging buddies and somebody I really care about.  Also, I have affiliated with Adam on this e-book.  That means if you buy a copy, he’ll throw some shekels my way.

Having said that, I’m going to do my” Pilgrimest to” keep this somewhat objective.

So why do I think “Unautomate Your Life” gives you simple ideas to a balanced life?

1. Lessons Learned

Adam’s main thesis is that by automating much of our (financial) life, we lose touch with it. We’re not mindful about our spending and as a result, our energies and resources aren’t maximized.  This argument makes a lot of sense to me and I’ll give you an example.

I used to have a person in my office take care of all my bookkeeping but I took back responsibility for that task about a year ago.  When I did, I was floored.

I soon realized how much money I was spending mindlessly.  And this is coming from a person you wouldn’t normally characterize as a spendthrift – just ask my wife and kids.

Was it nicer when I didn’t have to do this task myself?  Yes.

Do I like going through every single expense?  Not really.

But is the unautomation worth the time.  Absofreakinlutely!

You might come to the same conclusion by reading his e-book.

Adam takes readers through the steps of identifying what’s important and then shows them how to get it — immediately.  One step is being mindful of how we spend our time and money.  By unautomating, you do just that.

2. Writing.

Adam is a master wordcrafter. (He rarely uses words like “absofreakinlutely”.)  I love reading anything he puts out.  When I went through his e-book, I heard a clear voice and personality.  He’s passionate about this e-book and the message and you can’t help but pick up on that.

In fact, there was one exercise that especially got my attention.  In it, Adam asks readers to describe what they want their lives to look like right now. Not ten years from now…today. Then, he walks us through steps on how to achieve it.

I’ve seen plenty of exercises on imagining our lives in the future but I’ve never seen anything so direct and useful.

Is this e-book for everyone?

I don’t know.

I know my kids will enjoy it as will my wife but I don’t know about you.  If you are happy and content and feel that you live life to the fullest, you probably don’t need the e-book

If, on the other hand your life isn’t running the way you want it, this might be the ticket that gets you back on track.

If so, you can grab your copy here.

Do you think that  unautomating your life is a good simple idea for a balanced life?  Or do you think that you need to automate more of your life to simplify?

Mar 10, 2010 | 4 comments | View Post

How To Make Sure Your IRA Beneficiary Gets Your Money When You Go

IRA beneficiary form done wrong

photo by Stuart Pilbrow, Flikr

Now is the time to confirm that your IRA beneficiary form is completed correctly.

Why is now the perfect time?

Two reasons.

First, you’re still alive.

Once you’re gone, the mistakes you made with your IRA beneficiary forms can’t be undone. (Being alive has it’s advantages sometimes.)

Second, it’s tax season and you are probably going to contact your IRA custodian to make contributions. So while you’re at it, why not make sure everything is set up properly?

In order to make sure your IRA beneficiary form is filled out correctly, you need some background.

If you have a trust (or heaven forbid a will), don’t kid yourself. In most cases,they are no use to you when it comes to selecting your IRA beneficiary.

You see, tax deferred accounts have their own beneficiary designations. Those designations supersede the beneficiaries you name in your trust or will. Let me give you an example to illustrate the point.

Let’s say you get sick and tired of your husband playing the ponies instead of paying the bills so you divorce the slob. After the divorce, you update your trust but forget to update your IRA beneficiary form. If you pass away, your IRA still goes to your ex – and shortly thereafter, probably to the people who own the race track.

So, in the worst case, the money you worked hard for could end up in the wrong hands. Even if you are very lucky, if you fail to name the correct IRA beneficiary, it could a very long time for them to get their hands on the dough.

Also, mistakes made here could force your IRA beneficiary to pay taxes on the money years and years before they would otherwise have to. That means your mistake would cost them big bucks in lost tax deferred earnings.

Now that I think about it, I have a tragic story to share with you that illustrates the importance of naming your IRA beneficiary and filling out your IRA beneficiary form correctly. This case came up only a few months ago.

Dan, a divorced man was dying of cancer and had only a few months to live. When he divorced his wife, he named his minor children as his IRA beneficiaries. He died but his wife got control of the money anyway.

How?

Simple…the kids were minors. The ex-wife was the kids’ guardian so she got to call the shots with “their” money. They had no control.

This is an extreme example of how wrong things can go but it still illustrates the importance of being super mindful when it comes to your IRA beneficiary forms.

Let’s look at more mundane situations and the alternatives you have to name your IRA beneficiary.

Let’s say Dan isn’t divorced but happily married. He can name his wife as beneficiary and she can roll the money to an IRA of her own when Dan dies. As a result, she can continue growing the money and deferring the tax under the same rules that govern her own IRA money.

Let’s assume instead that Dan’s kids were over 18 and they are the beneficiaries. When they inherit Dan’s money, they could take it all out whenever they want to. But they have the opportunity to continue growing most of the money tax deferred as well.

If they do not want the money they will still be forced to take some money out – regardless of their age – but it’s not much. Basically, if anyone other than a spouse inherits an IRA they must take distributions the year after they got the inheritance.

The amount they must withdraw is determined by their age – the younger they are the less they have to withdraw. You can get the schedule by reviewing the IRS Publication 590.

How could the IRA beneficiary still lose out?

If Dan named his estate as beneficiary, the money would have to be withdrawn much faster – probably over 5 years. And in this case, the money would go to the beneficiaries of the estate. Of course, that would entail legal fees, court costs and delays PLUS eliminate the benefit of continued tax deferral. It’s just about the worst of all worlds.

Wait…there is a situation that’s even worse.

That’s if Dan fails to name any beneficiary. Again, this situation would have to be resolved with lawyers and courts. It would needlessly consume lots of time and money. Avoid it….OK?

Now, let’s get back to Dan’s real situation and consider using a trust as a beneficiary. Normally, I would never recommend naming a trust as an IRA beneficiary. But if your beneficiary needs special protection, like they did in Dan’s case, the trust might be the way to go.

Using an IRA beneficiary trust gives you more control. For example, even though the kids are minors and still under their mother’s control, an IRA beneficiary trust can name anyone to be the trustee. This way, the ex-wife doesn’t end up with the money.

There are downsides to using an IRA beneficiary trust. It costs money to set up and you can lose some of the tax deferral time.

In Dan’’s case, the trust would have been the way to go. His kids would have had a few fewer years to continue the deferral but it would not have been significant. In exchange, they would have been able to keep their mother’s paws off the loot. A good trade-off for Dan and the kids.

Even if you think you have your IRA beneficiary forms set up correctly, do yourself a favor and confirm it. I further suggest you do this every 5 years.

Do you have any IRA beneficiary horror stories to share? When is the last time you checked to make sure your IRA beneficiary forms were completed correctly?

Mar 08, 2010 | 13 comments | View Post

Why This 25 Year Old Should NOT Try To Make Extra Money

Has it ever occurred to you that you shouldn’t always try to make extra money?

On Monday, a faithful (young) Wealth Pilgrim reader was lamenting the fact that he was stuck in a job he hated. To make matters worse, he wasn’t even well paid – he reported an inablity to save for his future. This bothered him a great deal.

Many readers had fantastic ideas on how to help our young Jedi…..and I came up with a few ideas of my own. Here’s a 2 minute 20 second video sharing my thoughts.

Am I full of it? Do you agree with my suggestion? And on another note, how do you like the new look? I’m trying to jazz it up a lilttle. Am I “fresh” or just square. You be the judge.

 On to other exciting news. 

 I’ve joined the Financial Samurai Alexa Ranking Challenge.  This is a collaborative effort of 50 like-minded bloggers.  We’re trying to help each other rise up the Alexa Ranking system.  What I love about this group is that the folks involved are all trying to help each other.  Kind of reminds you of what goes on in Washington D.C. eh?

In any event, I’m going to include a list of posts written by some of the members of the challenge.  Rather than detail each article, I thought I’d give you a few key words and invite you to check out those that interest you most.

Enjoy!

Small Business Tax Advice

Make Extra Money

Treat Your Job As If You Won The Lottery!

Do you have what it takes to manage your money?

Mindless Money Wasters

Fiscal Sanity Legislation

Kids and Money

Friend’s credit card debt

Financial Filing Systems

Managing poor credit score

Why you need a will

Wasting Money on Memories

Wants versus Needs

Auto Refinancing

Raise Credit Limit

What do you do?

Unemployment and Motivation

Defining Financial Planning

I Knew I Was Going To Be Rich

3 Ways to Reduce Your Taxes

Marriage and Money – Making it Work

Price of Fame

Allowances for less than rich kids

Financial Lessons from Engineering

Why it’s frugal to live in Alaska

Ever Feel Like You Can’t Get Ahead?

The circle of life

401k Loan Rules

100 Things Challenge

Should I refinance my mortgage?

How I Got $8 Glasses

Life Energy and Money

Procrastinators Unite….Tomorrow

Money Saving Tips

Pros and Cons of Cash Only

Cut the Clutter

Mar 05, 2010 | 24 comments | View Post

Teaching Kids About Money So They Don’t Go Through All Yours

photo by Cliff1066, Flikr

photo by Cliff1066, Flik

Are you doing a good job teaching your kids about money?

Are you worried about your kids growing up unable to make smart financial decisions? Are you petrified at the notion that they’ll have to face the tough challenges you did? Do you fear they’ll repeat your jug-head mistakes?

If so, join the club. Many people I know have these worries…or at least…they should.

It’s tragic. It really is.

A family works hard to get out of debt and overcome obstacles. Then, the kids get out the shovels and dig the family right back into the hole they scratched and scraped their way out of.

This subject is especially important to me. As you may know, I was homeless and broke when I was 17. I worked my Pilgrim arse to the bone just to make sure my kids wouldn’t go through what I did. Do you think I’m going to stand by and watch my kids do something spectacularly stupid when it comes to money?

No I’m not. At least not if I can help it.

So what are a few “genius” strokes you can take to make sure your kids don’t put themselves (and you) in the poor house?

1. Teaching kids about money by not borrowing to pay for college.

This is not just about the debt….it’s about the debt mindset.

When your kids see you borrowing for college when a lower cost alternative is available, what message do you send? The wrong one.

You’re telling them that borrowing is OK and it’s not. Don’t be surprised when they buy cars and houses they can’t afford either. They’re just doing what they learned…..from you.

How are those tender little minds going to know the difference between good borrowing and bad borrowing? Debt is nothing to take lightly and you must demonstrate that by doing whatever you have to in order to get those youngsters through college without borrowing money.

Let them go to junior college. Work. Whatever.

This concept of not borrowing for college goes for you and them. You’re not allowed to borrow for their higher education if a lower cost alternative exists and you’re not allowed to let them saddle themselves with debt either.

Of course you’ll have to speak with the kids in order to make it a teachable moment.  But I do have some good news to remind you of.  You’re the parent, they are the kids and a family ain’t a democracy.  You are the Grand Poobah.  You decide.  They follow.

Even if the kids could get a “better education” by attending a more expensive school (that you can’t afford), don’t do it if it means you have to borrow money. They’ll benefit more by seeing, first hand, how powerful staying out of debt is.

That’s a life lesson they’ll never get in school. Only you can give them that gift.

Now for the second genius idea:

2. Teaching the kids about money by admitting your mistakes immediately.

This may seem to have to no connection to my earlier point but if you give me a chance to explain, I think you’ll see that it does.

Ever since my kids were babies, I’ve tried to admit when I was wrong. I jumped at the chance. I couldn’t wait. It was wonderful and I’ll tell you why.

I figured, even though they were my kids, there was still an off-chance they’d make a mistake or two down the line.

I wanted them to see how easy it is to own up to mistakes and rectify them quickly. There is nothing more expensive then ignoring a problem or working hard to deny one.

I wanted kids who understood how admitting a mistake wasn’t the end of the world.

Folks who have a life or death need to be right end up broke. They hold on to the wrong jobs, businesses, investments and boyfriends way too long. I didn’t want that happening to my daughters – especially the boyfriends part.

Do you think these ideas have merit? Is it beyond your power to insure your kids don’t become financial dunces? What other genius moves have I overlooked?

Mar 03, 2010 | 3 comments | View Post

How To Know If You Are Saving Enough For Retirement

Do you know how much you need to save for your retirement?

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Do you know if you are saving enough for retirement?

Most people don’t have a clue.

According to an ING survey, a third of the people over 55 think they need to save $250,000 in order to retire. Another third think they need $1 million.  Most of the rest don’t know.

By the time you finish reading this and do the exercises, the good news is you’ll know.

Let’s get started:

1. Get A Personal Budget Plan by Knowing What You Spend.

Notice….I didn’t say that you should monitor your expenses – you need to know what you spend and there’s a huge difference between the two.

When I ask folks to tell me how much they spend, they often list their expenses. Unfortunately, most people spend about 30% more than they think they do.

Why? Because they spend money on things that aren’t included in their monthly expense list. I’ve written about this issue extensively and I will tell you that unless and until you are willing to track your spending, you will have to depend on your luck in order to save for retirement because your luck will be the only thing you’ll have going for you.

Track you spending…..OK? (While this can be a complete pain in the rear, it doesn’t have to be. You can use my free budget planner to track your spending and get out of debt in 5 minutes a month.)

2. Don’t Make Bad Assumptions.

You know what happens when you assume don’t you? You make an ASS out of U and ME!

Specifically, don’t kid yourself into thinking your expenses will drop when you retire. They won’t. I say this for 3 reasons:

a. When you retire, you’ll have more free time to spend money….so you will.

If you think about it, you probably spend more money on the weekends than during the week. Well…when you are retired….every day is a Saturday. You’ll have the time you always wanted to go bowling, travel the 7 seas, take up skydiving as a hobby and more. It costs money baby. It all costs.

b. Inflation isn’t going to stop working just because you do.

Even if inflation doesn’t get out of control because of unfettered government spending, you should figure that inflation is going to continue. Let me illustrate the danger of inflation.

If you spent $50,000 a year in 1980 to get by, it would cost you $128,000 to pay for the same standard of living today.  That’s an increase of 250% in 30 years.  If you are 60 years old today, it probably makes sense to count on living another 30 years so you do the math.

c. Medical expenses.

Even after you qualify for Medicare at 65, you still have premiums, deductibles, co-pays and uncovered items such as glasses and dental.

d. You will probably live longer than you think you will.

Many people make the mistake of looking at actuary tables and assume they’re only going to live into their 70’s or 80’s. The reality is that the longer you live, the longer you are likely to live. So a healthy 53 year old man can expect to be older at death than a newborn who hasn’t overcome childhood diseases etc. What I’m trying to say is that you can’t rely on actuary tables.

3. Be realistic about your retirement income.

If you’re like me, you can’t count on collecting from a pension plan. My retirement income is going to be generated from investments and social security. With that in mind, let’s take a stab at estimating both.

Social security benefits are pretty easy to estimate. You can get simply ask them to send you a worksheet and you will have your number.

If you collect rent from real estate, adjust that rent for inflation.  Not too hard either.

Estimating income from investments is another story.

If you own equities and mutual funds, you’ll have no choice but to make assumptions about what they will grow to be. There are a number of calculators you can find online that will tell you what your nest egg will grow to given an assumed growth rate and assumed contribution rate.

For argument’s sake, let’s say that you currently spend $8,000 a month. Let’s also say that when you retire (15 years from now), you’re going to need $10,000 a month to keep pace with inflation. Some of your expenses will drop off (like your mortgage hopefully) but others will increase – like health care.

Let’s also assume your combined social security income will be $4,000 a month.

So in this case, you are $6,000 a month short.

Remember a few paragraphs ago you estimated what your nest egg would be when you retire? We’ll need to use that number now.

I know I asked you not to assume earlier…but now I see we are going to have to make some assumptions in order to illustrate the point.

If we assume you can withdraw 4% of your nest egg every year to create the income you need, let’s determine how much more you need to save.

Assume your nest egg will be $900,000 by the time you retire, that will generate $36,000 a year at 4% – or $3,000 a month. That means you are still $3,000 a month short. So this indicates you aren’t saving enough money.

How much more must you save for your retirement?

Well……you need an additional $3000 a month – or $36,000 a year income. You’ll need to generate that income in about 15 years so you’ll need an additional $900,000 by the time you retire.

Using the calculators I mentioned above, you calculate that you need to save an additional $33,000 a year (approximately).   Rather than look around for another calculator or use my fancy one in the office, I just plugged numbers in until I reached my goal of $900,000 using 6% as a growth rate.

Now of course for some of us, saving an additional $33,000 is an impossible task.

There are a number of solutions for this retirement problem but for this post, let’s set that problem aside.

You see, I think the reason more people don’t go through this exercise is because they are pretty certain the additional savings they’ll need is quite beyond their ability. As a result, they act like ostriches and stick their heads in the sand.

Mistake!

Look, for the time being, don’t worry about how you’re going to get there….all I want you to do is make sure you know what your number is.

I will guarantee that if you’re not willing to calculate the number, you’ll never be able to devise a good plan on reaching your goal — or modifying your goal so that you come up with one you actually can reach.

Have you calculated what you need to save for your retirement?  When you did, were you surprised with the result?

Mar 01, 2010 | 21 comments | View Post

Broke, Evicted Heart Attack Victim Has No Finacial Stress –And I’ve Got One Desperate Request

Can you be free of financial stress while in debt?

Not if you are sober….at least that’s the message in the media today.

Let’s face it…just about everything you read from books and blogs (including this one) might convince you that you can’t in fact be happy until you get rid of financial stress.

Everywhere you turn, you get the same message pounded into your head; you can’t do or be anything if you have debt.

Does Financial Stress Mean I Can’t Be Happy?

Let me go on the record; I think like goes better with no debt. I also think it’s important to take whatever steps you can to get your spending under control and out of debt as soon as you can. It has to be a priority. But at the same time, I think you shouldn’t wait to be happy until you reach your financial or business goals.

I spent way too many years thinking that financial serenity would be mine as soon I paid off my mortgage or reached a certain business goal.

photo by alancleaver, Flikr

photo by alancleaver, Flikr


What a waste. I’m here to tell you that I’m through thinking that way…and I hope you are too.

If we tie our happiness to some external achievement, we may work really hard and achieve a lot….but we’ll be stressed and not have any fun. We also won’t be that much fun to be around.

On the other extreme, if we abandon the goals we strive for and adopt a “who cares” attitude, we’ll be worse off. By so doing we shut off a part of ourselves that is truly wonderful. That part of us that wants to learn, explore and advance.

Clearly, we need a balanced approach.

While I can’t say this works for me all the time, the following idea has really helped me.

What is it?

Simply be present.

Being present is a very difficult thing to do but well worth the effort. Let me give you an example.

I met a woman the other day who had an amazing story. Even though she was a young woman, she had suffered a heart attack, lost her job and while recuperating, discovered she was being evicted from her apartment. Talk about something to worry about….right?

I asked her how she coped with that stress.

She told me that she couldn’t afford to waste any energy worrying about the future because it saps her strength and makes it hard to make rational decisions. Instead, she focuses on her daily activities….one day at a time.

She gets up every day and asks herself what the most effective thing she could do that day to improve her situation. All she “worries” about is making sure she completes those tasks. If she does, she feels successful. If not, she vows to try harder the next day.

She’s satisfied with doing her best. Why? Because if she does her best, she can do no more. Whatever the result is, if she tries her best, she feels successful.

I think focusing on daily activities rather than outcomes is a fantastic approach to finances…and life.

It doesn’t allow anyone to escape responsibility. It keeps you focused on doing what you can and letting go of the things beyond your control.

It’s appealing….isn’t it?

Do you approach your challenges this way or do you get caught up worrying about the future so much that you miss what’s going on today? Before you answer that, I’ve got to ask a favor of you…it’s that desperate request I mentioned earlier.

Wealth Pilgrim has been nominated for 3 prestigious Plutus Awards. If you’ve never heard of these awards, they are like the Oscars for bloggers but without the red carpet, cameras, fancy cars, celebrities and after parties. Seriously, these awards are the cat’s pajamas in blogger-world and I’d like to ask for your support.

Pilgrim has been nominated for:

Best E-Book

Best Retirement Blog

Best Podcast

Everyone has the the right to vote and I’m asking you to take a moment to vote Pilgrim down the line. To do so, simply follow this link and scroll down (or do a “FIND” for “Pilgrim” and you’ll see the three categories I’m running in. Of course, you can vote on all items on the ballot but I don’t think you are required to in order to have a valid ballot.

You don’t have to be a blogger to vote…you just need an e-mail address.

I hope you’ll take a moment and support the blog. The only cost to you is about 2 minutes of your time and I’d really appreciate it. If I win, I’ll have a special surprise for all of you.

Remember, vote Pilgrim and vote often! (Just kidding…you can only vote once.)

Feb 26, 2010 | 6 comments | View Post

Use Your Definition of Success To Regain Your Mojo

photo by FoodBev, Flikr

photo by FoodBev, Flikr

For some reason, we forget that we already meet our own definition of success.

I don’t know why that is…but as a result, we tend to beat ourselves up for absolutely no good reason. If we fall into this trap, it can be expensive.

Here’s an example of someone who forgot what his own definition of success was and what it almost cost him.

The story comes from Martha, a Pilgrim reader who sent me an e-mail about her son.

It turns out that her son Mark, a freshman in college, was suffering from “I’m-a-loseritis”.

This was really difficult for Martha to hear.

Mark did fantastic in high-school.  He had a great GPA and was super involved in the community.  He was elected to many leadership positions in clubs and organizations.  He volunteered often and was just a great kid.

His only problem was that he had an older sister who was also a super high achiever.  While her accomplishments were in other areas, Mark always thought he was operating at a lower level than his sister.

Push came to shove soon enough

Mark was considering running for office on the student council at college.  The position he had his eye on was normally occupied by juniors and he wasn’t sure if he should run or not.

He consulted with his mother prior to applying.  He told her he didn’t have the juice to make it –  despite all the evidence to the contrary.

That’s when Martha put on her genius hat.

She told her son to make a “victory list” — an accounting of all Mark’s achievements, good qualities and examples of what an amazing kid he was.

Being a good son, Mark made the list and read it to his mother.

1. Captain of the Golf Team
2. Outstanding Soloist Award – Lincoln Center Jazz High School Competition
3. President and Co-President of 3 community service groups

Mark’s list went on and on.

Mark’s mom asked him if he’d hire a person with a resume like that and Mark responded with an immediate “yes”. At that point he was convinced that he had the right to run for office and the ability to do a great job.

His “loserites” was gone.

My experience is that Mark isn’t the only one who lost sight of his abilities and strengths.

Lucky for Mark, his mother helped him snap out of it.

But what about you?  Have you ever forgotten about your strengths?  Have you ever lost your mojo?  Do you think a victory list would help you?  What other tactic have you used to get yourself back in the groove? Have you ever been in Martha’s position?

PS….Totally off the subject.A great resource you should check out is Festival of Frugality

Feb 24, 2010 | 5 comments | View Post

Tiger Woods’ Update: Lessons in Saving Your Money and Marriage?

photo by bensonkua, Flikr

photo by bensonkua, Flikr

Here’s  a Tiger Woods update you weren’t expecting; his’ damage control skills offers you many important lessons in how to manage  your money and marriage problems.

Of course the obvious lesson is to be faithful, honest and true. Those are the easy ones.

But consider the idea of “damage control”.

For a moment, put aside your feelings about what he did to himself, his family, his fans and his sport.

Tiger’s mea culpa on Friday is a text book example of how to handle a crisis well. And if you and your “Sponge Cake” ever fight – about money or anything else – you’d be well advised to take a good look at how Tiger handled the crisis.

Let’s break it down to see which nuggets you can use:

1. Take a  “Time out”.

Once Tiger’s insane behavior surfaced, he realized he had no idea what to do. He gave himself time to think and regroup. He didn’t deny anything – which as former President Clinton will tell you, can make matters infinitely worse.

Your take-away?

When in doubt, shut up. A quick verbal response to allegations of doing something wrong never ever helps. Don’t lie and don’t attack. Just be still. Give yourself time to think.

2. Be honest — in private.

Tiger and his family sailed away into the wild blue yonder. This gave everyone time to let the reality of what was happening sink in – and it also isolated them from the media. Good move.

Your take away?

If you are in a social situation and some problem surfaces, financial or otherwise, don’t air it out right there. If your spouse throws a metaphorical golf club your way, duck…but don’t respond. Try your best to make the exchange private. Make sure the only people who are part of the negotiations are the parties directly involved.

3. Get help.

I don’t follow golf and I don’t know anything about Tiger, but I hear he’s not very down to earth. Say what you want, but my guess is that it wasn’t easy for him to check into a rehab center. I have to give him credit for getting help.

Your take away?

Simple. If you have a problem, don’t let you ego stand in your way. Ask for help. There are so many resources available to you…just use them. I don’t care if the problem is debt, spending or planning. Whatever it is, there are tons of resources. Just ask for help.

If you don’t know who to ask…….search the internet. Heck…..send me an email….I’ll try to help if I can. Don’t stay stuck just because you don’t know where to find a solution. Admit what the problem is, admit you can’t do it on your own, and ask for help.

4. Make amends to the people you hurt.

You may or may not believe that Tiger is sorry for what he’s done. You may believe it’s all about the money and restoring his image. I personally believe that he was being contrite and honest. I believe that he’s going to try to get himself on track. But all that doesn’t matter at this moment.

The lesson is that he got out there and made an effort to apologize to all the people he’s hurt.

Your take away?

If you made some financial blunder that hurt others, you’ll be doing yourself and everyone around you a huge favor by getting by trying to set things right again. Why? Because if you walk around with shame about some past behavior it’s going to come out side-ways. Ever noticed that when you feel bad about yourself, you aren’t all peaches and cream to  other people? I don’t know why this is true, but it is.

Shame is toxic to you and everyone around you. The best way to do a toxic clean up is to be honest, admit your mistakes to the people you hurt and try to make it right.

That’s the best way to get rid of the shame that keeps you hurting yourself and other people.

5. Stay alert.

Tiger said that he’s not through. He’s got a long road ahead and he’s going to keep working towards staying healthy.

I like that idea.

If you have some recurring financial issue, don’t put a band-aid on it and expect the problem to disappear. Stay alert. Continue to educate yourself and stay accountable. There is no magic wand that makes problems go away.

What Tiger didn’t talk about was the risk of failure.

In my opinion, Tiger has a serious  illness. An addiction. Not everybody who suffers from addiction recovers immediately. Sometimes they slip up.

If you blow it, it’s important to take all the steps I’ve outlined above, but it’s also important to remember that you’re only human. You might make mistakes too. You might not do it perfectly. You might fail.

That’s the price of being a human being and you have to make allowances for that. Don’t give up if you mess up again. Get back on the saddle.

Sure Tiger had handlers and helpers coaching him on every move. He likely had speech writers and lawyers crafting every word he said.

On the outside chance that you don’t have those resources available when you mess up, don’t sweat it. The basics of what Tiger Woods did counted most – not the exact words or the way he did it.

Take some time out to gather your thoughts. Get honest in private and get help. Make amends to the people you’ve hurt, stay alert and don’t expect perfection.

Damage control isn’t about making problems go away but it’s a critical skill to master.  Of course I hope that your “mistakes” aren’t as grave as those Tiger committed.  But none the less, there is much to learn by how he handled himself on Friday.

What say you?  What have I missed?  Is there a better way to handle damage control?  What have been your experiences?

Feb 22, 2010 | 3 comments | View Post
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