MindsofWealth.com

Everyone has perfect credit right?

For any person to build a business, buy real estate or invest in stocks you need cash. This can be your savings, or an inheritance but for most of us it is in the form of a Loan.

Credit of course is what many lenders would look at to determine if you should get a loan.

If you have good credit: Congratulations, you have eliminated a potential roadblock with your money management.

If you have bad credit: Visit Budget your way to Billions Part III: The Technique to get your personal budget on track and start paying those bills.

Everyone should go to www.annualcreditreport.com and get a free copy of your credit report from all three credit bureaus. For a small fee you can get your credit score. I recommend just picking one. The score is probably about the same unless there are errors on your credit report. There should be nothing on these reports that surprises you. Please make sure that all the information is correct and file a dispute for anything that is not.

If you suffer from lack of credit then get out there an establish it. Credit cards are nothing to be afraid of if you exercise discipline. To save on interest charges you should pay off your balance every month. However, if you want to build up reputation with a bank I recommend that you don’t pay balances off completely. Banks make $0.00 when you pay off your credit cards, but they do make money from interest. I have never worked for a credit card issuer but I suspect they have extensive mathematical models that rank customers based on credit worthiness AND profitability.

To build credit take these steps:

1. Open up at least 2 credit cards, and pay them EVERY month.

2. Open a car loan that is within your budget. (This is easier than you may think)

3. Stop by a local bank and see if you can apply for a personal unsecured line of credit. This can be as small as $500 or $1000.

The most important step is the focus you will need to pay all of these on time every time once you establish them.

If you need help with discipline I suggest checking out our Discipline category.

You’ll see much more on credit in the future. Please bookmark us!

A.D.

No one wants to be looked upon as a failure.

Most people fear failure and attempt to avoid it at all costs. In fact they will actually decline opportunities that come around simply because of this paralyzing fear.

The neat thing about the average American habit is that they do not fear failure if they are part of a large majority or there is minimal initial risk. If “everyone” loses then its OK, or if you have little to lose then everything is fine.

Example 1: Most people enjoy some form of traditional gambling. From lotteries, bingo, to the poker table, people like taking a chance on the hope they might get a large sum of money. They do this even though it is well known (if not clearly stated) that they will not succeed. Scratch off lottery tickets have odds printed on the ticket. Multi-state lotteries have published odds of winning. Casinos offer specialized games of chance that have predetermined odds in their favor. Yet people flock to these chances to the tune of billions per year. They have no fear because they expect to lose and know everyone else will too. They also believe that since small amounts of money are involved that it is less risky. How many people do YOU know that have won at one of these games of chance? How many of those people won over $100,000? Over 1,000,000?

Example # 2: Most people give up on their dreams to be extremely Wealthy. Most children have dreams of becoming anything they want to be. A movie star, an actress, professional athlete, a millionaire, a billionaire you name it. At some point though many give up on these dreams because they find that it requires a lot of hard work. They look around and notice that there is no friend, relative or acquaintance that has been able to do this. They hear the preaching of practicalness and let go of their ultimate goal. In short they fail, but they did not fear this. They had almost nothing invested in this grand life of the future and therefore it was easy to let go.

The thought of Failure actually prevents people from taking advantage of good opportunities. This is a major obstacle to overcome. At the Minds of Wealth we want to show you the path to Wealth.

A major roadblock on this path is Failure.

If you have developed a Habit of Failure we suggest pulling a tip from The Power of Focus. Eliminate this bad habit by developing a new habit with the polar opposite idea: The Habit of Success.

Here is how we suggest you treat your thoughts on Failure to develop Success:

You must accept the fact that it will happen.

You must accept the idea that you will learn more from failure than success.

You must take the time to prepare for every investment but not let this preparedness stop you from proceeding when you are presented with an opportunity to succeed. You must proceed to succeed.

You must be open minded to reality. No single person knows everything, and no one can predict the future with 100% accuracy.

You must adapt to change. If the conditions regarding your original assumptions change you must be willing to accept these changes and adapt. Failure to adapt is a top reason for Failure at anything.

Visualize success. If you think about a successful outcome, feel the feelings of a successful outcome you will be successful.

Find others that are successful. The more you learn from them the better positioned you will be to follow in their footsteps.

We hope these ideas help you overcome one of the many Roadblocks to Wealth. Check out our other articles!

A.D.

In Budget Your Way to Billions Part 2 Matt talked about how to make your savings automatic. This is fantastic stuff! Everyone loves easy, and the easier something is the more likely you will stick to it.

In Part Three I will talk about what you can do after you have wrote out all your expenses and income.(Budget You Way to Billions Part 1) .

I started doing this years ago, but I didn’t quit doing it after the first time. I re-evaluate my expenses every month and see how I could have done better.

When I have my list of expenses in front of me I ask a very important question: How can I lower my expenses?

I also asked myself: What things did I buy that I didn’t really need? Am I buying things that I could be buying cheaper somewhere else? Am I spending money on things that will increase my knowledge?

The most important thing is to be honest with yourself. Only you can decide which things are necessary. At the moment you are fully conscious of what you are spending and see on paper the money you could have if you reduced your expenses you will be well on your way to Billions.

The Technique

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Here I will talk about my own personal technique on how I minimize variable expenses, and easily keep track of them on a monthly basis. This technique is simple and effective but I encourage you to copy it, change it, adapt it to your own lifestyle. I have found it very helpful and have put the same practice into our lawncare business. The Technique is to set a high level budget. I like to use post-it notes. I write down each bill, the amount and the due date. Every single month, every single time. You can get the information for this from the expenses you wrote down in part 1. I also add a section for Income. Like most people I am paid twice per month. Each time I get my paycheck I write in how much that is. I currently work in a job that pays commission so my paychecks vary from month to month. You may know your monthly income beforehand.One of my “expenses” is my ING Direct Savings account. This is where I pay myself first, just like Matt talked about in part 2.

Another expense is my “credit card“. I’m blessed enough to have several different ones, but I only use one. I would suggest using one that gives you reward points to maximize your benefits. I charge everything during the month that I possibly can to this card. Gas, groceries, dining out, entertainment, cell phone bills, clothing, online purchases, etc.

There are several advantages for doing this:

# 1 You don’t have to write down every transaction in your checkbook. This eliminates the chances of forgetting something, and/or overdrawing your bank account due to an error.

#2 Any unauthorized charges that may happen are not holding up your cash, they are holding up what I like to call “MasterCard’s Money”

#3 In most cases you are given a 20 day interest free grace period when you pay your balance in full each month. By making most purchases with the card you are getting an interest free loan for 20-40 days. That’s using MasterCard’s Money for free! On my last statement gas I purchased on June 20th was not due until August 1st. That’s 41 days!

#4 At the end of each month you get all the transactions on one statement. Its easy to sort out what is what. You get 1 bill, and make 1 payment. This makes your high level budget so much simpler. Instead of writing down gas, groceries, entertainment, clothes, etc. You write out one thing: “Credit Card“.

Don’t get me wrong.. you still need to take a careful look at the statement to make an assessment about how much you are spending on each of those things. The goal is to make sure those expenses are minimal and under control. This constant evaluation will be the key to your success.

Challenge yourself. I like to set goals to lower this “credit card expense”. For example let’s say last month I charged $500. This month my goal is $450. Because its a high level overview I can reduce spending in any area as long as my overall total comes to $450 or less. I can login to my card’s online billing to check on my balance from day to day.

Another key expense I have is called: “ATM” This is the budget I have for actual cash purchases during the month. I generally only use cash for small off-hand purchases. Lunch at work normally, or maybe a drink at the bar. A rule of thumb that has helped me out is the less cash I have on me the less I can spend. I know there are many people out there who enjoy carrying lots of cash on them. Others carry ALL of their cash on them because they don’t trust anyone else to have it. I challenge you to try and carry only a minimal amount of cash on you. My magic amount is $40. When I go to the ATM I only withdraw $40 at once. I will not go back to the bank until I have zero. I’ve found this to be effective because I’ve developed a feeling that lets me know if I’m spending money too fast. If $40 normally lasts me one week, and all of a sudden I’ve visited the ATM twice in the past 5 days then I need to cut back on spending the rest of the month. If you set a monthly budget of $240. Then you can only visit the ATM 6 times. Once again, I always try to challenge myself to “Beat the Budget”. If I can cut that down to 5 times, I can lower my budget next month and stick the extra $40 in ING.

So alas, we have all of our income, and projected expenses for the month. I take my income minus expenses. Whatever total remains is the exact amount I deposit into my savings account. This is the first transaction of the month, every single month. If your budget has a remainder of $0(mine does on occasion) I put down zero, and push myself harder next month to make sure I have something going into that savings account.

“Beat the Budget”:

I always leave $100-$200 extra in my checking account at all times. I use this as a safety cushion for unexpected things. Its important though to not leave more than a minimal cushion. Excess money in your checking account is costing you interest in your savings account. I had a hard time with this because when I was in college my checking account balance was very frequently below $100 . Now that I am finally in a position to avoid that I must tell myself its O.K. to only have $100-$200 left in the account. I only need to check my savings account balance to re-assure myself that I’m doing the right thing.

The beauty of this technique is that it can be applied if you make $100,000 a year, or $20,000 a year. Managing your money is a step you MUST master before you can take the next step to buying assets. I know people who are making $40,000 a year that save twice as much money as those making $100,000. What path will you take? The Path to Wealth starts Here…

A.D.

We will talk about more details in future posts such as how to build up credit, how to increase your income, what to do with money that you have saved, how to buy assets with other people’s money and more!

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The short answer: everyone.

See this article for some of the reasons why. They are very solid expectations and I’m sure you have your own. Your lifestyle choices are limitless. An eternal vacation. Achievement. Accomplishment. Need I go on?

So why are there slightly less than 1000 billionaires on the Forbes billionaire list? Because it’s not easy? Or because most people can’t truly envision 1 billion dollars and won’t take the steps to make it there? You would have to win a big lottery(350 million) three times to be a billionaire before taxes. A lottery would be the average person’s first guess on how to get a sum of money with this magnitude.

Here at the Minds of Wealth we feel there are a few better guesses and achievable ways that you can make a billion dollars. We hope to do our part to make another 1000 billionaires, and many thousands more millionaires. We ourselves want to be billionaires. This blog is one of the products of that vision. We will have many posts about investments in many types of monetary wealth building areas: Stocks, Real Estate, Tax Liens, Businesses, and more.

There is one thing to do before you plan out anything. This step is a step most people fail at, and a reason why most people fail in the long run. This step is called: Visualize. You must visualize where you want to go, what you want to do, and how you would like to succeed. You can Visualize material items, family relationships, charity donations, health, looks, success, etc. Write these things down. Write them down often. I have a 3′x2′ dry erase board in my room that I write out what I am currently Visualizing. Every night I write over the same things to reinforce my mental outlook. I spend only a few minutes each day in the shower, and each night before bed envisioning these items coming true. Some of these visions are flexible and can change on a daily basis, while some are long term items. For example: My board says: $1,000,000 A long term vision (1yr+) It also says “Blog visits”. This is a short term goal because you will be telling your friends about this site… right? There is no vision too small, and no vision too large if you truly believe in it. I feel as if I have just touched on this subject and there can be several more posts in the future. Stay tuned!

I’ll leave you with the MindsofWealth path to monetary wealth:

Visualize.

Increase your knowledge.

Manage your money.

Plan your investments.

Start your businesses.

Expand your Vision.

Execute precisely.

Enjoy your rewards.

Check back often for more posts at The Minds of Wealth.

A.D.

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