Hope you are doing well and enjoying Memorial Day weekend (for all my US readers), if not, I hope you are enjoying your weekend regardless.
I’m laying here in bed with my girlfriend, about to watch Pacific Rim Uprising, and I wanted to write it before I forgot.
I will be releasing a new book on Amazon in the next couple of weeks and I’m looking for early reviewers for the book (no not early amazon reviews, and you don’t have to buy it). I’m looking for people who are interested in reading an early copy of It and providing feedback on it to make it better.
If you would like to be on the insider list for early copy of the book please direct message me through the contact form on the site.
Are you feeling stuck? Are you struggling to make progress towards your goals? Have you felt information overwhelm?
If you answered yes to any of the above questions then listen up. This little nugget of wisdom will help you break free and make progress
Are you feeling stuck? Are you struggling to make progress towards your goals? Have you felt information overwhelm?
If you answered yes to any of the above questions then listen up. This little nugget of wisdom will help you break free and make progress
Don’t Over Analyze Things Before You Start
One of the biggest challenges to getting started with you know paying off your debt starting up your own business starting to develop a lifestyle that you choose to have is overthinking.
I remember that I tend to think a lot about things and have a very analytical mindset or so I’ve been told.
I tend to analyze things and I’ve actually noticed that I have paralysis by analysis by not “doing”.
Something that I’ve found it’s not just a struggle I have, it’s a struggle that a lot of people have and the only solution that I can think of that can help solve this is to take action.
I know, you hear it all the time in self-help circles and internet marketing circles and in online business circles like Amazon and eBay. You always hear “just take action, take action, take action” and it’s like alright I right I get it I’m supposed to take action but you’ve given me eight 18 hours of content how am I supposed to take action whenever i’ve I’ve got 17 days worth of videos to watch?
The simple truth is that you are not supposed to have all the answers when you start. If you continue to research and research and “think” before you act then you are going to get stuck in that “paralysis by analysis stage”.
So the simple solution is to take small actions and small steps, small commitments, and then grow those small steps and actions into bigger ones.
Now if you’ve got only $400 to your name, or even just $200 to your name, right we’re HECK! Seth from Just One Dimehad literally “Just One Dime” to his name he grew a business to the $1MM + mark
In the beginning he was working for someone else and was making his money to only be able to pay his bills and stuff but his actual startup capital was a dime, as in a single coin.
He just went down to downtown Austin and kept asking people to double his dime until he got to $400 and then once he got up to about $400 and he re-invested in products he could sell online
A simple example of you how you don’t have to have much to get started. You could start with only 50 bucks, going out to garage sales on the weekend and find some stuff to sell on ebay and amazon. You could also start up a blog, or start up a Shopify site and learn how to get traffic to your Shopify site.
The point is, you can get started with a small amount of investment capital and scale things up really big.
Don’t Over Commit and Allocate All Your Resources to Just One Venture
Don’t commit 100% of your finances to starting a business that isn’t proven yet.
Don’t commit your mortgage, don’t take a second mortgage on your home in order to get a loan to start a business that you don’t have experience in
If you had experience you’d have cash flow coming in from your business you could then use to fund another venture.
Don’t commit a hundred percent of your money, don’t commit a hundred percent of your finances unless you’ve only got 400 bucks to your name.
Test small at first and buy stuff for ten bucks or something. Once you start turning a profit then you can reinvest that into bigger purchases.
If you are just starting out, you can afford to gamble more of what you have and lose it all, but if you can manage to gamble less than 10% of your total investment capital then do that and test small. By lower cost items at first or start up something free like social media and learn how to provide value first and get paid to do so.
Once you have some capital to reinvest then begin spending more and aim for lower cost investments where you can maximize your return first.
Outside of big purchases I no longer use my credit cards for day to day spending.
I still do use cards with 24 month grace periods because it free’s up my capital for investing activities, allows me to keep a sizable emergency fund, and allows me to breath easier knowing that I could get equipment I need for my business without worrying about not being able to pay my rent because I spent all my liquid assets.
With your own business you will be able to take the expenses you incur purchasing capital goods, like machinery, computers, or other assets, but be careful not to spend all the money your business is making otherwise you could put yourself between a rock and a hard place should your lenders ask for the funds promptly.
With that being said, here are my rules for having and using a credit card:
Never carry a balance unless it is on a card with no interest for a deferred period of time, AND you have a repayment plan in place for it (ex. 15 months 0% with $X paid each month to fund the cost of _____ )
Expenses are for capital purchases or business related expenses.
Coffee and dinner dates, unless they are seriously with clients should be avoided.
Have the funds saved in your business checking or savings account, or have the cashflow already flowing into your business, to cover your expenses.
Someone just getting started in business though need not spend money they don’t have on credit cards in “hopes” of a return. If you can’t start incredibly small and roll the profit into greater returns rethink your business model and/or business plan.
If you need money now, get a job and save at least 6 months in emergency funds before you try to start your own business.
Credit cards are a terrible thing to use for your luxuries like clothes, jewelry, and anything else that does not produce income.
If the item does not product income for you, I recommend not buying it with credit. Instead buy it with money you saved from your income (preferably passive income).
Debt #2: Student Loan Debt
I am personally a believer that school is really the last resort when it comes to furthering yourself.
I had to pay back over $33,555 in student loan and credit card debt so I know that there are better ways to grow your income than studying for 4 years to get a degree in something you may or may not use.
With that being said, I can think of at least 20+ different ways to finance your own education in life:
Work your way through school by getting a part time job
Work your way through school by starting your own summer business
Get a technical job instead
Work for a small business owner locally
Get Adwords certified
Social media marketing manager
Learn Affiliate marketing
Look on craigslist a need and fulfill it
Start a lawn care business
Start a dent removal business
Start a window washing business
Start a dog walking business
Become a Nanny
Look at becoming an Au Pair
Go teach English abroad
Teach English as a second language locally
become a sign language interpreter
write a blog
learn email marketing
the list just goes on an on…
And of course if you are still interested in going to college you can look at grants, scholarships (both domestic and abroad) and consider community college or online degrees instead of attending full time university.
If you are one of the fortunate ones who has parents paying their way then take advantage of every opportunity you get in college to further your social network, your education, and your relevant professional experience.
There is no reason you should be coming out of college with any more than $10,000 in debt with all the possibilities out there.
If a white kid like me can go to school, come out with only $27,000 in student loans after attending a school with tuition costs of $176,000 for 4 years, with financial support from his parents, and work his way out of debt in only 3 years, then you can find a way to get funding to cover your full cost of education.
Individuals located outside of the united states have even more options for education with a lower cost of tuition.
Should you find yourself choosing to attend university, consider studying abroad in countries like Germany, Canada, United Kingdom, Hong Kong, or Singapore where the tuition is as little as 10% that of a school in the United States.
Debt #3: Mortgage Debt
This debt is one in which folks typically incur in order to purchase the “home of their dreams”, which can later become a nightmare…
Firstly, with an asset that will more than likely depreciate if you are buying anything other than in a neighborhood with millionaires in it, this is probably one of the least valuable assets you can invest in.
In addition to the likely depreciation that you will pay for a new home, you have variety of interest rates to play with, 15 year, 30 year, fixed mortgage, variable interest rate mortgages. There is also the question “how much should we put down as a down payment?” The answer? As much as you can afford.
Really REITS are the way to go if you are looking to invest. If you are looking to simply live in a place then consider renting.
I always aim for living in a place that is close to 10% or under my take home pay.
When I was earning $25,000 a year, I had to live at home to afford to pay my loans back and to be able to eat, pay rent and live. I contributed around $300 a month for food and living arrangements, and by my dad’s good graces was able to afford living.
Once I got a better job and earned more income I increased my rent contribution and eventually moved out to live with a room mate in a small 2 bedroom 1 bath apartment.
Then I got yet another job paying more and was able to move with my girlfriend to an apartment across from work. Still, keeping my housing costs as low as possible, ideally around 10% of my before tax income.
If you are looking to own a home now a days, money experts the likes of Tony Robbins, Dave Ramsey, and Grant Cardone suggest investing in REIT’s and Saving for your first investment property.
Check out this Article on CNBC Money: https://www.cnbc.com/2017/04/25/heres-how-much-money-the-average-first-time-home-buyer-makes.html
Don’t look to own a home.
But if you are still interested in owning a home, increase your income first to where your payment will be around, or under, 10% of your take home pay.
Want a $300,000 home with a 30 year mortgage and $1,000+ mortgage payment? Earn 10x that before you look at buying.
Being evicted from an apartment is a much smaller blow than losing your house and all the money you sunk into financing it.
Avoid mortgage debt at all costs until you can afford to buy your home or you at least earn 10x your mortgage payment.
Debt #4: Small Business Loan Debt
If you have a valuable good or service, that has been thoroughly researched and has been validated in the marketplace through small batch testing, then do you really need a loan?
I’m thinking not.
If you have a product or service which is consistently selling out and you need more capital to purchase more inventory that could make sense to invest.
One of my favorite ways to Microfinance a business, in order to minimize the risk but maximize the upside, is to get a 0% credit card like the chase freedom card, and to spend at most 10% of the credit maximum on business essentials. That means finding a good or service that is needed in the market place and to invest up to 10% of your card limit before calling it quits.
If you’ve followed the 6 Steps I’ve outlined in “6 Steps to Financial Freedom” and you’ve paid off all your personal debts, consumer debts, and student loan debts, you are now ready to begin building a business.
If you are approved for say $6,500 credit limit with a 0% APR for the first 15 months and you spend at most 10% of the card limit to begin your business you can, at any given point, afford to pay off the full balance. Carrying this $650 startup cost for up to 14 months before needing to pay it back is an option, but should you actually find a product or service with a need in the market place and be able to sell it for at least a 50% profit you will be able to reinvest the profit to not only pay off the full balance, but be able to then take the $650 that you have in profit and use that moving forward.
The important thing is that you take the profits each month and pay off the FULL balance of the card before you pay anything else. You do not want to carry a balance.
I REPEAT. YOU DO NOT WANT TO CARRY A BALANCE.
All the fund that your business spends you can funnel through the credit card each month, but you will keep a separate business checking account and not spend a penny of that money on your own personal expenses.
This money, just like a tree, needs to grow and not be “picked” like the fruit on an apple or pear tree. If you pick fruit before it’s ready you can kill the tree and it will taste like shitty fruit.
With that being said. Following that process you can quickly scale up and know that you have a value-able service or good without sinking your life savings into it.
What are Some “Better Types” of Debt
Type A: No Interest Personal Loan to Pay Off High Interest Debt
A personal loan from a friend or family member that know’s and trusts you, doesn’t need the money immediately, and can afford to live with out. Using this money for anything other than to pay down high interest credit card debt or student loan debt is a TERRIBLE choice and WILL result in you failing and getting into more debt.
Do NOT buy a car with this. Do NOT spend it on clothes. Do NOT frivolously blow it on the weekend. This is a personal loan that will help you to save thousands on interest by paying your high interest debt back early.
Type B: Personal Loan From Yourself to Yourself
If you have a decent savings account and you are trying to pay off a high interest debt that you occurred due to a bad business decision, or to start up your business venture, then consider taking out a personal loan for yourself. Key here is to set an expected payback date that you will 100% meet.
There is no point in loaning yourself money that you do not intend to pay back. You might as well just not do the loan and instead figure out some other way of funding the payoff of your 19% debt to the bank or your 6-9% interest on your student loans.
Type C: Private Loan to Aquire Cash Producing Assets
As Robert Kiosake writes about in his Rich Dad Poor Dad books, taking out a small loan from a friend or a family member, with the expectation to pay it back with around 10% interest, could be a valid option for acquiring real estate assets in the short term.
The tricky part here is that you have to know what you are doing to minimize your risk and to maximize upside for you and your investor.
This strategy is in the event that you have no liquid assets to use to invest in your first short term flip. But for those individuals who are interested in this avenue, securing financing from a friend or family member in a small investment around $2,000 (depending on your market), could be a good seed money to begin buying and selling real estate.
This method can be a bit risky though and is probably a better option for those a bit more risk tolerant.
For individuals who are less risk tolerant you would be better off growing the investment through a diversified asset like an REIT (real estate investment trust) and then reinvesting the money in a property once it’s reached a $5,000 mark.
With that property though, understand that there is quite a bit of work involved to find the tenants, maintain the property, collect the rent, and possibly even evict the tenants should they fail to pay.
Once you reach the $5,000 mark you can elect to simply keep your funds in the REIT and allow them to continue to grow at the market rate so as to not have to worry about the difficulties that come with managing properties.
How to fund your lifestyle without debt
Option 1: Start a blog
Option 2: Develop a unique skill and market and sell it
Option 3: Find a unique problem in the market place and sell and market that
Option 4: Begin investing your spare income (this isn’t really an option this should be viewed more of as a must in my humble opinion)
Option 5: Get a membership to Audible for $16 bucks a month and listen to a new book on business each month.
Option 6: Subscribe to free podcast on any subject you are interested in.
Option 7: Attend university level courses on your iPhone or iPad through iTunes U.
Option 8: Become a computer programmer on the weekends using W3 schools.
Option 9: quit life and live as a hermit in the woods eating squirrels and berries for survival
Ok the last option is more of a joke but you get the point. There are many ways of funding your ideal lifestyle but they all pretty much involve learning new skills and ways of managing your time and money moving into the future.
“If you want to live, and give, like no one else, then you have to be willing to live like no one else”-Dave Ramsey –
You really don’t need to go into debt to begin building wealth, you can start doing that working at a subway shop or a pizza shop. What you need moving into the future is new skills and knowledge, all of which you can gain through this magic called the internet and through networking with other entrepreneurial thinkers.
You don’t need to go to school to make a life of your dreams.
If you do, avoid getting into debt, there are numerous ways to fund education.
Avoid getting into debt with credit cards and carrying a balance.
Avoid buying a home without substantial assets, and research the area you are buying in to look for market upswing.
Don’t take out a small business loan, start small instead and reinvest the profit.
Acceptable forms of debt include debt which has a lower interest rate (or preferably no interest rate) to pay off higher interest rate debt (5%+)
Personal loans from friends or family are a good way to begin investing, start small and turn a profit, pay them back, and reinvest the profits.
The possibilities are endless and you don’t need to subscribe to any one persons “plan for life” in order to live a life of your dreams.
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I know countless job postings which claim that applicants “must be able to multitask” and yet, when we actually look at the research, not only is multitasking not actually a “thing” but it’s actually a great way of reducing your productivity. So why is it that employers feel the need to put it on job application criteria? Do they want us to be less productive and pay us to be that way?
I’m going to answer these questions below. But first. Why do we “multitask”?
You may say, “To get more done” or “to appear like we are working harder than we really are”, “To ‘stand out’ in the market place better”, or even “to feel like we are more productive than we truly are”.
But the simple truth is that multitasking, though it may seem like it’s working, is really simply task switching and is in fact decreasing our productivity and results.
Two critical thinking – left brain activities, or two creative thinking – right brain activities, are not possible to perform with our current human monkey brains.
The single most important skill moving into the future will be task focusing or single tasking.
In a world where we will have, and already have, seemingly infinite choices, multitasking seems to be the norm. But in fact, the most productive and happy individuals know that focus is key to success.
But Where’s the research on this?
After doing a little bit of research on the subject by running a quick search through google for the terms “multi-tasking” and “task switching” I was able to find the following:
Multitaskers think they are more productive then they are when they aren’t
People who frequently “Multitask” have difficulty organizing thoughts and are slower at “task switching”
IQ scores of “Multitaskers” decreased when they multitasked.
According to Earl Miller, a neuroscientist at MIT, “People can’t multitask very well, and when people say they can, they’re deluding themselves…”
So, if I heard you correctly there is really no such thing as “multitasking”, at least not when it comes to thinking activities.
And I want to mention, if you are reading this and rubbing your belly in circles while patting yourself on the head, CONGRATULATIONS! you have successfully learned a duel motor-skill with absolutely no real world application…#losing
If you want to try truly multitasking, try playing the violin while doing calculus.
Or better year do accounting while trying to paint.
Solve a riddle while drawing shapes with your left hand…
Ok, So How Does One Go About Single Tasking?
First you must create a list, then decide on which items need to be done first in level of importance.
Then, you must turn off external distractions and trust in the list that you created being the path to reaching your destination at the end of the day.
You may be tempted to get distracted with social media sites, friend messages, and emails, but you must fight the urge to forego your most critical tasks for these nice little distractions.
There is a time and place for social networking and it is not during your productive hours.
Here’s a little exercise you can do
Get a blank piece of paper. (Yes, that ancient thing that people once used to use to convey ideas and messages on).
Set a timer for 10 minutes and write down all the things floating around in your head. All of your ideas and thoughts for everything you must do for the entire day, write them down write.
Once you have that list, now set another timer and write an “a””b” or “c” next to the task in level of importance.
(A) These are the things that will make a major impact on your life, these are your “must do’s” or your critical tasks with time lines on them. Grocery shopping (you gotta eat), making sales (again, we have to eat), working on your business, working on projects that are mission critical for work, spending time with family, oh and going to sleep, etc.
(B) These are activities which are important but may not necessarily be urgent or may not drastically impact your life but would benefit you. These can include writing for your site, writing a book, working on building relationships with other business owners, conferences, reading books on your area of expertise, other personal development, family vacations, etc.
(C) These are the nice to do’s or the things that really aren’t that important and if they don’t get done then it won’t really matter. Things like trying out that one restaurant that you’ve always wanted to try, watching tv, getting your shirts dry cleaned personally, disputing credit card transactions with the carwash down the street, taking out the trash, etc. Things in this category can often times be delegated.
Two critical thinking, or left brain activities, or two creative thinking, or right brain activities, are not possible to perform with our current human monkey brains.
They are Duel core processors (if you will humor me) which allow for one critical thinking task at a time on either lobe.
Detailed analysis of stocks while analyzing your search traffic? Nope.
Want to write the outline for a novel while painting? Not going to happen. They both use the same areas of the brain.
So why not give your brain a break and focus on just one critical activity at a time, scheduling out your time during the day, so as to accomplish the most important first, then trickle down to the next, and the next?
It is a fantastic book, which you can get on audio as well, and you can listen to it while driving to work or while on the bus or train. In it you will learn how to effectively plan your day, how to delegate more efficiently and often, how to energize yourself with positive results feedback loop, and how to develop a sense of self worth from being the master of your own time even if you work for someone else at the moment.
Also if you are a freelancer or a business owner and you do creative work, I suggest getting Timing. It’s a useful app that allows you to setup and seamlessly track activities that you do on the computer which makes tracking billing hours easy and seamless, allows for more accurate reporting, and even produces a productivity score on your work flow for better analysis.
In a world with many distractions, learning to focus and track results is becoming an ever increasing skill. Learning to master your time and focus with laser precision will be the next step in your personal and professional development.
If you are struggling to make progress on your debt, are living month to month, or are tired of working for someone else, then you absolutely need this…
What is an Emergency Fund?
An emergency fund is a savings allotment that you set aside to cover costs in the instance of an emergency. An emergency can include a tornado hitting your house and you have to pay for unforeseen medical expenses (usually your deductible if you have insurance), your car needing a new transmission, needing to take unpaid medical leave for a few months due to surgery or unforeseen health issues. Any of these things warrants using your emergency fund.
Your emergency fund can be as small as $500 in a savings account, I know mine was only $1000, and that was fine for the last 3 years. If you have to, sell some stuff that you have lying around the house. Books, televisions, used furniture, stuff that is lying around in the garage, heck you can even sell your car if you live close to work like I do. But the point is that you need to put together at least $1000 in cash savings that you don’t spend so that you have a cushion between you and an emergency.
Car broke down, you can afford to fix it. Broke your arm, pay the bill cash. Fired from your job? Two weeks severance pay right there. You’ve got what you need to survive and not yet thrive, but we will get there soon enough.
Over time you will be able to build up more in savings and you will be able to go many more months without needing to touch this emergency fund, but it’s a good idea to have as much as 6 months of living expenses saved (this means rent, food, electricity, and insurance money, not a lambo or a fancy house payment, just the living expenses).
What to do if you are struggling?
If you are struggling to find ways to save towards this fund, consider getting a second job, skipping eating out, cooking all your meals at home, and giving up a few luxuries so that you can save for your emergency fund. Remember, it is only temporary and you will not need to live like this forever, but make the sacrifice now so that you and your family can live a life of security and comfort moving forward.
And just remember, never jump without a parachute. Your emergency fund is your parachute…