Archives For Estate Planning

This is the safe in my basement.  :-P       The first question most people have after they get a will is where they should keep it. It’s a good question to ask because you need a place that’s both safe and accessible for your important documents. It needs to be a safe location so they won’t get stolen or destroyed. But it also needs to be accessible so you (or your loved ones) can easily get to the documents when they’re needed.

The Problem with a Safe Deposit Box

       The first place that comes to mind for most people is to get a safe deposit box and keep their important documents there. The problem is that a safe deposit box can be a nightmare to get into after you die. If your box isn’t held jointly with someone who’s still alive after you die (or held in the name of your revocable living trust), then it’ll take a court order to open your safe deposit box and get to your documents. This can mean delays and headaches for your loved ones.

       You can avoid this by adding a joint owner you trust to your safe deposit box. Alternatively, you can make your revocable living trust the owner and your successor trustee will be able to access the box on your behalf. But you’ll want to make sure the trust document isn’t in the box, or your successor won’t be able to prove he has legal access!

The Fireproof and Waterproof Safe

       My personal choice is the fireproof and waterproof safe. They’re affordable and will protect your documents well. I found this SentrySafe Fireproof and Waterproof Safe on Amazon for $39.97:
 

 
       It’ll protect your documents from fire for half an hour at temperatures up to 1,550 degrees Fahrenheit and has a waterproof seal as well. (I wonder if it can protect from fire and water at the same time???) However, it’s not theft-proof. The lock could be opened by a thief who really wants it and it’s only 25 pounds. If theft is something you’re worried about, you can bolt your safe to the floor or wall with some hardware and tools. It’ll at least discourage the thief from trying too hard.

       The main caution with this option is to make sure someone else knows where the safe is and how to open it. Obviously, this should be someone you trust. The upside to using your own safe is that it will be easy to access whenever you need it.

At a Minimum…

       If you don’t want to get a safe deposit box or a home safe, you should at least keep your important documents on a high shelf. It won’t protect them from fire, but it may save you from some water damage. Also, make sure you and anyone who cleans around your house knows they’re important. You wouldn’t want to throw them in the trash accidentally!

Have a Financial Question?

       This post was written to answer a reader request. Have a financial question you’d like answered? Contact me and I’ll help you as best I can!

(photo credit: Cliff on Flickr)

This article was included in the Carnival of Personal Finance.

The Secret to a Successful Budget eBook
 
       Welcome to the Carnival of Personal Finance #271 – The Secret to a Successful Budget eBook Edition! My friend Craig Ford at Money Help for Christians is launching a new eBook today. It’s designed to help you discover the secrets to successful budgeting.

       I think it’s a great resource for anyone who’s ever struggled with budgeting, so I’ve included some quotes from his eBook throughout this carnival. You can get the book for 30% off if you buy before midnight (EDT) August 31st, 2010. Be sure to read through to the end of this carnival because I’ll be giving away two FREE copies to two lucky winners!

Editor’s Choice

       Here are my top picks from the submissions this week:

  • Mike Piper from Oblivious Investor presents Dealing with Investment Confusion, and says, “What’s the best approach to dealing with the confusion that comes from being a new investor?” – [Mike shares some good advice for people who are confused about investing. It won’t immediately cure your confusion, but applying this strategy over and over will help you make informed decisions you can stick to.]
  • Briana Ford from Go Banking Rates presents Why Americans Can’t Afford to Die [Infographic], and says, “If you never thought about this problem before, take a look at how expensive funerals really are. You may discover you, like many Americans, simply can’t afford to die.” – [What can I say? I’m a sucker for infographics.]
  • Len from Len Penzo dot Com presents A Simple Trick to Get Your Credit Card Interest Charges Waived. – [I wish more people realized the power of Len’s simple trick!]
  • Lauren from Richly Reasonable presents 4 Bad Deals, and says, “The term “Bad Deal” is relative. Not only is Necessity the mother of Invention, she is also the mother of many a Bad Deal. Necessity has a TON of children.” – [Funny, smart, and witty – and likely to open a few eyes at least!]
  • Jacob A. Irwin from My Personal Finance Journey presents Adjusting My Monthly Budget to Account for Home Ownership, and says, “A look at the steps I have recently taken to adjust my personal budget to account for the various elements of home ownership.” – [At our current rent rate owning a home just doesn’t make sense. Just look at all the costs involved!]

       Congratulations to the editor’s choice picks! Here are the rest of the articles from this week’s submissions.

Money Management

  • MD from Studenomics presents Quick College Students Guide To Personal Finance.
  • Jason from One Money Design presents How Do You Live Well on Less Pay?, and says, “There are plenty of people that don’t make a lot of money and have trouble covering basic expenses each month. There are 5 essential tips to follow to live well on less pay.”
  • Revanche from A Gai Shan Life presents Shopping for the single life .
  • ispf from Grad Money Matters presents The American Dream of Home Ownership: 10 Things You Can Do as a Student.
  • Jim from Wanderlust Journey presents Royal Caribbean Cruise Lines Shareholder Benefits.
  • Jason from Live Real, Now presents Check Your Bills, and says, “Can you automate your finances too far?”
  • Elle from Couple Money presents Financial Tips for College Success, and says, “Many college students are surprised to see how easy it is to build a financial foundation for themselves. Learn how to set up bank accounts, pay your bills, and start a graduation fund.”
  • DE(a)BTh from Murder Your Debt presents Your Wasted Life, and says, “You thought financing a house and a fast car meant freedom. That an expensive education would lead you to a rewarding career where you could earn lots of money. You were wrong, weren’t you? You hate your career but you’re stuck. You’re stuck because you swallowed the lies you were sold. The lies that material possessions bring success. The lies that more money means more happiness. And now what? You’ve got it all; the cars, the house with the huge yard, the sexy outfits and shiny shoes. But you’re STILL not happy!”
  • vh from Funny about Money presents Social Security’s Bizarre Rules, and says, “Social Security’s restrictive rules make it impossible to get out of poverty when unemployment forces one into early retirement and stock-market losses militate against retirement fund drawdowns.”
  • J. Money from Budgets Are Sexy presents What would you do with an extra $1,000?, and says, “Montel Williams wants to know ;)”
  • Bob from Christian Finances presents How to spend unexpected income: 3 questions to ask, and says, “It can be tough to know what to do when you receive a large sum of cash – this article will give you some questions to help you figure out what to do with it…”
  • Mr. GoTo from Go To Retirement presents How Much Long Term Care Insurance Should You Have?, and says, “Insuring against a long term care event is part of personal risk management. Estimating the amount of long term care coverage to obtain requires careful consideration of several factors.”


If you are working 40 or more hours a week to earn your money, don’t you think it is worth an hour or two to set up a budget?

Isn’t it worth spending about an hour every week to manage the money you work so hard to earn? It is always better to manage what you have than to work yourself crazy trying to get more money.

- from page 21 of The Secret to a Successful Budget by Craig Ford


Finance


Investing

  • Dividend Growth Investor from Dividend Growth Investor presents 33 Dividend Champions to Consider, and says, “Dividend investor David Fish has created a list of dividend stocks which have raised distributions for 25 consecutive years and has named it the dividend champions list. His list includes 100 companies, which is more than twice the size of the Dividend Aristocrats. I ran a screen on the list in order to identify stocks for further research.”
  • Mike from The Financial Blogger presents Use the Loonie’s Strength to Invest in the Eagle Market, and says, “Canadian dollar is strong compared to the US dollar at this time. Use this as an opportunity to invest in US stocks.”
  • Div Guy from The Dividend Guy Blog presents Dividend Investing with Less Than $1,000 Part 3: How to Pick Your ETFs and/or Dividend Funds, and says, “Starting to invest is quite motivating but as a young investor, you must put greed and hype aside and start by looking for sound investments.”
  • Squirrelers presents Small Stocks = High Return and High Volatility, and says, “Small stocks, particularly those in the lowest deciles, have performed very well over the long-term. They can be an important part of your asset allocation, provided you can stomach the associated risks.”
  • D4L from Dividends Value presents My Top 6 Performing Dividend Stocks Just Might Surprise You, and says, “As I have stated many times, my goal is to create an ever growing income stream from dividend stocks. Secondarily, it is my desire to beat the S&P 500 over time. With that said, I rarely look at the capital performance of individual stocks. However, I recently sorted my portfolio by Total Gain % (total gain/basis) and was mildly surprised at the top performers.”
  • ElizabethG (Modern Gal) from Modern Gal presents Investing for Inflation in 2010.
  • DSO from High Dividend Stocks presents Big GE and it’s big dividend, and says, “One of America’s oldest and most prestigious companies has become an accidental high yielder.”


Budgeting in and of itself is useless.

Budgeting is part of a larger financial plan.

- from page 9 of The Secret to a Successful Budget by Craig Ford


Budgeting


Saving


Frugality


You need to focus your finances on accomplishing one major task at a time.

If you don’t, the danger is that every dollar will be diluted to a point that it makes little impact helping you reach your goals.

- from page 9 of The Secret to a Successful Budget by Craig Ford


Debt


Credit


The goal of the budget is to help you spend less than you earn.

Therefore, this becomes the single criteria for an effective budget – does it help you spend less than you earn?

- from page 12 of The Secret to a Successful Budget by Craig Ford


Reviews

  • PT from PT Money presents Free Prepaid Credit Cards, and says, “A thorough, original review of the best free prepaid credit cards, including those that are free of activation and monthly fees. These cards are great for those who need to avoid debt, or those that can’t get a traditional bank account.”
  • Silicon Valley Blogger from The Digerati Life presents Citi Dividend Platinum Select MasterCard Review, and says, “Here’s a review of a credit card I actually like.”


Real Estate

  • FMF from Free Money Finance presents How to Hire a Home Inspector, and says, “When you buy a home, you need to be sure you hire a good home inspector to identify any potential problems. This post gives tips on how to do this.”
  • Jeff Rose from Good Financial Cents presents Should You Upgrade to a Larger Home”, and says, ”
    In many markets, home owners are looking at homes in the next price range up as good buys, since foreclosures and a slow market are resulting in good deals. But, as tempting as it is to upgrade to a larger home, is it really a good idea? Here are some things to consider before upgrading to a larger home.”
  • Rob from Two Wise Acres presents 3 Things to Avoid When Buying a Home, and says, “When buying a home, it’s critical that you avoid these three credit mistakes.”
  • ctreit from Money Obedience presents Do renters really save money in the end?.


Taxes

  • pkamp3 from Don’t Quit Your Day Job… presents Tax Incidence, and says, “Who really pays for a tax when it is enacted? If the government enacts a new tax on washing machines, is the entire tax on Maytag? The consumer? Cameron Daniels breaks down the details.”


A budget lets your spouse see your values and priorities in a tangible way.

A budget forces you to communicate not just about your life goals, but also about your daily financial preferences.

- from page 16 of The Secret to a Successful Budget by Craig Ford


Career

  • Kristina from Dinks Finance presents A DINK in The Office, and says, “As a married or unmarried employee with no children, are you treated differently than your colleagues with kids?”
  • Nicole from Nicole and Maggie: Grumpy Rumblings presents Why did you go to graduate school?, and says, “Nicole and Maggie discuss reasons for graduate school and how sometimes we’re directed into a career for the right reasons and sometimes we fall into it for the wrong reasons. But it turns out OK anyway (or maybe it doesn’t, but you can always change your mind).”


Economy

  • Bret from Hope to Prosper presents Trillion Dollar Public Pension Shortfall, and says, “An article in the New York Times stated that there is a $1 Trillion dollar public pension shortfall. Despite repeated denials from PERS and public employee unions, public pensions are in big trouble.”
  • JLP from AllFinancialMatters.com presents Democrats, Republicans, and the Federal Debt Since 1979, and says, “Though the title may suggest it, this is not a “political” post.”


Budgeting is a process, not an event.

You won’t wake up tomorrow with an effective budget. Instead, you will start with a decent budget that later becomes a good budget. Eventually, it is a great budget.

- from page 16 of The Secret to a Successful Budget by Craig Ford


Other


The Secret to a Successful Budget eBook Giveaway!

       As promised, I’m giving away two free copies of The Secret to a Successful Budget courtesy of Craig. To enter, all you need to do is leave a comment on this post telling me how budgeting has helped you OR your biggest struggle with budgeting. I’ll use random.org to select two winners tomorrow evening (August 24, 2010) at 5:00 PM EDT so be sure to enter by then!!! I’ll update this post to announce the winners, but use a valid email address when you comment so I can reach you if you win. Good luck!

[Update: Laura has won a free copy of The Secret to a Successful Budget! Congratulations!!!]


The Secret to a Successful Budget eBook

       Yesterday I posted an article about how to create a balance sheet. Part of that process includes calculating your net worth. After I wrote it, I realized I should talk about net worth from a Christian perspective. After all, the tag line for this site is “Personal Finance from a Christian Perspective”. There’s nothing particularly Christian about that article. It’s helpful for Christians and non-Christians alike to review their balance sheet and net worth. But as Christians, we must be especially careful to realize that we are more than our net worth.

       There is danger in obsessing over your net worth – in defining your success based on a number. It is wise for you to prudently manage your finances, and tracking your net worth is part of that process. But you must always be aware that your value comes not from what you own but from who you are in Christ. It is in being a child of God that Christians find their true worth.

       Our net worth is infinitely positive. Christ has canceled the debt of our sin and we will inherit immeasurable heavenly riches. What you own or owe here and now does not matter in eternity.

       This warning goes both ways. Those who are rich must grasp this concept just as much as those who are poor – even more so. It is easy for the wealthy to trust in their riches and forsake God. Their prosperity may even tempt them to think of themselves more highly than the poor. Both outcomes are sin in God’s eyes, and the rich must be careful to avoid both. The rich should not glory in their high estate, and the poor should not be shamed in their low estate.

       The Bible actually has much to say about this topic. I’ve chosen a few verses to help you see why it’s important for us to understand our true net worth. Consider what God’s Word says:

       The rich and the poor have this in common: Yahweh is the maker of them all.

Proverbs 22:2 (WEB)

       17 …and lest you say in your heart, “My power and the might of my hand has gotten me this wealth.” 18 But you shall remember Yahweh your God, for it is he who gives you power to get wealth; that he may establish his covenant which he swore to your fathers, as at this day.

Deuteronomy 8:17-18 (WEB)

       Riches don’t profit in the day of wrath, but righteousness delivers from death.

Proverbs 11:4 (WEB)

       For what does it profit a man if he gains the whole world, and loses or forfeits his own self?

Luke 9:25 (WEB)

       10 He who loves silver shall not be satisfied with silver; nor he who loves abundance, with increase: this also is vanity. 11 When goods increase, those who eat them are increased; and what advantage is there to its owner, except to feast on them with his eyes?

Ecclesiastes 5:10-11 (WEB)



       Focusing too much on your net worth can cause you to glory in your riches or to feel shame in your poverty. We must remember that the Lord is pleased with neither. What does please the Lord? Those who glory in their knowledge and understanding of Him and who boast about His loving kindness, justice, and righteousness.

       23 Thus says Yahweh, Don’t let the wise man glory in his wisdom, neither let the mighty man glory in his might, don’t let the rich man glory in his riches; 24 but let him who glories glory in this, that he has understanding, and knows me, that I am Yahweh who exercises loving kindness, justice, and righteousness, in the earth: for in these things I delight, says Yahweh.

Jeremiah 9:23-24 (WEB)


       A balance sheet is useful because it helps you see what you own and what you owe. It’s also useful in estate planning as it allows you to clearly list everything in one spot and can help you determine how much and what kind of planning you need. If you want to create your own personal balance sheet, here’s what you’ll need to do.

1. Give It a Date

       A balance sheet is a snapshot that’s only accurate on one particular date. When you create your balance sheet, you need to put down the date you made it or last updated it. Simply write “As of {Month Day, Year}” at the top just under your name.

2. List Your Assets

       Now you’ll want to break the balance sheet into two parts. On the left, you’ll list your assets. On the right, you’ll list your liabilities and calculate your net worth. Let’s start with your assets.

       Your assets include anything you own. This doesn’t mean you necessarily own it outright – just that legal ownership belongs to you or your spouse. You’ll want to list your assets in categories by order of liquidity – how quickly you can turn the asset into cash. Additionally, you’ll want to indicate the ownership of each asset (Husband, Wife, Joint, etc.). And finally, be sure to use the fair market value – the price you can actually sell it at. What you paid doesn’t matter. All that matters now is the price you can get if you try to sell the asset.

       The first category will be cash and cash equivalents (things that are almost like cash). This group includes actual cash, checking accounts, savings accounts, money market accounts, and similar assets. Next up are your invested assets. Stocks, bonds, mutual funds, retirement accounts, businesses you own, and any other investments you’ve made fall into this category. Finally, you can list your personal use assets – things like your automobile, furniture, clothes, and house. Some people don’t include personal use assets or they use a lower value. It’s up to you, but I say if you can and would sell it then list it on your balance sheet.

       Add up the total for each category and then add up your total assets.

3. List Your Liabilities

       In the right column, start listing your liabilities – anything you owe. Write down your liabilities in the order that they’re due. Short-term debts will go first (like credit cards or auto loans) and long-term debts will go last (like student loans or mortgages). Include any personal debts as well if you’ve borrowed money from family or friends. List the total amount owed along with who owes it (Husband, Wife, Joint, etc.). I think it’s helpful to also list your interest rate in the description of each debt.

       Add up your short-term debts then your long-term debts. Finally, add up your total debts and list it at the bottom.

4. Calculate Your Net Worth

       This is the easy part. Your net worth is simply your total assets minus your total liabilities. It’s what’s left over if you were to sell everything and pay off all your debts. Since you’ve already listed your assets and liabilities, all that’s left is to subtract.

       If your net worth is negative, you owe more than what you own. If it’s positive, you own more than you owe. It’s as simple as that.

5. Update It Regularly

       Now all you need to do is update your balance sheet regularly. Once a year is fine, but you can do this more often if you like. Remember to change the “As of” date each time you update your balance sheet.

       If all this sounds like too much work for you (it’s really not that hard), programs like Quicken and websites like Mint will help you create your balance sheet and keep it up to date automatically.

Provident Planning is a partner in GRABBBR, Giveaway Reaching All Bible Based Blog Readers. This is my featured GRABBBR blog post. By leaving a comment on this post, you will gain 5 ENTRY POINTS and may win cash or prizes.

Discussion is encouraged! However, only 1 comment per person will be counted towards GRABBBR, so please, no spam. For more information about GRABBBR, including how to gain additional entry points, visit the official GRABBBR page.

by Katie Tegtmeyer on Flickr - not my sister       My youngest sister will be having a baby soon. We were discussing wills recently, and she wisely brought up the question of how to choose a guardian for your child. I gave her some basic tips in an email, but I thought it would make a good topic for a post. This is an expansion of the advice I gave my sister.

What Is a Legal Guardian? Why Should I Choose One?

       A legal guardian is an adult who is designated to care for your child if both you and your spouse die or become incapacitated. If you don’t choose one, the courts will choose one for you.

       You shouldn’t assume that family will automatically get custody of your child. Unless you have a named guardian in your will, a judge will choose the guardian for your child. While the courts look most favorably upon choosing family members, they are free to pick anyone they choose. If they can’t find someone who is capable and qualified, your child could end up in foster care. If that’s not reason enough to designate a guardian, I don’t know what is.

       It’s also wise to name an alternate guardian in case your first choice is unable or unwilling to accept the responsibility. This can be easily handled in your will.

Choosing the Right Guardian

       The first thing you must realize is that you won’t find a perfect guardian for your child. Your job is to find the best guardian you can – not a perfect one. Start by making a list of all the possibilities. Then discuss each possibility with your spouse. Here are a few factors to consider when narrowing down your list:

  • Do the person’s religious values, beliefs, and parenting style & technique closely match yours?
  •  

  • Will the person be able to manage the responsibility of caring for your child? (financially, physically, and emotionally)
  •  

  • Is your child comfortable with the person?
  •  

  • Does the person have other children? Will your child fit in well with the family?
  •  

  • Does the person live close to you, or would your child have to move far away? (changing schools, losing friends, etc. in the process)


Should I Choose a Different Person to Manage My Estate?

       Hopefully, you’ll leave behind an estate that can help cover the costs of raising your child. If you do, you must decide if you want the legal guardian to also be the manager of those funds or if you should pick someone else. Having one person do both keeps things simple and makes it easier for the guardian. However, there are cases where you might want to pick a different person.

       Clearly, if the person you’ve chosen as your child’s legal guardian is not good at managing their own finances, you probably don’t want them to manage your child’s inheritance either. (Although, if this is the case, why would you pick them to be the guardian?!)

       You might also select a different person to be the trustee so you can keep them involved in your child’s life. Your parents could be a good example. They might be too old to raise your child, but by choosing them to be the trustee you can keep them involved in your child’s life without the day-to-day responsibilities.

       In either case, you’ll want to make sure that both the legal guardian and the trustee can work together well. Any complications could make a difficult situation worse.

Get the Person’s OK Before Signing Your Will

       Finally – and this should be obvious – make sure you’ve discussed this with the person you’d like to select as your child’s legal guardian. You don’t want them to be caught by surprise after your funeral. It would be quite foolish to pick someone without discussing it with them first.

       This is also a good way to narrow down your final list. One person may decline the responsibility. Another may be more than happy to take on this role. This makes your choice much easier.

Your Thoughts

       What advice would you give to my sister as she goes through the process of choosing a legal guardian? Share your thoughts in the comments below!


Provident Planning is a partner in GRABBBR, Giveaway Reaching All Bible Based Blog Readers. This is my featured GRABBBR blog post. By leaving a comment on this post, you will gain 5 ENTRY POINTS and may win cash or prizes.

Discussion is encouraged! However, only 1 comment per person will be counted towards GRABBBR, so please, no spam. For more information about GRABBBR, including how to gain additional entry points, visit the official GRABBBR page.

       If you’re looking for an estate planning attorney, it’s smart to have a few questions to ask before hiring one. A standard set of questions will help you compare several attorneys before making a choice. These five questions will help you find an attorney who is capable of handling your situation successfully.

1. What’s Your Background & Experience?

       There are numerous fields of expertise in the practice of law. Real estate, business, family, and estate are some of the major ones. Obviously, you’d prefer an attorney who specializes in the area where you need help – estate law in this case. Find out how long the attorney has been practicing in this area, where they went to school, who they’ve worked for previously, and how much of their time is currently spent on situations similar to yours.

2. What’s Your Process?

       Ask how the attorney will be working with you. How is information gathered? How are revisions made to my documents? How many revisions are included in my fee package? Are there any ways I can lower the costs by being more prepared/doing things myself? The answers to these questions will help you know what to expect and also uncover some ways you may be able to pay less.

3. Will You Do the Work Yourself?

       Attorneys often pass off some of their work to paralegals or junior attorneys within the firm. Find out how involved the attorney will be with your situation. If other people will be working on the matter, your fees should reflect that fact. The time that paralegals and junior attorneys work on your situation should cost less than the attorney’s fee.

4. How Do You Charge?

       Does the attorney work on an hourly basis, for a flat fee, on retainer, or on some combination or other method? What are the fees involved for the attorney’s time? How are expenses (like copying, filing fees, mailing, etc.) handled and charged? What are my payment options? How will I be billed? Be sure you understand the attorney’s compensation and what expenses you’ll be responsible for before hiring the attorney.

5. What Will This Cost Me?

       The attorney should be able to give you an estimate for the total cost of the services you need. If you’re getting a will, power of attorney, and advance medical directive, the attorney should be able to provide you with a general cost for these documents. If the attorney is unwilling to provide you with an estimate or remains vague, move on and find someone who will be more upfront. Understand that while it can be difficult for the attorney to know what the total cost will be, they should be willing to provide you with a possible and reasonable range of fees.

Your Thoughts

       What other questions would you ask before hiring an attorney? Share your thoughts in the comments.

       While knowledge isn’t really a hindrance to success, you don’t need to know everything to accomplish your goals. After you reach a basic understanding of an area you want to be successful in, you need to start taking action. Continuing your learning after that point is wise, too. But if you never act on what you learn, you’ll never be successful.

First, Learn the Basics

       This is especially true in personal finance. You don’t have to be a seasoned financial planner to begin finding success. You don’t even need to spend a ton of time to understand the basics. They’re simple. Spend less. Earn more. Save and invest. Be wise and cautious when making purchases (goods, services, or investments). Plan ahead. Don’t pay things you don’t have to (like extra taxes). And so on. A basic education is all you need to start finding success in your personal finances.

       You don’t need an accounting degree to make a budget. You don’t have to be Warren Buffet to start investing. You don’t have to go to law school to get your estate documents in place.

Then, Take Action

       Success in personal finance is not necessarily about knowing all the right answers. It’s about taking action. Those who only read about the benefits of budgeting will never be as successful as those who actually try to make a budget and stick to it. This is true even if the doers are not successful the first time.

       You can learn by reading about the experiences of others – but only so much. Until you start creating your own experiences, the information will just be knowledge in your head. You must start using it yourself!

       Don’t think I’m discounting the value of learning, education, and research. To be truly successful, you’ll have to keep learning. But you can’t get started on the road to success unless you follow a pattern of learning, doing, learning, doing, and so on.

Avoid Danger Areas!

       I’ll end with a few cautions especially true in personal finance. In some areas of personal finance, there are unscrupulous people who will try to take advantage of your lack of education. Insurance, investing, and debt are the most common places you’ll run into this, but you can really find it anywhere. Here’s the key: Before doing something, make sure you’re aware of the possible problems/pitfalls and educate yourself on how to avoid them.

       Here’s an example. In investing and insurance, you must be aware of how advisors and salesmen get paid. If it’s commissions, know what conflicts of interest might exist. In other words, learn how people might try to rip you off and be on the lookout for those techniques.

       Even though there are risks to the learn, do, learn method, you can avoid most major mistakes by learning first about the danger areas and how to avoid them. In personal finance, be aware of those who earn commissions, learn the math of debt, and read the academic research on investing.

Now Do Something!!!

       So get out there and start doing the needed things to achieve success. Stop reading about budgeting and do it! Stop worrying about having enough for retirement and start saving! Stop dreaming of starting your own business and do it! You’re never going to get anywhere until you take action.


P.S. I think I wrote this as much for me as for anyone else. I have the curse of perfectionism, and I must battle it every day. There is no such thing as perfect in this world. Only God is perfect. So I need to stop worrying about doing everything perfectly and just start doing. What about you?