Category Archives: Growth Mindset

Many Americans are feeling these 3 big financial stresses – MarketWatch

Posted on by

If you look only at the nation’s low, 3.7% unemployment rate, it would be easy to assume that the economy’s humming and that Americans are feeling great about their finances. But after reviewing five recent notable surveys, I believe many people are actually feeling three big financial pain points now.

Overall, according to the Bank of America Workplace Benefits Report of 996 retirement-plan participants, just 55% of employees rate their financial wellness as good or excellent, down from 61% a year ago. “That’s something to keep a close eye on,” says Lisa Margeson, head of Retirement Client Experience and Communications at Bank of America.

— Read on www.marketwatch.com/story/many-americans-are-feeling-these-3-big-financial-stresses-2019-10-02

Lifestyle changes to make if you want to get rich in 2020

Posted on by

If you want to build more wealth in 2020, start with these five lifestyle changes endorsed by self-made millionaires.

If your’re looking to build more wealth in 2020, money won’t simply appear — you’re probably going to have to make some changes to reach your goals.

Here are five lifestyle changes that have helped self-made millionaires get to where they are today. If they worked for them, they could also work for you.
— Read on www.cnbc.com/2020/01/03/lifestyle-changes-to-make-if-you-want-to-get-rich-in-2020.html

The Beginner’s Guide to Intermittent Fasting

Posted on by

The quote below from Dr. Michael Eades, who has tried intermittent fasting himself, on the difference between trying a diet and trying intermittent fasting.

“Diets are easy in the contemplation, difficult in the execution. Intermittent fasting is just the opposite — it’s difficult in the contemplation but easy in the execution.

Most of us have contemplated going on a diet. When we find a diet that appeals to us, it seems as if it will be a breeze to do. But when we get into the nitty gritty of it, it becomes tough. For example, I stay on a low–carb diet almost all the time. But if I think about going on a low–fat diet, it looks easy. I think about bagels, whole wheat bread and jelly, mashed potatoes, corn, bananas by the dozen, etc. — all of which sound appealing. But were I to embark on such a low–fat diet I would soon tire of it and wish I could have meat and eggs. So a diet is easy in contemplation, but not so easy in the long–term execution.

Intermittent fasting is hard in the contemplation, of that there is no doubt. “You go without food for 24 hours?” people would ask, incredulously when we explained what we were doing. “I could never do that.” But once started, it’s a snap. No worries about what and where to eat for one or two out of the three meals per day. It’s a great liberation. Your food expenditures plummet. And you’re not particularly hungry. … Although it’s tough to overcome the idea of going without food, once you begin the regimen, nothing could be easier.”

— Dr. Michael Eades

— Read on jamesclear.com/the-beginners-guide-to-intermittent-fasting

30 Examples of 30-Day Challenges That Will Change Your Life | Psychology Today

Posted on by

You can do anything for 30 days. And you just might find that one month is enough to inspire you to change your life permanently.

When it comes to self-improvement, two of the biggest stumbling blocks people encounter are a lack of motivation to get started and a fear that a goal will be too overwhelming.

pexels-photo-1028707

Photo by Acharaporn Kamornboonyarush on Pexels.com

30-day challenges is a way to help people tackle both of those issues. For 30 days. People design their own challenge.

Thirty-day challenges feel doable—you can do almost anything for 30 days. You can also use a 30-day challenge as an experiment. If it enhances your life, you’ll create momentum that motivates you to create more positive change.

— Read on www.psychologytoday.com/us/blog/what-mentally-strong-people-dont-do/201811/30-examples-30-day-challenges-will-change-your-life

Financial Advisors: Here’s How Market Volatility Impacts Investor Psychology

Posted on by

Humans either think that they’re in charge of what happens in their life, or they believe that life happens to them. Those who believe they’re in control of their life and its outcomes have an internal locus of control.

Having an internal locus of control tend to be associated with higher wealth, and because these people are more likely to take responsibility for the outcomes in their life. Additionally, the top one-percenters are also more likely to believe in their own abilities to solve problems and achieve goals, make better investment decisions and react more calmly when volatility strikes.

Having an external locus, however, is associated with self-destructive financial behaviors.

Financial advisors can help clients move to a more centered approach by asking thoughtful questions about past financial decisions, and can assist in determining where a client’s locus of control lies.

— Read on finance.yahoo.com/news/how-to-advise-your-clients-when-volatility-strikes-163641016.html

3 reasons investors might not be benefiting from rock-bottom fund fees – MarketWatch

Posted on by

There’s more to successful investing than just watching costs

The index fund fee-cutting battle reached its seemingly inevitable conclusion more than a year ago, when Fidelity Investments launched four zero-cost index funds. You can’t get any lower than zero, right? Apparently, you can. One small fund company is now effectively paying investors to own one of its index funds.

Still, the price war among financial companies has clearly moved on, with some firms eliminating brokerage commissions in 2019 or touting the high interest rate paid by their brokerage cash account. Cutting index-fund expenses is, it seems, so last year.
— Read on www.marketwatch.com/story/3-reasons-investors-arent-benefiting-from-rock-bottom-fund-fees-2019-12-18

Paying Yourself First

Posted on by

“Don’t save what is left after spending; spend what is left after saving.”

Warren Buffett

Automated saving and paying yourself first are probably the top two things Americans can do to create wealth and financial security.

Too many people try to save in a way that’s exactly backward. They spend first and then attempt to save up toward the end of the year.

The far more powerful way to save and invest is to set aside a percentage of your income every pay period — recommended 15%, 20% or more — and to save and invest it automatically.

Inevitably rich

Most of the folks who have accumulated wealth got there by systematically socking away a reasonable percentage of their pay into a broad array of stocks and keep doing it for decades.

The key take-aways are to make your savings an automatic deposit so you don’t get a chance to change your mind and spend it. And, spend what’s left and you’re certain to be on the right path to build wealth for tomorrow. Additionally, don’t forget to invest it!

By saving first, you eliminate the problem of not having enough money to save at the end of the month. Setting up automatic deposit into savings or brokerage accounts, you can secure your financial future and build wealth.

Source: https://www.marketwatch.com/story/the-huge-financial-force-even-albert-einstein-missed-2019-12-10

Cash Flow is King

Posted on by

Happiness is Cash Flow

Cash flow is about understanding where money originates, according to Brian Skrobonja, founder of wealth management firm Skrobonja Financial Group LLC. and originator of the Common Sense podcast . Further, Mr. Skrobonja states that cash flow is about strategically using money to not only live your life but to create more income sources for yourself. Essentially, when you put your focus on cash flow, it solves hundreds of other personal financial challenges, according to Mr. Skrobonja.

The confusing part about cash flow is that too few people understand what this really is. They believe that a monthly budget represents cash flow. It doesn’t. A budget is used to track expenses. It focuses on limiting expenses to stay within your means (income) in order to save money.

Cash flow is essentially the money that is moving in and out.  Additionally, cash flow focuses on where your money needs to go to fulfill the long term goals that you have for your future. It allows you to direct money toward creating wealth and ultimately more income. It is a financial growth mindset.  Thus, the cash flow between your current lifestyle desires and your future lifestyle requirements is the most important financial decision you can make.

The purpose of cash flow awareness is not simply to make ends meet, but rather to properly organize the flow of money, which allows you to create wealth and avoid debt.

When you think of your cash flow, break down your annual expenses into five groupings:

  1. Debt payments
  2. Tax payments
  3. Regular monthly expenses
  4. Savings and insurance transactions
  5. Irregular expenses throughout the year

Then list in chronological order the big-ticket items you plan to spend money on in chunks over the next five to 10 years. (This would include education, transportation, home improvements, etc.)

It is important to include the assets you plan to purchase or invest in to create more income on this list. Use debt to leverage investments by acquiring assets and grow cash flows. Do not use debt to buy things that make other people richer. These leveraged investments may be assets such as a business, rental property or some other income-producing asset you plan to acquire.

Don’t think about how you will pay for these big-ticket items, just list what they are, and then circle back later to work out the details.

Stable, reliable cash flow is the only true measure of personal financial success.  Individuals cannot thrive financially, let alone feel financially secure, without positive cash flow.  Cash flow is king in personal finance; cash flow should rule everything around your personal finances. Keep an eye on your cash coming in and your money going out.  Keep in the forefront, cash flow provides an unvarnished glimpse into a person’s overall financial health.

 

Animal Spirits

Posted on by

Animal spirits refers the state of confidence or pessimism held by consumers, businesses and investors. Regarding financial markets, they represent the emotions of confidence, hope, fear, and pessimism that can affect an investor’s financial decision making, which in turn can fuel or hamper economic growth.

If spirits are low, then confidence levels will be low, which will drive down a promising market—even if the market or economy fundamentals are strong.

Likewise, if spirits are high, confidence among participants in the economy will be high, and market prices will soar.

According to the theory behind animal spirits, the decisions of investors and business leaders are based on intuition and the behavior of their competitors or other investors rather than on fundamental analysis.

Famous British economist, John Maynard Keynes believed that in times of economic upheaval, irrational thoughts might influence people as they pursue their financial self-interests. In 1936, Keyne published, The General Theory of Employment, Interest, and Money, where he postulated that trying to estimate the future yield of various stocks, companies, or financial activities using general knowledge and available insight “amounts to little and sometimes to nothing.”

Keynes referred to these psychological factors that make investors jump into the equity market — in the face of deep uncertainty and volatility, as animal spirits. He thought, only a manic, driven, strong-willed person would put capital at risk in periods of high uncertainty and volatility.

When animal spirits are strong, investment is sufficient to maintain aggregate demand; when they lag, aggregate demand falls, and the economy lapses into depression.

It is assumed that the only way people can make investment decisions in an uncertain and extremely volatile environment is if animal spirits guide them.

Source: CARLA TARDI, Animal Spirits, Investopedia, Updated Apr 20, 2019

Importance of Embracing Failing

Posted on by

Everyone, and we mean everyone, experiences failure in life.

The difference is that most successful people have embrace and learned invaluable lessons from failure. Essentially, when they fail; when they embrace failure, they tend to learn lessons from the experience. They tend to grow and mature. They achieve new understandings and perspectives on life, love, business, money, investments, relationships, and people.

You can’t control the volatility of the stock market, market forces, the miserable weather or readers dismal response to your blog post. What you can control is your reaction to it.

We must learn how to embrace failure positively and understand that fearing failure only holds us back from realizing our full potential. By recognizing and accepting that everyone fails, we are better able to embrace failure as a regular part of life. For example, American President Lincoln and British Prime Minister Churchill both failed multiple attempts to get elected to public office until becoming President of the United States and Prime Minister of Great Britain, respectively. Thus, since most of what we learn is from trial and error, beginning when we fall down again and again trying to walk, it’s only natural to recognize that everyone fails … and often.

“Winning is great, sure, but if you are really going to do something in life, the secret is learning how to lose. Nobody goes undefeated all the time. If you can pick up after a crushing defeat, and go on to win again, you are going to be a champion someday.” William Rudolph

Thomas Edison, one of the greatest inventors in modern history, once said, “Genius is one percent inspiration, ninety-nine percent perspiration.” While experimenting on the incandescent light bulb, Edison exclaimed to a reporter’s question, “I have not failed. I’ve just found 10,000 ways that won’t work.” Success typically comes after numerous failures. There’s something magical that happens when you don’t give up.

Failure can be an immense asset if we are trying to improve, grow, learn, or do something new. It’s the necessary feature that precedes nearly all successes. And, there’s nothing shameful about being wrong, about changing course. Each time it happens we have new options. Problems can become opportunities and new insights to solve old challenges. Deep down we know that our past failures have contributed immensely to our personal growth.

People fail in small ways all the time. To gain the benefits, we have to learned from the failure. The simple truth is – no great success was ever achieved without failure. It may be one seemily life changing failure. Or a series of failures. But, whether we like it or not, failure is a necessary stepping stone to reaching our ultimate goals and achieving our dreams.