What is a mutual Fund?

A few of you have asked me this question:

What is a mutual Fund?? This site answers that question: http://www.sec.gov/investor/pubs/inwsmf.htm

If you have any additional questions on this topic after reading this site feel free to email me.

Again the important thing for now is " how do I increase the amount of money I deposit into my IRA".

I know all of you want to learn more about investing and making money in the market, but I'm telling you this below is the important part for now. ...............repeat after me: 5% of zero is zero, 8 % of zero is still zero.

Saving for the next car acct.

Member writes:


In a message dated 3/23/2005 9:48:08 P.M. Eastern Standard Time, X writes:
Instead of a rainy day account (a rainy day to me is that I can't afford to go out at this point in my life), should I set up an account with a specific goal in mind. In about 6 years I will be finishing up grad school and needing to purchase a car and afford a place to live. Is there a separate account I should look into to set up to prevent rainy days?I say this realizing that 8% of 0 is still 0. I'm thinking more in terms of money from this summer. Just trying to think ahead, or am I thinking too far ahead? I hate that I can't get out of the mind set of thinking in the immediate instead of the long term. By immediate I mean 5-6 years. That scares me more than when I'm 60. Is that wrong? Or is that me just being naive with finances?Thanks for your input.

Money Prof:


First of all if you're thinking beyond your next paycheck you're doing better than most. Yes, you need to think longer term, but I personally don't think there is one other member under 30 yrs old that thinks in terms of even 2 years let alone 5 years. ( that's at this point in time, hope that changes soon). I'm being polite, I really don't think its one year. :(

Are you serious on this or is this giving yourself the right answer???

Yes by all means set up a "specific goal" acct., just so its only for that item ( NO EXCUSES). For example a "saving for the next car" acct. You could compute what you would want to save for the down payment. What your trade in would be worth then, and estimated payments on a 3 yr loan.

Use this calculator ( and save it for future use): http://www.tcalc.com/tvwww.dll?CalcLoan?Tmplt=CarAfford.htm&Cstm=intuit3&PmntAmt=300.00

You could open a separate AG Edwards acct., then just leave the money in a MM which is automatic until you have multiples of say $500, then put that into "laddered" one - five year CDs which will give you a little more interest. You would never put this in the stock market as that is ONLY for long term money.It's probably a good idea to set up this separate "new car" acct., not so much for the extra interest you'll get while starting it, but for the psychological part that its earmarked for something and can't be used for an extra pair of new sunglasses.

It never ceases to amaze me

Member writes:


"Excuses are lies people tell themselves. from:Robert T. Kiyosaki.

I read another one of his books over my vacation.

Money Prof:

Good one, thanks.
It's bad when people lie to you, but its really bad when they lie to themselves.

BTW: it never ceases to amaze me the direct correlation between the person who needs the least help reading another book on the subject, and the person who needs the most help that won't even read this email!!!!!!!! :(

Rainy day fund

Member writes:

In a message dated 3/22/2005 11:52:08 A.M. Eastern Standard Time, X writes:
Set up a rainy day fund.
I know we've talked about this but where do you suggest I put my rainy day money? I remember thinking Money Market but I'm not sure it's smart or not. I just feel it's a waste sitting in my savings account getting little to no interest! Contact AG Edwards?

Money Prof:

You could open a separate AG Edwards acct., then just leave the money in a MM which is automatic.
Or once you have enough money to cover say 3 months of expenses for example, you could leave some in MM, and put some in 3 month CDs which will give you a little more interest. You would never put this in the stock market as that is ONLY for long term money.

It's probably a good idea to set up a separate "rainy day" acct., not so much for the extra interest you'll get while starting it, but for the psychological part that its earmarked for something and can't be used for an extra pair of new sunglasses.

But........................... don't forget the IMPORTANT part:

I know all of you want to learn more about interest rates, stock market, etc, but I'm telling you this below is the important part for now. ...............repeat after me: 5% of zero is zero, 8 % of zero is still zero.

At this point use your mind to set up the "household acct." instead.

Don't miss read this: The rate of return is VERY IMPORTANT, I'm just saying it doesn't matter until you have the money to get that higher rate on.

For those who aren't fast with math let me put it another way: the difference on 1% more interest on say $300 over one year wouldn't even pay for one beer in a bar. NO, I don't mean forget the interest rate and go out drinking more. :)

Your tax refund

Regardless of whether your cash back from Uncle Sam is a few hundred or several thousand, any amount of money can go a long way if you think before you spend. Try one of these money-smart suggestions. Suggest doing it in order, start with #1 :

1. Pay down credit card debt.OK, so this doesn't sound as appealing as the new designer "sunglasses". But if you can knock out -- or knock down -- the balance of even one high-interest credit card, you're making money. Think of all the interest you won't be paying. ( And then if you're really smart cut up card and use a debit card instead).

2. Add more to your IRA. Been putting this move off until you had "a little extra money?" Today's your lucky day. Any amount "will compound nicely," says Chris Farrell, author of Right on the Money.
"The biggest mistake people make is thinking [what they have] is too small an amount to invest," says Ric Edelman, author of Ordinary People, Extraordinary Wealth. "Rich people start off as poor people. The difference is they take the nickels and dimes and they invest it --

"they don't spend it all at the mall or in bars and restaurants."

3. Set up a rainy day fund.
The standard rule of thumb is to sock away at least three months of living expenses. So start with your refund and take it from there. ( I personally don't advise putting this in the stock market until you can say you won't take it out within X years.) This DOES NOT mean a rainy day fund for next week when you forgot your car insurance was due.

If I'm "gaining" on this AND you put the proper thought into previous emails you already are starting to accept "sh*t" doesn't just happen. For example: if you drive a car it will need tires after X miles. So don't say " boy am I unlucky my car needs tires and I didn't know that in advance"!! Yes, BS excuse. ( Wow, if you really said BS excuse to yourself you made my day!!!!!!! )

4. Add to your car ( or house) payment."For most people, this is better than putting it in a savings account," says Robert Van Order, chief economist in the financial research division of Freddie Mac.

5. Service your car."The No. 1 thing people forget with cars is to maintain them," says Clor. If you've been putting off that oil change and tune-up because you just didn't have the money -- this is the time. And check the tires. Extra bonus: A well-maintained car with properly inflated tires burns less gas and saves you money in the long run.

For my "pay" on this thought provoking email :), please email me that you read the March 22 email. Just write " I read the March 22 email")

I can even accept (sadly) that you didn't follow the advice, but can't accept that a few of the others didn't even have enough "lead out of their ass" to read it.

The IMPORTANT part

The IMPORTANT part. Reread this often:

I know all of you want to learn about investing and making money in the market, but I'm telling you this below is the important part now. ...............repeat after me: 5% of zero is zero, 8 % of zero is still zero. And 20% of zero YES, is still zero.

The first step is to promise yourself you will always have a budget. The next step is to commit to be saving for retirement now. Yes, now. You will be a millionaire if you invest 10-15% of what you earn per week into the stock market. EVERY week. The easiest way to do that is to have two separate checking accounts. One (called household) is for bills that you don't have much control over, example: Savings, phone, electric, rent, car payment, car insurance, plates for car, car repairs etc. The other is for credit cards, ( which I highly recommend you don't use unless you make payment before you use the card or debit card) food, beer, partying, gas, restaurants, clothes, gifts etc. You compute what the bills are per week and deposit that total amount into household acct. every week, so if car insurance is $520 a yr. then you deposit $10 a week into household acct. This sound like a pain, but it isn't as you would only compute this a few times a yr. once you came up with what the weekly figure needed to be. Best way to deposit is "direct deposit" if where you work offers this option.

IF IT'S NOT AUTOMATIC IT WON'T WORK.
After the correct amount is deposited into household acct., the balance goes into the other acct. The rules are simple, you can only write checks out of household acct. for the items that you listed as weekly deposit items. No excuses to yourself. In the other acct. the only rule is don't bounce a check.

The important part is the mental attitude. For example "what if I don't have enough money in the other checking acct. to go out with friends for drinks and dinner," then stay home and eat spaghetti. ( because you should have saved for this) No, not take out spaghetti from your favorite restaurant, the box you bought on sale at the Supermarket. :)Now I have a question for you: do you think the guy that closed his IRA yesterday was following the above advice on "household acct"???

Read this post first

Member writes:


From: X Date: March 12, 2005 9:33:16 AM EST To:X > Subject: moneyprof

When I started reading the site I felt as though I stepped into a conversation that was going on for some time. I was lost. Once I found the archives and went back to January it became clear.

MoneyProf:
Yes, makes much more sense when it's read in chronological order. Suggest new members read it in that order. Did I hear you say "you don't have time" ??? You have time to work and earn some money, now MAKE THE TIME to learn how to keep some to invest in your future.

This is what makes it worth while

This is from a new member:

In a message dated 3/13/2005 4:29:12 P.M. Eastern Standard Time, X writes:
> WOW!!! What fantastic information. You have to wonder what peoples > motivation are to offer advise on financial matters.

MoneyProf's response:

Thanks for your comments.

Motivation on this is strictly to try to help people do a little better financially. No hidden agenda. I followed most of my advice so don't need the money , ( yes, I would have done even better if I followed it all :) not looking for any financial gain on this. No, I don't get a cut from the stockbroker. Yes, I had a "student" ask me that a few years ago, and didn't quite believe the answer. She didn't succeed financially as she never learned the difference between being "being awake" on things and being over paranoid. This caused her to lose good jobs down the road. I get self satisfaction in seeing people get ahead. The hard part is the percent is so small. :(
I've learned (by a lot of experience for example: thousands of employees throughout the years, relatives, investing advice for years, AND this group etc.) that until you can get people to learn the difference between "wants & needs", "BS excuses & real priorities",
Household Acct. budgeting, etc., it is a total waste of time to start investing training first. Of the numerous times I've done investment advice first I've NEVER had 1 case where the problem was the person needed more investment knowledge BEFORE there was a problem with "I don't have an money to put in my IRA now, as I'm broke ( code for bought the sunglasses AND partied all weekend), took money out of IRA and closed it need money for X, or said "will have to stop payments for a month or two to catch up on back bills ( code for " bought the sunglasses & partyed all weekend on credit cards last month) then didn't ever start deposits again. Etc etc. Of the hundreds of cases would guess that 90+ % fell into the above, and 10% are succeeding with retirement money goals. ( Not a BS excuse, but I think the numbers are like this as I mostly get the harder cases. Meaning a high percent of the people that LOVE to party too much. :)
Now what motivates me to continue after for example"the woman I had to get rid of" a week or two ago !!!! Way too much wasted time. :(

This is what makes it worth while:
I have a student who started at 30'S and now is the "oldest member" email me in Feb. to say he rented a house in Florida for 6 weeks and was having a great time in the warm weather and coming back north in Mid March. Wanted to thank me again for financial help and to say he would like to visit me in April. Told him great, but if he waited until May we could go boating in my new boat :)
He retired at 62, could have retired a little earlier, but (take it from me) its a lot more fun working when you know you have so much money you don't need to work. Anyway, he decided to take a job offer in sales for 12 hours a week not so much for big money as for company car, and medical ins. He also negotiated that he can take off work whenever he wants to. Might work 16 hrs one week, and 8 the next. He DOES NOT need the money, but wants the extra to help grandchildren, and enjoys getting out and in his words " enjoys seeing people and having fun working the few hours".
I've advised this guy for 30 yrs. He 100% followed the investment advice. He even followed it when his brothers were making a much higher return than he and told him he should switch to their broker and get into tech stocks. ( which he didn't do) When they lost most of their money in 2001 & 2002 I'll bet he has thanked me 10 times.
It wasn't very much work for me as he " supplied all the motivation, I only had to supply the investment knowledge. never had to waste time on the extra 3rd pair of sunglasses theory. He NEVER missed a deposit, and every time he got a raise he increased the deposit. He has enough money to live very comfortably without ever working, takes vacations, house paid for, car bought for cash, no debt, no financial worries. Etc. Why this true story is extra good is this although this guy made a good living, upper top of middle income, he did it by SPENDING LESS THAT HE EARNED, not because he earned really big bucks.

PS He & his wife also will get self satisfaction out of sending their grandchildren on a cruise ship with their daughter next month. Yes, he can afford things like that too.
One of these story's make up for more than 10 of the failures. That is what gets me to keep on trying.

Say what you mean, AND mean what you say

Member writes:
In a message dated 3/15/2005 6:39:49 P.M. Eastern Standard Time, X writes:
I'm not sure if you have talked to X since the weekend but we were in pretty rough shape by the time she could leave. We were babysitting a couple people (I'm not going to drop any names) and I'm not sure what you would have thought of us!Someone told me you had quite the crowd over at your place, I sure hope you aren't upset with us! I had your book with me along with some other questions but I'm sure we'll talk soon.Would you consider rescheduling?
MoneyProf's response:
BS excuse. You could have left before X . Or called early in the day to cancel.
Yes, lets reschedule, BUT show up when you say you will.
"say what you mean, AND mean what you say.".


This is from a new member:

In a message dated 3/13/2005 4:29:12 P.M. Eastern Standard Time, X writes:
> WOW!!! What fantastic information. You have to wonder what peoples > motivation are to offer advise on financial matters. I love MoneyProf's answer to that by the students having the feeling of "owing" it may > compel them to continue and succeed.

MoneyProf's response:
Thanks for your comments.

I hope you're right on "owing may compel them to continue and succeed," but its a lot harder than that. Don't want to sound negative, but REALLY tough to get through to people on " a deal is a deal". There is a definite pattern that as a general rule, people that keep their word on non financial matters, also do good on financial matters. Why.............. because it follows the same thinking process.

For example: two of the "members" emailed me a couple of weeks ago that they were going to visit me Sat. night as they would be in town. They were coming over with the 3rd person friend (who is not a member because she said "she doesn't have money to save", boy does she need to learn the "latte" factor. :) AND the philosophy below.
She also emailed that she would stop over for a drink.

It was confirmed over several emails, exact words "will definitely stop over".
All 3 didn't stop AND didn't call. They will probably be polite and say sorry with a BS excuse( because they're smart enough to know I would want to hear that) , but really don't get that it was very rude to not call to cancel. ( I had other people stop for a drink, so I wasn't sitting there waiting for them)
You might say what does this have to do with financial matters??
It does: a deal is a deal, is the bill paid on time or not, is money spent to buy extra sunglasses at the same time you're saying " I can't afford to save $20 this week for my IRA" etc, etc.
This is the point: "say what you mean, AND mean what you say."

Hold it right here a min. IF you're thinking yes, but its OK to change your mind. (I love that one, I've heard that BS excuse so many times)
True, totally OK to change your mind, but then you owe the other person a call in advance. Repeat: you owe the other person a call in advance.

Important note: approximately half of the members reading this probably think " this guys nuts, of course its OK to not show up if you get a better offer. The other half probably think " I don't get this why is it necessary for him to explain the lowest level of "say what you mean, AND mean what you say.", they think "I live by that."

Now a question for you: which group do you think will do better financially???? Of course the group that gets a "deal is a deal" will.
I hope both groups do good, as I'm hoping that the BS excuse group "sees the light", and changes to "say what you mean, AND mean what you say."

Instant Gratification

RE:

But.................... I'd rather go out, great, then don't buy the sunglasses.
Re-read the above sentence 90 times, and then once a week. :)
__________________
STUDENT writes:

"also on this point, instant gratification , like buying the glasses goes away so fast, that by the time the weekend rolls around, you forgot you bought the glasses and are ready to drink, thinking you really didn't spend much extra money this week"

____________

True, but that can't happen with the "household acct. budgeting" concept.

If the person totally "buys" this concept, they would be forced to budget within that one week period on the "other" acct.

They couldn't take money out of household, couldn't charge, etc.
So would have to make a choice between the glasses or the drink.
( unless they saved in advance for the glasses).

In my experience of advising people on finances, I can't tell you even one story of someone who saved money for retirement & wasn't in debt etc. that did it without "the household acct. concept.

I personally guaranty you will NOT succeed on your financial goals without following AND totally "believing" in the Household acct. concept, or something very similar and automated. Why fight it????

Just kidding, of course I know why 95% of people won't do it ( or will start it and then write checks out of the household acct for the drinks, AFTER they bought the glasses that week!!!! ) :

They want the glasses AND the going out for the drinks.

Did I tell you the story about two three yr olds with one toy..............

NO FUN, NO LIFE AND NO FRIENDS

This paragraph indented below was written by the "former member" that I had to get rid of. You don't want to be around anyone ignorant ( or stubborn) enough to take this subject to mean " to obtain money you need to not have fun, no life, and no friends.

In life try to avoid people that don't know, but think they do know.

You can help people that don't know. and know they don't know.

But you will just waste you time with people that don't know, but think they do know.

This person has credit card debt, bills are so high they have to work two jobs, has an old car with a loan on it ( she also borrowed money from someone and then came up with an excuse for not paying it back) AND is still stubborn enough to write: "that's some thinking I will stick by and still be ahead in life."

You might be confused on this, she is not the spring break person. She is arguing for the spring break person that she doesn't know.

She is not 20, she's older.

This is part of what she wrote:

"They may obtain a lot of money, but no fun, no life, and
no friends-doesn't balance out to me. If you have your priorities straight
and get done pressing issues on time and together and have to "put off" some
smaller things for a week or two b/c your spring breaking at 20yrs old,
that's good to me and that's some thinking I will stick by and still be
ahead in life."

This is another person's response:

"I don't feel that you've ever said that I can't have fun as long as it's not
out of paying myself first or household account. I just wanted to make sure I
am understanding you...as long as it's "extra" that is set aside and planned
for, I don't need to feel bad getting a drink with friends for example???
Just clarifying... :)"

Exactly.

If you really mean this, maybe you should help me to teach "budgeting 101". :)

That is exactly the point, as long as its NOT out of household acct., out of money for IRA deposit, or charged on credit card, by all means have fun. :)

The concept is being able to understand ( wrong word: you all understand, I meant accept) trade offs. If I buy the 3rd extra pair of sunglasses, maybe I shouldn't go out this weekend.

But.................... I'd rather go out, great, then don't buy the sunglasses.

Re-read the above two sentences 90 times, and then once a week. :)

I've had this problem before on this subject. The people that don't "get it" ( and I hate to say this, but never might get it) think I mean "don't have any fun", or "he is causing me stress". Which is more stress, using household acct budgeting, or not paying bills and having creditors calling!!!!!!!!! Or worse yet.......... working two jobs to pay bills that are behind.

You're the youngest

STUDENT writes:

"That's not the way it works in the real world and I need the discipline.

___________
MONEY PROF responds:
What's funny about life is the young adults that know they need more discipline don't need as much more discipline. Then again you can apply that to any age group.

New medical research helps explain why people under 25 don't have fear of standing by the mailbox broke waiting for the SS check ( no, I didn't make this up) :

The part of the brain that weighs risks and controls impulsive behavior isn't fully developed until about age 25, according to the National Institutes of Health.

This also explains the high % of car accidents for the under 25 group. Logically early 20s should be by far the least accidents. This group has some experience driving by say 20, fast reflexes, better vision than the average person etc. etc. But NO fear of the risk.

My point on the above is not to use the above to justify the wild party's. "It's not my fault, it's my brain." LOL :)

My point is to accept that mid 20s are weak on controlling impulsive behavior and work around it. For example: direct deposit the money to your IRA to help lower the temptation of having the money in your hand to buy the new pair of sunglasses to add to the 3 other pairs you already had. ( Why I used sunglasses in the example is I know that the former student bought new sunglasses when she not only had other pairs, but was so broke she couldn't pay her bills.)
I also know that a current "member" bought more sunglasses when she already had a pair or two, has ALL bills paid, but doesn't have money to save.

For those of you over 30 receiving reading this: in case you skimmed the above because you're not 24 ( he must not mean me :)............... just insert your age where it reads " mid 20s". YES, YOU.

The question to ask yourself now, take a few min. to think this over:


Do you really think that when your 55 and laying on the beach, ( while your former friends are working 2 jobs broke and no IRA) that you'll say: jees, I wish I would have bought more sunglasses AND latte when I was younger.??????????

You might say later in life, for example: I wish I had a really great week vacation in the Caribbean when I was younger.
Sooooooooooooo, start a savings program for that.

NO I won't say don't go on the vacation and save even more!!!!!!!!!
That is the part I've never been very successful in teaching.
The vacation might be worth it to you now AND looking back on it later in life. So go & enjoy it, IF, and ONLY IF you saved for it in advance.
Repeat: IF, and ONLY IF you saved for it in advance.

There is a difference between "pissing away" money, and spending money that not only did you enjoy spending today, but won't regret that you spent it looking back on it later in life.

I know that is a really hard concept to accept. Why ............ because the sunglasses really look good and I want them NOW.

Did I ever tell you the story about two three year olds with one toy...........

You have me to tell you the truth

Please DO NOT read this to mean to not ask questions or challenge a point for further explanation.

Also DO NOT read this to mean making a big deal about waiting the extra 10 days.

Also throw in that I'm aggravated with myself for wasting a lot of time with the former student ( 20 times more time than I have invested in you) over about a 1 1/2 yr period.


Please do read this as a thinking process needed for financial success, career success, and life in general.

Always remember: you have ALL your friends to tell you what you want to hear. You have me to tell you the truth.

Just think of it this way: if you said to your friends "Im going to buy designer sunglasses this afternoon, and the friend knew you already had a few pairs, and no money saved. What would they say?????? How about "sounds good, I'll go with you and buy some too". :)

That is why you need me.

_______________
Member writes:

My mom was the only one who got on the internet on vacation. I'm not going to give you BS...I simply did not check my e-mail for the past week. As far as the paper work goes that I am sending you my mom never recieved it in the mail before Friday and I never recieved it here at school. I didn't get it done. It WILL be in my mailbox when our post-office is open here at school on Monday. I will send it back to you Monday. I am sorry that it took so long.

_____________________
MONEY PROF continues:

Had a major fight with one of the other students over this. She thought it was TOTAL BS for me to be pushing you to get it done before you left. She actually came right out and said she would "stick by her thinking on this subject AND still be ahead in life". It was totally OK to wait the week or two longer. Also, I had no right to add stress to her life over not reading emails timely.

Let me stop here for my thoughts on her saying she will stick by her thinking on that: I have a collage of quotes on my home office wall, I had it on my business office wall for 20 years. One of the quotes is:

There are four mental types of human beings:

The man that knows and is aware that he knows, he is wise so inquire of him.

The man who knows, but is unaware that he knows, remind him and help him that he forget not.

The man who is ignorant and knows he is ignorant, teach him.

The man who is ignorant but pretends to know, he is a fool, so keep away from him. By Solomon Gabirol 1021-1058.

So............ I'll follow the above advice. Remember: "A fool will learn nothing from a wise man, but a wise man will learn much from a fool."
Learn from other peoples mistakes.

But how do you know if she's right, or a fool???

Easy.................. she's the one with credit card debt, car loan on an about worthless car, bills so high she needs to work two jobs. Etc.
And those of you who know me good know I never talk like this, but don't know how else to make it clear to you: I'm the one with plenty of retirement money. :)

I think you should have got papers signed before you left, do whatever you had to do. My reasoning has some but very little to do with the time frame of me having to wait 10 extra days to gain access to your acct.

Here is the reasoning process: first of all the #1 thing that will allow you to succeed with your retirement saving goal, saving to start a business, saving towards a car etc, is financial discipline AND motivation. ( allow me to get side tracked for one sentence: this is one reason you don't want to marry the old rich businessman , I can't tell you how hard it is for me to justify this process when I know I'm 100% correct on the subject, we're using so much time explaining WHY each little step needs to be done) if you don't have the discipline to be able to mail the paperwork before you left, do you have the discipline to deposit a set % of your salary into retirement for 35 years ??? ( please don't say yes today as that would be BS dreaming, guessing, wishful thinking etc. You won't know the answer for that for a while. DO NOT confuse this with the needed discipline for college.

Bear in mind that a very high % of the people that start retirement savings either stop deposits, or take out ALL the money.
Is this because their investing knowledge wasn't ample???? Or was it they didn't have the discipline??
The next thing is motivation: if you don't have the motivation return the papers before you left, do you have the motivation to stick with whatever financial goal you set??
And an important thing that I hope to be able to teach you ( not that its more important than "discipline & motivation", probably much less important) is "owing". You will probably learn disciplined & motivation without me over time, BUT it will take much longer.


Slow down............ no skimming here:

I really believe that you ( and most the other "members" will NOT learn "owing" without me. And you do need to learn it. It will be very useful in your careers, in business things, AND in life in general.

Let me try here by first stating why I think you ( and ALL the others) are so bad on this subject of owing. Most of you were raised middle, upper middle class, and yes a few in the top 10%. so you don't have much experience "trading favors". A few examples: if your car breaks down you call the mechanic, you need body work on your car you take it to the body shop, you have a clogged drain, you call a plumber. So you pay someone money to get the thing done. Obviously its nice to be in that position. The only thing wrong with it is you never learn "owing".
If you were raised " high poor" or "low middle income ( I know this is bias but why I'm not saying welfare very poor is I think a high percent don't get this) then you would have learned owing very easily. For example: you knew someone that was either a car mechanic or very handy with cars, you would call him for a favor to look at your broken down car. It was implied that you "owed him one". So........... in your dealings with him you "owed him one". If he was moving you volunteered to go over and help him move. Etc. etc.

I know that you AND the others are smarter that average and in college, graduated college or have your masters. But on this subjects rather than use the hours and hours ( or days & days) it would take me to convince you that you need work on this subject for the sake of time trust me on this one: in a best case scenario you're really bad on this subject, in a worst case you're so bad that you think he must be talking about someone else as you absolutely don't get it.

Now so you don't think I'm totally side tracked I'll give you an example that the former student will NEVER get: You owed me the courtesy of getting the paperwork done BEFORE you left for spring break. You also "owed me" checking your email at least once in that week on vacation.
Why............... because "what's in it for me". No pay, not flirting with any of you ( boy did he get polite in his older age :), no commission from the broker, etc. NO hidden agenda.
Only the self satisfaction of knowing you're getting something out of it. So the lesson here is you could have gotten a small "marker paid" with little effort on your part. But again WHY??? not only because you "owe", BUT also because you should want to motivate me to continue.
One final note: please email me that you read this ( you don't need to write anything except "I read the March 6th email". Want this to be able to free up mail space for the people not interested.

Pats on the head

There wasn't one time I can think of that this person didn't have an excuse!!!!!!!!!

It's mind boggling to me that she can't see that she caused her own problem of having to work the extra job. :(


I don't recommend working extra jobs as all your effort should go into one job. And contrary to what you may think that I would say, you need the time off for fun. :)

______________
Member writes:

I have stayed late at work on friday evening to check emails. This is the
first weekday that I am not going straight from this job to waitressing.
You can add this to your BS list. Remember-not everyone has a computer

_______________
MONEY PROF continues:

SAD. :(

I really believe you're sincere ( I mean this as a negative). It's so bad that it doesn't even cross your mind that you don't have a computer because you made excuses to yourself on wasting money. ( overdraft charges, deposit on apt lost., spending habits, etc etc :(

BTW: reread email on " Pats on the head". Why would you give yourself a "pat on the head" for reading email that YOU need, when you caused yourself to be in the position to not have a computer. ( you could have easily had a few hundred $ used computer with the money you pissed away.)
------------------------------------------------------------------------------------------------
In case you're wondering why I'm so intolerant with this person, it is because I have A LOT of time invested. Have been "working" on this person for a couple of years. Total waste of my time, she didn't get anything out of it. :(

Didn't "hear a word"

Bear in mind when reading this her say "and that's some thinking I'll stick by" that after about two years of working on her she still thinks she's right. :(

Credit card debt problems, car loan on old car, needs to work a PT job on top of full time job to cover bills, etc, etc.

Learning from other people's mistakes beats the heck out of learning from your own:
_____________
Member writes:

"I think people get your point, but cut some slack where it's not necessary
to be such a hard ass. Some issues are pressing "get it done now", some
frankly, are not. It's good thinking to have in the appropriate situations,
if everyone had this thinking all the time they would be no fun and have
absolutely no life. They may obtain a lot of money, but no fun, no life, and
no friends-doesn't balance out to me. If you have your priorities straight
and get done pressing issues on time and together and have to "put off" some
smaller things for a week or two b/c your spring breaking at 20yrs old,
that's good to me and that's some thinking I will stick by and still be
ahead in life."

__________________
MONEY PROF continues:

Sad. You didn't "hear a word". :(
I never talk to people like this, but in your case: Do you think I started with nothing and built a 200 employee company, that does millions a year by not being an expert on setting priorities??
I thought it was important to "push" no excuses ( rather than getting into setting priorities) as you're incapable at this point of distinguishing the difference. All excuses are acceptable to you.
For example: I know the only budgeting thing that works for people without an extremely high discipline level is the " household acct". concept. So you tried it, did it obviously totally wrong, and your answer is to not do it. Do you even hear yourself???
If I had succeeded your answer would have been "what did I screw up", and this time I'll make it work............. no excuses to my self.
As far as you comment on " they might obtain a lot of money, but have no fun": First of all this has nothing to do with obtaining a lot of money, the purpose of what I was trying to get through to you would be pay your bills, not have stress from being in debt, have some money saved to retire early, AND have money saved for fun.
BTW: the myth that if you're poor you're happy and having fun, and if you have a few bucks you don't have fun was started by poor people.
The exact opposite is true, for example the top problem in relationships is financial. Question to yourself on fun: because of not accepting "excuses are BS" you have to work a side job besides a full time job, how can that be fun!!!!!!!!
As far as your comment on "spring break" how hard is it for her to have a set of papers sent to where she'll be on spring break to sign??
The other thing you're not throwing in is if she doesn't give a sh*t enough to take that type thinking, why would I waste my time. What's in it for me!!!!!!!!!! I have no hidden agenda, the only thing I get out of it is the self satisfaction of one of you being in the position to NOT think like the other 95% of people.
Might even help her set the tone for the no excuses concept on other items.
So stick to your thinking, and maybe it will work but it will be so much harder.
At my hourly rate of pay you could never afford to hire me to help you, I was willing to do it for free. My time is too valuable to waste, and not fair to waste yours. Good luck.
PS you always learn something in life. What I got out of this is "you can only help people that want help". And" those that need it the most will accept it the least".
In case you're wondering why I'm so intolerant with this person, it is because I have A LOT of time invested. Have been "working" on this person for a couple of years. Total waste of my time, she didn't get anything out of it.

people that need help the most accept it the least

Today's lesson: The people that need the help the most accept it the least

This person is in debt, needs to work a full time AND PT job to cover bills. Has an excuse for everything.

And thinks I'm "picking" on her. How sad. :(

I must be missing something, she doesn't want to stress herself over emails, but works two jobs because she's not capable of budgeting????

___________
STUDENT writes:

"can take criticism, but I only believe in constructive criticism.
Criticism that I am full of "BS" and can't see past my "BS" is very
offensive to me and I feel I don't need criticism referring to how timely I
respond to emails. "Was it done or not?" In this case- yes, responding to
emails, and working on your financial lessons was "done" and is currently
being "done". I don' t need to pressure and stress myself over emails...."

________________

Totally agree with you on priorities IF it was someone that even slightly understood the " excuses are BS concept".

In your case I thought it was important to "push" no excuses ( rather than getting into setting priorities) as your incapable at this point of distinguishing the difference.

For example: I know the only budgeting thing that works for people without an extremely high discipline level is the " household acct". concept. So you tried it, did it obviously totally wrong, and your answer is to not do it.

If I had succeeded your answer would have been "what did I screw up", and this time I'll make it work............. no excuses to myself.

In case you're wondering why I'm so intolerant with this person, it is because I have A LOT of time invested. Have been "working" on this person for a couple of years. Total waste of my time, she didn't get anything out of it. :(

Pay now, or pay later

You have to pay, the only question is when.

Do you really want to work when you're in your 60s?????

Just in case you said yes, bear in mind you won't be in the physical condition you are now. If you said no, what is your plan to retire early?? No, not a BS dream, a set plan???

Lets go over options: Do nothing and hope to hit the lottery. Marry a rich guy or woman. Save big amounts later. Do nothing and live on SS. Etc.

Lottery is one in millions. Bad odds.

Rich guy or woman is a real pain, several reasons ( I know :) used to having everything their way, figure that if they pay you should kiss up. The Golden Rule: He who has the gold makes the rules. Etc. So not a good option, unless you can accept the above. ( if you're under 39 yrs old today, you can't). I don't care what you say, ( trust me on this one) you will be miserable as today's mid 20 yr olds think in terms of "equal". Do you really think an older guy with money means it when he says "equal"?? Might not be quite as bad if a young guy / woman who inherited the money, compared to the self made, but then again might be a spoiled brat.

Save big amounts later: you know in your heart that won't work. Save $15- $20,000 per year !!!!!!!!!!

So that takes us to the logical option: Start now and save 10% of your paycheck. Start a "household" acct. to force disciplined budgeting. And the IMPORTANT ONE: Learn that excuses are BS, is it done or not.

My opinion on SS is it will be there for you, BUT will be slightly lower amount than it is now AND at an older age to collect. Say 68 yrs old for those of you in your mid 20s now.

Also, do you realize that you could NEVER live on SS alone???
Repeat: you could NEVER live on SS alone.

SS is meant to supplement your retirement savings.

Under Bush's plan, there would be no change for current retirees or workers age 55 and older. Younger Americans could divert a portion of their payroll taxes into personal accounts, to be invested in a limited selection of mutual funds of varying risk. In exchange, the guaranteed government benefit would be cut for these workers when they retire.

Even workers who decline the voluntary accounts would receive a reduced government benefit, according to congressional Republican officials who have been briefed by administration experts.

Rarely, if ever, does Bush talk about benefit cuts, preferring to stress that he wants workers to have the chance to build a nest egg for retirement, and saying that without change the Social Security system will not be able to deliver promised benefits.

Greenspan was more pointed.

"I fear that we may have already committed more physical resources to the baby boom generation in its retirement years than our economy has the capacity to deliver," he said.

"If existing promises need to be changed, those changes should be made sooner rather than later."

It's OK not to get it done...not my fault...

STUDENT writes:

"I will be leaving town on Friday morning for Spring Break and will not be
returning until March 13th. I just wanted to let you know that ahead of time
so you don't think I am giving you any excuses for not sending the paperwork
right back!! :)"

_____________
MONEY PROF responds:

FYI: That is a BS excuse.
Do all of you realize that it's an excuse for not giving an excuse. ???

YES, you do because you can see it in others by now even though you might not be able to see it in yourself yet. If you did we're gaining on it, if not reread all the emails.

My response:

FYI: That is a BS excuse.

Glad you sent it so I can go over the thinking process with you. I need to get you up to "is it done or not" thinking.


The correct thinking process is : "I called Melissa at 1-800-... to ask her to do me a favor and also mail forms to where I'll be on spring break". If I get it returned Thurs. great, if I don't I'll mail it from spring break.

Now you might say but hold it I didn't think of that. True, but why............ because you won't until you switch to NO EXCUSES, was it done or not. Get rid of the " it's not my fault" I was leaving for spring break thinking.

The beauty part about this is 95%+ of people buy the it's OK, its not my fault thinking, so if you can switch to "is it done or not", it will be easy to beat them be it financially or in life.

Excuses

( the old stand by: I didn't have time) here is a list so you can be more creative.


It doesn't matter what you say to me, it matters what you say to yourself.

I'd love to but...

I'd love to, but having fun gives me prickly heat.
I'd love to, but I changed the lock on my door; now I can't get out.
I'd love to, but I did my own thing, and now I've got to undo it.
I'd love to, but I don't want to leave my 0zone.
I'd love to, but I feel a song coming on.
I'd love to, but I have left my body in my other clothes.
I'd love to, but I have some hard words to look up in the dictionary.
I'd love to, but I have to answer all of my "occupant" letters.
I'd love to, but I have to be on the next train to Bermuda.
I'd love to, but I have to bleach my hare.
I'd love to, but I have to check freshness dates on my diary products.
I'd love to, but I have to draw "Cubby" for an art scholarship.
I'd love to, but I have to floss my cat.
I'd love to, but I have to fluff my shower cap.
I'd love to, but I have to fulfill my destiny.
I'd love to, but I have to feed my Ongbun.
I'd love to, but I have to go to court for kitty littering.
I'd love to, but I have to jog my memory.
I'd love to, but I have to knit dust bunnies for a charity bazaar.
I'd love to, but I have to rotate my crops.
I'd love to, but I have to sit up with a sick ant.
I'd love to, but I have to stay home and see if I snore.
I'd love to, but I have to study for a blood test.
I'd love to, but I have to thaw some karate chops for dinner.
I'd love to, but I have too much guilt.
I'd love to, but I made an appointment with a cuticle specialist.
I'd love to, but I never go out on days that end in "Y".
I'd love to, but I prefer to remain an enigma.
I'd love to, but I promised to help a friend fold road maps.
I'd love to, but I think you want the other Lump.
I'd love to, but I want to spend more time with my blender.
I'd love to, but I'll be looking for a parking space for December.
I'd love to, but I'm attending a perfume convention as guest sniffer.
I'd love to, but I'm attending the opening of my garage door.
I'd love to, but I'm being deported.
I'd love to, but I'm building a pig from a kit.
I'd love to, but I'm converting my calendar from Julian to Gregorian.
I'd love to, but I'm doing door-to-door collecting for belly button lint.
I'd love to, but I'm enrolled in aerobic scream therapy.
I'd love to, but I'm getting my overalls overhauled.
I'd love to, but I'm giving nuisance lessons at a convenience store.
I'd love to, but I'm going through cherry cheesecake withdraw.
I'd love to, but I'm going to be old someday soon.
I'd love to, but I'm going to count the bristled in my toothbrush.
I'd love to, but I'm having all my plants neutered.
I'd love to, but I'm having my baby shoes bronzed.
I'd love to, but I'm in training to be a household pest.
I'd love to, but I'm observing National Apathy Week.
I'd love to, but I'm planning to go downtown to try on gloves.
I'd love to, but I'm sandblasting my neighbor's oven.
I'd love to, but I'm seeing how long I can go without saying yes.
I'd love to, but I'm taking punk totem pole carving.
I'd love to, but I'm teaching my ferret to yodel.
I'd love to, but I'm too old for that stuff.
I'd love to, but I'm too young for that stuff.
I'd love to, but I'm touring China with a wok band.
I'd love to, but I'm trying to be less popular.
I'd love to, but I'm trying to cut down.
I'd love to, but I'm uncomfortable when I'm alone or with others.
I'd love to, but I'm up to my elbows in waxy buildup.
I'd love to, but I'm waiting to see if I'm already a winner.
I'd love to, but I'm working on my cottage cheese sculpture.
I'd love to, but I'm worried about my left foot.
I'd love to, but I'm writing a love letter to Al Gore.
I'd love to, but I'm writing a sex note to Richard Simmons.
I'd love to, but I've been scheduled for a karma transplant.
I'd love to, but I've dedicated my life to linguini.
I'd love to, but I've got a Friends of Rutabaga meeting.
I'd love to, but it's my parakeet's bowling night.
I'd love to, but it's too close to the turn or the century.
I'd love to, but my bathroom tiles need grouting.
I'd love to, but my crayons all melted together.
I'd love to, but my favorite commercial is on TV.
I'd love to, but my mother would never let me hear the end of it.
I'd love to, but my palm reader advised against it.
I'd love to, but my patent is pending.
I'd love to, but my plot to take over the world is thickening.
I'd love to, but my subconscious says no way.
I'd love to, but my uncle escaped again.
I'd love to, but my ex-wife would never let me hear the end of it.
I'd love to, but my yucca plant is feeling yucky.
I'd love to, but none of my socks match.
I'd love to, but the last time I went, I never came back.
I'd love to, but the man on television told me to stay tuned.
I'd love to, but the President said he might drop in.
I'd love to, but there are world issues that need worrying about.
I'd love to, but there's a disturbance in the Force.
I'd love to, but you know how we psychos behave in igloos.
I'd love to, but I am overdrawn at the blood bank.
I'd love to, but I never say yes.