WHY LITTLE THINGS MATTER

#TheLittleThings #SweatTheSmallStuff #LuckIsAMyth
The little decisions we make every day can make a difference in how our lives turn out.
Are you going to buy that cup of coffee, lunch etc., instead of making your own?
Are you going to engage in “retail therapy,” because something just happened to you?
Do you end a week not knowing where the money you had in your pocket went?
Andy Andrews tells us in his book, “The Little Things,” that we should sweat the small stuff.
And he concludes the book by saying that luck is a myth.
“Luck is undetectable because it is nonexistent,” he writes. “Luck is something wished for as the dice are rolling and blamed as soon as they stop,” he writes.
“You are strong, smart and capable. You will choose wisely because you have already chosen to open your mind, soul and spirit to the vital little things and their promise of ever-bigger things to come,” he writes.
Most people believe that circumstances – luck, as it were – dictate what a person’s life will be like. Perhaps it’s a job you got, or didn’t get, or lost. Perhaps you’ve been told that you are only going to go so far in life, and if you get there, you’ve have been the best you could have been.
Perhaps you believe that the rich are rich because they are lucky, and the poor are poor because they are unlucky. Certainly, circumstances can play a role in those cases, but they are not the whole picture.
Circumstances are usually things you cannot control. But you can always control how you respond to them.
Let’s take the little things mentioned above. Making and bringing coffee, or lunch, with you to work can save you a couple bucks a day. What if you put that money away in a relatively safe investment and paid no attention to it for, say, 20 years?
How much do you think you would have? What if you did the same for your lunch? What if you did that most every day, but treated yourself, say, once a week?
What if you could manage your instinct to shop for something you don’t need, to make yourself feel better. What if you could pick an amount you would have spent, and put that money away in a safe investment? How much do you think you would have in 20 years?
Attitude plays a key role in whether you become prosperous, or not. It almost doesn’t matter how much you earn in your job. If you can learn to live below your means, and saved your leftover money, you could be amazed at the prosperity you would have created.
Perhaps your job really pays very little. Perhaps you feel the need to augment that income. There are many ways you may not be aware of in which you could do that, a few hours a week, part-time outside of your regular job, that could put a good bit of extra money in your pocket. To check out one of the best, message me.
So, you don’t have to rely on luck to change your life. You can change EVERYTHING by changing how you think, and what you think about.
Don’t listen to those who tell you there is only so far you can go. If you look for it, your life could change tomorrow. The sky could be the limit.
Peter

MILLENNIALS: MORE SAVERS AND SPENDERS THAN INVESTORS

#millennials #investors #savers #spenders
Millennials don’t see themselves as investors.
According to the 2016 Fidelity Investments Millennial Money Study, 46 percent of the millennials surveyed considered themselves as savers, 44 percent considered themselves spenders and only 9 percent considered themselves investors.
This study was quoted in an Adam Shell article for USA Today, which was published April 27, 2017, in The Atlanta Journal-Constitution.
Despite Wall Street’s attempts to woo the nation’s largest generation into the stock market, millennials have yet to embrace investing, Shell’s article says. Only one in three say they invest in stocks, the article quotes a Bankrate.com survey.
A Black Rock study says nearly half of the millennials surveys found the market “too risky,” the article says.
And, four in 10 say they don’t have enough spare income to put away for the future, the article quotes a financial literacy survey from Stash, a financial app.
Let’s break down the facts. If you are a saver, and are putting money away, where are you stashing it? In a bank? Under your mattress?
In this market, the rates of return on that money between those alternatives are not far apart.
Secondly, there is wild and crazy – “risky” – investing, and there is careful investing. Each requires consultation with someone you trust , but here’s a good rule of thumb: as you start investing, look for more conservative vehicles, i.e. relatively safe mutual funds. As your wealth grows, you can diversify and take a few, well-thought-out risks. If you really do well, and want to play, take a very small amount of money and invest aggressively.
Here’s another rule: it’s difficult to have a nice nest egg for retirement just keeping your money in a bank. There are very few, if any, traditional, regulated banking products that are paying decent returns. Banks are wonderful institutions for your checking account, and perhaps a small savings account to cover unexpected expenses.
But to really be a saver for retirement, you have to take SOME risk. And, make no mistake, EVERYONE has to save for retirement. As stock-market-loving baby boomers can attest, you never know when your job is going to go away.
For those of you in the category of not having enough spare money to save for the future, there are ways to solve that problem. First and foremost, you have to make saving for the future a priority in your life. Even if you see yourself as a spender rather than a saver, you have make SOME saving a priority, or the fun you are having today will turn into poverty when you retire, or when that good job goes away.
A suggestion might be to look at the many ways out there to use your spare time to earn a secondary income. To check out one of the best such vehicles, message me.
In short, saving is not just prudent, but necessary. The more you save when you are young, the more you will have, and the better your life will be, when you are older. If you are a millennial, talk to your parents about what to do. However their lives have turned out, there are lessons in their lives that will apply to you. Don’t underestimate their story, or their advice.
As you save, some risk will become necessary. Though the stock market looks scary, over time it has proved to provide the best returns. Find a trustworthy, knowledgeable adviser to help you get started, and who will continue to work with you. Don’t be afraid to ask lots of questions about fees, returns etc., so that you will have a clear picture of how to proceed.
Finally, watch what you spend. Don’t deprive yourself, necessarily, but look for things you can eliminate to allow you to save more money. Remember that a dollar in your pocket generally is better for you than a dollar you put into someone else’s pocket.
Your future could well depend on decisions you make in your youth. You don’t have to depend on things “going right,” if you make good choices now.
Peter

HOW TO BE A HAPPY RETIREE

#HappyRetirement #GiveBack #StayPositive
Happiness in retirement may not entirely be based on how much money one saves for that purpose.
Many other things go into it, according to Wes Moss, chief investment strategist for the Atlanta-based Capital Investment Advisors, host of the “Money Matters” show on WSB radio in Atlanta and personal finance columnist for The Atlanta Journal-Constitution.
He discussed his eight rules for a happy retirement in his newspaper column June 7, 2016.
His eight rules include: 1) Skip the BMW. Own a car that is comfortable, reliable and affordable. 2) Stay the course on investments. Don’t chase the next “hot stock.” 3) Give back. Find a cause you care about and contribute your time, talent and money. 4) Don’t move or renovate. Make sure you are happy with your home before you stop working. 5) Buy the big stuff before you retire. When you spend your money is just as important as how much you spend. 6) Start now. He writes that 44 percent of unhappy retirees in Moss’ study group were dissatisfied with how much retirement planning they’d done. 7) Know your rich ratio – the amount of money you have in relation to what you need. Or, monthly income divided by monthly expenses. 8) Stay positive. People probably won’t retire when they want to because they don’t believe they can, he says.
It’s certainly important to save for retirement, starting at the youngest age possible. Some in previous generations did not begin saving until their children were adults, or near adulthood.
With the job situation very fluid today, one should not expect to work for as long as he or she wants. People are very often retired early not by their own choosing. If you’ve developed good saving and investing habits as a young person, you need not fear this problem.
Also, one should always have a Plan B, in case a good job goes away prematurely. It’s difficult to be a happy retiree when one is forced into the situation. One Plan B might be to turn a hobby into an income-producing activity. Another might be extensive, careful investing throughout your life.
There are other Plan Bs that allow people to make additional income without the need for an extra traditional W-2 job. For one of the best, visit www.bign.com/pbilodeau
As Moss writes, retirement is more than just sitting in a chair resting from years of labor.
It’s meant to be an enjoyable part of your life. You can certainly do things you love to do, but many experts say that it’s best to have a purpose in life, no matter what your age. That’s probably where Moss’ “give back” rule comes in.
“The happiest retirees envisioned a future and worked consistently toward that future with optimism – secure in the knowledge that while the economy and stock market can be a crazy ride, the long-term trend has been decisively positive,” Moss writes.
If you are young, think about when you might want to stop working, and prepare for that time. Set a goal. Follow Moss’ advice and don’t let fear and pessimism kill your dreams. Enjoy your young life, but also prepare for a good life as you get older.
Always have in the back of your mind that one day, the good job you have might disappear. If it doesn’t, you will have lucked out. If it does, the well-prepared person will goforth knowing he’s done his best to be happy in the face of an unexpected turn.
We can’t control our circumstances, but we can do what we can to react positively when things don’t go as we would want.
Peter

FINANCIAL DISASTERS CREATE MISERY, BUT THERE IS HOPE

#investing #investors #TheBigShort

The year 2008 was a pivotal financial year for most of us.

If we didn’t lose our home, lose our job or lose our retirement savings – or, God forbid, all of the above — we were among the lucky.

The movie “The Big Short” illustrates how the economy can collapse when Wall Street gets creative, and mixes in a little fraud.

In many cases, we are asked to sign documents we don’t necessarily read from cover to cover. If you’ve ever bought property or gotten a mortgage, you rely on the person who is presenting the material to you to give you a summary of what it all says. We tend to trust that person explicitly that we are not being led down a destructive path – one that means big money to him or her at our expense.

Not only do we, generally, not have time to read such documents cover to cover, even if we did, we would not understand some of them. Some people don’t want us to understand them, because they’ve put something in them with a “gotcha” that hurts us.

“The Big Short tells a story that the Wall Street bankers themselves didn’t read what they were signing on for. When a few decided to read the documents, they found them filled with risky mortgage investments that were not highly rated. So, they created vehicles that allowed them to bet against those investments.

Many of those on Wall Street do what they can to make money quickly. When greed sets in, fraud becomes a great threat. Still, many who work on Wall Street are good, honest people. Even they get caught, sometimes unwittingly, into the mess when such messes occur.

We who are not on Wall Street have to make money the old-fashioned way, with work, savings and time. Many of us don’t have the wherewithal to turn around a quick investment that would make a fortune that will last our lifetimes.

Still, we don’t have to resort to greed, fraud and financial “creativity” to make a potential fortune. There are many ways out there for those of us not on Wall Street to turn our financial situations around. For one of the best, visit www.bign.com/pbilodeau. Yes, you’ll still need time to realize the potential, but the trajectory could be considerably shortened from that of relying on a traditional job.

“The Big Short” also revealed how bad the investors who bet against the risky mortgage-backed securities felt when their wisdom paid off. It hurt them that their profit came at the expense of many other innocent people.

The moral, perhaps, isn’t that making a profit is bad. It’s more on the angle of how one makes a profit. If he can do it without hurting others, that profit feels much better.

If one can make a profit by helping others do the same, that’s ideal.

Most investment advisers suggest that, as an investor, one must remove emotion from the decision-making. A few develop investment products designed to make the world a better place, making the investor feel good about what he is doing.

The range, perhaps, between those two extremes is to invest in things that help others, while having a plan to help oneself have, say, a comfortable retirement. Proper investing can lead to a degree of comfort, even when greed and fraud on Wall Street is exposed, or when circumstances take the markets in wild directions.

No market goes up in a straight line. Success comes with failures mixed in. But a good, prudent plan can protect each investor from almost anything. Good advice from someone you trust is essential, preferably not from someone who gets “creative” with financial products.

Peter

BE AN INVESTOR MORE THAN A CONSUMER

#retirement #investments #saving
Investing for retirement need not be scary.
It also need not be impossible, no matter your income, age or situation.
Also, a secure retirement happens because of actions YOU take, not what someone else promises to give you.
Nanci Hellmich discussed investing for retirement, based on Tony Robbins book “Money: Master the Game; 7 Simple Steps to Financial Freedom,” in an article published Dec. 10, 2014, in USA Today.
Before getting to Robbins’ seven steps, let’s examine your plans for retirement. Do you believe you have to work until you die? Are you saving regularly out of each paycheck? Did you get so financially hammered during the Great Recession that your retirement is doomed? Did you lose your job in the Great Recession, forcing a premature retirement?
Let’s presume you are still working, even if you are working in a job that underpays you – that’s a growing trend these days. Find an amount, it doesn’t have to be much, that you can take out of each paycheck and put away. You have to look at it occasionally to monitor how your investment is doing, but don’t withdraw it until you retire.
If you are forced to retire before you want to, or are financially able to, try not to eat into that fund too quickly. It’s OK to use the dividends, interest etc., for income, but try to hold onto your principal as long as you can.
Robbins’ first two steps, Hellmich’s article says, is to become an investor rather than a consumer and to know what you are invested in. The former is a mindset. When money gets into your hands, you have to first think about paying yourself, before you think about what you will buy. The latter may require some good advice from someone you trust who will look out for your interests before his own.
Robbins third and fourth steps involve taking action. Don’t be afraid to start a retirement fund because you believe you’ll never have enough money in it to retire. If you are young, calculate what you think you’ll need to retire comfortably, and save accordingly. Then, evaluate your asset allocation, which is a big term for knowing how your money is invested. You may take more risk as a young investor, and perhaps change that allocation to more income-producing vehicles later in life, Hellmich quotes Robbins.
Again, the latter may require some help, but you can help yourself by figuring out ways you can save your money.
The last three Robbins tips again involve your thought process. You have to create a lifetime income plan, and believe you can be among the wealthy. Once you get there, enjoy the sacrifices you have made. “Start where you are, and you’ll begin to find out that there’s more than enough wealth for you,” Hellmich quotes Robbins.
If you are still a child, develop that savings and investment mindset early. If you have change in your pocket at the end of the day, put it in a jar. When the jar is full, take the coins to your local bank and put them in your own savings account. Don’t touch the money until at least when you go to college, or go to work after high school.
As an adult, you will already have the right mindset, and can get more sophisticated about saving and investing for retirement.
Lastly, you may be older, approaching retirement, fearful you don’t have enough money. There are many ways out there to solve this problem. For one of the best, visit www.bign.com/pbilodeau. Check it out with friends in the same situation.
Then, all of you can watch your retirement accounts blossom.

Peter

WHAT TO DO WITH LOTS OF MONEY: PART 3

#thinklikearichperson
You’ve done OK in life, but you still dream of something better.
So, you play the lottery.
You know the odds are not in your favor, but you can’t win if you don’t play, right?
If you think like a rich person, as author Steve Siebold suggests, you would take the money you spend in lottery tickets and put it into an investment that will multiply over time. In other words, you’ll get rich slowly.
Then, there’s the matter of what you would do with the money if it were suddenly in your possession. If you think like a “middle class” person, as Siebold categorizes it, you would come up with ways to SPEND your newfound fortune. If you thought like a rich person, you would find ways to INVEST your newfound fortune.
The message here is that if you think like a middle-class person, your fortune will disappear relatively quickly. It seems ridiculous, at least to those who think like a rich person, that ANYONE could be given that kind of money and not make it last through his lifetime, and the lifetimes of his descendants or heirs.
You see, thinking like a rich person, you would take your windfall, place it in appropriate investments and spend SOME of the dividends, interest and capital gains. The rest of the gains would be reinvested.
If you think like a middle-class person, your instinct might be to give some of your fortune to your friends, so they can SPEND like they have never spent before. That might make you feel like a really good person.
But, if you think like a rich person, your first instinct might be to give some to reputable charities. You might give some to your family. But the only way you would give money to your friends is if your friends had good investments that you could get in on. You would probably never give money to friends to spend, knowing they would not spend it wisely.
So it’s not only your thoughts about making money that matter. Your thoughts about how you would use money matter just as much.
So where are your thoughts today? If it’s Monday, are you dreading another workweek? Or, are you seeing your job as a means to an end, because you are slowly building a fortune?
If you think that way, you’ll think of Mondays as one more day until your ultimate payday. If you like your job, or at least have found enough things to like about it to make it relatively pleasant to go to work, it will make building your fortune that much easier.
So how does a “middle class” or working person build a fortune? First, you have to have a regular savings plan. Have money taken out of your check – it doesn’t matter how much or little you make – regularly to go into savings. Then, don’t touch it, unless you are buying into a superior investment. Let it grow for as long as you work.
Also, as Siebold suggests, perhaps you can find a vehicle that will allow you to build a fortune without interfering with your job. There are many such vehicles out there. For one of the best, visit www.bign.com/pbilodeau. You’ll see lots of former “middle class” folks who learned to revise their thinking, and could tell their employers goodbye quite early in life.
In short, thoughts matter, especially thoughts about money. Give first priority to growing money, second priority to help others grow money and third priority on spending money – wisely. Even if you don’t have much money now, thinking that way will provide you an eventual fortune.
Peter

HOW TO THINK ABOUT MONEY: PART 1

If you had all the money in the world, how would you feel?
There are all kinds of answers, and there are many books out there that try to teach us how to think about money.
Steve Siebold has written one called, “How Rich People Think.” It teaches, much the way Napoleon Hill teaches in “Think and Grow Rich,” or Robert Kiyosaki in “Rich Dad, Poor Dad,” that we have to look at how we think before we can get rich.
Sure, you can inherit a bunch of money from your late great aunt, or you can win a big lottery jackpot. But, chances are, if you have what Siebold calls “middle class thoughts” about money, you probably won’t have your fortune for very long.
Most of us have been taught that hard work, a good education and keeping your nose to the grindstone for, say, 40 years will help you retire comfortably.
But if you think like a rich person, you are not thinking about having enough money to retire, as Siebold writes. You are thinking about having enough money to make an impact on the world.
In other words, to be rich, you have to think of solutions to problems, and invent them.
Most of us were taught that if we had a job, or something else that was paying us, we had to worry about holding onto it. Rich people will try things, fail numerous times, and try something else. They don’t fear failure or loss. In fact, they don’t fear much of anything. Even if they lose their fortunes, they know they will find a way to make them back.
That may be why it’s difficult to really punish white-collar criminals. They used their genius for evil, and most of us would like nothing more than to see them lose everything. Even if they lost everything, they would find a way to make it back – hopefully in an ethical, law-abiding way this time.
Yes, we all would like to have a lot of money. Some of us believe it is not possible for us to get a lot of money. It’s possible for anyone to get a lot of money, just by thinking the right thoughts. You don’t think about who would give it to you. You think about how you can come up with the idea that people will pay you for.
Then, you think about how you can use and grow that money. As Siebold writes, middle-class people think about how to spend money. Rich people think about how to invest money.
Most of us have been taught to get a good education – get through high school, go to college, get a degree in something that will get you a good job. Rich people, Siebold says, don’t think of education in terms of degrees. They think of education as learning anything that will make them money. Some of the richest people in the world have relatively little formal education. They’ve just thought about ways to make money, learned what they needed to pull it off and gotten rich.
Do you think like a rich person? Do you think like a middle-class person? Do you think of making money via a job, or making money via an idea? Once you get money, do you think more of ways to spend it, or more of ways to invest it?
As you ponder these questions, visit www.bign.com/pbilodeau. You will see how some ordinary, middle-class folks got wealthy, and how you could do the same. The only difference between them and you is how they think. It’s difficult to become rich, until you first learn to think like a rich person.
Give it a shot. Think what you would do to make a lot of money, and to not just preserve it, but use it to help others. Don’t be jealous or envious of the rich. If you feel that way, remember the best way you can help the poor is not to be one of them.
Peter

YOUR PENSION? A LIABILITY FOR YOUR EMPLOYER

If you have been fortunate enough to work for an employer long enough to qualify for a pension, and your boss offers you one big check when you leave, in exchange for the smaller – and everlasting — monthly checks, would you take it?
J. Scott Trubey, a reporter for The Atlanta Journal-Constitution, has found that many big Atlanta companies are doing that. His report was published in the Oct. 14, 2012, edition.
On its face, it appears that the employers are bearing a big cost now, in lieu of mounting costs later. If the companies fund their pension plans, they won’t have to contribute nearly as much in the future by paying workers off now. If the numbers work well for the company, that’s all well and good.
But should the workers take the offer? There are several schools of thought. First, if you are ill and not expected to live a long life, you might think about taking the big payment now to cover your medical costs, presuming your employer doesn’t provide retiree insurance beyond Medicare. Of course, that would leave less for your spouse, if you are able to cover him or her in your pension. Then again, if you are a healthy, active retiree, expecting to live a long life in retirement, those monthly checks would be very nice to have for as long as you live. And, if you are fortunate to live a long and healthy life, you’d have collected so much more than that lump sum over time.
But let’s look at things a different way. Obviously, if you are not a careful money manager, or are not a savvy investor, or feel that having that much money in your pocket at once is too much temptation to spend frivolously and quickly, then the monthly pension payouts are best for you.
WHAT COULD $200,000 AT ONCE DO FOR YOU?
But if you have some financial smarts, or get good, reliable financial advice, you could invest that money with a return greater – even much greater – than your pension plan would get. To use round numbers, a $200,000 lump-sum payment in your hands could double every five years, whereas it might double every 10 years in the pension plan’s overly cautious investments. Naturally, pension plans have to be careful with their investments. But having the money in your hands give YOU power to invest it as YOU would want, with potentially more attractive returns.
Using those same numbers, if the $200,000 lump-sum investment doubled every five years, and you lived 20 years in retirement, you’d have a $3.2 million nest egg if you didn’t touch it. If that’s not practical – you need the money to live the retirement of your dreams – you can live off the returns of your money. An 8 percent annual return is not unheard of in the investment world, so you would make $18,000 a year to live on – and still have your lump sum. Compare that to your monthly benefit, multiplied by 12.There may not be much difference, or there could be a big difference in your favor.
The bonus: you would ALWAYS have that lump sum in its entirety working for you, no matter how long you lived. Just think if you took a part-time job you enjoyed. You might be able to put, say, $5 every paycheck from that job into that account to augment it. If you are money-savvy, you’d been saving all your life. It would be no big deal to keep it up.
If you already have decent savings over and above your pension and Social Security, and you add that lump sum to augment your account, how much more interest, dividends and capital gains would you make? Would your monthly pension matter?
So, if you are in a position to take a lump-sum payment in exchange for your monthly pension, give it a lot of thought. Get some good, trustworthy advice from someone other than a representative of your employer. Think about it from the perspective of control. If you like to control your own destiny, the choice you would make might be different from a person who doesn’t want the worry of financial management, or who budgets based on knowing what he gets every month.
Either choice has risks. You risk market performance with the lump sum, and you risk pension plans going belly-up with the monthly payment. Many pension plans are in trouble today and, even if you worked for a government agency or a very solvent company, that pension might not always be what you think it will be.
One more idea: what if you took the lump sum and invested a small portion of it into something that would give you a potentially substantial residual income that would dwarf your monthly pension? There are several ways to do that. To check out one of the best, visit www.bign.com/pbilodeau.
Most of all, if you get that choice,be thankful. So many people work hard and have NO pension. If you are young, don’t PRESUME you’ll get a pension, even if your employer promises it. Lots can change over time.
Peter