Financial Legacy Builders Blog

How To Overcome Fear When Investing

2010-04-13T20:46:00.000-07:00

“The Worship of Safety Emasculates Greatness” – Max Lucado, Fearless

It is often said that the stock market is driven by two simple human emotions: fear and greed. Most of us understand the danger of allowing greed to drive our investment decisions, but fear often plays a much more subtle, underlying role in hijacking our investment portfolios. Studies have shown that individual investors are often really bad at timing the market. People invest in droves when the market is near a peak and then flee out of fear when the market is close to its bottom. Fear also keeps people on the sidelines even when they know they should act. Does fear of the next crash keep you from investing in the stock market? Are you hesitant to buy that real estate investment property you’ve been eyeing out of fear of making a mistake? If so, you’re not alone, but just remember that fear is rarely a good decision maker.

Read the full article on ChristianPF.com

An Easy Way to Receive an Extra $100

2009-12-17T20:55:00.000-08:00

Last weekend, I decided to take advantage of an offer through Chase Bank where they give you $100 when you open a new checking account. Like most of these offers, there are a few stipulations, so be sure to read the fine print. This offer requires you to either set up a direct deposit or make five debit card purchases within 60 days in order to receive the $100 bonus. The five debit purchases sounded easy enough to me. Here is the link to the offer:

https://coupon.chaseinformation.com/chaseoffer/?value=1&MSC=c1234

According to the advertisement, the offer ends on December 31st, but I know they run these types of deals rather frequently. Bank of America has a similar offer available for a new checking account that is opened with at least a $500 initial deposit:

http://www.bankofamerica.com/promos/jump/uspsmovers/

In my mind, this is easy money and is worth the minor hassle that is required to transfer money and make a few purchases on a new debit card.

Budgeting Software That Does It All (and Won't Cost You a Dime)

2009-11-19T19:10:00.000-08:00

I recently came across an online budgeting tool that is one of the best that I've seen. It allows you to pull in all of your financial data from various bank accounts, brokerage accounts, etc. in just a few simple steps. You can create new budget categories easily and track your spending in each category. Best of all, it allows you to "rollover" your balance to the next month for each budget category where you didn't spend all of your allocated funds. This rollover feature is something that I haven't been able to find in other budgeting software such as Quicken. In addition, the software will track all of your investments, debts, and spending patterns, and provide you with an estimate of your investment performance compared to a standard stock market index such as the S&P 500. Finally, it will automatically update your account balances and compute your net worth each time you log in. The software is easy to use and is completely free! Just go to http://www.mint.com/ to learn more.

Piggy Bank Lessons for Toddlers

2009-10-12T14:46:00.001-07:00

Earlier today, I took my 2-year-old daughter to the toy store using the money she had accumulated in her piggy bank over the past several months by picking up her toys and doing other age-appropriate chores. This was the first time we ever broke open her piggy bank, and it was an opportune time to teach her the basics about earning, saving, and spending money. As I saw her grasp some of the key concepts that I was hoping to teach, I realized that it is never too early (or too late) to start teaching your kids about money.

Here are a few lessons that my wife and I were trying to teach:

Lesson #1: Money comes from hard work. The first thing my daughter learned during this process was that she earns money by doing chores and other forms of work. For a 2-year-old, the "job" is pretty simple. Pick up some toys and earn a few pennies. As she grows older, her job description will expand and so will her commission.

Lesson #2: Save money and watch it grow. Although my daughter's piggy bank didn't pay interest, it was still exciting for her to see how the money began to pile up over time. She really enjoyed dumping all those coins out to see how much was there.

Lesson #3: Money takes on several different forms. At first I was a little worried that my 2-year-old would have a meltdown if she began to think that all of her hard-earned coins were being swallowed into the abyss by the Coinstar machine that converts loose change into hard dollars. To prevent this from turning into a traumatic experience, my wife and I explained the process to her and reminded her that the end result would be a trip to the toy store to purchase new toys. Fortunately, dumping all those coins into the machine and hearing it go "cha-chunk, cha-chunk" was part of the fun for her, and she enjoyed holding onto those greenbacks even more than her heavy piggy bank.

Lesson #4: If you buy bargains, your money will go farther. Once the coins were converted into dollars, we took her $8 and went to the Dollar Tree. I could have taken her to "Toys-R-Them," but I figured that she and I would both be a little disappointed when her months of savings would only buy one small overpriced toy. So, off we went to the Dollar Tree to give her the ability to buy up to 8 different toys / items. I think she was happily surprised when she kept adding toys to her basket and didn't get scolded for it. At the end of the day, she came home with a balloon, coloring book, bubble wand, stuffed animal, crayons, stickers, a book, and flash cards.

Lesson #5: Prioritizing your "wants" is a fact of life. We'd all love to be able to walk into a store and buy anything our heart desires, but this just isn't reality. My 2-year-old learned a lesson today that some 50-year-olds (and the federal government) still haven't grasped: money is finite. You can't spend more than you earn, and you must make difficult choices with limited resources. My daughter had to choose between the "Winnie the Pooh" flash cards and the cool hand stamp. She easily would have bought the whole store if I wasn't careful, so we had several discussions on which items she wanted to keep and which ones we had to let go.

Overall, it was a very fun and successful outing. For this first piggy bank experience, I let her spend almost all of her savings to get the general feel for the process and to become excited about earning more money. However, next time we're going to introduce a few new lessons by only spending a portion of her money and giving a portion away. This way she will learn about long-term savings and the joy and importance of giving to those in need. These are lessons that all of us can brush up on from time to time.

I just bought $225 worth of groceries for $50!

2009-08-19T19:12:00.000-07:00

When I ask many of my friends whether they use coupons, I typically receive a number of standard answers in response. The most common response is, “I don’t use coupons because I can’t ever find any for items I regularly use.” This was the same response I received last weekend when I told a friend that I bought $225 worth of groceries for just $50 by taking advantage of Kroger’s one-day offer to double coupons up to $1. Here is a list of the majority of items I bought that day:

DAIRY: 4 packages of cheese, milk, soy milk, lots of yogurt, 2 Coffee Mate creamer
CEREAL AND BREAKFAST PRODUCTS: 4 boxes of cereal, 2 cans of biscuits, 2 boxes of pop-tarts, 4 boxes of waffles
SAUCES AND SPREADS: 2 bottles of mustard, mayonnaise, 6 bottles various sauces (salad dressing, teriyaki, steak, etc), peanut butter, 3 jars of jelly
TOILETRIES: 2 boxes of toothpaste, 2 cans of shaving cream, 3 bottles of fingernail polish, 2 single eye shadows, 2 body wash, shampoo, 3 deodorant,
SNACKS: 2 boxes of crackers, 2 boxes of NutriGrain bars, 12 boxes various snacks, M&M ice cream snack, Snickers ice cream snack
HOUSEHOLD ITEMS: 6 boxes of Ziploc bags, 2 mega roll 6 pack Scott paper towels, Tide laundry detergent, batteries
MISC: pasta

So the next logical question is, “Do you really need that much toothpaste, deodorant, sauce, or cereal?” Perhaps not right away. However, there is a good chance that over the next six months all of the items purchased will be consumed. If we don’t end up using all of the toothpaste that I received for free, our local women’s shelter will gladly take my donation.

Another common excuse that I hear is, “I don’t have time to cut coupons.” I actually used this same excuse before I realized how much money I could save with coupons. A friend of mine introduced me to this amazing website called The Grocery Game (http://www.thegrocerygame.com) that does all of the organizing for you. On this website, you can find a list known as “Teri’s List” for the grocery store of your choice. This weekly list shows the lowest priced products matched with manufacturers’ coupons and supermarket specials (both advertised and unadvertised). With the Grocery Game, you don’t have to waste a lot of time standing in grocery store isles sifting through coupons and then wondering if you are really getting a good deal.

So can you really buy $225 worth of groceries for $50, or is this a one time fluke? Every week at the grocery store, I save at least 50% (including non-sale items such as produce and meat) and spend no more than 30 minutes looking through the Grocery Game list, cutting coupons, and putting together my shopping list. In my mind, if I can continually save this much money on groceries, then my family will be able to afford more exciting purchases such as a trip to Hawaii or a ski boat!

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This article was written by Anne Gowan.

3 Teens Who Are Building A Legacy

2009-08-03T19:25:00.001-07:00

Earlier today, I was inspired and encouraged when I read about 3 teenagers in the local Houston area who are taking a lot of initiative and showing that you can make a positive impact on the world regardless of your age or financial resources. These teenagers have successfully organized a rather large-scale benefit concert in downtown Houston to raise awareness of worldwide human trafficking issues. I was impressed with the quality of their efforts and even more impressed with the quality of their character. They are fighting for the freedom of others by arming individuals with information regarding the facts of human trafficking. If you live in the local Houston area, then I'd encourage you to consider attending their benefit concert. If you live elsewhere, please consider donating to their cause. You can find out more information on their website, http://www.brokencords.com/.

One Person's Trash...

2009-07-11T17:48:00.000-07:00

My wife is a firm believer in the old adage that one person's trash is another person's treasure. So it was not much of a surprise to me when she told me one evening that she was going to a nearby neighborhood to pick up a free, used printer from someone. At first, I figured she had been in contact with one of our friends who had a printer that they wanted to offload, but she then informed me that she found this printer through an intriguing website, http://www.freecycle.org/. As I learned more about Freecycle, I quickly realized this was a great way to give and help others, not to mention help the environment. It really embodies the idea of "neighbor helping neighbor". If you're not familiar with Freecycle, I'd encourage you to go to their website to learn more.

The Centurion Principles

2009-06-28T19:38:00.000-07:00

On the Financial Legacy Builders website, you can find a list of recommended charities that may be worthy of consideration for some of your hard-earned dollars (view list). One of these charities is Mission of Joy, which was founded by retired Air Force Colonel Jeff O’Leary. I added this charity to the list after reading a book called The Centurion Principles, which was authored by Col. O'Leary. The Centurion Principles is one of the best books on leadership that I have ever read, and a common theme throughout the book is to focus your life on things that have eternal significance (i.e. building a legacy). I highly recommend that you read the book and also check out Jeff O'Leary's non-profit organization, Mission of Joy.

America's Top Creditor: China

2009-06-13T11:54:00.001-07:00

Recently, I read an article in Business Week discussing falling U.S. Treasury bond prices and the growing demands of America's top creditor, China. The article discusses the U.S. Treasury Secretary's recent trip to China, which was intended to help relieve some of the tensions associated with this issue. Here is an excerpt from the article ("Treasury's Geithner Faces an Assertive China", Business Week, May 31, 2009):

As China's economy shows signs of picking up and even growing 8% this year, Beijing is feeling no inclination to accept criticism from the beleaguered West. An assertive China will tell the U.S. to control the growth of its rapidly swelling budget deficit. Beijing is worried that Washington's spending policies will lead to inflation and further depreciation of the U.S. dollar. That would be bad news for China, the world's largest holder of U.S. Treasury bills, with an estimated $1.45 trillion in U.S. denominated-assets at the end of 2008.

With the U.S. government printing money like water and in debt to China to the tune of $1.45 trillion, I'm wondering if our elected officials need to learn the life lessons taught in Proverbs 22:7, which states that "the borrower is slave of the lender." If the demand for U.S. Treasuries falls rapidly due to selling pressure from China, it has the potential to send U.S. Treasury prices plummeting. For this reason and the associated inflationary risks, I'm not a big fan of U.S. Treasuries right now, especially those with long-term maturity dates. Personally, I won't be surprised if China's demands on the U.S. continue to increase.

Financial Peace University

2009-05-29T19:43:00.001-07:00

A couple weeks ago, my wife and I finished facilitating Dave Ramsey's Financial Peace University (FPU) at our church for the fourth time in the past 4 years. This time was quite a bit different though. This spring our class was just one of about 30 classes at our church that participated in FPU at the same time. Over 300 families attended the 13-week program, and as a whole, these families paid off a grand total of $944,000 in debt! Imagine if every church across the country implemented this same type of program. As Dave Ramsey says, "Imagine what the people of God could do for the kingdom of God if they were debt free." Imagine how much more people could give to their local church or to worth causes, such as the ones listed here. If you have never attended Financial Peace University or if your church has never offered it, I'd highly encourage you to go to http://www.daveramsey.com/fpu/home/ and learn more.

Welcome

2009-05-23T13:44:00.000-07:00

Welcome to the Financial Legacy Builders blog. Please check back soon for new entries.