Since I began this journey, I made a commitment to myself to continue to check in and work on improving my knowledge and application of financial matters. Boy is it exhausting!

Today I finally squeezed in finishing some of my legal documents – I now have a Living Will, a Power of Attorney for Medical stuff, a Will, and a Memorial Planner Information. I still need to spend a little more time on the concept of Estate planning, but I’m not in a huge rush yet as I don’t have that amazing of an estate.

So, let me take a moment to celebrate, YIPPEE!

Okay, I still have to get them all notarized and filed away safely. Sigh, another financial TO-DO.

Next Up on my Financial To-Do List This Month:

1. Look into refinancing my home. I just took it off the market as it is not selling. I have an inquiry into my mortgage provider to see if its possible to refinance after you take your home off the market or if they have some type of waiting period. Rates are certainly low, so I do hope I can. Seeing as I have had a major career shift, and the value of my home has probably gone down significantly since my last mortgage, it should be interesting to see if its a real financial possibility for me to re-fi. Crossing my fingers.
2. Convert my Traditional IRA to a Roth IRA at Vanguard. I’m willing to pay tax consequences this  year if it means that I get to move my Traditional IRA Funds (that were previously my 401k when I was a corporate gal) to a Roth IRA.
3. Set up a Roth IRA at Lending Club. I’m going to roll at least part of my Vanguard money to Lending Club. My experiment with Lending Club panned out to be an awesome choice that I can really support. I am excited to find an investment opportunity that doesn’t make me want to cry and pull my hair out unlike my experiences with Fidelity and Vanguard.
4. Get life insurance. I can’t believe I still haven’t gotten around to this. Need to get it done – I’m going to opt for the $500K policy I think. But I do need to do more research into this area.
5. Snore. Okay. I find this stuff painfully boring and awful. Thank you to this website for reminding me to stay on track with it. It’ll be worth it one day right??!!

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With the volatility of the stock market, I have been interested in other investment opportunities. They can be hard to find.

So far, I am very pleased with the peer to peer lending model offered at Lending Club. I can honestly say that its simple to set up and use, and is providing me an average return of 14% so far. I’m so impressed in fact, that I would like to invest in this option rather than my 401k. At least for a bit.

Diversification always sounds like a good idea, but it isn’t lately in both real estate and no matter what stock or fund I seem to choose. But peer to peer lending feels good because I’m helping out someone with consolidating their debt, and I’m earning a little interest for doing it. A win-win.

Visit their site and find out more for yourself if you haven’t already. Plus, they give great incentives for you to try them out, with $25 in your pocket, and $25 for you if you refer your friends.

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A while back, I wrote a post that I still find to be an extremely valuable, but somewhat idealistic, way to manage your finances on Eker’s Jars budgeting. One of the accounts he recommend setting up is called a Long Term Savings for Spending account. He recommends saving 10% of your income towards this ‘jar’ and you can divide it into sub-jars if needed.

I also found and use the amazing site SmartyPig for Long Term Savings for Spending accounts. This amazing system has gained so much in popularity, its now being bought out by BBVA Compass.

So, now that I am fortunate enough to be making a little more income with my new business, I am eager to get beyond debt and expense payoff, and focus a little more on the long term savings for spending accounts. However, I think I have gone of the deep end. When I actually make a list (ie mini savings accounts) of all the things we want to save for, it is daunting and frankly, way more than 10% of our income. I have reached $5K in a Contingency Fund and have decided that is enough for me to warrant putting funds towards long term savings for spending now.

Here’s All the LTSS Funds I’ve Got Set Up:

I’m thinking this is largely because of the stage of life we are in. Not quite thirty, wanting to make large purchases and build a family. We have our house on the market, and ideally would like to have 60 to buy the next house we want. But that is so unrealistic when you actually look at the numbers. Needless to say, I’ve decided that Eker’s Jar’s needs an upgrade that should be different based on your AGE and/or STAGE in life.

Also, I have so many graduations, weddings and gifts, that my jar for GIFTS is truly for gifts, not charity or giving in the sense that Eker intended.

So, ideally I would like to mimic the jars theory that Eker has, but in reality, I believe it is better suited for a higher income, slightly older demographic than my family.

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Joint and Individual Accounts Keeps Couple Finances Fair and Fun

The following is a guest post by Shannon Pray.

I’ve been married for almost a year now. Prior to being married, we were engaged and kept our finances separate. We decided that if we were going to be married and sharing a home and many expenses for the rest of our lives, we needed to come up with a system for combining our finances. Having talked to other friends in similar situations, I’ve found that there are a number of different ways people have come up with to make this work.

Unique Ways Couples Manage Finances

1. For one couple I know he owns the house they live in and she pays a set monthly rent and utilities, etc. This system may or may not change when they get married this fall.
2. For another couple who has been dating for a long time, they own the home together and keep track of spending and work it out at the end of each month. This couple alternates who gets to pay for things when they go out with friends or on dates.

For a long time we were pretty similar to the second couple. We alternated who paid for things when we went out and we both wrote separate checks for rent and utilities. This worked while we were dating and when we were engaged, but as we were getting ready to get married and really start a life together, we decided we needed a new system. After discussing some different options (total combination, partial combination, zero combination) we came up with our plan:

Joint Income, Joint Account PLUS Individual Accounts

1. We decided to do some math on how much money we spend on rent, utilities, cable, food, eating out and entertainment in a typical month.
2. We took that total and divided by two. That’s how much money we each put into our joint checking account each month from our paychecks.
3. I get paid monthly, so I put the whole amount in on the 2nd of the month, he gets paid bi-monthly, so twice a month he transfers half the total.
4. We kept our individual accounts for savings, gifts, and our own decisions for what to do with it.

The main problem with combining our finances entirely was that we have different spending patterns. I love to buy shoes and clothes, he’s much better at resisting and only buying things when he needs, though every once in a while he “needs” a new golf club. I like to have dinner or lunch out with my girlfriends; he’s less likely to meet the guys for a similar event. He’s more likely to play round after round of golf in the summer, I am generally uninterested. While it’s possible that our various spending patterns would even out, I didn’t want to feel like I couldn’t buy things I wanted because in essence he was paying for them. Likewise, I didn’t want him to feel guilty about playing golf or grabbing a game with the boys since it was my money too. And, a biggie, I didn’t want to be able to look at our account online and see where he’d gotten me presents from, or vice versa.

In the end, we opened a joint-checking account with Charles Schwab because I’d heard great things and because they do high-yield checking, which was somewhat exciting to us. Interest on a checking account?! There have been some pros and cons to using Schwab checking, but overall we like it. In any case, we each have a check card, so we can use it whenever we need for whatever we need. I’ve come to realize that money is something we need to be able to talk about, so we’re working on that front. We discussed what we thought were appropriate things to use the check card for and we’re both pretty good about sticking to that. I do use it if I’m picking up groceries; I don’t use it if I’m buying lunch out with my girlfriends. Sometimes, by the end of the month we’ve overspent and then we each use our personal checking accounts to make up the difference on rent or cable or whatever it is. We’re still working out some kinks and reigning in our spending, but overall this system works for us. He always gets to pull out his joint-checking card and pay when we go on dates, letting him maintain a feeling of being a provider (he does after all provide half of the money in that account). I get to buy outlandish shoes out of my personal account and not feel guilty about spending his hard earned money on them. Mine, yes. His, no. When we’re buying things for our apartment we generally use the joint account, and when I take a weekend trip with my girlfriends I use my personal savings.

Communicate Openly About Money

One thing we’ve learned in this process is to talk pretty openly about our finances. We discuss large ticket purchases that might be coming up (house, furniture, international trip) and how we plan to pay for them and what sort of savings strategy we need. We hash out how to best attack out debt rather than keeping it as some hidden shame. Our system is not perfect, and I know it is far from the only one out there, but it works for us. We have our combined-life financial plan, but we also still maintain some freedom to make independent purchases without answering to one another about them. And, he never knows when I buy him presents because they don’t show up on our joint statement!

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In responding to a comment on this site, I noticed a sentence that I wrote a few months back that still resonates strongly with me:

As Americans, the only way to get out of a recession/depression is to face our fears, and start doing, not just saving.

So many of us have been burned by loss of jobs, loss of their home, loss of their health care, etc that people are struggling to get by and losing hope. But we cannot lose hope as a collective. What our happiness, our lives, our families, our economy and everything around us needs is for us to have HOPE, motivation and drive to move things FORWARD.

If you are frantically saving and paying down debt, good for you. I’m not saying that’s bad. But getting your finances in gear is not all that is needed to make your life, and all of us as a collective’s lives better, what is needed is to start DOING.

If you don’t spend any money, the economy can’t get any better. Spending, in the right ways, is a very good thing. Spending and doing creates jobs and wealth in an economy. We just need to be more conscious about WHERE we are spending our money and what impact it has on our lives. Put your energies into putting your thoughts and what you might want to do and making them a reality. You will never know what could be unless you try.

I am now a firm believe that where your energy goes, results show.

If you’ve lost your job, see it as an opportunity to DO. Check out this video: http://www.lemonademovie.com/

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Rolling Over a Traditional and Roth 401K Plan

I have 2 types of accounts in my 401k from my previous employer – a tranditional 401k and a Roth 401K. After doing some research and weighing my options, I have decided to roll over my 401k into  Vanguard due to the lower fees and a variety of investment choices. I still do not feel educated enough to trust my 401k funds to a fully self-managed account with individual stocks and bonds, so the fund option is still appealing to me at this stage in life. Hopefully, one day I will have the time and knowledge to invest more specifically and strategically. For now, I plan to put some research into the  funds, diversify wisely and monitor my investments.

How a Roth 401 Works

Some organizations allow you to invest all or a portion of your “after-tax” dollars in to a Roth IRA type of 401K, called a Roth 401K. This can be good for some investors because the earnings will not be taxed at withdrawal. The withdrawal rules can get tricky, with options such as the 5-year rule, but I do not plan to withdraw (or otherwise called a distribution) any time soon.  There are many more things to consider to fully understand the Roth 401K, and it does vary in rules from the Roth IRA. I recommend going to Roth401KInfo.com as a starting point for information or consulting your financial advisor. Another interesting point is that employer matching funds cannot be contributed to the Roth 401k – they have to go to your traditional 401k. I didn’t even realize this. Apparently the laws allowing Roth 401Ks will be re-evaluated in 2011, so they may not be available forever.

Here Are My Steps to a Complicated 401k Rollover

1. In order to roll over my 401k, I had to sign up for 2 new accounts at  Vanguard, both a traditional IRA and a Roth IRA. The folks at Vanguard were quite helpful on the phone.
2. I then had I believe 3 different phone conversations with someone at Fidelity discussing the process of rolling over my Roth 401K. At one point, he was convinced that the earnings on my Roth 401k would have tax implications because of my rollover. He said because I didn’t have the account open for at least 5 years, the earnings could be taxed. This made absolutely no sense to me as the whole point of a Roth 401K or Roth IRA for that matter are that you put after tax dollars into them in order to NOT have to pay taxes on the earnings in the future. Or at least that is MY understanding of them. A rollover should still be a tax-sheltered process and should not count as a distribution. After much debate, he agreed with me and initiated the request.
3. Mailed documents have been sent to me that I now have to send to my former employer for approval. I find this odd since I no longer work there, why would they care about my rollover?
4. After these documents have been processed they go back to Fidelity and then Fidelity will cut me checks for the rollovers addressed to my Vanguard account.
5. I have to send the checks with a cover letter and instructions that I create to Vanguard in order to process the funds.
6. I then will have my money in a Money Market fund temporarily that earns basically nothing until I figure out what funds to invest in.
7. I invest my funds into a new portfolio, in 2 different accounts, the Traditional IRA and the Roth IRA.
8. Then, now that I am self employed, I figure out if I want to contribute to my new Vanguard accounts on a regular basis or find out more about SEP and Keough plans.
9. Pass out from exhaustion.

If you find this of interest, here’s a few resources on Roth IRAs and 401K rollovers:

• http://www.roth401kinfo.com
• http://banking.about.com
• http://www.investopedia.com

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Day 161 of my First 365 Day Journey to Financial Freedom

On day 1 of my 365 Day Journey towards Financial Freedom, I charted a short list of what I wanted in order to find a more ‘sustainable’ happiness.

In reviewing my list, I am proud to say that I am a little, or maybe even a lot, further along in my journey than I would have predicted. This blog, and my dedication to not lose my drive and focus, have helped me stay on track and get inspired. This transformation of my life is real, and I want to thank those that are reading and following me along in my journey. I hope some of my stumbling thoughts have helped you.

Let’s take a look at what I said I wanted and if I am now doing or feeling these things:

Excerpt from First Entry Oct 26th 2009

To begin my journey, I wrote a list of some of the key answers to the question: ”What do I want?” Here are my answers in no particular order:

I want to be FREE to move my life forward

Through much reflection, I’ve learned that freedom is really a perception. Though I felt very stuck for many years prior to starting my journey, I was only as stuck as I allowed myself to be. Things don’t always move or change as fast as I want them to in order for me to feel more free, but many things have changed. Most namely, I quit my FT job and I am choosing to pursue my own business! That is a big step for me toward my freedom.

I want to get my POWER back

The main thing I was looking for was an inner confidence in what I am and what I will add to the world. In my journey so far, I’ve learned that success is almost entirely based on your confidence, attitude and sense of purpose.

I want to WRITE

I am writing – a lot! I’m writing on this blog, I’ve written articles that have been published on Wisebread and in magazines, and I’m in need of a lot of how to guides and documents for my new business. I also cannot wait to write a series of ebooks on SEO & usability and other web marketing tips I’ve learned along the way.

I want to LOVE what I do for a job

Guess what – I now do! I didn’t love the politics where I used to work, they impeded on me enjoying my work. The design and business building of what I am doing is super fun, but my passion is lead generation and marketing. I was discussing it with my husband and realized its a matter of an inner desire to help others combined with a need to influence. Successful online marketing is all about beauty, simplicity and influence. Beyond this, I am looking forward to getting into the health industry once I have started being more successful with business building.

I want to feel comfortable and at PEACE

Not quite there yet. I move at such a fast pace, and I have a 2 year old for goodness sakes. Finding time for balance of mind, body and spirit is always a bit of a struggle. Still an important goal for me however.

I want to take CONTROL of my own destiny

I feel that I am doing this much more than I used to, though many things always still seem up in the air. I have realized that you can only control things so much, and after a certain point you have to trust and believe that things will shape themselves for you.

I want to spend more QUALITY time with my family and activities I want to do

I don’t know that I am spending MORE time, but the time I have with my family is better spent with me happier. Step in the right direction.

I want to find SUSTAINABLE happiness

Sustainable? Not yet. Happier? Yes.

I want to live an INTENTIONAL life

I think everything I am doing is getting me much closer to this. The largest thing that I have to do is manage my most precious asset, time, as best as I can and filter out what is and is not a priority toward my intentional living.

So, overall, I think I am a lot closer than I expected to getting where I want to be at this stage in my life. Hooray!

Related Posts

• June 23, 2010 -- Stop Chasing After Happiness – Choose Happiness

One thing that has suprised me so far in my journey to financial freedom is the laborious process for signing up for certain types of accounts to manage and improve my finances.

Since I started this blog, I have been reading and learning a lot, but actually opening accounts has been a bit of a nightmare. Noneless, I’ve had success and ease with a few of them:

Awesome & Easy Financial Accounts I have Opened So Far

SmartyPig Savings Accounts – I am so impressed and in love with this simple banking model.

1. The process to open the account was so easy and all online.
2. I have many simple savings account goals set up
3. I have small but recurring transfers being sent to my specific savings goals
4. I earn 2% interest
5. Not to mention if I should choose to buy a gift card with one of the savings goals (ie wedding season!), I get a bonus cash back.

529 College Invest Account with Vanguard

1. I opened this account entirely online and funded it through ACH from my daughter’s expired CD.
2. I diversified the options of investment allocations
3. I’m planning to monitor it on a monthly basis.
4. I have recurring transfers set up, which will increase slightly automatically annually. Done and done.

Key Bank Business Account

1. This was the best website I could find in my local area for information on the full features of a free business account, rates, fees, online tools, etc
2. The online sign up process was simple
3. I didn’t like having to wait 7-10 days for the follow up paper work
4. Other than that I am happy with this account so far.
5. Added bonus is they are going to give me a few hundred bucks promotional money

What I’ve Learned About IRAs & 401K Rollovers

IRAs are not very easy to open online. Also there are tax implications with converting to a Roth from a Traditional, rollover processes, etc. I have more to learn here before I’m done.

I’ve opened a TradeKing account and tried to figure out how to transfer my Traditional IRA over and then convert it to a Roth IRA. There was a $50 charge to do that and they said I had to re-apply all over again. So, I am in uncomfortable territory here and its making me go slower.

Additionally, I considered rolling over at least a portion of my former employer 401K to LendingClub. I really want to get started with LendingClub as well as some very well researched stock trading. LendingClub has something in its documentation with its partner company for IRA’s, Entrust CAMA, about a $150 annual fee that I’m not too happy about. So, I need to read over the documents for IRAs and fees with a lot more attention to detail before making a decision.

But I’m still a novice, scared investor. The 529 is easy because its fund based, but I of course will pay management fees. I’d like to not have to, but I don’t want to be a super active day trader either.

So, all in all, investing and investment accounts are scaring me, but I don’t really want to go pay an advisor, so I’m going to have to overcome this fear and figure it out sooner than later!

How do you overcome your lack of knowledge with investing in uncharted territory?

photo by: ndevil

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• November 22, 2009 -- Review of SmartyPig Online Savings Account and Budget Tracker

Use Your Calendar to Schedule Out Blocks of Time

I use a very simple, but extremely effective, method of planning out my day that has helped me immensely when I worked in the corporate environment using Outlook’s calendar feature, but also will be an essential part of my success as an entrepreneur.

I wanted to share it with you, because whenever I have told others about it, they find it very different and a helpful way to organize their time to be the most efficient.

Schedule Out Your Time Visually – Here’s What I Do:

I plan out my week ahead of time, by putting blocks of time on my calendar labeled with “tasks” or “big picture” labels for what I need to accomplish. I have been consulting long enough now, that I have a sense of how much time it takes me to accomplish things. Though it is not fail-proof, it works. This time management technique also helped prevent me from having my calendar TOO filled up with appointments and meetings when I worked in the corporate world. Not that it completely prevented it, but it helped others respect my time when they looked at what I was doing on my calendar to schedule appointments.

Schedule Out Your Time Visually – Here’s What You Can Do:

1. Determine how long on average it takes you to accomplish your work in 1/2 or 1 hour increments
2. Schedule your time out ahead of time in blocks on your calendar (Use tasks or simply appointments)
3. Adjust as required

To some, this concept may seem to simple or maybe you already do something similar. We all manage our time differently. There are many advanced task options, categories, and other time management options in Outlook and other office clients that help immensely as well. This technique that I listed above has been the single most helpful way to manage my daily work load that I have found. Now, to manage multiple clients and multiple time frames for projects, I use a project planning tool.

A Note on Monitoring Your Email Inbox

One last thought that I have heard  from many works wonders in freeing up your time to be more efficient with the workday.

Only check your email at certain intervals in the day.

Let’s say you block off 15 minutes in the morning, before lunch, after lunch, and about 1-2 hours before you leave. If this is a possibility for you, it can extremely help you focus your time and stop allowing for constant distractions.

What other techniques do you use to organize your calendar?

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Overcome Fear to “Win Some or Learn Some”

Today is my last day at my job, and I am taking a step into the unknown. For the last four years, I have worked at the same full time position. In my last post, I outlined the logical and emotional reasons for making a decision on what to do next with my life and career. I also explained that, if all fear was pushed aside, I would choose to follow my heart and do my freelance web design and online marketing, as well as build other business ventures.

The fearful side of my still keeps saying, are you crazy? In this economy?  What happens if you fail? How do you know you will succeed?
And of course, the truth is, I have no idea what is coming next. All that I can do is keep my mind in the right place, and put my best foot forward.

Fear and doubt have a tendency to sneak back into your mind at the most stressful and insecure times in your life, when what you really need are feelings of confidence and strength.

For me, though I still experience feelings of doubt and fear, I am now able to recognize my fear as a trigger for the fact that I am out of my comfort zone, and that this will be a good learning and growth period of my life.

The Steps You’ll Need to Overcome Fear and Doubt:

1. Recognize the emotional trigger that caused you to feel fear, doubt, etc
2. Accept that there are some logical reasons for the feelings
3. Acknowledge that, though there are some reasons that you are feeling fear, there is also the strong possibility that things will go the way you want them to
4. Accept uncertainty and the unknown as a constant part of life
5. Think positive and be confident in your decisions
6. Move forward with your best foot forward
7. Mission Accomplished: Fear is Overcome

What are the Possible Outcomes of Pushing Past Your Fears?

1. You Get What You Hoped or Even Something Better
2. You “Fail”, but You Learn From Your Mistakes and Move On

Or, in the words of Jason Mraz: “You Win Some or Learn Some”

I’ve made my decision to give it a try. I have the ability so I am going to take a 2 month test period to see if I can truly build my businesses to support my family.

Here’s My 2 Month Plan:

• I already have a few new and a few big projects lined up, including my other recurring work for clients.
• I am going to re-brand my business, which is currently called AGR Web Designs, to Lead Online Marketing. This will include moving from a sole proprietor model to an LLC, a new website/branding/blog, etc strategy, marketing and better packaged offerings. I have also started to get better with software for my invoicing an estimates (I may to a post/review on those tools)
• I may also do a bit of additional part time work during this time as I build my business
• I will continue to build my timeline/planning templates business
• I’m considering building another small site that focuses on wordpress and/or thesis design, as this market is really booming and I enjoy working in that area

I am afraid, but I am also very excited. And though it is a slightly uncomfortable place to be, it makes me feel more alive and happy about my career than I have been in the last 4 years.

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Well, its official. I have turned in my two week notice at my current position and I am pursuing other options. We have enough of a padding to last long enough for me to sort this out. (My fear is talking there)

I’m very happy about this first decision and I have lots of options. Nonetheless, I am very much struggling with this life decision. The lucky part is that I can actually make this choice with the career path that I have in web design and online marketing. Here are my options:

Option 1: Accept a FT Corporate Job - The “Logical” Choice

Pros

• Steady income to support my family, benefits (health, dental, paid time off)
• Opportunity for learning from others and new environment
• Career growth potential
• Escape from the cubicle and florescent lighting

Cons

• Not enough time to do my freelance work, be a mom, take care of the house, etc
• Potential to be ‘more of the same’ in terms of politics and personalities
• 401 K hasn’t been a reliable investment vehicle for retirement

Option 2: Accept PT Work + Freelance/Businesses - The “Tempting” Choice

Pros

• Flexible hours, variation in work
• Ability to pursue many projects and avenues (web, businesses, writing)
• Pontenial to be happier by feeding my creative outlets, feeling of acomplishment
• Ability to help many small businesses and increase networking
• Ability to be there for my daughter more, especially when she is sick

Cons

•  Inconsistent income, no protection from month to month, no paid time off
• Have to work at ensuring I have additional work
• Location of jobs may vary, though remote is very possible in my industry
• Administrative duties increase, have to take care of own taxes, health, investments
• Might be lonely working alone majority of the time

I want to live every day as if it was my last. I want this thing called life to matter. And I don’t know how I’ll ever be able to do that if I can’t do more of the things that I want to do with my time. Having a little 2 year old means that I don’t have any ‘down time’. The time I have is absolutely precious.

But whether I’m following my heart and whether I’m taking care of my responsibilities might be two separate things. I am the sole bread winner right now in our household. Is this just a timing issue or is it the right time to make the leap?

I’ve made a hard choice which is to quit my job to start to really craft the life that I want to lead. But now I need to get more specific and really play out what my life will look like depending on what path I choose.

If there’s one thing I’ve learned it is that there are no black and white answers. I’ve  also learned that people are willing to be flexible working with you if they truly value what you offer.

Often times its fear that prevents us from taking a leap. If I can get past the fear, what choices would I make?
Option 2 hands down. Can and should I overcome this fear?

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Dying  Your Hair at Home without it Turning Green or Orange

Rainbows Might be Pretty, but Its Not What I Have in Mind!

This post is for the ladies, but if you’re a guy, send it to your friends, girlfriends or wife, they’ll thank you!

First off a note: Use this ‘advice’ at your own risk. I take absolutely no claims for your own use or misuse of hair dying products. This post is simply a few tips I’ve learned that have helped me save some money without compromising my style too much.

I have experimented with dying my own hair for years now, and I’m not going to lie, I have had some green and orange experiences.

For the dying products that I use, I like to go to Sally’s and get the professional grade products. They are very cheap, and if you know how to use them much much much more affordable than the boxed kind at the super market. Plus, the boxed kind often don’t work or leave you with the orange/green issue.

If you have golden toned hair, use products with gold in the title. If you have more grey or ash colored hair use products with ash in the title. I personally avoid all ash related products as they without a doubt can turn my hair green. I’d prefer orange to green anyway.

When things typically go wrong and leave you with orange or green hair is because you are trying to do something too drastic to your hair, your hair is over-dyed, or you aren’t using products that go well with your hair. If you get products at Sally’s ask them to help you find what goes with your hair type.

There are so many chemical factors that go into dying hair, this is why many people would prefer to go to a stylist, they don’t want to mess around with their hair and potential side effects. I forgo this to save money and take the risk. I have it down pretty well at this point.

My Most Recent Results. Not too Bad.

Using the Wella hair dye products with the developers at Sally’s has been consistent for me.  Typically I use a 1:2 ratio. One part dye to 2 parts developer. For doing highlights, I can get away with using just 1/2 ounce and 1 ounce developer. So that ends up costing me about $2 or so per time for the dye and developer used. The developer works this way: 10% will do more deposit and less lift, so its good for dark colors. 40% will do more lift so its good for lightening hair. I typically use the 40% developer for adding golden highlights to my hair.

I use a cap for highlights and then cover my head with aluminum foil. I sometimes add heat with a hair dryer to speed up the process. It can take anywhere from 10-30 minutes to get the results I want with lightening. I check often to see how its doing.

Its always good to do a sample on your hair before doing the full thing. This will prevent many many problems.

The typical rotation that I like to use to save money on hair expenses is this:

Month 1:

• Professional Hair Stylist: Color, 3/4 Highlights and Cut. Cost: About $145 + Tip
• Wash with slightly nicer than lower end Color Enhancing Shampoo / Conditioner. Deep Condition Once / Week. Cost: $15-25

Month 2:

• Semi-permanent hair shine or rinse wash to enhance the color. Cost: $5-10

Month 3 or 4:

• Do my own hair highlights with sally’s products. Cost $5 (Once you’ve purchased all the products needed, its very inexpensive to continue, but you will need to buy a brush, cap, plastic gloves and the color/developer at first)

Month 5 or 6:

• Semi-permanent hair shine or rinse to enhance color. Cost: $5-10
• Hair cut. $30-50

Month 7 or 8:

• Depending on how it looks, its back to the salon or I’ll do it myself again.

You get the gist. Again, this system isn’t perfect, but it helps me to save a lot of money without compromising on my style.

photo by mogret

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In my pursuit towards financial freedom, I have been able to narrow down my goals and realize key elements that I want to focus on for my career and life style.

I have now managed to categorize and budget my expenses, long term and short term savings accounts, and I have begun to understand tax rules and how they affect investment accounts and options.

Nonetheless, I still find it difficult to determine the order and priority to assign to saving, paying off debts, investing, and business start ups.

There are so many competing philosophies on this topic, and I believe that there truly is not any one answer. Most advisors and financial ‘gurus’ will base their recommendations for you based on your risk tolerance, age and stage in life, and other factors. Lately, many advisors are much more conservative in their recommendation that you save and save and save your money for emergencies.

Here’s a look at what our short term plan is to balance all of these categories:

Save

Short Term Savings for Spending: I am doing a better job of setting aside small amounts towards short term savings goals including a wedding gift fund, a car maintenance fund and a tuition fund for my husband’s college.

Long Term Savings: We also are saving towards longer term savings goals such as our contingency fund, software business expenses and my daughter’s education fund.

Pay Off / Reduce Debt

We are selling out house in an effort to reduce our debts and get to a level where we are more comfortable with our savings options. It hasn’t sold yet though (bummer!). I’m also looking forward to renting and not owning for a while so that we have a bit more flexibility with where we live.

Besides this, I used some of our tax refund to go towards our car loan. One of our goals is to pay off our 7 year car loan in 1.5 years. That will involve some aggressive payments. According to the calculator I used something like paying $150/month more than what we owe. I am considering setting up a bi-weekly payment also for this to help reduce the balance and interest paid. This will allow us to begin paying off our new student loans for my husband’s college expenses. They aren’t huge, but we’d like to be able to make that transition. So, paying off the car loan debt is definitely a focus for us.

Invest

I invest in my 401k, but it mostly depresses me to follow it. No matter how I allocate it, it vastly under peforms the S&P 500 index fund.

Beyond that, I am in the process of transitioning my Traditional IRA to an online brokerage. I also am opening up a Roth IRA, but realistically won’t be able to contribute to it until our home is sold.

I’ll be moving my daughter’s certificate to a 529 College Invest plan in April.

Building Businesses

I don’t plan on building just one business, I plan on having multiple, including the consulting business that I already operate. I want to focus my efforts on business opportunities but once they are developed and running well, I would like to diversify and branch into other businesses (hopefully product based) for multiple income streams. This is not an overnight thing, but I firmly believe that this is possibly the most valuable thing I could be spending my time and some amount of investment on. Plus, I think this is what America needs right now. More start up small businesses, more entrepreneurs to get things moving.

As much as I am happy to be making efforts in many financially-savvy categories, I do still struggle with balancing and prioritizing them. I’d love your insight on this.

photo by calliope

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Since I began this blog I have narrowed down my focus towards determining that I want to start more businesses that are product rather than service based. I have now taken that leap with my new, still working out the kinks website; ontimelines.com.

Based on the wonderful feedback from this website, I have realized an area that I really want to focus on further and offer help to others: Planning and organizing. I love the simplicity that a time line can offer for planning and visualizing your goals.

In the short term, this site will offer custom, beautiful templates for PC and Mac office tools for everything from wedding planning to childhood milestones to fitness scheduling. The site will include packages of timelines, checklists and plans for every day use. My long term goal is to offer an online tool as well.

So, you may notice a slight decrease in my blogging on this site, but it is not because I am not working on my journey to financial freedom, I am just redirecting some of my efforts into action!

If you have suggestions on what to do or add, I’m happy to hear them.

Happy planning!

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Photo from Apple.com

Alright, this post is just a shameless plug for my iMac on the Leapord OS X. But really, this computer has allowed me to use so many organizing and helpful tools so that I can expand both my business and improve my use of time. I know this is a bit off topic, but I just have to share some of the reasons why my Mac has made it possible for me to progress my quest for organizing, budgeting, and overall happiness since I have owned it.
For years I have wanted a Mac. I just never was ready to take the leap until Parallels (and Boot Camp) arrived. I bought my first laptop mac, but was quickly scared by my failure to get Boot Camp working and quickly returned it and went back to the comfort of my PC.

Now, I know that most Mac converts already know this stuff, but a lot, and I mean a lot, of PC users don’t. So, I’m going to share my version of what you’re missing out on if you still own a PC.

Photo from Apple.com

What PC Users are Missing:

• I can use my mac and PC software at the same time
• I don’t have to buy or install virus software all the time, that comes with the mac worry free
• I don’t have to worry about backing up my files. I just plug in an external hardrive and Time Machine does all the work without me thinking about it. If you want to revert, its actually FUN to enter into the time machine which looks sort of like a star wars show and go back in time to a previous edition of a file, etc.
• Built in video, fun tools, iPhoto, and so much more. I’m not kidding, the list goes on and on with the features that PC’s are leagues behind on.
• Expose is awesome to be able to view multiple windows that you are working on at once and the dashboard widgets are also an easy and simple way of keeping your workspace clean, but allowing for quick access to widgets of your choice.
• There are many applications that come standard with the Mac and many free or cheap ones to install that just run, there is very little to do to get your apps running.

Trade Offs – What Will I Loose if I Switch from a PC?

• Old software that isn’t compatible may not work. Its unlikely though. You can get Parallels to work with XP or a newer version of windows, which works with most old software.
• Add on software tools do have an upgrade cost associated with them, such as Parallels. For some reason Parallels tells me I don’t have enough 3D video memory for optimal performance, which surprises me as I got my mac not 6 months ago.
• You have to adjust to folders and icon sorting, as well as a slightly different way of using applications, but the newer version of PC operating systems like Windows 7 and Vista are moving in that direction anyway.
• That’s all I can think of off hand. You can still use Microsoft Office if you are addicted to that. However, I have also become a large fan of iWork and the Mac Office tools. UPDATE: Please see the comments below about compatibility issues if you are an avid Microsoft Office and software user. You may not be able to make the switch if you are, because it just plain wouldn’t be worth it.

If you can, I say ditch the PC. Its worth it.

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There are many savings and investment vehicles to choose from when it comes to saving for your children’s college. They range from ESAs to CDs, and in some states, you can invest in a 529 savings fund.  I have been confused and intrigued by the 529 College Savings Plans since I had my daughter, but have made it a goal to start one by April 2010 when her CD expires. I’m not clear what states these are available, but they are where I live in Colorado.

529 plans are more than just savings accounts. These state-sponsored college savings plans were established by the federal government in Section 529 of the Internal Revenue Code to encourage families to save more for college. They offer unique state and federal tax benefits you can’t get from other ways to save, making them one of the best ways to save for college. – College Invest

Benefits of 529 College Savings Accounts are Numerous:

• Possible state tax deductions from contributions
• Savings are tax-free
• High contribution limits
• Withdrawals and account options are flexible for your needs

Why not invest in something stable for my daughter and get a little help at tax time? Here’s a summary of what I’ve learned about what’s available and how to select a 529 College Savings Plan.

There are 4 plans to choose from. Some of the plans available, such as the one from Vanguard, offer a range of investment options for your funds with varying levels of risk. The main concern I have is that I would rather have a stable return with little risk, and have the tax incentives than have a volatile savings plan for my daughter’s education savings.

Great Resources:

• Smart Choice College Savings Plan eFirstBank.com – Offers a money market and a 1 year savings option.
• Vanguard’s Direct Portfolio College Savings Plan – There are options for all risk levels, use their Risk Tolerance Allocation Tool to find out your level
• Scholars Choice College Savings Program – Offers a variety of investment options through Legg Mason Global Asset Allocation, LLC. and thier financial advisors only.
• CollegeInvest Stable Value Plus – A partnership with Metropolitan Life Insurance Company of Connecticut (MetLife) to offers a guaranteed fixed income college saving option
• Comparison of the difference between 529, Coverdell Savings ESAs, UTMAs and more for 2009. Compare College Savings Options. [PDF]
• CollegeInvest.org – Full Detail on the 529 Program Options

One thing is certain, don’t bank on your children getting a scholarship, start saving today. As parents we don’t have to do everything for our children, but what we can do makes a huge impact. I know it did for me, as the help my parents have given me has been invaluable.

Please note, this post is not to be considered financial advise. I do not take any responsibility for your investment or financial decisions. Please see my policy for more details.

UPDATE 3.29.2010: Yay! I finally opened and funded this account for my daughter through the College Invest website. It took me about 20 minutes to fill out the application, decide if I wanted to also enroll in the UPromise (shopping cash back that is directed and linked to your 529 account), and read over all of the documentation. I opted for the Vanguard fund after all, as I allocated a diverse mix of investment elections and plan to monitor it over time. I also set up a small recurring monthly transfer that will increase yearly by a certain amount. Progress!

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I am curious if life is made up of Either / Or choices or if it is truly possible to have a life full of ANDs. I’d like to believe it is possible to keep adding ANDs to your life, yet I know that at some point your plate gets full and you have to take things off.

So, what do I mean by leading an AND life versus an OR life?

Do you agree with this statement?:
In life, you can either have a fulfilling career or a great marriage or you can have children.

Or do you agree with this statement?:
In life, you can have a fulfilling career and a great marriage and you can have children.

There are only so many ANDs you can add to your list. Yet how do you know when enough is enough? Is it possible to just get more and more efficient with your time to the point where you can have all the ANDs that you want?

Here’s some of the financial top gurus family status:

Suze Orman – No Kids

Robert Kiyosaki – No Kids

David Bach – Unknown (Please let me know)

Dave Ramsey – 3 Kids

Okay. Point conveyed. Is it possible to reach any sort of financial freedom when you have the responsibilities, be it financial, time, energy, love, that you have to devote to your little ones? I’m not sure. I hope so. However, it does bother me a bit that many of the top advisers on financial education and wealth don’t have a family. Suze Orman recommends investing in your retirement before sinking too much to save for your child’s college, but that is a very difficult choice to make in my opinion. As parents, you often have the instinct to take care of your children as much as if not more than you take care of yourself.

Its difficult for me to listen to some of these gurus talk about how to get rich because I feel they are already too far removed from me and my life. Not to mention my age group. I prefer to read many of the blogs out there at the moment.

I have a little toddler and the question that has entered my mind lately is just that: can I have this AND that, and to what degree. Can I truly find balance? Right now, it seems that all that I am doing is adding to my plate, with out enough focus, and I am not taking enough away.

What do you think? Is it possible?

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A recurring theme that I have heard and read from ALMOST ALL of the books on wealth and prosperity involve one consistent thought: Documenting and staying focused on your vision.

This is taught in many ways. Some people prefer to clip pictures together from magazines, etc to have a visual representation of their future desires. Personally, I want to write it down, them set goals and visual representations through things such as timelines to chart and hold onto my plans.

Many businesses write their vision in the present tense, to add weight to the vision. I am consciously not going to do that, as it doesn’t jive in my head. I’d rather write about the future in a clear and precise outline format.

So, Here Goes. Hopefully this will also give you some ideas for getting started as well.

1 Year Life Vision (Personal & Business)

• Work to find preferred neighborhood to live in for at least 5 years
• Continue to learn and improve relationships with my daughter, husband, family & friends
• Feed my mind with wisdom and knowledge
• Transition to additional entrepreneurial business ventures (product vs service based)
• Begin to focus on health industry as I have realized that this is where I want to focus my life’s work

3 Year Life Vision (Personal & Business)

• Move to neighborhood close to jobs in our field and with good schools
• Have second child
• Transition to PT work after 2nd child, with focus on entrepreneurial ventures
• My husband will have a successful personal / athletic training practice
• Continue to work on balance of mind, body & soul
• Develop solid business relationships with a broader range of colleagues

5 Year Life Vision (Personal & Business)

• Spend more time being a mom
• For business, we’ll begin to think bigger. Invest in larger business opportunities in health industry.
• Increased efforts towards balance of body (more exercise & diet choices)

10 Year Life Vision (Personal & Business)

• Move to somewhere humid near the ocean with lots of greenery. I want to walk on the beach every day.
• Increased efforts towards feeding the soul (meditation, gardening, down time)
• Continue to learn and build business ventures in health industry

All of these tie in with what I have been blogging about so far, getting your mindset in the right place, getting organized, and setting goals. Oh, and my free and simple timeline template is a great tool for visualizing your plan. Next, action, action and more action. Followed by planning, monitoring, and adjusting as you go and learn.

What does yours vision look like?

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I had the privilege of listening to a thoughtful free webinar by “conscious” entrepreneur Max Simon in which he interviewed Vishen Lakhiani on the concepts of creating a wealthy mind. He also spoke about how to turn a business from performing so-so to really reaching a ‘turning point’.

Some of the most insightful points of the audio (available for free below) were the following:

• The biggest mistake that most marketers make is that they have a lack of understanding of what Eugene Schwartz says is called “Market Sophistication”. Market Sophistication is the not the same as the buyers life cycle. The traditional marketing concepts that I was taught in my marketing undergraduate work was regarding reaching your customers at certain stages in the buyer life cycle: awareness, interest, preference, adoption. Instead, Market Sophistication refers to the stage that the buyer is at in terms of their awareness of the types of messages already available for a particular product. If it is a relatively new product, your message needs to be much different than a message for an much more saturated market. For a saturated market, you will have to offer much more to differentiate yourself. I love this concept and it gives me a lot to ponder in my marketing efforts.
• Succeeding in life, whether it be in wealth, health, relationships, etc is really all about your MINDSET. We all know this, yet it is entirely different to consciously, day in and day out, make sure our mind is in the right place. It is so easy to let it veer off in the direction of doubt, uncertainty and loss of focus.
• By setting a clear purpose and vision for what you want to do with your business, you will be able to focus your efforts and achieve much better results. Seems obvious? Large businesses do this, but you can apply this concept to your small business OR your personal life, and achieve great results as well. (Goal tracking tools help with this)

No matter what business you are in, if you have an entrepreneurial spirit, you can’t avoid needing to also learn the tricks of the trade of marketing. Personally, I love the ever changing dynamic of the marketing world, and the endless possibilities that are presented by the concept of reaching your market in the best, fastest and most efficient ways.

In my opinion, much of the laws of attraction and success can be boiled down to these 3 things: Confidence, Purpose & Marketing.

1) Confidence: Free your mind from doubt, fear and worry. Doubt is the #1 thing getting in your way towards success. Hold true to your intuition, but do not let doubt cloud your belief in yourself.
2) Purpose: Define and hold true to your purpose and vision for yourself and your business efforts
3) Marketing: Brand yourself first, your business second. Your personal brand will get you farther than all the efforts you can put into your business. Start with yourself, then build from there.

Listen to the recorded webinar, and let me know your thoughts.
The audio is also available here: http://www.getselfcentered.com/turningpoint/replay.html

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• January 12, 2010 -- Does Opportunity Come to You or Do You Have to Create It?

Review of The Best Online Goal Tracking Tools for Personal Use

There are many online tools available for keeping track of and measuring progress on your goals. Many corporations have started to incorporate goal systems (Success Factors is one example) and S.M.A.R.T. goals. Not all goal systems utilize this method, however, it is widely accepted as an excellent way to achieve results with your goals. The following is a look at how to measure your personal goals and a review of some of the best online tools for measuring your goals.

So, what are S.M.A.R.T. Goals?

S – Specific (the more specific the better)
M – Measurable (The criteria that you will use as measurement that you have completed a goal, such as getting your degree, etc)
A – Achievable (Do you currently have the skills and resources needed to reach this goal?)
R – Relevant (How does this goal tie to your passion or purpose?)
T - Time-dimension (When will you aim to start and finish the goal, will there be milestones to reach along the way?)

Many of these goals start with the questions (that you then fill in the blank for):

• Why do you want to achieve this goal?
• Next ask yourself, what specific benefits will come with achieving it?
• When will you achieve it by? (time factor)
• How you plan to achieve the goal?

There is a growing philosophy that if you share your resolutions or goals with others, your friends, family, or a social community can help encourage you to stay on track and keep your goals alive. The same often holds true for other areas in life, such as getting in shape, isn’t it more fun to do when you have a friend that will meet you at the gym and hold you accountable for sticking to your work out goals? So, some of the online tools focus on the social sharing element of goal tracking.

Best Online  Goal Tracking Tools of 2010:

GoalsOnTrack.com Rating: 4.5 out of 5 stars $48/year subscription

This simple, easy to use tool does a great job of allowing you to track your goals, visually chart your progress and see reports, create specific action plans, manage daily tasks associated with your goals, track specific time spent, as well as keeping a journal for your additional thoughts and inspirations that you want to capture. You can assign visual pictures with your goals, set overall categories with specific goals beneath that category, and assign any type of progress metric you want to show your measurement (dollars, percentage, etc). It follows the S.M.A.R.T. goal model. You can print out your goals, your daily tasks, and really use this tool to get on track. You can set email reminders, import and export your tasks to CSV or for iCal format, and much more. Just check out their full list of features on the site. This tool costs money, yet I believe its worth the investment if you want a full suite of highly effective goal tracking tools.

SuperViva.com Rating: 3 out of 5 stars Free
SuperViva is a social sharing goal or “life” tracking site that allows you to create  goals to share or keep private. SuperViva was created in 2006 (runs ads and accepts donations to support it). It allows you to set up weekly reminders to check in with your list of goals. Super viva offers something closer to the SMART goal method by allowing you to group your goals, set specific goals within an overall list, assign what “Life Dimension” your goal applies to (Personal, Family, Finances, Community, etc) and also set the start and completion dates, priority, effort needed and budget needed. You can mark a goal as completed, on the backburner, or remove it. There is a section to find ideas from the community and ‘get inspired.’ Nice overall concept for a free tool, however, I find it difficult to navigate and you cannot visually see and chart your progress on a goal.

Goalmigo.com Rating: 3.5 out of 5 stars Free

Goalmigo is also a social sharing goal tracking tool. You start by adding your goals, and adding who is going to help hold you accountable or your ‘Supporters’ for your goals. You enter your completion date, and can set up reminders in day, week or month increments. A great feature is that you can assign a tracking log (they have some already listed such as weight, calories, etc). You can assign tags to help you to share your goal in the social environment. Once you set your goals, you can mark them as complete and also add milestones in your “Log” which display in a bar chart format. Beyond that, you can visually see a reminder of how long you have remaining to complete you goal such as “One Month Remaining”. You can also add notes to your goals. There are ads on this site, but otherwise its a pretty clean and user friendly interface.

eLifeList.com Rating: 3 out of 5 stars Free

eLifeList is another social sharing tool which allows public or private goal tracking. What’s awesome about this tool, is that it has very useful categories and goals already entered in it. I’m not sure if there are from the community or were created ahead of time, but they can help you get started. You can add descriptions, photos or videos to your list, and also set reminders to be sent to your email. The site is pretty user friendly, though some of the features you don’t edit until after you’ve set the goal, such as reminders. I would think you’d create everything when you are creating the goal. You can mark the goal as complete, and see a progress indicator (from 0-100%) of how far you are toward reaching your goals. From the design of the site, it appears to be focused on a younger demographic (perhaps college students?). Overall, it does the job for simple goal tracking.

LifeTango.com Rating: 3 out of 5 stars Free
LifeTango is a very clean and effective goal tracking tool. As the other tools, you can choose if you want public or private goals. You can sort by priority, date, and other categories. You have to manually update the progress you are at in your goal by a percentage from 0-100%.  Ongoing, periodic goals are considered “Tasks” and are tracked using their “Task Tracker” (as opposed to goals that you want to assign a specific due date for). And example of a Task Tracker goal would be to workout every day for 1 year. You would then set these recurring tasks and mark your progress daily. They assign stars that you click on to indicate that you have completed your recurring task goal (kinda cute like when you were a kid and got stars for getting something done). There is also a fun little sticky note for “reminders”. Overall, I like this site for their Task tracking but I think it is a little confusing for tracking larger picture life goals.

Stickk.com – Rating: 4 out of 5 stars Free

Stick is a tool meant to motivate you to stick to your goals through the use of accountability with other people and putting a bet or monetary value at stake if you don’t meet your goals. It is much more focused on coaching and pushing you to achieve your goals than any of the other tools. You start by setting a goal (Referred to as a Commitment Contract, much more formal and committed sounding!), then setting the ‘stakes’ or what’s at risk to complete it (You literally have to pay out money to your selected charity or person if you miss your goal deadlines), then you ‘get a referee’ or a person in your life to to push you meet your goals, and you can also add friends to help you achieve your goals. Many of their pre-set goals are around losing weight, quitting smoking, or other life-changing habits that it often takes a ‘coach’ to help with. However, it can be used for other goal tracking as well. You can set the category, whether it is a one-time or recurring event, get reminders and view your progress. Oh, and you don’t HAVE to set a “Stake” of financial value, you can still use this tool without the pressure of a stake. For many people though, I can imagine that this method (fear of losing your money!) works great for actually getting them motivated and on track. This is by far the most unique of the tools I’ve seen.

GoalsTogether.com Rating: 2 out of 5 stars Free

This free social sharing site offers the ability to create and track your goals, and share them with the community. You can choose to have private or public goals. You can search for other goals for people in the community. It allows ‘basic’ goals which are manually updated for progress, and ‘checkpoint’ goals which you set the checkpoints or milestones needed to attain the goal at the beginning of the tool. When you have completed a task in the goal, you mark it as complete by checking it off, like you would on a to-do list. Overall, I would say that this tool is very basic, and not all that useful for the serious person trying to implement a SMART goal process or anything much more than a task list. There are ads on this site.

43Things.com Rating: 1.5 out of 5 stars Free
I saw this mentioned often as a goal tracking site, but it really isn’t. This site is really just a simple social site to measure trends for goals and resolutions with the answer to 1 question: “What do you want to do in the year 2010?”. To me, it seems similar to Twitter and many other social sharing tools, so who knows if it will be used a lot. Cute idea, but not that helpful for achieving your goals.

Which one to choose?
You decide. Just keep in mind, when searching for a goal tracking tool, I would recommend determining if you simply want to have to do lists, or if you are ready to have specific goals with associated tasks. Goal tracking is about all of the small tasks (from your TO DO Lists) that add up to one overarching goal. Sometimes, you may have random TO DO’s that don’t really seem like they fit into any goal, but you feel that they have to get done anyway. Go ahead and add them to the list and perhaps even do them, but first consider: WHY am I doing some task if it doesn’t help me reach any of my goals? This can lead to the type of self reflection that will ultimately help you to reduce the amount of mindless, or purposeless tasks that you are doing, and help you to find the best use of your time.

Let me know your thoughts on these tools or if there are some great ones that I have missed.

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One of the things that many of the financial gurus tell you is necessary to reach financial freedom is to be able to free your mind from the fear and worry you feel about the future. It would be nice if we could control our future, but its very difficult to do because of all of the unknowns and external factors. Without control, comes uncertainty. With uncertainty, often comes fear and worry.

The realities of adult life have left me with more responsibilities than I originally knew I signed up for, and it makes it rather difficult to find peace. Nonetheless, I am finding inspiration and making much more conscious decisions with my money and choices since I started this blog. In order to confront my largest fears, and give myself a chance to push past them, I’m documenting them below.

My 2 Financial Fears

Here are my greatest financial fears around making a dramatic life-changing choice that I want to do, but tell myself is foolish:  ‘what if I were to drop everything, reduce or stop paying some of my obligations and responsibilities, be with my daughter more and pursue an entirely entrepreneurial career’:

1. Fear #1 – I would hurt my credit score. I’m not actually afraid of the concept of foreclosing on a mortgage or losing my house. I know that I will always have the means, family and friends if we ever needed somewhere to live. I am afraid of the long-term implications of running out of money and impacting your credit score. I don’t want a short period of time in my financial life to affect my ability to borrow and get ahead in the world. So, there it is, this very realistic fear is what I believe cripples many people into paying down their debts before taking care of their true desires and their dreams. The fear of breaking the rules of the system stop many of us from doing what we truly want to do with our lives.
2. Fear #2 – I would lose my health insurance coverage. This year, we switched from my company’s HMO to the HDHP because of costs. Though it may sound nice, it really is bothering me already. My husband is avoiding going to the doctor for something, even though we pay hundreds a month for health insurance, because we don’t want to pay another $150 out of pocket with the risk that he will have a virus and not be given any medication anyway. HSA’s definitely do force you to think twice about going to the doctor, but this may not always be a good thing when you are ill. I am interested in looking into alternative and more preventative health and nutrition options, such as eastern practices, certain foods and herbs, etc, but sometimes you need American medicine and care. Many American’s are literally losing everything because of their health expenses. I had a client tell me that she was going bankrupt because of her medical bills. She was previously a very successful, wealthy woman. What has this world come to? I’m sure many people feel the same way, and I’m not certain if it will actually get better with the changes they are making D.C. I would be afraid to have another child because of the costs that I would incur in medical bills if I didn’t have health insurance coverage. And even then, it costs thousands to add a person to your family (unless you are really poor and can get help from the government).

That’s about it.  Those are the two scariest things for me. I’m pretty sure I could live in a trailer, and eat cheaply for a while if it meant that I was able to spend time with my daughter and pursue my dreams. But I am afraid of the immediate implications, and because of this, I currently have to make a choice to take things slower than I want to. Ah well, baby steps are better than no steps at all. My life is run by the rules of taxes, debt and inflation.

What About the Fear Driven “Emergency Fund”?

I’ve been reading a lot that most people recommend having 6-8 months of expenses saved before you ever do anything dramatic such as pursue an entrepreneurial endeavor. (We have a small one, about 2 months bills worth). The part of this concept that I struggle with is that the premise of this fund is based on fear. It may be a justified fear, but it is still a fear nonetheless. Will you be thankful that you had this fund set aside in times of need? Quite possibly. Yet there is also the flip side in which you may not take the necessary steps that you want to take with your life, because you are so consumed with a fear of the unknown and of having enough to pay your bills. Maybe a well-educated investor would at least put some of this contingency money into a somewhat liquid, but higher paying asset. Or diversify in multiple types of assets. Or spend in on your business venture that you want to start…? As Americans, the only way to get out of a recession/depression is to face our fears, and start doing, not just saving.

So, here’s my thought for anyone feeling afraid, desperate, or just plain stuck (a word I am very much trying to get out of my vocabulary, yet there it is again): Acknowledge your fears, but do something anyway. Nothing dramatic, just something. Read a new book, try something new. Turn off the TV and sit down and write about what it is you want, your goals and your dreams. Focus on what you want, to the point where you can visualize and see it, and you will start to set the forces in motion for change. Change doesn’t always happen quickly, but it does happen.

What are your greatest financial fears? Do you think they are based on reality or possibly just in your head?

Related Posts

• December 21, 2009 -- Be the Change You Want to See in the World
• November 24, 2009 -- Review of Free Credit Score Analysis Tool: Credit.com
• November 23, 2009 -- Review of Free Credit Score Analysis Tool: Credit Karma
• November 20, 2009 -- Simple Approach to Change: Assess, Aquire and Apply

Science has proven that people who express their gratitude daily are 25% happier and significantly healthier than those who don’t—and doing it takes as little as a minute a day! – Gratitudelog.com

GratitudeLog.com is a fun social site that takes the basic concept of short updates from sites such as Twitter, and applies it to a specific concept, Gratitude.

You are able to mark someone’s comment as “Awesome!” or reply to it. You can follow people and they can follow you. Beyond that, you can send people “Appreciation” gifts (for free), which are simply little icons with a thoughtful note (like you can send on Facebook).

Rating: 3.5 out of 5 stars

Pros:

• People on this site really seem to respect the type of content that can be posted and shared, you will find inspiration from what other’s are saying!
• It can integrate with your Twitter account to post your updates
• There is something both cool and scary about publicly sharing your personal thoughts on your gratitude for your life

Cons:

• The list of updates on the main page shows those that you follow’s comments, but I find it somewhat difficult to navigate as a running list.
• If someone isn’t a member of this site, you can share a gift with them, but you can’t really interact much further than that… So, I suppose they’ll have to join!

I have made a pledge to myself to login and put something that I am thankful or grateful for every day. So far, day 5, I’m doing pretty good. Reflecting on what I am grateful for on this site has been  great, but the best part is that I am starting to expand that further into other aspects of my life through out the day. My husband and I have made a commitment (thanks to a posting I saw on this site) to express something we are grateful for to each other every day as well. Already, this starts off or ends the day with a smile.

No matter your religion, your spirituality or your place in life, it is without a doubt helpful to give thanks for what you have in your life that you appreciate. I am convinced that a commitment to maintaining a pattern of expressing my gratitude will play a key part in keeping me motivated and maintaining my perspective.

Related Posts

• June 23, 2010 -- Stop Chasing After Happiness – Choose Happiness
• January 6, 2010 -- 5 Steps to Happiness with a Personal Finance Twist

I’m new-ish to the personal finance/weathly mind blogging and as much as I like some of the hugely known PF blogs I enjoy reading from perspectives of ‘smaller’ PF bloggers because they aren’t necessarily experts, but instead on a similar journey to mine. I thought I would share some of the interesting personal finance blogs that I have found so far for you to check out yourself:

• Automatic Finances – Writes about saving, ‘automating’ your finances so you don’t have to worry about certain things, personal finance and spending. I liked a recent post about how to follow the entire personal finance blogosphere through sites like Tip’d and PFBlogs.com
• Frugal Zeitgeist – Writes about saving, setting goals, finding happiness, and the realities of life with debt. Having just recently educated myself about what zeitgeistism (if that’s a word) even is, I am intrigued to learn more of what he has to say.
• Fiscal Fizzle – This blog offers a ‘spicy’ and very educated perspective on personal finance. He has a unique perspective of discussing principles, simplicity, critical thinking and ‘money paradigms’, or thinking of money through different perspectives. I recently found this blog and am very impressed.
• FreeFromBroke – A very honest perspective on saving, raising a family, and affording life.
• SteadfastFinances – Covers a lot of topics from banking to frugal living and real estate. Very insightful writer.

These are just a few fun ones to check out. Let me know what other blogs are growing in popularity in the personal finance world. Or better yet, submit your PF blog to me to check out!

Random Posts

I’ve noticed a lot of blog posts and a growing movement on Twitter and the blogosphere about the topic: “move your money.” (See the site: MoveYourMoney.info). Full disclosure: I work for a local credit union in my area, and I prefer the credit union not-for-profit business model. I typically try to avoid any direct reference to where I work because that’s not what my journey is about, its about my personal finances. However, I wanted to take a moment to acknowledge the concept of “going local” with anything you buy, including where you choose to bank. To me, going local is an important part of making conscious decisions and choosing where and how to spend your money. Choosing to shop local has many benefits which I will explain in a moment.

This particular movement is coming from consumer’s anger at the big banks for being bailed out and spending OUR tax dollars for often times wasteful and frivolous purposes. Many people, including big names such as Bill Maher (watch a video from Maher), and Suze Orman are endorsing and making public statements about going local and moving your money. They believe that if enough people actually do this, it would mean that we are actually doing something big to INFLUENCE change, one individual at a time.

I have not always been a large proponent of ‘spending local’. I admit that I still (shamefully) have a BofA credit card. I don’t always remember to shop at the farmer’s market. However, the more I start to learn and educate myself about the current financial system in America, the more that I learn about the awful things that are put into my child’s toys that are from China, and the more that I truly understand the impact of shipping my hard-earned dollars out of my local community, the more I realize that choosing to spend your money local is one of the most useful things you can do for YOUR local economy and the stability of those around you.

So, if you are already choosing to shop local, or if you are considering taking it one step further, start to think of other places that you can make the choice to spend local and invest in your own community instead of communities outside of your influence.

Here’s a few suggestions for spending & keeping your money local:

• Go to your old town, specialty shops, or craft fairs for buying gifts, these stores need your support
• Stock up at the farmer’s market from local growers
• Look for local produce at your regular grocery store
• Choose a local bank or credit union (find a credit union) to save and borrow money from
• Consider going thrifty – to thrift stores and garage sales to buy things that you don’t need brand new (Better yet, swap! Check out SwapMamas.com for local swap options)
• Consider a Staycation this summer – there are many uncharted territories in your state to be discovered, its often less expensive to stay in town on your time off, and you spend local
• Eat at locally owned restaurants instead of big chains

You don’t have to give up things that you love to go local. And you don’t have to do all of the items on my list. Mainly, all that I plan to do and suggest you try, is to think twice about the options for where to spend your money, and consider making a more conscious choice when you do decide to spend.

Random Posts

Best Envelope Budgeting Software: You Need a Budget YNAB 3.0 for PC or Mac

Just when I thought I had it all figured out by using online tools like Mint, I repeatedly saw mention of one of the top rated budgeting software for download on your PC or Mac, YNAB 3.0 (You Need a Budget). YNAB is a budgeting software that incorporates the envelop method of budgeting. This may just be the next step for me in advancing my money management and control of our finances. The tools that I am currently using are easy to import my financial information and great for big picture trending, but we still haven’t really done well at isolating how to break some of our patterns and stick to our budgeting goals.

One of the goals of this tool is to help you get off of living only paycheck to paycheck. This is accomplished through the “YNAB Buffer” or by organizing your money in a way that you are able to save enough to off set one month of bills.

Your YNAB Buffer is the equivalent of one month’s income which, once saved, will allow you to use paychecks received during the current month for the following month, removing you from the “Paycheck to Paycheck” cycle.

This tool is not for the faint of heart. It is for people that are truly committed to managing the budget and investing the time and energy necessary to do so. When your are ready to get serious, give this tool a try.

Rating: 4 out of 5 stars

Type of  Tool: Downloaded Budgeting Software for PC or Mac, imports .OFX, .QFX or .CSV files (Download from your online banking)

Price: $59.95

Compatiblity:
Windows 7 / Vista / Vista 64 / XP / 2000
Mac OSX
Linux

Pros:

• Simple, user friendly interface includes “Accounts”, “Budgets” and “Reports”
• Intuitive categorization
• Flags for follow up
• Excellent reports for trending with ultimate control of what you are looking at and exportable to Excel or to Print
• Helpful how tos section and blog for getting started
• Helps set up and manage your funds for one time expenses
• Helps save for larger 1 time expenses
• It can help you track EVERYTHING you spend – even cash which I hate because its usually disappears without a trace.
• Very helpful for people with variable income
  

Cons:

• Getting started can take a long time to set up. Unlike some other tools (Mint.com) that auto categorize the majority of your expenses, you need to manually categorize all of your expenses, at least at first.
• Cannot auto-import your information, you must download it and import it into the tool (This could also be seen as a PRO for some that are weary of the online only methods for security reasons)
• Not as full featured as Quicken or MS Money for investment and business tracking

Screenshots:

Random Posts

Do not wait for an opportunity to be all that you want to be; when an opportunity to be more than you are now is presented and you feel impelled toward it, take it. It will be the first step toward a greater opportunity. There is no such thing possible in this universe as a lack of opportunities for the man who is living the advancing life. – Wallace Wattles

Do some people just have it easy while others always struggle to get ahead?

In the past, I’ve often felt jealous or a bit resentful when I look at certain other people that seem to have everything in life fall into their lap. I always thought that wealth, jobs, boyfriends, and the works seem to just naturally happen for some people more than others. Social and economic factors are certainly a big part of why people have opportunities in life initially, but beyond that, when you are truly on your own, what makes opportunity happen?

Recently, I had a realization. Ever since I’ve started writing my blog, and putting myself out there more in the world, I have had small but steady opportunities start knocking on my door. Its what I wanted, but I didn’t really know what to expect or believe that it would happen. We’re not talking a big book deal or achieving financial freedom in 2 months. Its a different sort of opportunity that I am CREATING. I’m connecting with amazing new people from all over the country. I’m sharing stories. I’m offering up what I’ve learned for someone else to hopefully gain some insight from. For instance, my simple but useful free time line template is now getting 5-15 downloads a day in just a short few weeks of its existence. It makes me feel great to give something useful to a lot of people that will help them plan. It inspires me to do and give more. Giving is definitely addictive.

Lately, I have had a much more positive outlook on my life because I feel like I have gotten my power back. No more white flag, no more self-pity, I am taking control and doing something every day to make a difference, education myself, set goals and make tiny steps in the direction I want to go in life. I am making more conscious financial choices in spending, saving, budgeting, and in what I spend my free time doing.

I’ve realized that opportunity, though it may seem like it just falls into some people’s laps, is usually a result of a few key things:

• Having the right attitude and mind set to SEE the opportunities when they appear
• Taking ACTION – Small steps are better than nothing at all
• Putting yourself out there, meeting people, networking
• Offering something(s) of true value to others
• Having confidence in yourself, your purpose(s) and going after what you want

So tell me, are you one of those fortunate that have had opportunity come to you, or have you had to do something different to find it?

Related Posts

• January 28, 2010 -- Confidence, Purpose and Marketing: Ingredients for Success

Can You Really Find Personal Finance eBooks for Free Download?

It can be hard to find any summarized information online for personal finance education without having to give away your email address or buy something. I have been reading a lot of blogs and websites and books, but for some reason, I do enjoy the occasional ebook. Often times, ebooks offer a great compressed version of key information from people’s blogs or books.

Here are some resources that I have found that offer truly free ebooks or PDFs of some very useful information and education on personal finance and a wealthy mindset. (Some of them do want to sell you something also, but you can still get these for free without purchasing anything).

List of Free eBooks on Personal Finance & Motivation

• Dream Manifesto from Thomas Herold -Herold offers an amazing site with topics ranging from Mind and Body to Personal Finance, to Simplifying Your Life. I also find his blog very refreshing. Download his free eBook, The Priciples of Successful Manifesting, right now. [PDF]
• Mint.com found 30 Free eBooks for Personal Finance – This list offers free ebooks from accross the web on topics ranging from personal finance to credit to privacy and consumer advocacy. What can I say? Thanks Mint for compiling such a great list. It will take me a while to get through it.
• The Incidental Economist Offers a link to an eBook on Roth IRAs from Blogger J.D. Roth, host of Get Rich Slowly – Great resource for Roth IRA information.
• Jess & Graeme Stuart Showcase Some Great Wealthy Mind Free eBooks – The Stuarts mainly want you to join their sales team, but the ebooks they have compiled on their site are really nice and timeless for matters of wealth, laws of attraction, and business.

Enjoy, and let me know if you know of other great free reads to add to the list, besides all the wonderful websites and blogs in the financial blogosphere that is!

Random Posts

Silver and Gold are Pretty and Shiny, But is the Allure Driven by Fear in the Economy or a Sound Investment Decision?

I have been researching and reading and researching some more on the commodity market and I have no idea what to do. I admit that I am a novice at investing. However I do not deny that it will be an essential component in my journey to financial freedom. My experience investing consists of this: I got burned in 2000 when I invested in a four star mutual fund, thought that I didn’t need to watch it, then it tanked with the rest of the stock market. Beyond that, I tried day trading a few individual stocks and felt like I was uneducated and gambling rather than making sound investment choices. My main problem is, right now I just don’t know exactly where to begin on my limited funds. I have read contradictory things, and still have a lot of financial lingo to learn.

The Gist of the Typical Advice in Many Personal Finance Books and Blogs:

1. Save for an emergency/contingency fund (Various advise between 3 – 8 months expenses… That’s a lot of money sitting there not earning anything!)
2. Max out investing in your company’s 401K, or at least enough for the company match (Diversification choices of a mutual fund or another mutual fund)
3. Next make sure you have a Roth IRA (Roth’s are great for the young investor because when you take your money out way down the line, your earnings are not taxed)
4. Then beyond that, there is a lot of debate what to invest in next
5. Most financial gurus suggest your best investment is in your financial and occupational education (That’s what I’m focused on)

I am happy to have some liquid funds saved aside for contingency funds. I do invest for my company’s 401 K match, but I am not happy with the selection of funds available, it is too limited. Also, I hear over and over again that Mutual Funds take too much out in fees, and over 70% of mutual funds under perform against the S&P 500 Index Fund. I have monitored the trend of my 401k funds against the NASDAQ and the S&P 500 and it is true, they vastly under perform. So, needless to say, I am disillusioned with my 401K as a sound investment (not to mention) retirement vehicle.

So Where Do Commodities Fit Into the Mix?

First off, do not consider investing in silver, gold, platinum, oil, etc without doing a lot of research first. There are a lot of people out there trying to scam people in this market. This is why I haven’t invested in it yet, because I am very cautious and skeptical with my money. You work hard for your money, don’t let it go with out a lot of research.

Here are some pros and cons that I’ve gathered to the choice of investing in silver, gold and other commodities.

Pros:

• They can serve as a hedge against inflation (many predict inflation to increase, investors will flee to commodities and the US dollar value will continue to decrease)
• They can be a good investment choice for diversification if you have most of your investments in paper assets (Funds, Bonds, Stocks)
• If you have the physical commodities, you do not have to worry about paying taxes on selling them them (Interesting fact!)

Cons:

• You pay a high tax rate on them if you have owned them less than a year (28%) in ETFs and withdraw (this can be avoided through holding shares in a Roth IRA fund)
• If you have large quantities of the physical commodities, they can get expensive to secure and protect
• The 5 year market trend for most of these is rather volatile (ie, they still carry risk), though seemingly on an upward curve the past year, the 5 year trend is still quite volatile for many commodities
• Often the price of entry to gold, platinum, etc is rather high. (You can go buy a few silver coins, but that doesn’t seem like a true investment to me, just something to add to your coin collection)

For a thoughtful approach to reviewing the balance between commodities, the dollar and inflation , consider reading this post by Dream Manifesto.com on Is Our Monetary System Near a Singularity?

I’d love to get more valid resources, and I will update this post as I read more books and articles on the topic. Let me know your thoughts.

Random Posts

I came across five simple steps to be happy and appreciated the simplicity of them. Often times, greed and corruption overcome people’s desire to do good when they are on a quest toward financial freedom. If your moral and/or ethical compass is overlooked or compromised on your journey to earn more and save more, you risk the loss of balance in other areas of your life, such as happiness and fulfillment.

So, the following are my thoughts on how to combine your quest for financial fitness with your quest for happiness using these 5 simple steps.

Step 1. Free your heart from hatred.

There are often negative and petty emotions which cloud our day, contribute to our stress, and keep us from feeling happy. Letting go of some of the anger you feel towards your boss, your co-worker, your spouse, or your ‘enemies’ leads to you being able to be happier. Sometimes it seems impossible, but I have noticed that if I allow myself to achieve this, I am able to be more productive with my life. How to apply this to personal finance? From personal experience, I have felt a lot of anger/hatred at the state of the economy, political climate, and the greed of our society. It is an age-old tale of humanity that often the greedy take more than their share and the division of classes becomes more and more evident. I have to constantly remind myself that the anger that I feel does nothing to change my financial situation in life, and I am the only person that has the power to change.

Step 2. Free your mind from fear and worries.

Worry and fear are the often the top 2 things that stop most people from taking risks. Taking risk is the surest way to earning more passive income. You can control that risk by having a sound financial education and taking financial moves that are in your best interest. But you will always have risk. The fear of the unknown and the future is also a reason that people worry. These days, the financial guide Suze Orman says that you should save 8 months worth of expenses in your ‘emergency’ or what I prefer to call contingency fund and only pay minimums on your credit card if that will help you reach your contingency fund goal. The fear of the unknown, of security and monthly income to pay the bills is one reason that so many people stay with thier jobs instead of doing something on thier own that may be riskier. We as a society have been taught to be responsible and believe that safety and security are more important than almost anything else.

Though I believe its important to have a contingency fund,  I think its more important to play an active role in daily financial education, awareness of your budget and your spending, and taking action to improve your financial situation. Don’t spend all of your time focusing on paying off debt, because then you are spending your energy on debt rather than on increased wealth.

I cannot say that I am free of fear and worry. Far from. However, what I am able to do right now is take action, start learning, and push through my fear toward doing something in the right direction. As long as your fear and worry aren’t crippling you from action, you are still on the right path.  The less fear and worry that you let into your mind, the wealthier your mind will be, and you will be able to take more action to succeed in your financial endeavors.

Step 3.  Live simply.

This one is the key that so many Americans have missed for so long, but are  just now starting to value. Frugality and thriftiness are in these days as opposed to the recent days of excessive spending, huge homes and lots of vacations.  The more recurring debts that you add to your life, the more your bills seem to control you. I am making many conscious efforts to simplify our lifestyle, determine what is truly important to us, organize, reduce clutter, and not buy new things that we do not need. For me, having only what I need, having things in their place and being able to spend my time on the important things in life like family, education, etc, are all made more possible by reducing some of life’s distractions. Technology has the power to make things more complicated and provide us with over-stimulation, but when used carefully can also help you organize and simplify your life.

Step 4. Give more.

Given the fact that my family struggles to get by month to month right now, its difficult to donate a lot of money. However, sometimes I think monetary donations are not always as valuable as giving other things, your time, your wisdom, your teachings, etc. If you put thought into what you are giving, it can often have a larger impact than simply writing a check. Giving someone a smile and brightening their day is giving. Volunteering is an amazing form of giving. In the online personal finance world, I love all the cool sites like FiLife which allow people to answer financial questions that you might normally have to pay a financial advisor to get an answer to. That’s a pretty cool forum for giving. Some of the most successful people acknowledge that giving is a win-win because it helps someone and makes you feel better as well.

Step 5. Expect less.

This step could almost go hand in hand with living simply. Expectations are the stories that we tell ourselves and hold others or ourselves accountable for. Often they are not based on a true reality other than our own. For so long in my life I had an expectation of what my life SHOULD look like, and I made decisions according to the shoulds. I have now realized that there are many options, and the less that I require out of the specifics of my life, the more I am able to see the opportunities and possibilities that are right in front of me, and the closer I can get to being happy in the present.

Have you found happiness in your journey toward financial freedom? What contributed to it?

photo by nosha

Related Posts

• November 12, 2009 -- Who Am I Writing For?
• June 23, 2010 -- Stop Chasing After Happiness – Choose Happiness
• January 19, 2010 -- Review of GratitudeLog – “The Happiest Place on the Internet”
• January 3, 2010 -- Definition of Financial Freedom
• December 21, 2009 -- Be the Change You Want to See in the World

What Does it Mean to Be Financially Free?

I’ve been writing about my journey toward financial freedom through organizing my finances and education for months now, but realized that I didn’t ever define the specifics of what it was I want in saying that I want to be financially free. What does it mean?

Definition of Financial Freedom:

Passive Income – Expenses >= 0

Passive Income Minus Expenses is Greater Than or Equal to Zero

Now, let me explain what this means to me. Being financially free does not have to mean that you are a millionaire. All of us want to be millionaires in theory, but that’s not always easy to come by. So, following the advice of many great financial thinkers like Eker and Kiyosaki, I would rather set my sights on something tangible to begin with, so that I have a goal that is attainable. My goal is to make enough in monthly passive income to equal or outweigh my monthly expenses. This is something that many retiree’s are used to. Or, at least they were before some of the crazy stock market crashes of late that hurt their 401 K and retirement plans. However, I don’t think this has to be a goal of only those that are retired. I don’t plan to retire when I reach this goal. Instead, I plan to be able to start using my most precious resource, time, in more efficient and better ways because I’m not slaving away the days trying to earn an hourly income to ‘survive’ or ‘pay the bills’. My goal, essentially, is not to be a slave to my bills.  I am also working to decrease the dollar amount of our monthly expenses. I want to make sure that we are living within our means so that my goal of a passive income to meet our expenses becomes even more attainable.

I believe that there are many ways of reaching this goal. First, as I’ve mentioned, I’ve started getting organized and playing an active role to take control over my family’s finances. Secondly, I’m working to reduce whatever is in our control of expenses. Next, we need to increase our income sources, most importantly through passive income. Passive income is a phrase that gets tossed around a lot in the financial world, as its the “gold mine” towards financial freedom. However, it is not easy to come by in large quantities and involves a lot of financial knowledge, hard work, and conscious decisions towards achieving it. Generating large amounts of passive income can difficult, because of risk. Almost all investments that generate a passive income also come with risks which can sometimes eat into or diminish your gains. I do believe there are many creative ways of making passive income and I have started to research them as part of my journey. Many network marketers and others believe that the internet presents the best opportunity for generating automatic, recurring income (residual or passive). I believe the internet can do this as well, however as I’ve mentioned in a previous post, this is not always done in a way that I believe to be trust worthy sales practices.

Definition of Passive Income: Income derived from investments in which the investor does not have to be actively involved

(Examples: Income from a vending machines, parking lots, a certificate of deposit among countless others)

Definition of Residual Income: Income derived from recurring sales, in which the investor is not involved actively beyond the initial sale.

(Examples of residual income businesses: web hosting, Comcast cable, basically anything that charges a monthly recurring fee for use of their services)

Passive income will be an important part of my journey. My journey has just begun though, as I am still actively learning and have not yet picked which path to focus on.

What are your thoughts on Financial freedom and passive income?

Related Posts

• December 26, 2009 -- Online MLM Recurring Passive Income Stream Techniques: Trust Busted
• January 6, 2010 -- 5 Steps to Happiness with a Personal Finance Twist
• December 21, 2009 -- Be the Change You Want to See in the World
• November 12, 2009 -- Who Am I Writing For?
• November 11, 2009 -- Financial Ignorance and Conspiracy of the Rich