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Income Up! Expenses Down!

Financial Education Course #3

Income Up Expenses Down

One fundamental concept to financial success is simple: increase income and decrease expenses. Although this concept is very simple, most people do not apply it. Throughout your life, your focus should be on increasing your personal income and decreasing your personal expenses.

Decreasing Expenses

Most people have misplaced goals when it comes to finances. One misplaced goal is to get the nicest house possible. Another misplaced goal may be to finally save enough money to buy a dream car. The problem is this: most people focus on what they want instead of the best way to get it. This focus – on achieving your financial goal without focusing on the method for achieving it – is doomed to failure.

Increasing Income

Increasing income is kind of a “no-brainer.” We all know the benefits of increased income. However, have you ever really studied diligently how you could run a business or increase your knowledge towards the goal of increasing income? Knowledge is power. Acquiring assets and financial knowledge almost always increases your income. For instance, when was the last time you went to a seminar about marketing or website building? How much time do you spend learning about how to acquire and manage assets? If you constantly “build” yourself up with personal abilities and knowledge, your income will increase. However, an important warning is necessary here. If you do not first apply the principle of decreasing expenses, all of your increased income will be worth absolutely nothing. The tendency of most people is to immediately find ways to spend increased income. A nicer house, better cars, indulging in hobbies and other personal habits – these things have a natural way of immediately exhausting additional income. First make a commitment to decreasing expenses. Make them as low as possible! Then, make a commitment to only use your increased income for new assets and other investments. If you do this, a better overall financial life will naturally follow.

Conclusion

Math Never Lies. We have all found ourselves in the dynamic of wanting nicer things in life. Houses, cars, vacations – we want it all and we want it now. Sometimes the “right- now” desire to live life overcomes our math skills. In order to truly have an easier financial life, we need to always be focusing on increasing our income and decreasing our expenses. The math of this truth never lies.

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Get Dynamic! Get Serious!  – Course #4
Never Take the “Easy” Way – Course #5
Do the Opposite of Everyone Else – Course #6
Action Plan – It’s Game Time!  – Course #7

How to Change your Financial Worldview

Financial Education Course #2

Indianapolis Bankruptcy Attorney John Bymaster explains the importance of changing your financial worldview.

Changing your financial worldview is a much larger task than what you may first anticipate. It requires a tremendous amount of dedication. It requires you to make drastic changes to how you approach life. It usually also requires you to do the exact opposite of what most other people are doing around you. You may feel like a loner, the only person in the crowd with vastly different financial goals.

The best way to explain how to change your financial worldview is to give some examples that will start moving the way you think in the right direction. Remember, changing your financial worldview is something that takes commitment. Massive changes to your life will be required. Below we have explained five examples of how your financial worldview will may need to change.

1. Be Productive and Make “Work” Your New Best Friend

There are no limits to those who choose a good attitude about work and business. The popular personal finance book, “The Richest Man in Babylon” by George Samuel Clason, gives an example of someone who worked from the bottom to the top by making work into a “best friend” instead of a mortal enemy.

If we fear work or make it our enemy, we will never be able to open a business or be successful in our employment. If we drop all our fears and bad attitudes relating to finances, we can start truly be productive and excited about financial things instead of dreading them.

2. Make it your Goal to Learn About Money the Same Amount of Time That You Work for It

How many people do you know that will punch in and out faithfully everyday for work, spending at least 40 hours towards working each week? Out of those people, how many people do you know who spend even 15-30 minutes each week learning about money or how it works? The answer is not too many – almost none at all.

Why is this? Learning about business, financial skills, and how money works – these are all very easy and enjoyable ways of making your financial life much easier. If you spent as much time learning about business, new skills or abilities, and money as you worked each week, your net worth and financial understanding would drastically increase in a short time.

3. The Working Hard and Working Smart Equation

After you have decided to gain financial knowledge, you can start putting that financial knowledge into effect. Two parts exist in the financial equation. In this equation, your hard work is essentially multiplied by the “smartness” of your work. These two factors multiplied together are what determines how financially successful you will be.

How many people have you seen working hard but getting nowhere financially in life? How many easy-going, intelligent people have you seen who have some financial knowledge but are unwilling to work to be successful? These two factors, hard work and smart work, must always be used in conjunction with each other in order to achieve financial success.

4. Decrease Personal Expenses and Increase Income

Many people are thrilled to purchase a beautiful house on mortgage and new financed cars whenever they find themselves able to make such payments. Unfortunately, such thinking usually leads to either financial mediocrity or even financial failure. Instead of such goals, your primary financial goal should be to decrease your personal expenses to as low as possible.

With the goal of decreasing your personal expenses, you can still many times achieve the purchase of such items such as nice accommodations and vehicles. However, the route to these desired items is vastly different. Many financially successful people pay very little (or virtually nothing) for the lifestyles they enjoy. Their corporations or rental income frequently offsets all of their personal expenses.

With your expenses as low as possible, you can use anywhere from 50% to even 80-90% of your income for investing in new sources of income. The process of wealth accumulation never ends in such an equation. However, if you start out with high personal expenses, you will never be able to break free of the monthly bill payment cycle that dominates the entirety of most people’s income.

5. Do Not Care About Appearances. Do not “Keep up with the Jones’s”

Many people purchase automobiles and houses in order to help their self-esteem. They know that they work hard and feel like they “deserve” some nice things in life. However, this way of thinking is very detrimental to gaining financial knowledge and breaking out of the monthly-payment cycle.

The only thing that ultimately matters is the reality to your finances. If you have hundreds of thousands saved but drive a modest car, does it matter what other people think? From now on, judge how much your net worth is gaining each year in order to determine your financial or other “worth” you desire. Remember, financed items are really only “on rent” anyway. You do not own any part of them unless you are taking drastic steps to quickly pay off the debt. Do not let financed items be your self-esteem booster. Make responsible financial choices that will lead to genuine accumulation of wealth.

Assignment: Read or Listen to the Book, “The Richest Man in Babylon” by George Samuel Clason

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To move on to Financial Education Course #3 click here!

Stay tuned for Indianapolis Attorney John Bymaster’s next Financial Education Courses!

Income UP – Expenses DOWN! – Course #3
Get Dynamic! Get Serious!  – Course #4
Never Take the “Easy” Way – Course #5
Do the Opposite of Everyone Else – Course #6
Action Plan – It’s Game Time!  – Course #7

How to Identify and Avoid Loan Forgiveness Scams

Loan Forgiveness Scam

Large loans make the borrower feel trapped.  With this trapped feeling brings desperation to find any route of escape.  Loan forgiveness scams prey on this desperate, “trapped” feeling.  This is especially true for student loans.   Student loans create the perfect dynamic for loan forgiveness scams.   A loan forgiveness scam claims that you will be able to have your loans forgiven if you offer them payments or personal information.    To protect yourself, you must be able to quickly identify and avoid loan forgiveness scams.

How to Identify a Loan Forgiveness Scam: Know How Scammers Operate

The signs of a loan forgiveness scammer easily identifiable.  You just need to know the way they operate.  Below are a few common signs that you are dealing with a loan forgiveness scam.

Scammers Want Personal Information

Loan forgiveness scams focus on collecting personal information.  The person on the other side of the phone may sound convincing.  They will ask for your personal information such as your social security number, date of birth, or even bank account information.

You should never give anybody this information over the phone if at all possible.  This especially applies when someone you cannot identify initiates the contact with you over the phone.   If they are offering to enter you into a “loan forgiveness” program after you give them your personal information, then you are likely falling victim to a loan forgiveness scam.

Scammers Need Payments

Loan forgiveness scams will attempt to set up either a single payment or a series of future payments over the phone.  The scammer will claim that the payment(s) will qualify you for debt forgiveness of the entire loan.  Any attempt from an outside caller to collect payments over the phone should immediately serve as a warning sign.  Never give payments over the phone unless you initiate the call. The tell-tale sign of a scam artist is a request for payments over the phone.

Scammers Will “Promise the World”

If it sounds “too good to be true,” then you are probably dealing with a scammer.   Loan forgiveness scams sound convincing.   Many times there is even a fake application process that allows you to build your comfort level with the caller.  Make sure to analyze the entire situation.  By the end, they will promise an unbelievable benefit by your participation.  If what they promise is disproportionate to regular reality in some way, you are probably being scammed.

Scammers use Former President Obama’s and other Politicians’ Names

Scammers will frequently use Obama or other politicians’ names in order to make their claim of loan forgiveness more believable.  It is all part of the “act.”  The scammers will use well known names, cite legal programs, or use official-sounding language.  It is all part of the scam to make it sound more appealing and believable.   Do not be fooled. Learn how to identify scammers.   Get them off your phone or email feed as quickly as possible.

 

Are There Any Rules to Follow at the Bankruptcy Meeting?

The bankruptcy meeting, sometimes called “the meeting of creditors” is an administrative hearing that requires the respect and timeliness of all who participate.   This “Section 341” bankruptcy meeting has a few rules that must be followed in order to have a successful meeting.  Let’s go over the few basic rules of the bankruptcy meeting of creditors.

Rule One: Be on Time and be Professional

Although the bankruptcy meeting is not as formal as some court hearings, it is critical to be on time and to act professional during the meeting.  Your bankruptcy meeting will be scheduled some 30 to 40 days in advance.  If you are not on time, then the court will know that it is your fault. The court and your attorney have given you several documents as to the nature and scheduled timing of the meeting.  If you are too late, the court will reset the meeting once.  A second late appearance could result in the case being dismissed.

During the bankruptcy meeting you must act and dress professionally.  You do not need to wear your best “high-dress” attire, but you need to come in a reasonable and respectful form of dress that is appropriate for a legal hearing. During the meeting, you should also remove any hats if you are a man.  Also, no one should be chewing gum or doing any other form of distracting activity.

Rule Number Two: Bring all Required Documents

The bankruptcy meeting also requires documents that must be brought to the meeting.  If these documents are not brought to the meeting, then you may have to come back because your meeting will be canceled or postponed.  First, you must bring your Drivers License and Social Security card: these two documents are absolutely necessary for the bankruptcy meeting to occur.  Second, you must bring your two most recent paycheck stubs.  Third, you must bring 90 days bank statements for each bank account.  This time period to bring must cover the 90 days directly before the bankruptcy case was filed.

In some cases you may already have brought these documents to your attorney at his or her office. However, the local rules require that you also bring these documents to the bankruptcy meeting. The above documents presented do not include every potential document that could be requested for your bankruptcy meeting. The above documents are only the basic documents that are required for every Chapter 7 case.

Rule Number Three: Tell the Truth

The most important rule to follow during the bankruptcy meeting is to tell the truth. The bankruptcy meeting is an examination where you are put under oath. If you do not tell the truth or be transparent during the examination, you will be breaking the law.  Not telling the truth can easily come back to haunt you later.  Resolve from the beginning to tell the truth every time both to your bankruptcy attorney and the bankruptcy trustee. If you always tell the truth, then your bankruptcy attorney can better guide you as to what your options may be an any particular situation.

Get Financially Savvy Before You “Take the Hit”

Get financially savvy before you take the big hit

Everything builds up in our financial lives. If we are moving in the wrong direction financially, eventually we are going to “take the hit.”  Years of bad financial decisions and no improvement on financial understanding will add up.  Eventually, it will lead to one massive, financial, knock-out “hit.”  It may come in bankruptcy, loss of relationships, a mental breakdown, or many other negative ways.  It all simply becomes unbearable.  

Savvy means workable knowledge.  Getting financially “savvy” can help you to avoid this future “hit.” It will also give you the hope needed to continue after a financial “knock-out” has already come into your life. 

Financial Savvy Requires Massive Life Changes 

You can read all the financial books you want. You can go to a multitude of financial seminars. However, knowledge is simply not enough.  You must be willing to make a massive life changes to become financially savvy.

If you are currently working so much that you have no time to relax or study, you are going to need a massive life change. It is better to shut your entire financial life down than to continue in financial folly.  You may need to surrender your house and everything you own.  You may need to file for bankruptcy.  You will still be better off in the end if you make the commitment to change financially and never go back to your old financial ways.

No Change No Gain: Get Out of “Payment” Bondage

Many people are unwilling to change.  They put financial education and financial savvy on the lowest part of their priority list. However, the same people work hard day in and day out to barely live paycheck to paycheck.  They somehow believe that they must hang on to the possessions they are barely buying on installment  through mortgage or car loans.   If they lose these items, it would be he highest anguish and a clear sign of personal failure.  This mindset is damaging and counterproductive. 

This “monthly payment” perception of financial reality is false.  You already do not own anything.  Only financial bondage follows.    The person with a 100 year old $75,000 house with two cars- all paid in full- this person is successful financially.   The person with a $400,000 house and two new cars -all with heavy loans- this person is in bondage.   If the paychecks stop, this second person instantly loses everything. 

The Payment Mentality Is Doomed to Failure: Drop it for Financial Savvy

To become financially savvy, you need to adopt the opposite of a payment mentality. Your mentality needs to be based on acquisition: the acquisition of financial knowledge and wealth.   Every month and every year should be measured by this question: has my wealth and my financial knowledge increased?  Every year a financially savvy person has a higher net worth.  Also, each year a financially savvy person has acquired more financial knowledge.  

Dropping the “payment mentality” is the first step towards becoming financially savvy. First, it frees up time and takes away all illusions.  What you own is what you own.  If you want to acquire something else, you seek new financial knowledge to do it.

Secondly, dropping the payment mentality will help you focus on acquiring true wealth. If your total assets are not slowly increasing every year, you will know something is wrong.  In such an event, you will make the appropriate changes. Essentially, you will no longer be satisfied to “spin your wheels” financially.   Being financially savvy will be a number one goal and sometimes even a pretty enjoyable hobby!  No longer will financial knowledge be dreaded.  Financial savvy will become a natural and desirable part of your life.