Get Financially Fit!
Archive for May, 2006
So You Want to Become a Millionaire
May 18th
by Eric Heckman
In August 1999, the ABC network asked America, “Who Wants to Be a Millionaire?” and received a loud “we do” in response. Almost every American will tell you that they want to become a millionaire, but they can’t tell you how to become one.
Millionaires have mastered the art of investing their money wisely and spending it in a frugal manner. Most millionaires don’t drive large imported cars or wear the latest fashions by top designers. They know to invest their money where it will grow and earn interest.
Millionaires, in most cases, live simple lifestyles, spend wisely and invest well. Most Americans give their money away on such a regular basis, that they’re stuck living life paycheck to paycheck.
Many Americans may not even want to become a millionaire; they may just want to find financial independence. Living a simple life will help Americans do just that. Americans just need to stop the spending.
Here are a few tips that will help you embrace the “millionaire lifestyle.”
1. Ask yourself, “Do I really need this?” How often do we find ourselves purchasing an item and feeling sick about it at the same time, because we know we really don’t have the money for it? Also, cut up your credit cards. If you can’t afford to pay for it right now, you probably can’t afford to pay for it later with interest.
2. Make saving money an automatic thing. Make sure you automatically take money from each paycheck and put it into some type of savings.
3. Don’t keep up with the Joneses. According to Stanley and Danko, most millionaires believe that financial independence is far more important than showing a high social status. Think about it, when a friend or neighbor gets a new expensive car, the first thing you wonder is how much their monthly payment is.
4. Be sure to spend your time, energy and money in efficient ways that will help you make money. Maybe instead of planning a quick trip to Vegas, plan a trip to visit a financial planner or spend time researching what kind of investment options best fit you and your family.
5. Parents, let your kids work. Most millionaires don’t supplement their adult children’s income. Teaching your children financial responsibility will not only help them become financially independent, it will help you to become financially independent as well.
6. Finally, it may not sound nice, but be a tight wad. Remember, you are your favorite charity. Keep a close eye on your money and where it’s going.
Most Americans want to feel financial independence. They want to be free from credit card debt. Many of them believe that this is a dream, but in reality it’s not. Americans just have to be willing to live a simple life and not a frivolous one.
About Eric Heckman
Eric Heckman is president of Heckman Financial & Ins. You can contact him at (408) 297-9800.
Paypal Offers Free Equifax Credit Watch
May 14th
Thanks to Jonathan @ MyMoneyBlog, I found out about this free service. It appears Equifax is providing Paypal users with two of their eleven credit watch alert services. Assuming you have a Paypal account, you’ll receive the following from Equifax:
- Alerts for any credit inquiries (authorized or not)
- Balance changes over a dollar or percentage amount you specify
Why would anyone want these alerts? First, if you sign up for the alerts, you have one more safeguard in place to help protect yourself from identity theft. Second, it’s good to keep tabs on credit inquiries since frequent inquiries can lower your credit score.
While this service is marginally useful, you should always keep on top of your credit report. If you haven’t done so already, be sure to take advantage of your free credit review at AnnualCreditReport.com–a convenient service sponsored by Equifax, Experian, and Transunion.
5 Ways to Start a Business Part-Time
May 13th
by Brion Lau
I’ve met a number of people who think you need to quit your job to start a business venture. For most, this can be a big risk especially when you’re starting out and have not established a solid customer base and steady cash flow. Even worse, your friends and family may caution you against taking such a risk, citing familiar statistics such as nine out of every ten businesses fail in their first year alone.
Well, the good news is that you don’t necessarily need to make the switch to full-time entrepreneur immediately. Last week I found an interesting article from “Business 2.0″ talking about different ways to think about starting a business while still maintaining the security of your job during the transition. The article is called, “5 Ways to Start a Company (Without Quitting Your Day Job)”.
If you’re thinking about starting your own business venture, you may be interested in reviewing how others made the switch. For some, this can be a very good strategy to hedge against risk and help ease your transition from employee to entrepreneur.
Note: If you like this article, you may also want to check out similar articles at Startup Nation.
Senate Passes New Tax Bill
May 11th
Update: The Senate has just passed the new $70 billion dollar [tag]tax bill[/tag] I discussed the other day. For more details, check out the Yahoo! news article for more info.
New Tax Bill Agreement
May 10th
by Brion Lau
Today, CNN Money released an article, “Tax Bill Agreement Reached”.
Key highlights in the measure include:
- Extensions to the reduction in [tag]capital gains[/tag] and [tag]dividend tax[/tag]
- Provisions to relieve millions of middle class Americans from the Alternative Minimum Tax ([tag]AMT[/tag])
- Conversion clause for Traditional IRA to [tag]Roth IRA[/tag]
Personally, I think this bill is good news for those of us trying to build and accumulate [tag]wealth[/tag]. First, if you have stock and/or real estate investments, the reduced tax is a benefit you already have. This bill will extend the benefit time frame. Second, AMT relief is sorely needed because individuals may have to pay more taxes when hit with the AMT. Finally, Roth IRAs are great because the earnings are tax free–not tax deferred as is the case with Traditional IRAs. Roth IRAs are a great [tag]retirement[/tag] investment vehicle and should be a part of your wealth plan.
I encourage all of you to become familiar with the proposals and how it will affect your individual situation. Also, don’t forget to take action so you can benefit from the new bill when it is passed.
Here’s to your wealth and success!