The road to wealth is paved with goals

Ramit Sethi, author of I Will Teach You to Be Rich, recently shared his thoughts on a New York Times profile of Russ Whitney, a real estate mogul who charges thousands of dollars to learn the secrets of his success. (Whitney helped inspire Casey Serin's foreclosure odyssey. John T. Reed has extensive information on Whitney, not all of it negative.)

Ramit's post prompted me to read the original New York Times article. I began the piece planning to offer my own criticisms of Whitney and his get rich quick schemes. But two-thirds through the article, I realized there were actually two stories here: one about Whitney's brash hucksterism, and another about the people — like Casey Serin — who are so desperate to get rich now that they lose touch with reality.

Midway through the article we meet Tracie Taylor, who is leading Millionaire U, a three-day real estate training course for "advanced" students. Most of the students don't actually know much about real estate, so Taylor is giving them the basics. She's also touting goals, positive thinking, and visualization (all excellent tools when used correctly).

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How to organize your finances in four easy steps

You've heard that to take control of you finances you sould track every penny you spend. You'd like to try this, but it sounds like such a pain. There's so much paperwork involved. You lose receipts. You forget when bills are due. It's hard enough making sure the bare necessities are tackled — who has time to track every penny?

I've been there. My financial life used to be a mess. Whenever a bill was due, I had to play a game of hide-and-seek to find it. I often overdrew my checking account because I'd lost track of how much money I had. Eventually I learned that it's easier to track your finances if you keep them organized.

To stay on top of things, you need to have a system. You also need to reduce the amount of information coming in; you need to keep all of your information in one place; and you need to process your finances regularly. Continue reading...

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How to retire rich Dave Ramsey style

how to retire rich

Eager to know how to retire rich? It might be surprising that Dave Ramsey's site has one of the best money hacks I've seen recently. Drive Free, Retire Rich explores the impact of carrying a car payment, and offers ideas on how your money can be used more wisely. Though the sentiment is familiar, I find Ramsey's approach novel.

You want a brand-new sports car that would normally cost you $475 a month. The car you're driving now is worth around $1,500. If you take that $475 and pay yourself instead of paying the dealer, you'll have $4,750 in just ten months. Add that to the $1,500 you can get for your current car, and you can pay cash for a used $6,250 car. That's a major upgrade in car in just 10 months — without owing the bank a dime! Continue reading...

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Manage your finances like a professional gambler

Small Things Add Up

I was eighteen, and a freshman in college. For the past few years I'd been making a few hundred dollars a month selling Palm Pilots on eBay. It was a lot of money for a teenager with no real expenses, but of course I spent it all. My knowledge of personal finance was fuzzy at best. Naturally I squandered any money I made.

Then, through a strange series of events, I became a professional gambler. It happened fast, and soon my "studies" were being neglected for long nights of blackjack, roulette, and video poker. Eventually I dropped out of school to make serious money, and thus began my real financial education.

There are a lot of analogs between gambling and real life finance, which should come as no surprise since gambling is simply the bizarre intersection of fun and finance. I learned more about personal finance, discipline, and math during my six years as a professional gambler than any other period of my life.

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How To Protect Yourself From Lifestyle Inflation

One thing I worry about is lifestyle inflation. No matter how little or how much someone earns, their spending tends to match their income. When you're living the student life, your friends are also broke, and it's easy to eat frozen pizza for dinner and manage without a car. That was probably one of the funnest periods in your life! But when you have more money, you start looking to upgrade: a nicer car, a bigger house, brand name clothes, cooler gadgets. Call it peer pressure, entitlement, or simply money burning a hole in your pocket.

As we progress along our career paths, here are a couple of things that my wife and I are trying to do in order to try and inflation-proof our spending:

Put saving first

You've heard it before, but that's because it's works. Pay yourself first. If you get a raise, immediately increase the percentage going into your 401k, IRA, or savings account. The less that's ending up in your checking account, the less you'll have the urge to spend.

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How to Create a Will: A Guide to Get Started with Making a Will

It's Halloween — time for a scary, morbid subject.

Young adults don't think about wills. The typical person graduates from college, gets a job, marries his sweetheart, has children, and never considers a will until he turns fifty. But not everyone lives to be fifty. You can't always see death coming. A will is for anyone with money and possessions that need to be distributed according to some plan.

A Lifehacker reader recently asked about drafting a will: Continue reading...

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How to manage a windfall successfully

This entry is part of JLP's October project — a month-long, cross-blog review of the book The Bogleheads' Guide to Investing. Some of what follows is taken directly from the book.

You have won $50,000! So, what do you do now?

Every day I give advice on following the slow, sure path to wealth. But what happens if you do manage to get rich quickly? What happens if you win the lottery, or hit the jackpot in Vegas, or inherit a million bucks from your Great Aunt Tilley? Continue reading...

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Make a wish list of financial goals

If one moves confidently in the direction of his dreams, and endeavours to live the life which he has imagined, he will meet with a success unexpected in common hours. — Henry David Thoreau

What would you do if money were not a concern? Would you quit your job? Would you travel? Would you live in another state? Another country? Would you write? Would you garden? Would you devote your life to charity? Would you race cars? Would you enter politics?

Many people make poor financial decisions because they don't have long-term personal goals. If you don't understand that buying a new cell phone or playing a game of poker takes money from a larger goal — a new home, a new car, a vacation to Europe — then there's no incentive not to use the money for whatever seems fun at the moment.

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Once-a-Month Cooking: Cooking for the Rushed

Get Rich Slowly-reader Kevin comments:

Eating well on a budget requires some thought. But planning out a whole month of meals, and shopping for that month (you only get two paychecks a month) is the real challenge. Is there a website with a month long meal plan of healthy meals, in a spreadsheet shopping list, that can be used at most grocery stores? I cannot find any.

While you can try the 14-day trial of $5 Meal Plan, my brother suggests books might be more useful than websites for long-term meal planning. His family has been using a couple of volumes that do just what Kevin wants:<

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The Wealthy Barber

When I picked up The Wealthy Barber from the public library, I figured it must be good: the book was well-worn, the cover bent, pages dog-eared, passages highlighted, whole sections annotated in pencil and pen. Only the best personal finance books receive this sort of treatment. I'm pleased to report that The Wealthy Barber is a good read — author David Chilton offers an excellent introduction to personal finance.

The Wealthy Barber's gimmick is that instead of presenting information in a dry subject-by-subject manner, Chilton has written the story of Roy, a small-town barber who is also a millionaire. (Roy got rich slowly.) The reader learns about IRAs and whole life insurance and compound interest as Roy dispenses advice to a trio of customers, each of whom has different financial circumstances. (This allows Chilton to highlight different approaches to certain problems.)

The Wealthy Barber's financial planning guidelines include: Continue reading...

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