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Pay Yourself First

Pay Yourself First

Your paycheck makes everyone rich… except you.

Allow me to explain.

Your labor actually is helping make your boss rich. He gives you a portion of earnings in exchange for your time and effort. No harm, no foul. But what becomes of that paycheck?

It goes right back to people just like your boss.

The owner of your favorite coffee shop gets a piece.

Whoever dreamed up your favorite streaming service gets a piece.

Your landlord gets a huge piece.

And your credit card provider? They gobble up whatever’s left.

Everyone gets rich while you’re left scrambling to make ends meet. You get another paycheck and the cycle repeats.

So how do you escape this endless cycle and begin building wealth?

Before you do anything else, you’ve got to pay yourself first.

Start treating your personal savings as the most important bill to pay. Here’s the simplest way:

  • Decide how much you want to pay yourself each month and adjust your budget accordingly
  • Set-up a recurring automatic payment from your checking account to your savings account. Schedule it right after your payday.
  • Pay rent, utility bills, and buy groceries after your automatic transaction goes through
  • Use whatever is left for your lifestyle

Remember, the most important person you owe money to is you. Prioritize your own savings and use your income to build wealth for yourself.


One Simple Rule For House Hunters

One Simple Rule For House Hunters

The real estate market has witnessed a wild year.

All the ups and downs and uncertainty about the future have made it hard to tell if now is the time to buy or if it’s better to wait things out!

Fortunately, there’s a simple principle that can bring some clarity to your house hunting process. The 30/30/3 Rule can help you determine the right amount of house for you, whatever your stage of life! It’s composed of three mini-rules that we’ll explore one at time.

Don’t spend more than 30% of your gross income on mortgage payments.

In other words, don’t sign away too big of a portion of your income in mortgage payments. This rule makes sure you have a healthy chunk of your cash flow available for other essential spending and building wealth. There’s definitely wiggle room to pay more as income increases, but 30% of your gross income is still a good target!

Have 30% of the home’s value saved in cash before you buy.

Banking up a solid stash of cash before you purchase can protect you from several threats. Using about 20% of that cash as a down payment can get you lower mortgage rates and dodge private mortgage insurance.² Also, keeping a 10% buffer provides you with a useful line of defense against unexpected repairs and appliance replacements. Just remember to keep your housing fund away from risk. Think of it as an emergency fund for your house rather than a savings vehicle!

Avoid houses over 3X your gross annual income.

This one is simple—Don’t buy a house you can’t afford! Do you make $50,000 per year? Shoot for a maximum $150,000 price tag. This is a simple way of narrowing your house hunting and managing your overall debt.

Why The Rule Works.

Let’s say you’re earning an income of $60,000 per year, or $5,000 per month. You read the headlines about the housing market and decide to snatch up a home. An opportunity presents itself—there’s a gorgeous home in a good neighborhood that’s selling for $180,000 (3X your annual income, and almost impossible to find) with a 7.3% interest rate (the national average). With monthly payments of $1,365 per month, you’ll only be handing over 27% of your income to the bank. Over $3,500 dollars of cash flow would be at your disposal!

What if you had the same income level but were looking at a house worth $360,000 (6X your annual income)? You’ll be forking over nearly half your income for your house. That’s a huge amount of firepower that could be used to build wealth or start a business!

Don’t forget to review your home buying plan with a financial professional who can help put this helpful principle into practice!


Life Insurance From Work May Not Be Enough

Life Insurance From Work May Not Be Enough

In some industries, the competition for good employees is as big a battle as the competition for customers.

As part of a benefits package to attract and keep talented people, many employers offer life insurance coverage. If it’s free – as the life policy often is – there’s really no reason not to take the benefit. Free is (usually) good. But free can be costly if it prevents you from seeing the big picture.

Here are a few important reasons why a life insurance policy offered through your employer shouldn’t be the only safety net you have for your family.

1. The Coverage Amount Probably Isn’t Enough.

Life insurance can serve many purposes, but two of the main reasons people buy life insurance are to pay for final expenses and to provide income replacement.

Let’s say you make around $50,000 per year. Maybe it’s less, maybe it’s more, but we tend to spend according to our income (or higher) so higher incomes usually mean higher mortgages, higher car payments, etc. It’s all relative.

In many cases, group life insurance policies offered through employers are limited to 1 or 2 years of salary (usually rounded to the nearest $1,000), as a death benefit. (The term “death benefit” is just another name for the coverage amount.)

In this example, a group life policy through an employer may only pay a $50,000 death benefit, of which $10,000 to $15,000 could go toward burial expenses. That leaves $35,000 to $40,000 to meet the needs of your spouse and family – who will probably still have a mortgage, car payment, loans, and everyday living expenses. But they’ll have one less income to cover these. If your family is relying solely on the death benefit from an employer policy, there may not be enough left over to support your loved ones.

2. A Group Life Policy Has Limited Usefulness.

The policy offered through an employer is usually a term life insurance policy for a relatively low amount. One thing to keep in mind is that the group term policy doesn’t build cash value like other types of life policies can. This makes it an ineffective way to transfer wealth to heirs because of its limited value.

Again, and to be fair, if the group policy is free, the price is right. The good news is that you can buy additional policies to help ensure your family isn’t put into an impossible situation at an already difficult time.

3. You Don’t Own The Life insurance Policy.

Because your employer owns the policy, you have no say in the type of policy or the coverage amount. In some cases, you might be able to buy supplemental insurance through the group plan, but there might be limitations on choices.

Consider building a coverage strategy with policies you own that can be tailored to your specific needs. Keep the group policy as “supplemental” coverage.

4. If You Change Jobs, You Lose Your Coverage.

This is even worse than it sounds. The obvious problem is that if you leave your job, are fired, or are laid off, the employer-provided life insurance coverage will be gone. Your new employer may or may not offer a group life policy as a benefit.

The other issue is less obvious.

Life insurance gets more expensive as we get older and, as perfectly imperfect humans, we tend to develop health conditions as we age that can lead to more expensive policies or even make us uninsurable. If you’re lulled into a false sense of security by an employer group policy, you might not buy proper coverage when you’re younger, when coverage might be less expensive and easier to get.

As with most things, it’s best to look at the big picture with life insurance.

A group life policy offered through an employer isn’t a bad thing – and at no cost to the employee, the price is certainly attractive. But it probably isn’t enough coverage for most families. Think of a group policy as extra coverage. Then we can work together to design a more comprehensive life insurance strategy for your family that will help meet their needs and yours.


Are You Prepared For a Recession?

Are You Prepared For a Recession?

The purpose of this article isn’t to speculate whether or not a recession is on the horizon. It’s to make sure you’re ready if it is.

Some downturns can be seen from a mile away. Others, like the Great Recession and the Coronavirus lockdowns, are black swan events—they catch even the experts off guard.

But they don’t have to find YOU unprepared.

Here’s a quick checklist to help you assess your recession readiness.

Your emergency fund is fully stocked.

Without well-stocked emergency savings, losing your job could spell disaster for your finances—you’d be forced to rely on credit to cover even basic expenses. When you re-enter the workforce, a huge chunk of your income would go straight towards paying down debt instead of building wealth.

That’s why it’s critical to save three to six months of income asap. It may be the cushion you need to soften the blow of unemployment, should it come your way.

You’ve diversified your income.

Recessions don’t discriminate. They affect everyone from the poorest to the wealthiest. But one group weathers downturns better than most—those with multiple streams of income.

If you have more than one source of income, you’re less likely to feel the full brunt of a recession. If one stream dries up, ideally you would have others to fall back on.

What does that look like? For many, it means a side hustle. Some create products like books, online guides, etc., or they might do something like acquire rental properties. These types of businesses typically only require a one-time effort to produce or purchase but will yield recurring income.

If you’re ambitious, you could create a business to generate income that far exceeds your personal labor. It’s not for the faint of heart. But with the right strategy and mentorship, it could lend your finances an extra layer of protection.

You’ve diversified your savings.

Just as you diversify your income streams, you should also diversify your savings. That way, if one account loses value, you have others to fall back on.

What could that look like? That depends on your situation. It’s why talking to a licensed and qualified financial professional is a must—they can help tailor your strategy to meet your specific goals.

You’re positioned to make bold moves.

The wealthy have long known that recessions can be opportunities. With the right strategy, you may actually come out ahead financially.

But in order to take advantage of those opportunities, you need to have cash on hand. That way, when others are forced to sell at a discount, you can scoop up assets at a fraction of their true value.

So if you want to be in a position to take advantage of a downturn, make sure you have ample cash on hand. That way, when an opportunity comes knocking, you’ll be ready to answer.

No one can predict the future. But by following these tips, you can prepare your finances for whatever the economy throws your way.


The Hidden Truth About Debt Consolidation

The Hidden Truth About Debt Consolidation

You’ve probably heard of debt consolidation. It’s a way to help lower your interest rates and monthly payments by packaging all of your debts into one neat little bundle.

And it can be helpful—if properly structured, consolidation can noticeably lower your interest rate.

But if you’re serious about getting out of debt, it shouldn’t be the only tool in your arsenal. Why? Because debt consolidation doesn’t do anything to attack your balance.

Let’s say you have three debts…

■ $3,000 personal loan at 7% interest

■ $15,000 car loan at 5% interest

■ $8,000 credit card balance at 15% interest

That comes out to a total monthly debt payment of $2,160. That’s a lot of money!

But what if you consolidate those debts into a single $26,000 loan with a 7% interest rate? Your new monthly payment would be $1,820. Not bad!

Now consider another scenario—what if instead of consolidating your debts, you could slice your total debt burden in half?

Your monthly payment would plummet from $2,160 to $1,080. And because you’re paying less each month, you’d have more money available to put towards building wealth, ASAP.

That’s important because the sooner you start building wealth, the better. The longer your money can grow via compound interest, the wealthier you can become.

So while debt consolidation can be helpful, it shouldn’t be your only strategy for getting out of debt. It’s just one tool in the arsenal.

If you’re not sure where to start with debt, meet with a debt relief specialist. They can point you towards the strategies and relief programs you need to get out of debt—for good.

This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies that may be available to you. Any examples used in this article are hypothetical. Before taking out a loan, enacting a funding strategy, or setting up debt consolidation, seek the advice of a licensed and qualified financial professional, accountant, debt expert, and/or tax expert to discuss your options.


How To Be A Lifelong Learner

How To Be A Lifelong Learner

Are you stagnating?

Have you fallen into a rut of living the same day over and over again, rehashing the same information and thinking the same thoughts? Maybe you’re bored and looking for adventure or intellectual stimulation. It turns out that there are actually a few things you can do to consistently push your mental capacities and become a lifelong learner!

Read daily.

Good writing is magical. It can transport us to distant lands and introduce us to incredible worlds and characters. But reading can also transform our minds, especially when we encounter new and challenging ideas. We’re able to overcome the limitations of our own imaginations and experiences and see the world through someone else’s eyes.

Surveys have shown that almost all successful people, regardless of their backgrounds, read extensively.¹ And it’s no wonder; the ability to assume appreciate perspective is incredibly powerful. But what should you be reading?

Expand your horizons.

Not all reading is created equal. Romance novels about vampires and werewolves might count as brain “junk food”. It also might be best to avoid a 19th-century philosophical treatise right out of the gate!

Instead, explore entry-level books about topics you don’t know a lot about. Dip your toe into new subjects and see if they spark your interest! You can always move to more advanced work on the subject from there. On the other hand, you can find new opinions and perspectives on topics that you’ve already mastered. How is your field changing or evolving?

Conversation is another great way to encounter new ideas. Chances are that you’re surrounded by vast amounts of knowledge sitting untapped inside your friends and family. You just need to know how to extract it! The keys are to listen seriously and ask real questions based on what you’ve heard. Most of us are more consumed with what we’re going to say next than with what the other person is saying. Honing in on what you’re hearing and trying to develop questions as you listen helps you understand what they’re saying and fuels your curiosity. It’s a virtuous cycle where everyone benefits!

Focus intensely.

But the key to both of these lifelong learning strategies is to focus intensely. That means when you’re reading or taking a class, turn off your phone and absorb what’s right before you. Engage in conversation intentionally, asking real questions based on what the other person is saying. You might be surprised how tricky both of those things can be at first! But stick with it. Those learning muscles will grow stronger and stronger until you’re brimming with information!

One final tip: always ask why. Don’t just ponder something to yourself. Ask someone who might possibly have an answer! And don’t be vague. Be as precise and specific as possible when you ask your question. The best thing about learning is that you can potentially keep learning forever! Learn to love the process of learning, and you might be amazed by how far your brain power can go.

Sources:

¹ “A self-made millionaire who studied 1,200 wealthy people found they all have one — free — pastime in common,” Kathleen Elkins, Insider, Aug 21, 2015, https://www.businessinsider.com/rich-people-like-to-read-2015-8


The Secret Strategy to Start Saving

The Secret Strategy to Start Saving

Bills, bills, mortgage payment, another bill, maybe some coupons for things you never buy, and of course, more bills.

There seems to be an endless stream of envelopes from companies all demanding payment for their products and services. It feels like you have a choice of what you want to do with your money ONLY after all the bills have been paid – if there’s anything left over, that is.

More times than not it might seem like there’s more ‘month’ than ‘dollar.’

Not to rub salt in the wound, but may I ask how much you’re saving each month? $100? $50? Nothing? You may have made a plan and come up with a rock-solid budget in the past, but let’s get real. One month’s expenditures can be very different than another’s. Birthdays, holidays, last-minute things the kids need for school, a spontaneous weekend getaway, replacing that 12-year-old dishwasher that doesn’t sound exactly right, etc., can make saving a fixed amount each month a challenge. Some months you may actually be able to save something, and some months you can’t. The result is that setting funds aside each month becomes an uncertainty.

Although this situation might appear at first benign (i.e., it’s just the way things are), the impact of this uncertainty can have far-reaching negative consequences.

Here’s why: If you don’t know how much you can save each month, then you don’t know how much you can save each year. If you don’t know how much you can save each year, then you don’t know how much you’ll have put away 2, 5, 10, or 20 years from now. Will you have enough saved for retirement?

If you have a goal in mind like buying a home in 10 years or retiring at 65, then you also need a realistic plan that will help you get there.

Truth is, most of us don’t have a wealthy relative who might unexpectedly leave us an inheritance we never knew existed!

The good news is that you have the power to spend less and start building wealth. That’s great, and you might want to do that… but how do you do that?

The secret is to “pay yourself first.”

The first “bill” you pay each month is to yourself. Shifting your focus each month to a “pay yourself first” mentality is subtle, but it can potentially be life changing. Let’s say for example you make $3,000 per month after taxes. You would put aside $300 (10%) right off the bat, leaving you $2,700 for the rest of your bills. This tactic makes saving $300 per month a certainty. The answer to how much you would be saving each month would always be: “At least $300.” If you stash this in an interest-bearing account, imagine how high this can grow over time if you continue to contribute that $300.

That’s exciting! But at this point you might be thinking, “I can’t afford to save 10% of my income every month because the leftovers aren’t enough for me to live my lifestyle”. If that’s the case, rather than reducing the amount you save, it might be worthwhile to consider if it’s the lifestyle you can’t afford.

Ultimately, paying yourself first means you’re making your future financial goals a priority, and that’s a bill worth paying.


Mediocre Money Mindsets

Mediocre Money Mindsets

Healthy money habits start with mature money mindsets.

Even though it’s not always obvious, we carry lots of assumptions and attitudes about money that might not be grounded in reality. How we perceive wealth and finances can impact how we make decisions, prioritize, and handle the money that we have. Here are a few common money mindsets that might be holding you back from reaching your full potential!

I need tons of money to start saving

It’s simple, right? The rich are swimming in cash, so they’re able to save. They get to build businesses and live out their dreams. The rest of us have to live paycheck to paycheck, shelling out our hard earned money on rent, groceries, and other essentials.

That couldn’t be further from the truth! Sure, you might not be able to save half your income. But you might be surprised by how much you can actually stash away if you put your mind to it. And however much you can save right now, little as it might be, is much better than putting away nothing at all!

I need to save every penny possible

On the other side of the coin (get it?) is the notion that you have to save every last penny and dime that comes your way. There are definitely people in difficult financial situations who go to incredible lengths to make ends meet. Just ask someone who survived the Great Depression! But most of us don’t need to haggle down the price of an apple or forage around for firewood. And sometimes, the corners we cut to save a buck can come back to bite us. Set spending rules and boundaries for yourself, but make sure you’re not just eating ramen noodles and ketchup soup!

I don’t need to budget

There are definitely times when you might not feel like you need to be proactive with your finances. You don’t feel like you’re spending too much, debt collectors aren’t pounding down your door, and everything seems comfortable. Budgeting is for folks with a spending problem, right?

The fact of the matter is that everyone should have a budget. It might not feel important now, but a budget is your most powerful tool for understanding where your money goes, areas where you can cut back, and how much you can put away for the future. It gives you the knowledge you need to take control of your finances!

Breaking mediocre money mindsets can be difficult. But it’s an important step on your journey towards financial independence. Once you understand money and how it works, you’re on the path to take control of your future and make your dreams a reality.


How NOT To Spend Your Next Raise

How NOT To Spend Your Next Raise

You walk out of the office like a brand new person.

That’s because you’ve done it—you’re going to be earning a lot more money with that raise. The first thing that pops in your head? All the fancy new things you can afford.

Dates. Your apartment. Vacation. They’re all going to be better now that you’ve got that extra money coming in.

And to be fair, all of those things CAN get substantially fancier after your income increases.

But one thing may not change—you still might end up living paycheck to paycheck.

Why? Because your lifestyle became more extravagant as your income increased. Instead of using the boost in cash flow to build wealth, it all went to new toys.

This phenomenon is called “lifestyle inflation”. It’s why you might know people who earn plenty of money and have nice houses, but still seem to struggle with their finances. The greater the income, the higher the stress. As Biggie put it, “Mo’ Money, Mo’ Problems.”

The takeaway? The next time you get a raise, do nothing. Act like nothing has changed. Go celebrate at your favorite restaurant. Keep saving for your new treat. But you’ll thank yourself if you devote the lion’s share of your new income to either reducing debt or building wealth.

Rest assured, there will be plenty of time to enjoy the fruits of your labor in the future. But for now, keep your eyes on the most important prize—building wealth for you and your family’s future.


Going the Distance

Going the Distance

Without careful planning, your money will never go the distance for your retirement.

Well, unless you win the powerball or stumble upon buried treasure.

The simple fact is that retirement can last a long, long time and often be expensive. According to the Federal Reserve, the average American can expect a retirement of almost 20 years, requiring $1.2 million.¹

How long would it take you to save $1.2 million? Even if you could stash away your entire paycheck, it would likely take over a decade. Factor in the daily costs of living, and decades may become centuries.

Unless, of course, you leverage two simple strategies…

Strategy One: Maximize the power of compound interest.

Strategy Two: Start saving today.

These are time-proven strategies that anyone can leverage. And they can mean the difference between your savings running out of steam or lasting as long as you do.

Let’s start with strategy one: Maximize the power of compound interest…

Compound interest can supercharge your savings. Instead of taking centuries, you have the potential to reach your retirement goals just in time!

That’s because compounding unleashes a virtuous cycle. The money you save grows on its own over time.

But here’s where the magic happens—the more money you have compounding, the greater its growth potential becomes. Even a fraction of your paycheck can eventually compound into the wealth you may need for retirement.

Think of it like changing gears on a bike. Savings alone is first gear—good enough for going down hills or casual jaunts through the neighborhood.

But for reaching greater goals, you need more power. Compound interest is those extra gears—it’s an advantage that can radically improve your performance.

That leads straight into the next strategy: Start saving today.

The longer your money compounds, the greater potential it has for growth. To prove this, let’s crunch the numbers…

Let’s say you can save $500 per month. You find an account that compounds 10% annually.

After 20 years, you’ll have saved $120,000 and grown an additional $223,650 for a grand total of $343,650. Not bad!

But what if you wait another 11 years? Your money will more than triple—you’ll have $1,091,660!

The takeaway? A few years could be the difference between reaching your retirement goals and coming up short. The sooner you start, the greater potential you have to get where you want to go.

No more sporadic saving when you feel the panic. No more burying your head in the sand because you don’t know what the future holds. No more fear that your finances won’t cross the finish line.

These simple strategies can help you go the distance and retire with confidence. Contact me if you want to learn more about building wealth!


¹ “Retirement costs: Estimating what it costs to retire comfortably in every state,” Samuel Stebbins, USA Today, Feb 11, 2021, https://www.usatoday.com/story/money/2021/02/11/retirement-costs-comfortable-in-every-state-life-expectancy/115432956/


Too Much of a Good Thing

Too Much of a Good Thing

Diversification is a key strategy for anyone who’s serious about building wealth.

That’s because no single source of income or wealth is perfect. They’re all subject to ups and downs, highs and lows.

Think of it like going to the golf range and handing the caddie an armful of drivers. You’ll make powerful drives every time, but what happens when it’s time to putt? Even worse, how will you escape bunkers?

It’s a classic case of too much of a good thing. If you’re a serious player and plan to play for the long run, your golf bag needs a variety of clubs—a few different irons, wedges, and putters—to handle whatever challenges you’ll face during the game.

The same is true of building wealth.

You need…

  • Different accounts that each leverage the power of compound interest.
  • Income streams besides your main job.
  • Savings that feature at least some protection against loss.

It’s not a silver bullet. But diversification can offer a layer of protection against the ups and downs of the economy. It can also provide you with supplemental income during lean times.

So how can you start diversifying today? Here are two ideas…

Start a side hustle. This simple strategy can diversify your income sources. Regardless of what’s happening at your 9-to-5 job, you can count on your side hustle to help generate cash flow.

Meet with a financial professional. A licensed and qualified financial professional can help you implement diversification in your savings. This could make a huge difference in protecting your wealth from the ups and downs of a changing economy.

Contact me if you want to discover what this strategy would look like for you. We can review what you’ve saved thus far and check your opportunities for diversification.


Who Qualifies for Student Loan Forgiveness?

Who Qualifies for Student Loan Forgiveness?

Here’s every Millennial’s dream—you wake up one day to find all your student loan debt completely forgiven.

Recently, that dream became a reality for dozens of former students when the U.S. government gave $17 billion of debt relief to 725,000 borrowers.¹

Still, that hardly puts a dent in the $1.6 trillion in student loan debt collectively owed by 43 million Americans.²

So, what are the chances that your loans will be forgiven, and how do you know if you qualify?

Here are three ways to qualify for student loan forgiveness…

Public Service Loan Forgiveness

Work for a qualifying non-profit or public organization? Then you qualify for the Public Service Loan Forgiveness (PSLF) program.

Under this program, your remaining loan balance will be forgiven after you make 10 years’ worth of payments.³

And fortunately, it just got far easier to qualify—before recent reforms, the denial rate for the PSLF program was up to 99%.⁴

So if you’re a public servant, head over to the Federal Student Aid website and click Manage Loans.

Teacher Loan Forgiveness

Similar to the PSLF program, the Teacher Loan Forgiveness program is available for educators. If you’ve taught in a classroom for 5 years and meet the basic qualifications, you could be eligible for up to $17,500 of debt forgiveness.⁵

But be warned—there are some highly specific qualifications. From the Federal Aid website:

“You must not have had an outstanding balance on Direct Loans or Federal Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or on the date that you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998.”⁶

Sound complicated? That’s because it is. As with most financial moves, meet with a debt professional or financial planner to see if you qualify.

Total and Permanent Disability Discharge

If you’re totally and permanently disabled, you may be eligible for a complete discharge of your student loan debt.

You’ll need to submit proof of your disability to your loan servicer. The proof can come in many forms, such as a doctor’s letter, a Social Security Administration notice, or documentation from the U.S. Department of Veterans Affairs.

As with everything involving bureaucracy and disability, you may quickly find yourself mired in red tape and conflicting phone numbers. That’s why it’s always wise to seek out professional help if you think you might qualify.

The sad truth is that few actually qualify for these programs. If you work in the private sector, are healthy, and face significant debt, you’ll need to find alternative strategies for moving from debt to wealth.

Still, it’s good to know that there are options out there for those who qualify. So if you think you might be eligible for one of these programs, don’t hesitate to explore your options.


¹ “Here’s who has qualified for student loan forgiveness under Biden,” Erika Giovanetti, Fox Business, Apr 26, https://www.foxbusiness.com/personal-finance/student-loan-forgiveness-programs-biden-administration

² “Student Loan Debt Statistics: 2022,” Anna Helhoski, Ryan Lane, Nerdwallet, May 19, 2022 https://www.nerdwallet.com/article/loans/student-loans/student-loan-debt

³ “Want Student Loan Forgiveness? To Qualify, Borrowers May Need To Do This First,” Adam S. Minsky, Forbes, May 16, 2022, https://www.forbes.com/sites/adamminsky/2022/05/16/want-student-loan-forgiveness-to-qualify-borrowers-may-need-to-do-this-first/?sh=6aa44a617cdb

⁴ “Want Student Loan Forgiveness?” Minsky, Forbes, 2022

⁵ “Teacher Loan Forgiveness,” Federal Student Aid, https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher

⁶ “Teacher Loan Forgiveness,” Federal Student Aid, https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher


Deconstructing Wealth

Deconstructing Wealth

Wealth, simply put, is the stockpile of resources you have at your disposal.

The rarer the resource, the “wealthier” you are.

On a surface level, that definition conforms to the common stereotypes of wealth. Can we all agree that a stacked bank account is a rare and precious resource?

But dig a little deeper, and you’ll find that wealth takes many shapes and forms.

Your knack for finding the right word at the right time?

Your secret talent for creating with your hands?

Your indestructible support network that’s there for you, no matter what?

Those are all resources. Those are all rare. Those are all wealth. They just don’t have a dollar value… yet.

To be fair, you shouldn’t monetize all of your assets, especially if those assets are people. Leveraging your network for money is something that must be done with the utmost care and respect, if at all.

But the fact remains that you likely possess an abundance of resources that could be converted into increased cash flow. Your talents, your ability, and your time are all precious assets that have the potential to boost your income.

The takeaway? When you break it down, you’re wealthier than you may think. The real question is, how will you monetize the resources you’ve been given?


Mind Traps and Your Money

Mind Traps and Your Money

Your mind is incredible. But it’s not perfect. It makes mistakes. And those mistakes can wreak havoc on your finances.

This isn’t to talk bad about your brain—it’s like a supercomputer ceaselessly working to make sense of the world and keep you safe. The trouble is, sometimes it does this by coming up with shortcuts that feel like they should make sense, but can lead to serious errors.

These mistakes are sometimes called mind traps. They can derail logical thinking and lead you astray. And they can have a big impact on your money.

Here are some of the most common money mind traps, and how you can avoid them!

1. All or nothing thinking. This is a classic example of the “great” being an enemy of the “good”. You might feel that unless you can go all out on saving and building wealth, you might as well do nothing. Go big or go home, right?

It’s an obviously flawed line of thinking. Saving even a little is always better than saving nothing. But the temptation not to is still very, very powerful. Why? It might be because of anxious or perfectionist tendencies. Anything short of perfection seems like failure. And that sense of failure is so uncomfortable that it seems safer to not even start.

But here’s the truth—you’ll never go big unless you start small. Waiting for the stars to align, or even to get all your ducks in a row, will result in permanent inaction.

The solution? Commit to save $20 per month (or whatever amount works with your budget). Read one blog article about money. Follow just one money influencer. You might be surprised by the difference that even just a little change can make!

2. Magical thinking. For example: “I’ll start saving when I get a raise.” Spoiler—you won’t.

Why? Because you didn’t start saving after your last raise. What would make this time any different?

This is magical thinking. This time is going to be different, even if you do nothing different. It’s the hope that circumstances will change on their own, and with them, your behavior.

The solution is to be proactive. If you want to save more money, you have to take action. That might mean reworking your budget or setting up automated transfers into savings. It might mean looking for ways to make more money. But whatever it is, do it now. If the “present you” won’t do it, neither will the “future you”.

3. Catastrophizing & personalizing. Have you ever opened your bank account and thought “This is the end of the world?” It’s happened to everyone at least once. Suddenly, you realize you’re far closer to zero than you realized. Worst of all, you’re not sure why.

To be clear, that’s NOT the end of the world. There could be plenty of good reasons why you’ve spent more this month, and there are plenty of ways to get your financial house back in order.

But that’s not how it feels. It feels like defcon 3. Surely this means that you’ll default on the mortgage, lose the car, and ruin your future.

And that catastrophizing almost always leads to personalization. You start blaming yourself. How could you let this happen again? What’s wrong with you? Those negative voices are off to the races, and it can feel impossible to get them under control. And it’s all because you’re looking at your bank balance with no plan.

The solution is to step back, take a breath, and remember that it’s just a number. It does not define you. Sure, you need to take responsibility for your actions. But follow your train of thought. Where are you jumping to conclusions? What are you assuming? If you can catch yourself in the moment, it’s a lot easier to calm those anxious thoughts before they get out of control.

Mind traps are dangerous because they’re so believable. They seem like rational thoughts, but they’re really just faulty logic that can lead to costly mistakes.

The good news is, once you’re aware of them, you can start to catch yourself in the act. And with practice, it gets easier and easier. So next time you find yourself thinking you have to go big or go home, or that your finances will magically fix themselves, or that you’re a failure, take a moment. Write down your thoughts. And then ask yourself—is this really true? Or is it just a mind trap?


Money is Symbolic

Money is Symbolic

Money is symbolic.

Sure, it’s a source of value and a medium of exchange. But above all, it’s a symbol.

What is a symbol? It’s a visible representation of something that’s invisible.

Think about it—can you see success? Not really. It’s an abstract idea. So money is largely how people evaluate if they’re succeeding or failing.

What do you see when you imagine a successful person? Expensive cars, big houses, fancy clothes, and lots of zeros in a bank account.

Those are the symbols of success. And make no mistake—money is the central symbol of success.

How do you feel when your bank account looks full? You probably feel awesome! You get a quick rush, and your steps are just a touch lighter.

But what about when you’re in debt or when you can’t make ends meet? Maybe you feel not so great. You might become stressed and anxious, and feel like you’re not good enough.

That’s because money is a visible representation of your success or failure. It’s a way to keep score.

You see that loaded bank account, and you think “Everything looks good! I’ve really got my act together.”

You see an empty bank account, and you think “What have I been doing? I’ve really messed up my finances.”

Here’s the sticking point—the symbolic nature of money is great for motivation. But it’s terrible for guiding decisions.

Why? Because chasing the symbol can easily lead you to making moves that give you the appearance of wealth without being wealthy. You start buying things far beyond your budget to represent wealth you don’t actually have. This is the fast-track to living paycheck-to-paycheck.

But as motivation? That’s where the power of the symbol lies. Think about that bump you get when you see your net worth climb. Use that feeling as fuel to keep pushing when you hit roadblocks and obstacles.

So what does money mean to you? Is it a scorecard? A way to motivate yourself? Or something else entirely?

How you answer those questions will determine whether money is a powerful tool or a dangerous weapon in your life.


The Laid-Back Way to Build Wealth

The Laid-Back Way to Build Wealth

Automating your finances can take the pain out of wealth-building behavior.

You know how it goes. The thought flashes through your mind—”I need to start saving money!”

And then… well, that’s it. You read a few articles on saving and try to spend less, but after a week or two your mind has moved on.

Why? Because all forms of positive change are energy intensive, at least at first. And your brain, smart as it is, likes conserving energy.

So to jump-start saving, you need to take several one time actions that are borderline thoughtless.

Enter automation. It’s a small step with massive return potential.

It’s simple…

  • Log in to your online banking account
  • Set up a deposit
  • Choose to make the deposit recurring instead of one time

Like that, you’ve set the stage for dozens of wealth-building actions well into the future.

And what did it take? A few taps over a few minutes.

So what are you waiting for? Automate your savings right now. I’ll wait! Even if it’s $5 per month, it’s a step in the right direction—to build wealth for your future!


Why People Aren't Going Back to Work

Why People Aren't Going Back to Work

It’s official—Americans aren’t going back to work.

Even though there were 10 million job openings in June of 2021.¹

If you’ve been out and about, you’ve seen firsthand that jobs aren’t getting filled.

You may have noticed the signs at your local grocery store. Or the longer wait at your favorite restaurant. Or slower service from businesses you depend on.

They all stem from the same source. Americans aren’t rushing back to work.

But why? The COVID-19 pandemic caused mass unemployment and havoc for millions of American families. Wouldn’t they want to start earning money again, ASAP?

It’s not the unemployment benefits holding them back. Those dried up months ago, and the numbers still haven’t budged.

And again, it’s not that there aren’t jobs. There are millions of opportunities out there!

Here’s an idea—many people have woken up to the fact that most jobs suck.

Most jobs leave you completely at the mercy of your boss. If they mismanage the business, your job’s in danger. If you want a bigger bonus, your job’s in danger. If another pandemic breaks out, your job’s in danger.

They give you no control over your hours, your income, your location, or your future.

Who would want to go back to that?

Instead, Americans are looking for a better opportunity. They want control of their future, their wealth, and their hours. They want to replace the insecurity of a 9 to 5 with more reliable sources of income.

If they see an opportunity that checks those boxes, they’ll be willing to re-enter the workforce.

Americans are looking for a better path. The million dollar question is, who will provide it for them?


¹ “Many Americans aren’t going back to work, but it’s not for the reason you might expect,” Paul Brandus, MarketWatch Aug 14, 2021, https://www.marketwatch.com/story/many-americans-arent-going-back-to-work-but-its-not-for-the-reason-you-might-expect-11628772985

² “What states are ending federal unemployment benefits early? See who has cut the extra $300 a week,” Charisse Jones, USA Today, Jul 1, 2021, https://www.usatoday.com/story/money/2021/07/01/unemployment-benefits-covid-federal-aid-ending-early-many-states/7815341002/


Getting Out Of Debt Doesn't Make You "Free"

Getting Out Of Debt Doesn't Make You "Free"

Debt is an unfortunate reality for most people in America.

The average household owes $6,000 in credit card debt alone, and the total amount of outstanding consumer debt in the US totals over $15.24 trillion.¹ It’s a burden, both financially—and emotionally. Debt can be linked to fatigue, anxiety, and depression.²

So it’s completely understandable that people want to get rid of their debt, no matter the cost.

But the story doesn’t end when you pay off your last credit card. In fact, it’s only the beginning.

Sure, it feels great to be debt-free. You no longer have to worry about making minimum payments or being late on a payment. You can finally start saving for your future and taking care of yourself. But being debt-free doesn’t mean you’re “free” to do whatever you want and get back into debt again. It means you’re ready to start building wealth, and chasing true financial independence.

For example, when you first beat debt, are you instantly prepared to cover emergencies? Most likely not. And that means you’re still vulnerable to more debt in the future—without cash to cover expenses, you run the risk of needing credit.

The same is likely true for retirement. Simply eliminating debt doesn’t mean you’ll retire wealthy. When you become debt-free, you can put those debt payments towards saving, leveraging the power of compound interest and more to help make your dreams a reality.

But now that you’ve conquered debt, that’s exactly what you can do! You have the cash flow needed to start saving for your future. You can finally take control of your money and make it work for you, instead of the other way around.

So don’t think of being debt-free as the finish line. It’s not. It’s simply the starting point on your journey to financial independence. From here, the sky’s the limit.


¹ “2021 American Household Credit Card Debt Study,” Erin El Issa, Nerdwallet, Jan 11, 2022, https://www.nerdwallet.com/blog/average-credit-card-debt-household/

² “Data Shows Strong Link Between Financial Wellness and Mental Health,” Enrich, Mar 24, 2021, https://www.enrich.org/blog/data-shows-strong-link-between-financial-wellness-and-mental-health


Entrepreneurship Will Change You

Entrepreneurship Will Change You

Starting your own business can be a challenge.

It will test your talents, your mental toughness, and your ability to adapt. And those tests—if you pass them—can spark extraordinary growth.

Here are four ways entrepreneurship will change you.

You’ll develop self reliance. Entrepreneurs need to learn to solve their own problems, or fail. They don’t have a team to handle the daily grind of running a business.

Instead, new entrepreneurs handle everything from product development to accounting. It’s a stressful and high stakes juggling game.

But it can teach you a critical lesson: You’re far more resourceful than you thought. You’ll learn to stop waiting for help and start looking for solutions.

You’ll discover loyal friends. One of the downsides of entrepreneurship is that it may expose toxic people in your circle. They’re the ones who might…

  • Mock your new career
  • Feel threatened by your success
  • Try to one-up you when you share struggles

As you and your business grow, you may need to limit your interactions with them. They might be too draining on your emotional resources to justify long-term relationships.

Rather, your circle should reflect values like positivity, encouragement, and inspiration. Those new friends will support you through the highs and lows of entrepreneurship.

You’ll learn how to manage stress. Late nights, hard deadlines, and high stakes are the realities for entrepreneurs.

To cope, you must build a toolkit of skills that can carry you through the hardest times. Otherwise, you may crack under the pressure and lose any progress you’ve made.

It comes down to one key question: Why do you want to be an entrepreneur?

Are you driven by insecurity? Or by vision?

If you’re trying to prove a point to yourself or others with your business, you may fall apart at the first hint of failure.

If you’re driven by vision, you’ll see failure as part of the process.

Examine your motivations. Over time, you’ll grow more aware of your insecurities. Talk about them with your friends, families, and mentors. As you bring them into the light, you may find they have less and less power.

Entrepreneurship can spark an explosion of professional personal growth. You’ll grow up. You may start with an employee mindset, but you’ll mature into a leader. That’s how entrepreneurship will change you.

P.S. If this seems daunting, start with a side hustle. It can ease you into the role of entrepreneurship without throwing you into the deep end too soon!


Passive Income Requires Work

Passive Income Requires Work

“I want passive income!”, said the community of struggling entrepreneurs (and retirees).

“But what exactly is passive income?” they asked. A simple Google search revealed thousands of articles with a common theme—passive income is money you make while you sleep!

But is passive income really possible, or does it just live in the dreams of people looking for a way to make money without working?

To answer that question, let’s look at what passive income is (and isn’t). Then you can see if it will work for you!

Passive income, generally speaking, is a product or service that requires an upfront investment of time, effort, or wealth to create.

Examples include…

- Rental properties that require wealth to purchase, and are cared for by a property manager while creating rental income - Books, music, and courses that required time and creativity to create and now generate income without regular upkeep - Investing wealth in a business as a silent partner and taking a slice of their revenue

Can those income sources generate cash flow while you sleep? Of course! But notice that all of those opportunities require either work or resources that can only be acquired by work.

Does that mean you shouldn’t prioritize passive income sources? No! They can sometimes provide the financial stability you need.

Just don’t expect a passive income stream to effortlessly appear in your lap.

Remember, there is no such thing as free money. All wealth building opportunities require time, effort, and energy to reach their full potential.

If you want to learn more about creating passive income sources, contact me. We can review your talents, your situation, and your dreams to determine smart strategies for developing passive income.


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