Book Review: Rich Dad, Poor Dad

I first heard about this book some time ago, but never felt the desire to read it until recently. I was looking on amazon for a Christmas gift for my father-in-law. I came across this book and began to read the reviews. I liked what I read and made the purchase. I soon wanted to read the book myself even though he had not started it yet. Well, I can tell you after reading the book, I should have read it a long time ago.

This book is filled with great lessons about financial intelligence. They are presented in a fun and interesting way to teach you principles that will help you become rich. The key message in the book is that most people work to make money while the rich makes money work for them. This is accomplished by only buying money producing assets, not liabilities.

Overall, I highly recommend this book to all my readers. It will open your eyes and help you understand how money works. Because you need to understand how money works if you ever want to be rich. That is the secret. Enjoy!

Do Not Get Comfortable With Credit Card Debt

For many Americans, credit card debt is a big burden on their financial freedom. Yet they can't seem to give them up. This is partially due to the "must have it now" mentality. You see that new big screen TV and have the credit card in your pocket. Even better, the store will give you a sweet deal if you get their store credit card at 29.99% interest. Take two seconds to breath and then remember that you will save money in the long run if you put money aside and pay cash (debit or check). By doing so, you will save yourself from paying interest. Keep this in mind next time you see something you MUST have.

So You Have Spent All Your Money on Christmas Presents, Now What...

Many Americans woke up Friday morning before the sun was up, got in line at a retailer, and when the doors flew open grabbed everything they wanted and paid for it with money they did not have. I personally know people who have financial troubles but somehow found $500 or $1k to buy Christmas gifts. If you have to take out debt to buy Christmas presents, what is the point? You are creating a bigger hole for you to big yourself out of and this stuff is not even for you! You are just going to give it away! If this is you, WAKE UP! You are under no obligation to buy gifts for anyone. If a friend or family member gives you a hard time about you not giving them a gift, then they are not truly a friend OR family to you. If someone really cares about you, they will not let you do something so detrimental to your well-being.

Remember, spend only what you have, not what you want to spend. If you have any debt, give yourself the greatest Christmas present of all and pay down you debt.

Three Bills You Can Cut Back On To Save Money

In today's economy, people are always asking me how they can save money. People want to have money saved up for a rainy day, but always seem to spend all they bring home from their paycheck. Here are three bills you can use to cut back your spending and save some money.

Cable Bill

Do you have all the premium channels, 200+ regular channels, and sports packages? Most people watch fewer than 1/3 of the channels they have available. You can start reevaluating your cable options. Especially with free web based TV and movie sites such as Hulu.com and Fancast.com, there are more options available than before.

Mobile Phone Bill

Do you have the top tier plan with the fastest mobile internet, unlimited text messages, and he coolest new phone? Do you get a new phone every two years? Most people that have a data plan have it on a phone that may be wifi capable. Wifi hot spots are available almost everywhere you are nowadays. Also, try looking at your bill and seeing how many minutes you actually use compared to what you are paying for each month. Those new phones cost money, yet most people take on credit card debt to pay for them. If you are looking to save money, just get the free phone that most companies offer. It may not be the most glamorous, but it will keep you from throwing a computer at someone after looking at your bill.

Food

This is by far one of the biggest budget busting areas. Do you eat out each day for lunch? By doing so you are easily spending over two thousand dollars a year. That is not counting the gas to go get it, tips, cost on your health, and many other negatives. Bring your lunch to work and put this money back in your pocket or towards your bills.

These are just three of many ways for you to save money and live a more physically fit lifestyle.

The End of Small Credit Unions

Increasingly, smaller credit unions are finding it harder to compete for their member's business because of new governmental regulations, increasing competition, and lack of an adaptive business model.

The federal government passed major banking regulatory overhaul recently which will put additional burdens on financial institutions. If you are a credit union with only four or five employees total, this will represent a significant increase in costs. Some people even believe that this is the federal government's plan all along. Drive the smaller financial institutions into insolvency so they are forced to sell out to bigger institutions. If you haven't noticed, when the FDIC shuts down a bank, it is "sold" to a bigger bank. Soon we will only be left with mega banks which will be easier to control by the federal government.

Most of your small credit unions are one branch financial institution that services one company's employees. Also, some credit unions that have defined employer based membership are finding it more and more difficult to compete with those credit unions with community based charters. This is only natural because for the smaller credit unions your potential membership base is much smaller that as community chartered credit union.

When speaking of business model, financial institutions have traditionally relied upon taking deposits and making loans to supply their interest income. As the deposit and lending rates become more competitive, the amount of income you make from this decreases. The only way you can make up for this is the either make more loans or diversify your income stream. The smaller credit unions are unable to expand lending due to limited membership size, but they have yet to embrace other avenues of generating income. Some people find it strange when I speak about profits when it comes to credit unions because of their not-for-profit status, but every organization to remain solvent needs to generate profits or else they will soon go under.

My advice to credit unions are too either adapt to the new business climate or merge with a compatible credit union to increase your membership base. Either way, they should keep in mind that they should always do what is best for their members since they are the ones who own the credit union.

Getting the Best Deal on a Car

Have you ever heard horror stories from people who had bad experiences at car dealerships? This happens because most consumers do not do any research before showing up at the dealership. That is like showing up for a test without looking over the material! Here are some more quick tips when negotiating with a dealership.

Start from the Bottom

What I mean is start from the lowest price possible. The dealership is starting from the highest possible price (MSRP). Your first objective is to establish the "real value" of the car. If it is a used car, then you need to look up the NADA trade in value. This is most likely more than what the dealership gave the the individual who traded the car to them. This will make the dealer justify anything higher than that value. Meaning you will get a lower final sale price.

Keep Your Trade in to Your Self

If you plan on trading in your car to the dealership, it is vital that you negotiate the final price before letting them know you have a trade in. This will keep them honest and make them work to give you the best deal. If you tell them upfront that you have a trade in, they will get the keys from you and take it to get appraised. This is a trick dealerships use to keep you on their lot. Until they give you the car back you are stuck there.

Pre-Approve Finance Before Going to The Dealership

Go to your local credit union and get a pre-approval for financing before going to the dealership. This gives you the flexibility to negotiate the best deal without worrying about if the dealership will finance you or not. Larger dealerships get extra money to charge customers higher interest rates. This is called participation. What happens is a lending institution will tell a dealership that they will finance the customer at X%, but for every 1% above that rate the dealership gets you to accept, they get paid X dollars. If you see a deal claiming 0% interest for 60 months, most of the time you have to buy a brand new vehicle at MSRP. Which means you will end up paying more for the vehicle than if you financed it at a moderate interest rate.

I hope these and my other tips when buying a car find a way to help you get a better deal!

Do Not Go Into Debt to Buy Gifts...

Whether it is for Christmas, Anniversary, Birthday, House Warming, or any other occasion, people tend to spend way too much. Don't get me wrong, it is a great thing to give a gift. It shows you care, love, and/or respect the recipient. The mistake that most people make is they use a credit card or take out a loan because they do not have the money.

There are many times I have had people come into my office and say to me, "I need a loan to buy (someone) a gift." Do you ever ask someone how they paid for a gift? No, we never do. So it is up to the purchaser to be responsible for their finances. I can guarantee you that no matter what you get someone, they are going to appreciate it. If they don't like it, then most likely they will keep from saying anything anyways. Plus if they were the type of person to look down on your for the kind of gift you got them, are they worth keeping as a friend, girl/boy friend, or partner?

So my advice, try giving a gift that has a low price tag but is high on thought and creativity. Here are some examples:

*99 Cent cards at most retailers like Wal-Mart and CVS: This will allow you to not spend a lot, but also you can write in a clever poem, story, or anything pithy comment that you think the recipient will cherish.

*Candy: The right candy will go a long way. If you know what there favorite candy is, get them a $2 -$3 bag of their favorite. They will love it!

*House Warming Gifts: The most inexpensive gift is to ask the host if you can bring some soda, chips, cookies, etc. that will help them provide the food, and save you some dough!

There are many other ways to save. Stay tuned later in the year when I will give you some money saving tips around Christmas!