The Right Mindset Is In The Grey Matter

After 9 years of teaching alternative financial models I’ve discovered the critical challenge consumer’s face when trying to absorb and understand the concepts I teach; it is their mindset. If we are to learn anything new, whether it be a new golf swing or financial concept our minds need to be open to accepting something new and unfamiliar, regardless of how contrarian it might appear. If we are to allow our minds and our beliefs to accept something new we need to be in the right frame of mind. Our mindset must tell us; “listen up and pay attention, this could be good”.

Have you ever noticed how extreme we get with many of the decisions we make in our life? There seems to be no middle ground once we’ve made our decision. We tend to gravitate to and then live at the extremities of our beliefs. Our world becomes black or white; no middle ground. When our beliefs live at one end of the spectrum or another our beliefs become permanent and we tend to defend that position with all of our might. In our vane effort to protect our pride, ego or image, human nature disallows us to deviate from our decisions because deviation equates to an element of failure. This life of extremes prevails with our financial decisions, especially so when the discussion turns to our debt management decisions. In fact, when the debt discussion comes into play often time’s people will hold on to that black or white extreme like it was their first born child. The chosen methodology or strategy becomes the immovable foundation of their debt management and debt repayment strategies.

You may have heard in the past that ALL debt is bad. This is a good example of an extreme mentality. People who live at this end of the spectrum believe they are categorically correct (ALL debt is bad) and there’s nothing you can say to convince them otherwise. Do you know anyone like this? It’s hard to have a meaningful conversation with this type of person. But, if they’re extremism is so right and everyone should live to that extreme then what argument is there for millionaires who don’t have debt (consumer/installment debt), but they have mortgages? From the ‘ALL debt is bad’ extreme; are millionaires financially inept because they carry mortgage debt? Such a heavy handed stance indicates an equally extreme level of arrogance and ignorance. One of my favorite sayings is by Dr. Wayne Dwyer: “The highest form of ignorance is to reject something you know nothing about.”

I’ve heard well respected financial “guru’s” say; “any 65 year old with any mortgage debt is an idiot”. I believe anyone who makes such a statement has no compassion or understanding for the human condition. If a 65 year old has mortgage debt there is more than likely a good reason. There are 101 circumstantial reasons a 65 year old has mortgage debt, but I’m pretty sure it wasn’t in his initial financial plans. If any one consumer has mortgage debt that late in life I can promise you it was due to circumstance, whether it is planned or unplanned. The point; making that kind of extreme judgment on an individual without first learning about and understanding their human condition is appalling.

Here’s the rub; we live within and life exists between the extremes. Nothing in life resides at the extreme black or white end of the spectrum. We live in the grey matter and we continually gravitate within the shades of grey as we manage our way thru life. Take a quick inventory of your debt management beliefs. Do you live by one extreme and discount all others? Can you gravitate towards middle ground to get a better perspective of your options and how to compare the two? Mentally notate those beliefs that live at the rigid extremes and recognize their limitations. You may already exist in the grey matter with your investments. You have to do the same on the debt side of the ledger if you want better results.

When the decision process resides within the grey matter you have more clarity and it is easier to compare and contrast without extreme prejudice. When you stand right in the middle and approach life’s decisions from a balanced perspective you have an equal view of each extreme, of each argument. A balanced perspective allows new light to shine in from both sides. A clear vision of the pro’s and con’s of each precipitates a decision that fits your particular circumstance or situation as opposed to force fitting the extreme into a world it may not belong. We learned this at a very early age: don’t force the puzzle piece to fit, find the one that fits just right. To do this you have to look at all of the puzzle pieces, not just the piece in your hand.

When it comes to decisions about debt management and debt repayment force yourself to reside in the grey matter before making your decisions. Stand in the middle. Don’t be swayed by those who advise from the extremities. Look at your options without extreme influence. Recognize that extreme choices are inflexible and intolerant. Living within extreme conditions ultimately lead to limited results and limited possibilities. Stand in the middle and let some new light shine on your beliefs. With new light comes new perspective. A new perspective will present opportunities that may have not been visible from extremes.

The truth is in the proof!

This article by Bill Westrom first appeared on TruthInEquity.com and was distributed by the Personal Finance Syndication Network.

Saving with a “Salvaged Title” Car

Many families need a reliable, spacious vehicle. For many, new vehicles are unaffordable. According to Kelley Blue Book, the average cost of a 2015 vehicle is over $33k. Ouch. That’s why many are looking for affordable options. Some are considering buying a wrecked vehicle that has been repaired or can be. Prices are drastically reduced, which makes them very appealing. While it may not be an option for everyone, guidance is needed to make the safest choice possible.

Common sense tells buyers to look for light damage; however, most don’t know what should be avoided. With the right professional advice, an informed decision can be made. A professional can determine the extent of damage, needed repairs, and safety factors. Even if the vehicle has already been repaired, it should be properly inspected.

Rodney Goins of Goins Automotive in Shelby, North Carolina has been in the auto repair business for 31 years. As a body repair expert, he has extensive experience in salvage repair. He feels there are four types of damage that should be avoided: all water damage (especially salt water), cowl damage (located at front door hinges), major front-end damage (can damage sensors), and rear damage to hybrid vehicles (can damage battery). Mr. Goins advises that major frame damage should be avoided, but light frame damage can be repaired easier now than in the past. Your body repair expert can alert you to what vehicles should be avoided.

Mr. Goins says other light damage may be acceptable. Examples are light rear damage (except to hybrid vehicles) and hail damage. If you’re considering a hail-damaged vehicle, he advises to inspect for water damage. Another option is a theft recovery vehicle that has little to no damage. A professional can determine safety and extent of damage.

Choose an expert with multiple years of repair experience and favorable reviews. If you don’t know one, contact your local Better Business Bureau. Another option is to find one through social media outlets; ask others for recommendations and then follow up to meet them and inspect their backgrounds. Mr. Goins says not to "be fooled" by certifications; some only require a class and test. Instead, look for salvage experience and familiarity with state laws. Once you find a trusted professional, ask if they will inspect a damaged vehicle. If so, confirm their inspection fee. If possible, it’s best to accompany them during the inspection. This will allow time for questions and concerns to be addressed. If it passes inspection, you can then decide if it’s the right vehicle for you and your family.

If you decide on repairs, create a contract. It should outline repairs, parts, and labor costs, as well as an estimated period for completion and be signed and dated by both parties. In the event of damage or theft, confirm that the shop has insurance and include it in the contract.

Loan requirements vary, and many lending institutions don’t offer loans on salvage vehicles. April Sprague of State Employees Credit Union in Shelby, North Carolina advises that financial institutions have varying policies and procedures; it’s best to check with each one. She adds that lenders want to be helpful and may be able to offer alternate loan options if a traditional vehicle loan isn’t viable. It’s best to investigate options before a purchase is made.

It’s worth noting that title laws vary from state-to-state. For example, North Carolina requires that a repaired salvage vehicle pass an inspection by an official DMV (Department of Motor Vehicles) inspector. If it passes, a Rebuilt Title is issued and it can be returned to the road. Other states may vary, so check your local DMV for guidelines and procedures.

Many buyers have purchased salvaged vehicles with satisfactory results; two of those live in Dallas, North Carolina. Years ago, Jerry Thomas purchased a wrecked 1996 Chevrolet truck. It had light damage to the front and side. He purchased and repaired it for a fraction of the cost of a new vehicle. He felt it was one of his most reliable vehicles ever owned. He added that he later purchased other salvage vehicles with gratifying results. His friend, Ronnie Wiggins, added that one of his favorite vehicles was a 2004 Chevrolet Impala with salvage history. He also had good results and drove it for years. Both said they would purchase another salvage vehicle if the price fit their budget.

If budget restrictions hinder your vehicle purchase, a salvage vehicle may be an option. While not for all consumers, big savings are possible for those willing to take the necessary steps. By following regulations and hiring an expert, a salvage vehicle might stretch your dollars and fit your family needs.

Kelli is a freelance writer who lives on a small horse farm in the North Carolina foothills. She lives with her husband, horses, dogs, and bossy cats. Her hobby is saving money. Today she’s sharing her writing with TheDollarStretcher.com. Visit today for more on how to buy a cheap, reliable used car and buying an insurance friendly car.

This article by Kelli Clevenger first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.

What’s that chip doing on my credit card?

FTC Returns Money to Consumers Tricked into Buying Phony Health Insurance

The Federal Trade Commission is mailing 6,832 checks totaling more than $1.1 million to consumers who lost money to a health insurance scam.

In 2012, the FTC charged the Independent Association of Businesses (IAB) and Health Service Providers (HSP) defendants with violating the FTC Act and the FTC’s Telemarketing Sales Rule by deceiving consumers seeking comprehensive health insurance. Instead of health coverage, consumers received membership in IAB, an obscure trade association that provided purported discounts on services such as identity-theft protection, travel, and roadside assistance, and some healthcare related benefits that were subject to broad exclusions and limitations.

Under settlement orders issued in 2013 and 2014, the defendants are banned from selling healthcare-related products.

Consumers who purchased IAB memberships from HSP’s telemarketers will receive checks in the amount of $167.63 from the FTC’s refund administrator, Gilardi & Co., LLC. Consumers should deposit or cash the checks within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed. 

Consumers who receive checks and have questions can contact Gilardi & Co. at 1-877-255-2476. Learn more about the FTC’s refund program.

Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.

Raising Future Millionaires

Maybe it’s a bit presumptuous on my part to title this post “Raising Future Millionaires”, a better title may have been “Raising Potential Future Millionaires.” Although I do not know what the future exactly holds for my three children, I do know my wife and I have laid down a solid foundation for them so far. No I’m not here to pat myself on my own back, we still have a long way to go before we can kick back and declare victory on this one. I do however feel like we have laid such a solid path for them. We have led and taught be example, just like our parents did for us. My parents were married for 50 years and my in-laws are on their way. We have always taught the basics, right from wrong, say please and thank you, be respectful, be humble, be kind, share, forgive, and many other things as our children have grown up. It hasn’t been perfect, as an example we are in the middle of negotiating how and when summer homework will be done. (When I say negotiating, I mean telling our children it needs to be done by this date or else) Then five years ago we introduced money into the equation. The initial involvement was just so they understood why they were hearing the word “no” so often, now it has even bigger meaning.

Paths to FIRE

Talking to teenagers about a financial independence, or retiring early and my guess is you are going to get a lot of blank stares. In a lot of cases these teenagers haven’t ever worked a full-time job yet, but as I’ve mentioned it before if you need an attention grabber or conversation starter with your teenager how about trying “how would you like to be a millionaire?” This usually peaks their interest.

That’s been the key for us, making sure when we discuss money in our home that has meaning, and purpose. The initial conversation with our children was that there were going to be changes, in order for us to clean up our financial mess we had to make sacrifices. That was a good start, but unless we explained the “why” there would have been a lot of kicking and screaming. Our why was to have a better future, to reduce stress, to build wealth, my wife and I put it in terms our children could understand. It meant we could say “no” less, they agreed at the time that was a good thing. We than began to involved them more as the years went on, and as I look at it now it’s an incredible gift, because if these things are used from a young age that have the potential to grow exponentially.

Involvement – It just that simple, just involving our children in money discussion raises the financial IQ. They know that it’s okay to talk about money, even in bad times. This has taken the fear and taboo out of money discussions.

The “Why” – They understand the why behind shutting off lights or ticking the heat down a degree or two in the winter to save, because they’ve seen the electric and heating bills. If we blindly yelled at them all the time for these things it would create resentment. They understand why we shop with a list, why we compare prices, and why we wait before making a major purchase. It’s all about having a purpose for our money.

Tools – We’ve discussed things like budgets, a companies 401K match, saving, reward credit cards, compound interest, and the rule of 72. All tools that they can use to help build and protect wealth.

I’ve always been excited for my children futures, and believed we were doing a good job preparing them for their futures, but after educating ourselves on personal finance I realized we overlooked this piece of it. We have now taught them to learn from our mistakes and showed them with discipline and team work that mistake can be overcome. I’m now ever more excited for their futures. Adding the financial and career pieces to our parenting feels like we are rounding out our parenting curriculum. I’m hopefully that they will take these lesson and run with them, turning what we are doing in our forties into habits they form in their twenties, or possible earlier.

I’m looking forward to sitting back and watching it all unfold and helping in any way I can, advice, course correction, or maybe just asking “how would you like to be a millionaire?”

This article by Brian Brandow first appeared on Debt Discipline and was distributed by the Personal Finance Syndication Network.

5 Inspiring Warren Buffett Investing Quotes

Warren Buffett is considered one of the most successful investors of our time. According to BusinessInsider‘s Andy Kiersz, in “Here’s How Rich You’d Be if You’d Invested $1,000 in Buffett Way Back When”, $1,000 invested in Berkshire Hathaway in 1964, would be worth about $11.6 million today. This information uses the 1964 share price of $19 and the February 27, 2015 closing price of $221,180 for Buffett’s Berkshire Hathaway (BRK-A). With the more recent closing share price of $194,620 (September 25, 2015) you’d still be rich.

I don’t know about you, but this type of information doesn’t particularly cheer me up. The ‘woulda, coulda, shoulda’s’ aren’t particularly helpful. Let’s pull out the helpful nuggets from these inspiring warren buffett investing quotes.

Use these inspiring Warren Buffett Investing quotes to educate and motivate you to investing greatness.

Here are some of the Top Inspiring Warren Buffett Investing Quotes: 

“Rule No. 1: Never lose money. Rule No. 2: Never Forget rule No. 1”

This is a great rule, but as any seasoned investor knows, if you invest in the financial markets you occasionally lose money. In fact, even Warren Buffett has lost money a time or two. The best way to avoid losing money on an investment is to do your homework, research the stock or fund and buy at the right price.

Bonus content: What Does PE Ratio Mean?>>>

“Price is what you pay. Value is what you get.”

Investing in individual stocks is time consuming and requires a tremendous amount of research. That’s why I don’t invest in individual stocks anymore. But even if you stick to mutual funds, you may overpay. 

Stocks and stock funds have a price tag(s) which are calculated with valuation ratios. If you pay too much, even the best stock bought at the wrong price will take your money.

“In the business world, the rear-view mirror is always cleaner than the windshield.”

Phrased another way, ‘hindsight is 20-20’. If anyone says they know what’s going to happen in the future, run the other direction. The best way to invest is by being lazy and average. In any given year no more than approximately 25-35% of active managers beat the market indexes. And the catch is that even if someone beats the markets one year, it’s unlikely they’ll outperform the next.

“Only buy something you’d be happy to hold if the market shut down for 10 years.”

This means, active trading is a losers game. Investor’s who buy and sell are more likely to lag the market than to beat it. Look at the research! 

On a John Bogle video I watched awhile ago, the founder of the modern day index fund and Vanguard Investments suggested (tongue-in-cheek) that you should invest throughout your life and only check the stocks, bonds, and funds prices when it’s time to retire. Although checking mutual fund prices once, at retirement, is not enough checking prices every week is too often. Once per year or quarter, will help you sleep better.

“What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit. . . . My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors . .” ~ CFA Institute.org; Enterprising Investor in “Warren Buffett’s 90-10 Rule of Thumb for Retirement Investing” on March 4, 2014.

Last year on a CNBC Squak Box interview, he  hit it out of the park with this  inspiring Warren Buffett investing quote. In that quote, Buffett disclosed plans for how to invest his estate. Guess what, it’s in index funds. If the greatest investor of this generation recommends a passive investing approach, maybe you should listen!

These 5 Inspiring Warren Buffett Investing Quotes and their interpretation can serve as a ‘cheat sheet’ for index fund investing practice and success.

Source; Quotes 1-4 – Ruleoneinvesting.com, “29 Warren Buffett Quotes on Investing and Success”.

This article by Barbara A. Friedberg first appeared on Barbara Friedberg Personal Finance and was distributed by the Personal Finance Syndication Network.

HMDA data shows more people took out a mortgage to purchase a home in 2014 than 2013