Danger! Stay Away!

In this installment, I'd like to take a minute to warn readers about some potential pitfalls.  Don't fall in these traps!

• Payday loans, title pawn - even with the Federal laws that were recently put in place these predatory lenders are horrible rip offs.  They can still legally charge up to 17.5% Interest on a 30-day loan amount.  That's equivalent to 210% interest per year.

• Lotto, powerball, etc. - these institutions are a tax on the poor and those who can't do math.  The odds are better that you will walk outside and have a flying pig land on your head than the odds of you winning the lottery.  The average person that plays the lottery regularly spends over $100 per month.  That much money invested wisely over a lifetime would make you very wealthy.  Stay away from gambling of any kind.  People say "I just gamble for entertainment".  If you want some entertainment, walk down the street throwing $20 bills on the ground.  Pretty soon there will be people scrambling all around you.  You'll probably cause at least one traffic jam and a heck of a lot of commotion.  Now that would be entertaining!

• Car lease - Smart Money magazine, Consumer Reports and Dave Ramsey all agree a car lease is the most expensive way to drive a vehicle.

• Credit Cards - Unbelievably large pitfall.  It's amazing to me after so many people's lives have been ruined by out-of-control spending and the resultant interest and late payment fees on credit cards that they are still considered a perfectly normal part of everyday life by so many.

• Television - Yes.  I said it.  One of the most effective things you can do to help you be successful with money is walk over to your television set and turn it off.  It's a statistical fact that people who watch more television spend more money.  It's because of the constant barrage of ads that we get hit with when we watch.  I believe that there might be as much or more more ad time than content nowadays.  Spending more is just one side effect of TV watching.  TV watching throws your brain and body into neutral.  Not only is it an incredible time waster, it contributes to our increasing health problems caused by lack of physical activity.  Health problems that will eventually cost you (or hard working taxpayers) lots of money.  All the health and financial side effects aside, do you really care to watch tv any more given the constant immorality displayed there?  Turn it off.  It will do you good.

Some Basic Truths about Money

Here are some basic truths I've learned about money and money management over the years.  

1. Managed money goes farther.  Unmanaged money disappears.

2. There are really only three things you can do with money:  save it, spend it or give it away

3. Financial success can be achieved in three easy steps:  live on less than you make, save for the future, don't borrow money.

4. It is commonly thought that the more money you make the better money manager you must be.  In reality, a high income earner has much more room for mistakes and sloppy living.  A low income earner has less room for mistakes and therefore must be more diligent and a better money manager.

5. Everyone wants our money.  Some out there are very good at getting it from us.  We must be alert, educated and diligent to keep our hard earned money out of other people's hands.

6.  God owns everything including us, our families, our income and our possessions.  We are not owners, we are managers of His possessions.  We save, spend and give differently when we keep that in mind.

7. In the children's story "the tortoise and the hare", the tortoise wins the race.  Likewise in investing, slow steady plodding beats get rich quick every time.

Hope this helps!