Archive for March, 2007

The best perspective on wealth comes from a stand-up comedian. When a panhandler asks him for change with the line, “Hey, buddy, I’m broke. Can you spare anything?”, the comedian responds, “Broke? Listen, I’M broke. I’M $700,000 in debt. You’re EVEN!!”

If you want to be wealthy, you may need to redefine your concept of wealth. Do you think wealth means living in a huge house? Most millionaires don’t, because it means thousands of dollars beyond the mortgage and associated expenses to maintain this lifestyle. Debt is the opposite of wealth.

Do you think it means driving (and maintaining) an expensive car? Expensive clothes? Expensive upkeep on just about everything? This thinking is not in keeping with many millionaires’ priorities.

If you want to be wealthy and you have not read The Millionaire Next Door yet, make it the next book you read. It may change your mind about wealth and how to go about amassing it. Remember, changing your mind is still free.

Whether you are looking for entertainment ideas for you or your children, here are a few ideas that will cost you next to nothing. Enjoy!

1. Establish Family Game Night; play board games, cards, or charades.

2. Cook a nice meal.

3. Dance.

4. Draw, sketch, paint.

5. Make a card or gift for a loved one.

6. Write letters.

7. Work out using an exercise video. Discount bins and the library are great sources.

8. Browse the goodies at a farmer’s market or check out local yard sales.

9. Read out loud, preferably to a little one.

10. Take a walk.

The good news is that your 2006 income tax return isn’t due until April 17, 2007. Because the April 15 deadline for filing income tax falls on a weekend day, the IRS typically adjusts the deadline to the next business day. However this year April 16 is a holiday (Emancipation Day) in Washington, D.C., so the IRS has set the deadline for April 17 nationwide. The bad news is that that’s five weeks from today. It may seem like you have plenty of time until then, but preparing now will save you money later.

Overcome your fear of finance and get to work on your tax paperwork. Before filing your return, remember to read up on recent tax legislation to see if the new laws will save you money. After filing, remember to do your own filing. Check our recordkeeping guidelines to be sure you have what you need to adequately document your 2006 year in taxes.

Do one thing to increase your wealth today. Even if it is simply clipping a coupon for something on which you will later spend money, find a way to end the day with more than you had. Did you know that on average, first-generation millionaires spend twice as many hours each month on financial planning as those with fewer than average assets? Maybe you need to spend an hour coming up with a financial plan for your life. Perhaps you’ve been meaning to take time to set up an auto investment. Consider selling unwanted possessions online or via newspaper classifieds. Once you decide to increase your wealth, the possibilities are endless.

The History Channel includes a fascinating section on the history of money. You can see videos of the production of currency, the Gold Rush, and Black Tuesday. Be sure to check out the timeline for little-known money facts and my personal favorite, coined phrases.

“A fool and his money are soon parted.”
~A Defense of Government, by John Bridges (1587) 


In assessing value, don’t overlook enjoyment. If you collect junk, well, the value is inherent in it’s name–junk. But if you collect something of value with purpose, your passion can pay off. Perhaps not in dollars, but in friendships, acquaintances, barters, giveaways, and plain fun. For example, collecting stamps, coins, rare books, art, or furniture as a hobby has a value attached, both monetary and ethereal. Consider this investment when deciding how to spend your time and money. Remember, too, that simply collecting money can be a pleasure unto itself in the peace of mind it brings. On the opposite side of the coin, collecting debts has little value.

What is it about numbers and money that you loathe? Maybe it’s filing taxes. Perhaps it’s planning for retirement. If you’ve got that under control, you might consider building another financial asset: your own business. Whatever it is about finance that befuddles you, decide to tackle it now.

Knowledge is the best weapon in any battle. There are books on every aspect of the financial world as well as online information. Local courses are another terrific resource to glean financial knowledge as well as financial friendships. If you apply a little energy to your specific financial worry, you’ll beginning to build strength in that area.

Dollar-cost averaging basically means that you invest a certain amount of money at specific intervals over a period of time, usually years. This means that if you are investing in stock, the price of the stock you are buying will go up and down; when the price is down, your fixed amount buys more shares. Conversely, when the price of the stock rises, your regular investment buys fewer shares.

Over time, theorists say that the price per share generally averages out, insulating your investment against fluctuations in market value. By establishing an automatic investment plan that takes advantage of dollar-cost averaging, you can also avoid overreacting to changes in stock price (as well as the risks associated with playing the market).

Though the market certainly has crests and troughs, the overall value has persistently risen–dollar-cost averaging is a simple idea that may help you achieve your financial goals.