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Thread: Financial Freedom

  1. #1
    Proud Father Maki Riddington's Avatar
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    Financial Freedom

    Does anyone know any good links to teaching one how to get themselves out of debt and on the path to saving?

    It seems that the more money I make the more debt I have. That's not a good thing.
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    "Soli Deo Gloria"
    "Test all things; hold fast what is good.": 1 Thessalonians 5:21

    "I do not understand what I do. For what I want to do I do not do, but what I hate I do. And if I do what I do not want to do, I agree that the law is good. As it is, it is no longer I myself who do it, but it is sin living in me. I know that nothing good lives in me, that is, in my sinful nature. For I have the desire to do what is good, but I cannot carry it out. For what I do is not the good I want to do; no, the evil I do not want to do--this I keep on doing. Now if I do what I do not want to do, it is no longer I who do it, but it is sin living in me that does it.
    So I find this law at work: When I want to do good, evil is right there with me. For in my inner being I delight in God's law; but I see another law at work in the members of my body, waging war against the law of my mind and making me a prisoner of the law of sin at work within my members. What a wretched man I am! Who will rescue me from this body of death? Thanks be to God--through Jesus Christ our Lord!"
    Romans 7:14-25

    "Judo is not about strength. Yet in the learning curve, all Judokas get strong. Only with time do you learn where to apply that strength."
    The Art of Judo

  2. #2
    As I Am Paul Stagg's Avatar
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    I did it.

    Need some help?
    Squats work better than supplements.
    "You know, if I thought like that, I'd never put more than one plate on the bar for anything, I'd never use bands or chains, I'd never squat to parallel or below, and I'd never let out the slightest grunt when I lift. At some point in your lifting career (assuming you're planning on getting reasonably strong and big), you're going to have to accept that most people think you are some kind of freak." -Sensei
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  3. #3
    Soon to be lean... Joe Black's Avatar
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    Maki, if you listened to the Anthony Robbin cd’s I sent you there is a cd titled “Financial freedom” Its got quite a cool way of managing your finances in that one and also how to save for the future especially. Emphasises the power of how small savings per month can add up to big amounts if done consistently.

    Have you heard of the book rich dad, poor dad? That might be worth a look, it seems quite popular. I want to read it soon.

    I would however do a financial statement of your current affairs. I think this was one piece of advice the author of RDPD (Robert T. Kiyosaki) gives in an audio cd I have of his. He mentions how most businesses do them but we don’t do them for our personal affairs. Most people run on bankrupt!

    I am currently in debt but am trying to figure out a path to get me out of it.

    I am realizing I need to do the following things to make this happen.

    1 - Live below your means and look to reduce monthly outgoings as much as possible
    2 - Pay off debts starting with the highest interest first
    3 Save every month even if you cannot afford to. I have been putting away £150 per month and I just seemed to have adjusted to it and don’t even realize its gone until 12 months down the line and you realize this is now over 1000 in savings you have.

    Just some food for thought.
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  4. #4
    Proud Father Maki Riddington's Avatar
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    Ya, my wife has been listenning to those cd's. I don't know if she has gotten that far though. I'm gonna do a search on that book you mentioned.

    Thanks a bunch.
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    "Soli Deo Gloria"
    "Test all things; hold fast what is good.": 1 Thessalonians 5:21

    "I do not understand what I do. For what I want to do I do not do, but what I hate I do. And if I do what I do not want to do, I agree that the law is good. As it is, it is no longer I myself who do it, but it is sin living in me. I know that nothing good lives in me, that is, in my sinful nature. For I have the desire to do what is good, but I cannot carry it out. For what I do is not the good I want to do; no, the evil I do not want to do--this I keep on doing. Now if I do what I do not want to do, it is no longer I who do it, but it is sin living in me that does it.
    So I find this law at work: When I want to do good, evil is right there with me. For in my inner being I delight in God's law; but I see another law at work in the members of my body, waging war against the law of my mind and making me a prisoner of the law of sin at work within my members. What a wretched man I am! Who will rescue me from this body of death? Thanks be to God--through Jesus Christ our Lord!"
    Romans 7:14-25

    "Judo is not about strength. Yet in the learning curve, all Judokas get strong. Only with time do you learn where to apply that strength."
    The Art of Judo

  5. #5
    MulletII - AKA Ninja Boner Gyno Rhino's Avatar
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    Originally posted by Hulk
    1 - Live below your means and look to reduce monthly outgoings as much as possible
    2 - Pay off debts starting with the highest interest first
    3 Save every month even if you cannot afford to. I have been putting away £150 per month and I just seemed to have adjusted to it and don’t even realize its gone until 12 months down the line and you realize this is now over 1000 in savings you have.
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  6. #6
    Soon to be lean... Joe Black's Avatar
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    Paul, if you have any general advice also, speak away!
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  7. #7
    Professional Lurker Herc's Avatar
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    Htere is a book called "The richest man in babylon" or something like that, that helped me a lot.

    The big lesson: pay yourself first.

    Three people can keep a secret so long as two of them are dead

    - Benjamin Franklin

  8. #8
    Reborn hero Sinep's Avatar
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    I caught a show the other day by Suzy Oman I think her name was. She was talking about some interesting stuff. Like...
    don't live a lie (don't buy things you can't afford)
    invest in the known first, then in the unknown (pay for what you must first)
    only use credit card when you can pay the balance at the end of the month. keep no debts unpaid.
    there was some 2 others rules, which she called the Laws of Money , I thought the package of it was interesting, look her up.
    Last edited by Sinep; 08-15-2003 at 10:28 AM.
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  9. #9
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    I was (is) in the same boat. Started with 50K in crap debt (doesnt count the house) and now down to 30K in two years. It is hard. I have about another 3 years to get rid of the rest of it.

    I think it is interesting that this is the same question asked "How do I lose weight?" More out than in and you have less. Less out than in and you have more. There are all kinds of fancy diet schemes but that is the basics of any of them that work. Finances are the same. Spend less or make more or do a little of both. What I did was:

    1) Close and cut up all credit accounts. If you need to have one for travel (I do) then keep it and put it away somewhere in the house.

    2) I don't agree with paying off high interest first. Yes, that is the most logical but we are people and most logical doesn't always work for motivating people. I started with the lowest balance and attacked it like the devil. When that was gone, I took all the money I was paying toward it and went after the next. It is very motivating to knock those suckers out and receive your final statement showing 0 balance.

    3) Build an emergency fund. 500 or 1000 or whatever. I had started this process a couple of times in the past and it was all thrown out of wack by a bad alternator or new tires, etc. You need the money around for those things when they happen. I opened an ING Direct account - no fees and good interest and it takes a couple of days to get your money so no ATM temptations. And you can transfer online between your accounts or set up to auto deposit into ING from any account.

    4) Know where every penny goes - Microsoft Money or a good spreadsheet. If you are like me, I had no clue that I was spending so much money that I couldn't account for. When the "misc." category is the largest something is really wrong.

    5) Never have two car payments. We have one paid off car and one we financed. I drive a truck with 100K miles on it everyday to work but it is paid off. I would love to have a new one but until the car is paid off, I will keep chugging along in the ranger.

    It's hard. But the best thing is the feeling I get out of it - more of a man - more independent - more in control. Hmm...sort of the same feelings as building muscle.

    Good luck man. You are way beyond the majority just because you are making the effort. Most Americans are swimming in debt and don't care. Again, like going to the gym. I see a theme here.

    rayk1029

  10. #10
    Party of "No." Tryska's Avatar
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    Originally posted by Herc
    Htere is a book called "The richest man in babylon" or something like that, that helped me a lot.

    The big lesson: pay yourself first.

    word. richest man in babylon, suze ormond's 7 steps to financial success i think?

    the millionaire next door, and i also liek the dummie's guide to personal finance.


    richest man in babylon will tell you step by step how to get out o debt, tho.
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  11. #11
    Soon to be lean... Joe Black's Avatar
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    You just prompted me to buy the following book from amazon actually.

    Rich Dad’s Cashflow Quadrant: Rich Dad’s guide to financial Freedom.

    Also upon a recommendation I got Sam Walton’s book made in America My boss read it and said it was a great read and was only a fiver.
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  12. #12
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    I didnt notice your sig before Maki...If you are Christian, then you would probably enjoy Dave Ramsey http://www.daveramsey.com/. I got the a lot from him except being non-Christian, I got tired of listening to him. His workshops are held througout the country (usually in churches) and he backs up his financial philisophy with Biblical scripture. He has a real good syndicated radio show as well.

    Peace
    rayk1029

  13. #13
    Proud Father Maki Riddington's Avatar
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    Thanks guys. Ray I am a christian. I'll look at his stuff. Thanks again!
    Maki Fit Blog

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    "Soli Deo Gloria"
    "Test all things; hold fast what is good.": 1 Thessalonians 5:21

    "I do not understand what I do. For what I want to do I do not do, but what I hate I do. And if I do what I do not want to do, I agree that the law is good. As it is, it is no longer I myself who do it, but it is sin living in me. I know that nothing good lives in me, that is, in my sinful nature. For I have the desire to do what is good, but I cannot carry it out. For what I do is not the good I want to do; no, the evil I do not want to do--this I keep on doing. Now if I do what I do not want to do, it is no longer I who do it, but it is sin living in me that does it.
    So I find this law at work: When I want to do good, evil is right there with me. For in my inner being I delight in God's law; but I see another law at work in the members of my body, waging war against the law of my mind and making me a prisoner of the law of sin at work within my members. What a wretched man I am! Who will rescue me from this body of death? Thanks be to God--through Jesus Christ our Lord!"
    Romans 7:14-25

    "Judo is not about strength. Yet in the learning curve, all Judokas get strong. Only with time do you learn where to apply that strength."
    The Art of Judo

  14. #14
    As I Am Paul Stagg's Avatar
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    General stuff?

    Figure out a budget, and stick to it

    Live beneath your means. Mrs Stagg and I both do very well. Yet we live in a house that is a third of what we can afford. We buy used cars. We shop sales and outlets for clothes. We clip coupons. Remember - this doesn't mean live poor. We own a Merceds and a BMW, and we have a nice house. We eat out when we want... we buy good beer. But we don't go to foriegn ATMs... we don't buy chicken when it's $4.99 pound, we buy lots of it when it's on sale for $1.99 a pound.

    Pay off debt fast - before you save. Highest interest first.

    Don't carry balances on credit cards.


    A couple of comments on these suggestions:

    1) Close and cut up all credit accounts. If you need to have one for travel (I do) then keep it and put it away somewhere in the house.

    ** I disagree. Having an open credit line is a good thing on a credit report. Not having one is an indicator of poor credit habits. The key is to never carry a balance on your credit cards. Use them, then pay them off. Every month.

    2) I don't agree with paying off high interest first. Yes, that is the most logical but we are people and most logical doesn't always work for motivating people. I started with the lowest balance and attacked it like the devil. When that was gone, I took all the money I was paying toward it and went after the next. It is very motivating to knock those suckers out and receive your final statement showing 0 balance.

    ** Its fine to motivate, but this is not the way to do it. Highest interest gets paid off first, that's more money in your pocket, faster.

    3) Build an emergency fund. 500 or 1000 or whatever. I had started this process a couple of times in the past and it was all thrown out of wack by a bad alternator or new tires, etc. You need the money around for those things when they happen. I opened an ING Direct account - no fees and good interest and it takes a couple of days to get your money so no ATM temptations. And you can transfer online between your accounts or set up to auto deposit into ING from any account.

    ** Good advice, although, again, get your debt sorted first. If you need to limit access to maintain control, fine, but I suggest keeping a months salary cusion in your checking account, then about 2-6 months in a fairly liquid investment (money market), where you can get to it quickly if you need it. The rest can go into longer term stuff where it is more difficult to pull it out.

    4) Know where every penny goes - Microsoft Money or a good spreadsheet. If you are like me, I had no clue that I was spending so much money that I couldn't account for. When the "misc." category is the largest something is really wrong.

    ** This is crucial. You'll be amazed what you spend money on. I used to spend hundreds of dollars a year on ATM fees, and had no idea.

    5) Never have two car payments. We have one paid off car and one we financed. I drive a truck with 100K miles on it everyday to work but it is paid off. I would love to have a new one but until the car is paid off, I will keep chugging along in the ranger.

    ** I like this strategy, too. I'd go one further, and say not to pay interest on depreciating assets... that means pay cash for cars. Given that is a bit extreme for most people, I agree it's key to limit car debt.
    Squats work better than supplements.
    "You know, if I thought like that, I'd never put more than one plate on the bar for anything, I'd never use bands or chains, I'd never squat to parallel or below, and I'd never let out the slightest grunt when I lift. At some point in your lifting career (assuming you're planning on getting reasonably strong and big), you're going to have to accept that most people think you are some kind of freak." -Sensei
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  15. #15
    HomeYield WillKuenzel's Avatar
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    Originally posted by Paul Stagg
    We own a Merceds and a BMW, and we have a nice house. We eat out when we want... we buy good beer. But we don't go to foriegn ATMs... we don't buy chicken when it's $4.99 pound, we buy lots of it when it's on sale for $1.99 a pound.
    Awesome!


    Lots of good info in here and definitely stuff a recent college grad like myself needs to know. I'm not in incredible debt (no student loans) but having a credit card that needs paying and car loan, its all stuff that couldn't hurt me to read and hear. Good thread Maki!
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  16. #16
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    All good stuff Paul. Everyone has their own way to go about things.

    Knocking out small balances has given me more cash flow to pay off more debt with and save. Paying off high interest, high balance gives you MUCH more money at the end of the game but not much help during the game.

    I had to stick my emergency fund somewhere else when I started. Most of the reason we get into these situations is a lack of discipline and keeping that money in the checking account was too much of a temptation for me. Now I keep a balance in checking and reg savings in addition to the ING account.

    I may have been advised wrong but having 0 balances on credit cards is not positively scored on a credit report. I destroyed my credit in college and had a loan officer sit and go over how the credit scores are determined when I bought my first house.

    She said O balance accounts on a credit report scare creditors and are scored lower than when you carry a balance of lets say 50% of your limit. The logic is that a creditor is thinking you will go from 0 balance to a max balance on that VISA after he gives you the loan on that new car or whatever and you wont be able to pay your bills. Max balances are bad too. There is some magic percent of balance to max credit that gets the better rating. The best part (other than all on time payments) is having a mortgage that has always been paid on time.

    The low balance strategy and the issue related to credit scores is also covered in Dave Ramsey's stuff. I know he explains the "why" part of it a lot better than I do. He believes in no credit cards whatsover.

    Major bump on Paul's car advice. It made me throw up (literally) when I financed the car. Every month it makes me mad that I did that. The car we got rid of was becoming a money pit and I wanted a new car (never had one) BIG MISTAKE! Dont get me wrong. I bought a good new car for under 17000 that will last a good while but I could have done much better with a cheaper used car and paid it off sooner.

    Mercedes and BWM cash? That is a goal to shoot for.

    rayk1029

  17. #17
    Soon to be lean... Joe Black's Avatar
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    save expensive cars for when you are rich.

    I made the awfull mistake of getting a used bmw on credit. Overall i lost 25% on the car through depreciation in 1.5 years, and probably spent that again on services etc.

    SUCH a waste of money.

    I'll get another one, when I can afford one
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  18. #18
    As I Am Paul Stagg's Avatar
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    The credit card advice is from some mortgage lenders I know.

    You can always close an open account if it's a problem.

    But lots of closed accounts indicate previous problems.

    Yes, we have a MB and BMW that we paid cash for (or had the cash and financed because the interest rate was lower than the rate on savings - although now we carry no loan on the cars). Remember we are a bit older than most of you, and make an awful lot more money than someone just out of school... I have an MBA and a good job with a good company, and Mrs Stagg has built a very successful business as a Realtor. But the principles we use(d) apply to everyone. About 4-5 years ago, our combined income was less than half what it is now - and we lived beneath our means then, too... but we drove Hondas.
    Squats work better than supplements.
    "You know, if I thought like that, I'd never put more than one plate on the bar for anything, I'd never use bands or chains, I'd never squat to parallel or below, and I'd never let out the slightest grunt when I lift. At some point in your lifting career (assuming you're planning on getting reasonably strong and big), you're going to have to accept that most people think you are some kind of freak." -Sensei
    "You're wrong, and I have a completely irrelevant pubmed abstract that may or may not say so." - Belial
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  19. #19
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    Very good point about the closed accounts. I should have left them open till they were paid off. It looks questionable to close a lot of accounts when they have balances remaining. I have had to explain that to a banker and they understood but it was still a pain.

    Paul -- since the formula is spend less and make more. Did/does your MBA make a signifigant difference in earning potential? I have been in a large corporation for 8 years and wondered if I should pursue that as a responsibility/salary bump. If I could go back I would have got a Master's right after undergrad. It seems like it is a lot harder to do it midstream. I know a lot of people on the board are around college age (not me).

  20. #20
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    Since I have read none of the material mentioned above, I'm wondering does it say anywhere a key to financial freedom is to OWN your own home A.S.A.P?
    That's what I hope to accomplish with 3 years up north working in an oilpatch. Own my home at age 25... substitute $1k mortgage payment for a car payment... *drool*...

  21. #21
    Skinny Fat John0101's Avatar
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    If you have losts of credit card debt you can take out a personal loan (if you have good enough credit history) and pay the credit card debt. It's better to pay $10000 with 5% annual interest rather then $10000 with 20% annual interest.

    also...

    save your pocket change, this stuff adds up over the long run

    set aside maybe 50, 200 dollars whatever, each week that you are going to save. Small steps are going to yield large results if given time.
    Life isn't like Burger King, you can't always have it your way.


  22. #22
    the lil engine that could chops's Avatar
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    rich dad poor dad, the book

    no instant gratification, but you'll start thinking in a while new way.

    i have a gf swears by this book. she was working a normal corp job during the day. on weekends, she worked at a grocery store for extra cash to help pay for her new condo.

    today, 2 years later she just sold that condo and owns 2 OTHER properties.

  23. #23
    Senior Member flake's Avatar
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    Put you're whole salery for the month on black 42

    j/k

    Seriously though, try and minimize interest by becoming a credit whor - loads of credit card companies offer 0% or below 6% on balance transfers.

    Also set up means to force you to stick to your plan - I had 2 overdrafts one of which was at £2k and I just made them lower my limit by £250 a month so I basically had to pay it each month.
    half the time I have no idea what you're talking about. the other half, I'm not listening.

  24. #24
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  25. #25
    Senior Member hemants's Avatar
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    What Paul said.

    Live within your means.

    Buy expensive houses and cheap cars.

    Whatever rat race you are in, get out of it.

    It's easy to ramp up your lifestyle, but very difficult to ramp it down. Be very careful. Lifestyle is sticky upwards.

    Don't borrow money for anything other than a home. If you don't have money for that car you want then save up for it, and drive a used Integra or Civic in the meantime. Staying up at night worrying about money will definately cut into your anabolic gains in the gym.

    There are no get rich quick schemes unless you are an entrepreneur.

    Budget. Calculate. Buy used where possible.

    You don't have to be a miser, just shop wisely.

    Put away 10%-20% of your gross pretax earnings into a long term balanced investment and forget you have it.

    Keep another rainy day fund. Rainy days WILL come.

    Don't buy expensive cars that you can't afford. There is no free lunch in a lease! Master your Grade 12 math. It comes in handy wrt finances.
    If the only thing you are holding is a hammer, everything looks like a nail.

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