Teaching you to embrace today while making yourself a millionaire!

I wish I would have understood how easy it is to become a millionaire by starting to save small amounts of money when I was younger...

I feel compelled to share the simple concepts you can apply today....


30 October 2008

Happy Halloween.......Financial Friday!!

Generation Millionaire - Wisdom beyond your years!!!
Will announce contest Monday --- Win a Chipolte gift card........

Boo - Don't want to be white as a ghost every time you look at your checking account........
Want to avoid skeletons in your closet - (for some job applications and on almost all credit applications - you have to list bankruptcy)
Don't be batty every time the mail comes ..........

Okay, enough of my Halloween humor......

I have been thinking of the basic principles of investing and setting yourself for a well rounded financial future.....

I found a great article's on Investopedia that reviews 8 financial tips for young adults. Amy Fontinelle looks at your whole life - from finances, taxes, health costs and insurance. She reinforces the concepts of Generation Millionaire. She also has some good links from her site.

This is what you are trying to avoid - Cnn

Stay safe and have a happy halloween....

Stay tuned.........

28 October 2008

More Thoughts on Student Loans.......

In the last blog I discussed ways to reduce the amount of money you may need to borrow for school and ways to repay more quickly once you graduate. We also received some great comments that are real world examples from people who shared their experiences and thoughts.

Stefan's idea of looking into Internships is excellent! He landed an internship that he worked at until graduation. So it wasn't for one term - it lasted 18 months. He was able to gain experience and his employers were flexible with his hours due to his school schedule. He also received pay increases as he took on more responsibility. This internship experience helped him gain his full time job after graduation.

M - brings up a great point - that most schools will offer job fairs. The fact that he found out he was really good working with computers and changed his career direction is very exciting. Being willing to try something that is new can be a real life changer!

J- is one of the really fortunate individuals who didn't have the additional stress of worrying about loans. However, her idea of working to save an emergency fund is an excellent thought. Once you graduate there are many costs - needing clothes to interview and work in, possible relocation, car expenses and commuting costs, housing, repayment of student loans just to name a few. Having a bag of money saved makes all this much easier. The last thing you want to do is start charging everything and creating debt. That is a trap that takes years to get out of.

Again, the goal is to borrow the least amount needed while you figure out ways to increase your ability to make a few bucks and reduce your costs. The principles are the same ideas we discuss regarding retirement savings. Determine what you really value and spend your time and money on those things. Find those free activities on campus, free food, have a pick up game of touch football, grab a Frisbee and some friends, cards anyone, get involved in student groups - support your passion.

In the next blog I will go through repayment of loans using different time frames. Again, more than anything you don't want to be finishing paying off your student loans as your kids are starting college.

Keep the thoughts, comments and questions coming........

Stay tuned................

27 October 2008

Repayment of Student Loans big concern

I want to thank the Sigma Phi Epsilon fraternity at Ohio State University once again for a great night discussing your current and future concerns.

I just compiled all the surveys and it seems the most prevalent current financial concern is repayment of student loans. I have a few thoughts on this topic - some from my own experience, my experience with my children and lastly from all my years of working with people who are trying to make ends meet while paying back loans and saving for retirement.

National average for undergraduate loans is about $20,000. I have attached a repayment calculator that you can run some numbers for varying repayment options. As always, the sooner you can pay off the loans the better. You really don't want to finish paying off your student loans as your kids are entering college.

During the presentation I discussed some recent college graduates that I have been working with to help set themselves up for financial success. There are 4 people that are making between $32,000 to $55,000 a year. They opted to rent a 4 bedroom house in a nice suburb that was affordable. They were able to upgrade their college lifestyle to a nice house in a safe neighborhood. They furnished most of the house with donations from family members. They coordinated with each other so not to spend a bunch of money needlessly. They split utilities and share the 2 car garage. It took flexibility but they believe the long term pay off is worth going this route.

By choosing to take this step they are able to save 15% of their salary in their 401K's and make additional principle payments on their student loans. They are hoping to have the loans paid off in 5 to 7 years. One of the graduates had no student loans however needed a car - this afforded her the opportunity to get a new Honda Accord. They are also saving an emergency fund. It is always good to have 3 -6 months of living expenses readily available. They are able to still eat out and travel while moving forward in their lives.

The other options were to not save and spend more on living expenses or move home and save. This has been a great comprise. Affordable independence while being a responsible adult. I went by their home the other day and it is decked out for Halloween, they hired a neighborhood kid to cut their grass (trying to teach him financial independence) and they were enjoying sitting on the front porch and relaxing.

I am also working with students who are trying to keep the loan amount to a minimum. A few suggestions: figure out your expenses for tuition, housing, food and books. Do not borrow more than you need. If you can work in the summer to cover some of the costs - DO IT!, if you can work part time during the school year to cover the costs of extras - DO IT!, using loan money to eat out or party with your friends is insane. $7.oo lunch over the time of your loan is about $15.00.

If you do this on a regular basis you are spending thousands of dollars that is going to take you years to pay back.

The trick is to really place a value on what you are going to spend your money on. Is it going to get you closer to your goals. Is it a short term pleasure that will have no lasting effect on your life. The football games, fraternity or sorority dances, home coming are part of the college experience you may not want to miss so plan for them.

Some programs have co-op opportunities where you can work every other term. That is a wonderful way to gain experience while making decent wages to pay for school. Scholarships are out there. Normally, not easy to figure out but if you are willing to put the time into researching and applying for them -it can help reduce your costs.

I would love to hear some of your tips on cost saving and ways to earn money for school to keep your loans to a minimum.

It comes back to choice and values. I am not a big advocate of loans and debt but if you are getting loans for school to invest in yourself, as long as you put forth 100% effort and get that degree - you will never borrow money for a better reason.

Stay tuned......

24 October 2008

Millionaires in the making from CNN

I am always looking for articles and web pages that support the Generation Millionaire concepts. I thought this was interesting from CNN Money. I am not promoting any career choice or options. Just trying to show how different people budget their money.
As always send me your ideas, questions and goals.

Millionaires in the Making are smart about choosing investments and they get a kick out of socking away money. They don't spend frivolously but know how to enjoy life, they keep an emergency fund, save for retirement and education expenses, and try to keep debt to a minimum. To be considered for a feature, tell us more about your saving strategies and goals. Send us your story and photo, or upload a video telling us all about your family and your finances, and why you deserve to be the next Millionaires in the Making.

I am not sure if they are still accepting new people for stories because it does not have an end date listed. Either way the stories about the families are interesting.

Stay tuned......

23 October 2008

Financial Friday - Q & A

We are going to start with some basic investing principles. There are short term money concerns as well as long term money concerns. So your portfolio planning should consider them both. This is not to be considered advice and before you make any financial decisions - make sure you contact a financial professional to discuss your specific financial situation. This blog is for educational purposes only.

Before you make any financial decisions you should always consider your time frame until you need the money, risk tolerance - how much do fluctuations affect you, and make sure you are in a well diversified portfolio.

Short term goals:

3 - 6 months of living expenses for emergencies. This should be in a savings account. This is called liquid money or cash because it is easily accessible.

Any money you will need in the next 2 years should also be in a savings account. You don't want it subject to market fluctuations. So if you are buying a house, car or have a planned large purchase - the money should be in a savings account. Don't try and get a big return in the stock market because if the market goes down you may not have the money when you need it.

Money you may need in the next 3 - 5 years can be in a low volatility fund - such as a bond mutual fund or an asset allocation fund - like a balanced fund. (mix of stocks - usually large size companies and bonds). There is more risk in this type of investment vs savings accounts or cd's, but it does give you more growth opportunity.

Money you won't need for more than 5 years can start to assume more risk. Normally, it takes at least 5 years for the stock market to rebound from a down turn. Below I have different types of portfolio allocations.

Long Term Money:

Money that you are saving for retirement can take on more risk depending on your time frame. The longer your time frame until retirement the more stock you can have in your portfolio. You have other concerns besides the stock market going down. You need to be concerned about inflation, increased health care costs, and potentially no pension or reduced social security benefits. Historically, the stock market has returned the best long term returns.

There are different types of portfolios:

Portfolios should be a mix of large, mid, small and international stocks and mix of government, corporate, investment grade, and high yield bonds

Aggressive growth - has approximately 85% stock mix and 15% bonds
Growth - 70% stock mix, 25% bonds, 5% in cash
Balanced - 50% stock mix, 30% bonds, and 20% cash
Conservative- 20% stock mix, 50% bonds, and 30% cash

The longer your time frame the more risk in the stock market you can afford take. Sites like Fidelity Investments and Vanguard do a good job of explaining simple investment concepts and even have questionnaires you can go through to help determine your best options.

Check Spelling Thanks for coming it was great to hear the presentation. A couple of days before you gave your presentation for Sig Ep I had walked into my bank (knowing that is was a FDIC institution) and put the majority of my savings (approx. $7500 in total) in a 'laddering' of CDs ( a 6, 9, and 14 month). I have had the money sitting in low interest savings accounts but am scared to put it into the market (especially with the current conditions). Was this the right decision and what should I do with my money when it matures? You kept presenting the opportunities to invest at 8% returns. What is a feasible avenue that a college age student can go through to seek such a return.


Again, I always defer you to a financial professional who knows your entire situation to guide you. But basic rule would be......

If you need the money for school in the next few years - you are on the right track. Keep the money very safe (FDIC insured savings accounts or cd's) CD's will normally return a little more money than a traditional savings account but you have to be sure you will not need the money prior to it maturing. You do not want to assume any risk on money you will need in the next few years!

However, if this money is for retirement than you may want to consider getting into the market in a well allocated portfolio. Firms like Fidelity, Schwab and Vanguard offer funds that are based on Time Frame until retirement. They are very easy to invest in and they are great for novices or people who do not want to worry about rebalancing their portfolios every year on their own. They help individuals from making common investment mistakes.

The 8% return that was discussed in the presentation was an assumption for a long term portfolio in a well allocated stock/bond mix over a 40 -50 year time frame. When investing in the stock market for the long term - 2 things are happening:

Money will compound over time - you invest money, you have your gains reinvested into the principle amount - which increases the amount that is now working for you. So you invest $1000 and you get a 5% return. Now you have $1050 dollars working for you...

Dollar Cost Averaging - hopefully, you will be adding to your account on a regular basis. As you are buying into your investments - you are buying at different prices depending on if the market is up or down since your last purchase. Over the long term this is a very effective way of building wealth over time.

The 8% discussed was a reasonable assumption over 40 -50 years of investing. The market may be up 10, 15% or more some years and down 10, 15 % or more other years. Over the long term of contributing on a regular basis, and keeping your portfolio mix correct for your risk tolerance and time frame - from a historical standpoint 8% is reasonable.

Keep the questions and comments coming! I want to know what is on your mind so I can address the issues that are most concerning to you!

Stay tuned........

22 October 2008

Financial fridays and Speaker at Ohio State University

This Friday I will answer some of the questions I have received! Will go over basic investing concepts and how to determine what to do with money. How do you get 8% on a long term investment?

Also for those of you at Ohio State - the Wellness Center is putting on a presentation on November 6th at 6pm. Money in the Real World. It is a free event at the RPAC but you do need to register before Oct 27th.

If you have trouble with the OSU link contact the Wellness Center. Plus there is FREE FOOD - wow, put that savings in the bank - alittle closer to that $3000 savings for this year!

I just read this article from and think it is pretty fun and interesting...

Keep the questions and comments coming -

Stay tuned.......

21 October 2008

Thank you Sigma Phi Epsilon at The Ohio State University!!

Wow! What a great night! It was my pleasure to present to these future leaders at the Sig Ep house! They were engaged and curious about what they could do to avoid the financial pitfalls of most Americans. I was asked to come and educate them on how money works. There were around 100 young men and the energy in the room was electric.

It was wonderful to see the light bulb go off as I presented the information of how money works over TIME! They became much more engaged when they saw that they were in a great position to really change their future. Currently, most have little debt, after the presentation education and most importantly time.

They asked a lot of great questions - and many of the guys hung around after the presentation to continue the conversation. I was really privileged to spend time with these young men.
In my next blog i am going to address some of the common themes from the surveys.
Such as "Where does 8% return come from? and go into more detail on the amount of savings.

So thank you guys of Sig Ep for your wisdom to seek out information and educate yourselves. You truly do have Wisdom beyond your years!!

Stay tuned......

20 October 2008

GenM building momentum

For those of you who have been faithful followers of the blog - I want to thank you and let you know there will be more frequent entries, as well as, a few little contests coming up on:

The best ways to have fun without money - Keep it clean please ha

The best savings tip - Be creative

I will also have Financial Fridays - where i will either recap the week, give tips on good books or cd's, answer any questions that come thru on the blog or email. I welcome your thoughts, questions and insights!

The craze is starting to take hold - tonight is the presentation at the Sig Ep house at The Ohio State University.

Stay tuned........

15 October 2008

Short term fixes aren't what we need........

As I listen to the politicians talk about what we can do to solve this crisis - I keep thinking your generation can avoid all this. You just need to be educated on how to go forward.
One of the things that just came up is having people take their money out of their retirement accounts without penalty. Which is a great short term fix for them and probably really needed for many people. But what is going to happen to them when they retire? The majority of Americans do not have enough saved for retirement. So by tapping into it early will just exacerbate the problem.
I have worked with many hard working people who have done the right thing only to have their companies go bankrupt and they lose their pensions and the stock. Companies like Enron and Lehman. But the majority of people I spoke with over the years just didn't save enough, didn't understand the principles of investing and now they don't have enough saved.
Another issue the politicians are avoiding is we need to swing the pendulum back. We went from the depression era of scarcity to over excessiveness. I grew up middle class in the 60's and 70's and that was a time that was more balanced. We were green not to be trendy but because it made sense. My mom reused everything, we passed things around - clothes, furniture, cars, and dishes to name a few things. Everyone pitched in to help each other. Then somehow we as a culture became disposable and brand aware. Throw away containers, technology changed so fast that we were replacing at unprecedented rates, marketers convinced us if we didn't have their brand on - we were not as good or cool as others. It shifted our collective conscious and changed our values.
It is time to swing the pendulum back to moderation, cooperation, and our basic values.
Which leads me to share a blog with you! My neighbors are amazing people who embrace these concepts! Mike , Janie and Iyla are the ones that we survived 5 days with no electricity. In their blog The Dragonfly Chronicles they share the fun of family life, enjoying Iyla and just simple pleasures of life.
Stay tuned......

12 October 2008

Iceland is bankrupt -- really I mean are you kidding me??

Being that I subscribe to the theory that if you are invested correctly for your time frame, risk tolerance and goals - you leave your investments alone. Especially in a down market!!! This is what the market does - fluctuates sometimes wildly. History shows that through world wars, assassination attempts and success, natural disasters, terrorist attacks and over inflated markets - the stock market has always over the long term been the best place to invest a portion of your money.

With all that being said - I still firmly believe this. I went on vacation from Oct 1 - 7. When I came back and saw that Iceland could go into bankruptcy - I started to think what the heck does that mean???????? Here is a quick explanation of how it will affect the citizens. Their currency the Krona is no longer worth anything outside of Iceland. Within Iceland they will still operate and function normally for the time being. The country will have to decide what currency they will use and normally the residents will have a certain time frame to convert their old money to the new currency. They have many of the same issues we have with housing and inflation. The government is trying to unite the people to avoid a civil unrest. For a more detailed explanation read Reuters article.

Regarding the US economy - hopefully, we are getting close to the bottom. Panicking is not going to help. Rather than trying to rewrite what has already been written over and over again I thought CNN's article on how we got here and what happens when banks default were easy to understand.

My message hasn't changed one bit with all the chaos in the economy. It strengthens my point. Your generation needs to be the change.

Stay tuned.....

07 October 2008

Thanks Sigma Phi Epsilon at Ohio State University!

I am very excited about the upcoming presentation at the Sig Ep Fraternity House at Ohio State University on October 20, 2008! I have been invited to discuss the ways they can be financially successful. We will also discuss lifestyle and choices! Their interest is in having a balanced life which is the mission of Generation Millionaire!

It is so exciting and refreshing to see young adults interested in learning and deciding to make good choices.

I will have pictures and commentary on the event and will address the questions and concerns in future blogs.

Stay tuned......

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