Plan Your Work, Work Your Plan - Overcome Fear

Wealth Is Relative - One definition of wealth is when someone has enough income producing assets to maintain a standard of living they desire, without having to work.

Be What You Want To Be - Before setting any goal, let’s explore our dreams. Remember when we were young, and our parents said, “you can be what you want to be, and do what you want to do, if only you want to bad enough?”

Goal-Setting - “Plan your work and work your plan.”

Emotions play a big part in wealth creation. True learning about money and finances takes energy, love passion, a burning desire, and even anger. Anger is passion and love combined. Most people want to play it safe and feel secure, thus passion does not direct them, fear does. Fear is what has killed the dreams of many to be wealthy. Fear of losing a job, fear of not being able to pay bills, fear of losing it and having to start all over again, fear of failure. People rationalize this fear and do not recognize it for what it is - FEAR. We should take this fear, put it in a bag and throw the bag away, today. Replace that fear with passion.

Not everyone wants to be wealthy, because it’s easier. They work for money rather than working so that their money works for them. Some say money is evil, they just want to be comfortable, money isn’t everything, it’s too late to start now, etc., etc., etc. What they are really doing is not recognizing their own fears, or that it is fear that drives them to work for money, spend, then work for more money only to spend that money.

Question - If it is a fact that 95% of the of the working people on earth create wealth for the remaining 5%, why would someone follow the teachings of those who are not wealthy. Answer - FEAR, or they simply don’t know any better.

The wealthy work to create income producing assets (make their money work for them). The middle and other classes create expense producing liabilities (work for money) which is the foundation of a debt-ridden society, repeating history once again.

eople on earth create wealth for the remaining 5%, why would someone follow the teachings of those who are not wealthy. Answer - FEAR, or they simply don’t know any better.

How a Retiree Wounded Up With a 375% Loan

Last September, a pressing family matter led 63-year-old Preston White to walk into the Cash Store in Killeen, Texas. The retiree's daughter had just returned from serving in Iraq and had asked for some financial help relocating her family.

White couldn't say no, even though he didn't have the money. It had all gone to pay medical bills for the surgery and treatment of his wife's pancreatic cancer. He had spent all his retirement savings and even the money from selling his home in Virginia.

"We were able to overcome cancer, but it had a real impact on us economically and took away all that we worked for all our lives," says White. Today, his wife, a retired school teacher, is cancer-free and continues to visit her doctor for regular scans. But White wanted to help his daughter settle down. So, he went to the local First National Bank for a $5,000 loan. He was rejected.

That's when he took his 2003 Chevrolet Avalanche pickup (pictured, with White) to the Cash Store near his home and used it as collateral for a one-month "auto-title loan" of $5,000. However, he got only $4,000 in cash, but ended up owing more than $5,000, because of fees and charges that were tacked on. According to the loan document written by the Cash Store, White would owe the lender $5,268.50 at the end of the month. The costs included a fee of $1,200, a lien fee of $28, and finance charges of $40.50. According to disclosures in the document, the cost of White's credit at an annual percentage rate was 375.12%.

The Cash Store manager in Killeen, Veronica (who wouldn't provide her last name), declined to explain the details of White's loan. The chain of 280 stores in about eight states is operated by a private entity called Cottonwood Financial, based in Irving, Texas. A company spokesman, Jared Smith, also declined to answer questions about the loan.

A Rude Awakening

Despite the terms, White was happy to get the loan, and he wired the money to his daughter. Before the end of the one-month period, White decided to pay back part of the loan and went in with $1,300 in cash. That's when he got a rude awakening. The Cash Store told him he'd have to repay the entire amount. He could make a partial payment, but he would have to take out another one-month loan, which would come with the same fees and finance charges totaling over $1,250. White realized he could pay about $1,300 for months and still owe close to the original loan amount of $4,000.

White felt trapped. "In four months, I could have paid more than what I went to the store for in the first place, and still owe the original loan amount," he says.

White's case isn't unique. In fact, each year about 12 million people take out short-term loans with interest rates of 400% or more, according to research by consumer advocate group the Center for Responsible Lending.

No Ability to Repay

White's loan also bears an uncanny resemblance to sub-prime mortgage lending that was extremely popular just a few years ago and was one of the primary reasons for the financial system's near-collapse in 2008.

"Mortgage loans were given out based on the value of the homes, rather than on people's ability to repay, and that led to defaults and foreclosures. That's exactly the case with these short-term loans. They are written out on the value of a car or another asset, not on the basis of whether you will have enough money left over after your regular obligations to pay back," says Leslie Parrish, senior researcher at the Center for Responsible Lending. "That's how people get caught in these cycles of debt, where they spend months just paying out interest and fees on their loans."

Parrish was the lead author of a study released last year that found "59 million payday loans are opened, not due to a financial emergency, but primarily because the borrower could not repay a previous payday loan and afford their regular expenses without it." The report reviewed loan prices in each state and found "that the average $350 loan costs the borrower approximately $59.15 in fees. The result of these 59 million unnecessary loans is that borrowers pay about $3.5 billion in fees."

There's One on Every Corner

White's loan -- where borrowers sign over the title of their paid-off car to the lender -- is a fast growing business. EZ Corp. (EZPW), for instance, ramped up the number of stores where people can get auto-title loans to a total of 393 in the latest quarter, from 263 in the third quarter of 2009. "Auto-title installment loans introduced in the last two years represented three-fourths of the growth in this segment's total revenues," says Joe Rotunda, CEO of EZ Corp., in a conference call with investors. The company doubled its outstanding auto-title loans in just the last two quarters ending December to over $5 million.

Money stores, where people can cash checks and take out auto-title and payday loans, have also become increasingly accessible, mushrooming from just 500 stores in 1990 to 22,000 today.

These alternative lenders have become the only source of credit for millions of people who don't have bank accounts or have spotty credit records. A Federal Deposit Insurance Corp. survey released last year found that over a quarter (25.6%) of all households either have no checking or savings account, or have a bank account but still choose to rely regularly on alternative lenders such as payday loan stores and pawnshops.

These "unbanked" and "underbanked" households are disproportionately low-income and minority. Households with earning less than $30,000 account for at least 71% of unbanked households, while 21.7% of black households and 19.3% of Hispanics were unbanked, according to the FDIC survey.

Left Shaken

When people like White get spurned by their bank, they don't know where to turn for money up-front. The money stores on Main Street lure people with signs that say: "Get Cash Today! No Credit Check Required!"

But White became snared when he found out he couldn't just pay down the loan bit by bit. Before retiring, he worked as a defense contractor with the government for about two decades. He and his wife collect Social Security and pensions, which are enough for them to lead "a comfortable life." However, they don't have much left over for lump-sum amounts like what his daughter needed. The auto-title-loan experience has left White shaken.

"Never in my wildest imagination did I think that such a loan product could even exist," he says. "You assume the system will have usury laws and protect you from such things."

White finally was directed by friends at his church to the Covenant Savings Federal Credit Union, where he was able to borrow $4,000 at an interest rate of 16%. He used that money and some of his own to pay off the Cash Store loan, with fees and interest.

White says he has written a letter of complaint to the Texas attorney general and to state lawmakers, asking them to take action against 375% interest rates like his. Says White: "Everybody's got to make a profit, but there should be no place for usury in the 21st century."

The Daily Finance, By Pallavi Gogoi

Banks Scambling For New Customers

Saving Money at the Bank

Columbus, Ohio -- While banks are competing -- literally throwing money at customers to get their business -- can you pick up quick holiday cash by just moving your money?

Key Bank is giving $225 for opening a checking account. But, here's the fine print: you must make one debit card transaction and two direct deposits of $100 or more, and the checking account carries a high minimum balance.

The deadline for Key Bank's offer is November 20.

At Citizens Bank, get $100 for starting a checking account with no minimum balance. But, it requires enrolling in direct deposit, use online bill pay and use a debit card.

Chase Bank is offering $100 to anyone opening a checking account -- with a deposit of at least $500. You must use your debit card five times and there's a 20 percent return on your investment.

Capital One's online banking will give you $50. But, you must have $10,000 in the bank on November 25.

Financial experts say if you can keep track of your account and you're aware of the fine print, then there's nothing wrong with taking advantage of the incentives.

Banks Scaring Customers into allowing fees

Rip Off Alert: Chase and Bank of America are both trying to trick customers into "opting in" for rip-off fees, according to the NY Times.

Beginning this summer, banks will have to get your permission before they're allowed to show you a false balance at the ATM or approve debit transactions that will make you overdraw your account. Good news, right? Yes, but these two techniques generate tens of billions of dollars in fees and the banks are doing everything they can to get you to opt in.

To that end, Chase is sending letters to customers designed to scare them into allowing themselves to be ripped off.

"Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you,' the message, emblazoned in large red type, warns," according to the Times' report. "'If you don't contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 -- even in an emergency,' with 'even in an emergency' underlined for emphasis."

When questioned by the Times about the letter, a Chase spokesman gave a laughable response.

"We have begun to reach out to customers and are encouraging them to sit down with a branch banker to make sure they understand overdraft services, which can be confusing. We want them to make an informed decision."

There's nothing confusing about it. You simply don't want to give your bank permission to rip you off!

Bank of America is trying similar ploys to hook people. Their employees are allegedly being re-educated so they know what spin line to pitch to customers who want to opt out.

Remember, these are two banks that only exist in the first place because of the generosity of taxpayers during the bailout! Unbelievable.

Organize Your Finances - Spend Wisely, by Dave Ramsey

On a budget? Still over-spending? Trying to figure out the best way to organize your finances and spend wisely?

Get on a Simple System

I found out that Grandma's way to handle money still works. People used to always use cash envelopes to control their monthly spending, but very few do in today's card swiping culture. The envelope system is a key component of the Total Money Makeover plan because it works. Here are a few simple basics for starting a cash envelope system:

1. Budget each paycheck. Budget is a dirty word to most people, but you must budget down to the last dime if you're going to successfully implement the envelope system.
2. Divide and conquer. Of course, there will be budget items that you cannot include in your envelope system, like bills paid by check or automatic withdraw. However, you can create categories like food, gas, clothing and entertainment.
3. Fill 'er Up. After you've categorized your cash expenses, fill each envelope with the money allotted for it in your budget. For example, if you allow $100 for clothing, put $100 in cash in your clothing envelope for the month.
4. When it's gone, it's gone. Once you've spent all the money in a given envelope, you're done spending for that category. If you go on a shopping spree and spend the $100 in your clothing envelope, you can't spend any more on clothes until you budget for that category again. That means no visits to the ATM to withdraw more money!
5. Don't be tempted. While debit cards can't get you directly into debt, if used carelessly, they can cause you to over-spend. There's something psychological about spending cash that hurts more than swiping a piece of plastic. If spending cash whenever possible can become a habit, you'll be less likely to over-spend or buy on impulse.
6. Give it time. It will take a few months to perfect your envelope system. Don't give up after a month or two if it's not clicking. You'll get the hang of it and see how beneficial the envelope system is as you dump debt, build wealth, and achieve financial peace! See ... simple!

Certainly, some bills may come in at different times of the month, so you'll need to adjust your written game plan to take it one step further. You need to plan the budget based upon your pay periods.

Say that you get paid twice a month. If you can write down which bills you plan on paying from each paycheck, you will not be left with a surprise bill. Spend each month's income and each individual paycheck on paper before it comes in.

By Dave Ramsey

Personal Finance

Personal Finance in America

People in America need cash flow to:

Pay for their lifestyles, and;

Invest to build cash flow producing assets which will provide income during their retirement years, and provide an inheritance to their heirs.

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TAXES - Save money now

The rules have changed when it comes to filing your 2009 taxes.

Tax experts told 10TV's Jeff Hogan that there are three things to consider as you begin filing your 2009 taxes.

New home-owner Michael Valo will have to consider his first time home buyers' credit. Valo used the $7,500 incentive to buy his home in 2008.

"As a first time home buyer there are a lot of new expenses that I'm just not used to in owning a home and taking care of a home and so this certainly helps," Valo said.

Homeowners who received the tax credit will have to pay it back over time, Hogan reported.

Another thing to remember when filing your taxes is mortgage debt cancellation. If you were in danger of foreclosure, banks can negotiate smaller payments. If those payments are not taxed, however, CPA Darci Congrove said you could have a problem.

"Historically the challenge has been that if you were able to negotiate your debt down, you then had a tax problem," Congrove said.

Now, the government will not treat the difference as income earned, so they won't tax it.

The third thing experts told 10TV to watch for was the new rules for Roth IRA's. The $100,000 income limit has been lifted. You can roll over your full balance of your traditional IRA into a Roth.