7 Greatest Money Mistakes

 

Mistake # 1: Paying Too Much Tax.

 

One third to one half of your personal wealth is going to come from tax planning. If you do not believe that you are a fool. Look at your existing expenses. The number one expense for everyone is either tax or housing. It is your right under the law to pay the least amount of tax possible (under the law). That means you can structure your life, structure your finances to pay the least amount of tax possible. And there are simple and powerful techniques that can make a major difference in your tax life (not to mention improve your financial position).

 

Take a look at these simple examples:

 

  • If you rent you are missing out on the interest deduction, which could lower your tax bill by $5,000-15,000 each year. Most people who do not own a house say they can’t afford it. Truth is you cannot afford to be without one. If money, credit or down payment is stopping you check out our Real Estate materials.
  • If you take vacations and could turn those vacations in to “tax deductible” trips, you could take more of them or get money back from the government for taking

those trips. There are a half dozen ways to make trips tax deductible.

  • If you took money out of your brokerage account and paid tax you could have reduced that to 15% tax rate (or less).

Tax strategies make the difference between the poor and wealthy. And it seems

on the wealthy know them or can afford them. Not any longer, through our tax defense program you can learn 44 ways to cut your tax bill in less than 30 days.

A simple effective and proven plan to cut your taxes in half and at the same time

improve the quality of your living.

 

Mistake # 2: Paying Too Much for Insurance.

 

We are taught about insurance from “insurance professionals”. Interesting that they are paid commission to teach us. There are some good insurance agents out there in the market place. They are interested in providing you with good quality insurance at low prices. However, there are some agents out there that are more concerned about their pay check than yours.

 

Life Insurance. Generally we want to buy Term life insurance. It is pure insurance. Meaning there is no savings or investment associated with the insurance. You pay just for the insurance. Premiums (cost) is lower than Universal or Whole life policies. To get the best at the lowest rates visit our Quote Service. Get instant insurance quotes from over 300 insurance companies. No obligation. It will quote a variety of rates and choices. Another choice may be Variable Universal Life, because it allows you to control

the investment portion of your life insurance. By the way if you currently have Universal or Whole life polices you can covert them to Universal Life.

 

Car Insurance. When it comes to the typical automobile insurance policy, there are four major areas of coverage:

 

  • Bodily injury liability (including personal injury protection in “no-fault” states), in case you injure someone with your car.
  • Property damage liability, in case you run into someone else’s property.
  • Comprehensive, in case your car is vandalized, stolen, or in some other way damaged by someone else.
  • Collision, in case you damage your own car.

 

Each of these four areas has its own deductible. Cost cutting here is a three step process:

 

  • Contact your auto loan lender to determine the maximum allowable deductible for each area.
  • Apply for a credit card that has no annual fee and a reasonably low interest rate with a limit equal to your total deductible. Once obtained, place this credit card in your file with your insurance policy and forget you have it.
  • Raise your insurance deductibles to the maximum limits.

 

If you raise your deductible from $500 to $1000, that extra $500 you might some day be responsible for will be saved in reduced premiums over a period of a few months. In the event you ever have a need for your insurance, use the credit card to pay your deductible and pay off the balance over a period of time that is comfortable for you. By doing so, you have avoided a financial strain on yourself, and “self-insured” a portion of your automobile.

 

If your car is an older model, avoid collision insurance.   Collision insurance is normally a more expensive coverage than a coverage that may be substituted such as comprehensive.

Avoid incidental coverage’s such as auto medical coverage.      If you are in a no-fault state, use medical insurance instead of personal injury protection if your state allows you to do so.       Substitute transportation, which covers rental cars, towing, and

insurance auto club memberships are very overpriced and should also be avoided

(especially if you are already a member of AAA).

 

Some states require car owners to maintain “no-fault” coverage. If your state is one that does require it, of course you must maintain the coverage. But, if your state does not require the coverage, get rid of it because it only duplicates other coverage you will have.

 

Mistake # 3: Not having a Financial Blueprint for Life and Retirement.

 

It is estimate that the typical North American will make 2 million dollars in their life time. Most will retire with a few pennies and perhaps a less than adequate pension. If fact the static’s at age 65 are scary. At age 65 this is what most people retire to:

 

  • 22% Must Continue to Work past age 65
  • 28% Rely on Welfare or Social Security

 

  • 45% Depend on their family to live and exist
  • 4% Meet the basic needs of life (food and shelter)
  • 1% Truly Financially Independent

 

Of the people who are financially independent the most common reason they expressed that help them “make it” was: starting early and having a plan. A blueprint for success. Your blueprint must have the following:

 

  • Tax reduction plan.
  • Compounding of investments to maximized funds at retirement.
  • A return of 15% or greater over time.
  • Asset Protection. One 4 people will be sued this year!
  • Investment in Real Estate. Your own property and investment property. Using leverage to

build wealth.

  • A business for tax deductions and building wealth.
  • Product discounts and savings plans. Coupons. Shopping cards. Wholesale relationships.

 

We provide a benefits package to our members that can save $1000 to $5000 EVERY YEAR. If you are interested in placing your self on the path to savings and wealth building join our program to day. One of the first steps in our programs is to do a complete Financial Review for you and then build a wealth building plan for success.

 

Mistake # 4: Not Receiving a 15% or Greater Return on Your Investment

 

A lot of people have money in CD’s earning 3-4%. You know what CD stands for “Certificate of Death”. It is death to your long term wealth. There are many better choices out there than Certificates of Deposit (CD).

A simple choice would be to put your money in no-load mutual funds. The “no-load” means there is not the typical 5-7% commission (the load) paid to the broker (sales

rep). Who is usually broker than you, by the way.

 

IRA’s, Keogh’s and 401K’s are great investment vehicles because of there tax

deferment too. If you start or own a small business you can create your own retirement program (in addition the one you have at work). What most people do not understand

is the power of investing in these financial instruments. When you put money in to

these you automatically make 30% (your tax bracket) on your money. That is awesome! We make 30% before we even begin to make money in the stock market or

mutual fund or what ever your IRA invests in. You must max these out every year!

 

Individual stock investing and day trading can make a big difference. The skill is getting the big returns with out much risk. And there dozens of investment strategies. Check out our investments section for some recommendations and winning strategies.

 

Tax lien certificates can be another great choice. You can earn up to 22% in less than 6 months. Guaranteed by the government.

 

Mistake # 5: Not Owning Your Home!

 

A major mistake. There are 3 important reasons you should own your own home. First, it is one of the best tax breaks possible. The interest on the borrowed money is tax deductible. That means you can shelter some of your existing income. For a new home in that first few years almost all of the monthly payments is interest. If you have a

$1000 per month payment almost all of it is tax deductible. So at the end of the year you can right off almost $12,000 against your income. That can mean a $3000 or more

tax savings. Second, owning a home and paying it off over 15 or 30 years gives you an

appreciating asset. The house will appreciate about 4% per year (national average). In addition you are paying of the principal every month, creating equity. At the end of 15

or 30 years the home is yours and it has grown substantially in value. The third reason

you want to own a home is leverage. Leverage in real estate means we use a little bit of money to control a large asset. An example, if I buy a home with $5000 down and it

is worth $100,000, I now control asset of 100k. Interesting that each year the asset will

increase in value of 4%. Which means after the first year the asset is worth $104,000. So in essence I spent $5000 to get a $4000. Are you with me? Each year the asset is

going to grow another 4% (another $4000–actually more but I am keeping the number

simple). $4000 each year times 15 years is $60,000 (in appreciation–increased value). When I sell the house I will make this money. And all I did was put up $5000 initially. A

good return on investment and a great example of leverage.

 

Houses are great investments. In fact we must buy a home for our family and we should strongly consider investing in housing. The power of leverage, appreciation and equity build up can make you wealthy. Not to mention the outstanding opportunity around buy and selling foreclosures, distressed (run down) properties, or renting homes out and making monthly cash flow.

 

Mistake # 6: Not having A Small Business

 

There are thousands of success stories about a small business that started in a back bedroom or garage that are now worth Millions, some even Billions. Microsoft, Sony, Hewlett-Packard, Apple just to name a few. Perhaps you have the next brilliant idea, product or service that can make millions. May be the idea can just generate enough money for you to quite your existing job. You know what job stands for don’t you? Just Over Broke. Or may be the you can just use the small business to reduce your taxes this year? Did you know through your small business you can take the following deductions:

 

  • Convert the allowance you pay your children to a wage they earn in your small business.
  • Write off $20,000 in business equipment each year. I know in my business I need to use a

VCR, a TV, a camcorder. Do you see any possibilities?

  • Vehicle expenses related to business.
  • Health insurance.
  • Vacations. Now business trips. Find out the rules and use them.

 

Small business gives us immediate tangible tax deductions we write off against our current income. We can in a few minutes show you how to write off 10, 20 even

$30,000 in tax deductions this year. That could mean a refund or tax reduction of

$3,000 to $10,000 this year from the tax man. In fact our staff specialize in helping people find those missing deductions. We developed a very cool program that does not cost much but has big rewards. It is our Tax Deduction Review Program and it is Free!

 

Make money. Save money. Perhaps find that special business that is personally rewarding and financially prosperous. Every one should have a small business.

 

Mistake # 7: Not having Asset Protection

 

Did you know when you die, if you have not planned the event properly, up to 73% of all your money, and assets could be lost? Check out the following chart of famous people and the loss of their estates.

 

 

Name

 

Gross Estate

 

Total Settlement

 

Net Estate

 

Shrinkage

William E. Boeing 22,388,158 10,589,748 11,796,410 47%
Marilyn Monroe 819,178 448,750 370,426 55%
Elvis Presley 10,185,434 7,374,635 2,790,799 73%
J.P. Morgan 17,121,482 11,893,691 5,227,791 69%
John D. Rockefeller, Sr. 26,905,182 17,124,988 9,780,194 64%

 

I know what you are saying. Well I do not have nearly that amount of money. Well let me tell you something surprising. If you own a home, a car, some life insurance, and or have a retirement account (401k, IRA)…..You need an asset protection plan. There is a good chance not all of the value will be passed on to your heirs and or it will be taxed at higher rates than you want. Or your heirs want.

 

In addition right now we are a litigious nation. Everyone is getting sued. Studies indicate that one out of four people in our nation will get sued. Easily it could be you. How would you feel if you had to sell your house to settle a law suite or lost everything because you were not prepared.&

45/45/10 Investing

Strategy: 45/45/10 Plan—A balanced approach to investing.

 

45% Cash Flow. Focus on cash flow strategies first. This builds multiple sources of cash flow. If we have more than just job income it keeps us safer. And or allows extra money to build wealth, or leverage. Strategies to consider are:

  • Get a job. A good start, but not the only solution.
  • Credit Spreads. Monthly income from the stock market.
  • Covered Calls. Rent your stocks out and get paid.
  • Rental Real Estate. Single residence, duplex or triplex.
  • Commercial Real Estate. Mobile Home Park. Bill Boards. Storage.
  • Small Business Income. Web sites, services, retail, & professional
  • Intellectual property. Write it once, get paid forever.
  • Referral fees. Match products and databases; take a small percentage each and every month. 2% can make you rich.

45% Growth. Once we have multiple sources of income working. We can turn our attention to longer term growth. Long term growth makes us rich. One strategy I heard early in my real estate investing career was “buy one rental property a year, for 10 years and in year 15 you will be a millionaire. Run the numbers, it is true if the appreciate rate is about 6 percent or great. Simple growth strategies can make us rich. But it all about the ROI. See growth section on time, roi and compounding and further explaination of tactics. We may consider strategies such as:

  • Real estate appreciation. Long term growth.
  • CANSLIM. An uptrend growth strategy.
  • Buffet Approach. Key fundamentals.
  • Dogs of the Dow. A simple Dividend Strategy.
  • Bi weekly mortgage payments. A interest cutting program.

10% Speculation. We can speculate and get a better pay day. But we must understand the relationship between, risk and reward. Only a small part of our investing should be speculation. Unfortunately, many investors speculate too much. They gamble on the long shot, when they should be making small amounts of money consistently over time. A few examples of speculation maybe:

  • Land options.
  • Buying homes on Speculation.
  • Development(s).
  • Naked options. High risk.
  • Forex (high leverage positions).

Now if you have the right education, and experience these “speculative” strategies can be safer. As experience, can give you higher probability of success. A forex investor has a distinct advantage, if they know support, resistance, world economy, an Elliott Wave, or Gartley pattern. He will tell you a hundred to one leverage (or more), is not risky, but profitable. The key here being EDUCATION, STRATEGY and EXPERIENCE.

Take a S.T.E.P.

Many folks are frozen by fear. Fear of success. Fear of failure. Fear of the Unknown. One of my mentors, had a simple solution for fear.

 

Strategy: When FEAR raises its ugly head, take STEP forward any way. 

 

By the way STEP, stands for:

 

Strategy. you have a plan to deal with the fear. For example if u are afraid of losing money, you have a wealth plan. A system to succeed.

Time. You must dedicate the time to succeed. Give the strategy or idea, time to grow.

Experience and Effort. You need to have a mentor show u the way, but u have to put up and effort too.

Persistent. Don’t give up.

 

 

Dreams are held hostage by FEAR

Dreams are the prisoner of doubt and fear

 

Many folks do not live their dreams, because they are held hostage by their own limitations. And I mean self limiting beliefs. NOT real. If fear or doubt holds you back you must have a few strategies for killing the fear. To eliminate doubt. To live your dreams.

 

Strategy: Take a step anyway.

 

John Wayne said “Courage is being afraid and saddling up anyway”. Successful people realize that on the other side of fear are your dreams. Just take a step. I have done a lot of fire walking in my life. Actually taught fire walking too. Do you know there is a trick to fire walking? See if I can get you moved to do the first step, you are very motivated to take the rest. J It is true. If I can get you to take that first step you are on the path. The hardest step is the first one. The rest are easy.

 

Strategy: Get a mentor

 

When you do not know, you often create issues and doubt that are not real. You create issues, you create problems, you look for excuses not to try. Well, that would never work. I can’t do that. Mentors squash that thought process right away. Because when you say, you can’t figure it out, they often know away to success. Mentors are worth their weight in gold. You can spend years looking and panning for gold. Or they can show you were to find it right away. I know the value of time. While other are trying to figure it out themselves, I have a mentors show me the quick way to success.

 

Strategy: Push Past Your Self-Imposed Limitations

 

Ok. My high school guidance councilor said base on my aptitude test, I would be a good electrician or cable service repair guy. Than god I did not listen to them. Or create limitations about what I can do in my life. Too many people fall into a BOX. This is whom I am. Or worst come up with limitations. “I am not smart”, “I am too old”, “I could not do that”. What ever you believe you achieve. Start with breaking out of the box. Start with a better self concept. Start by believing you are capable of great things.

 

Dare to be Rich as well as do much more with your life. Travel the world. Send your kids to the college of their choice not the college down the street. Build a business. Write a book. Make 5 million or more. Have the house at the beach. The hot car. You deserve more in life.

 

Believe, and Achieve.

TEA Principle

One of my mentors said, “Jim. Do you cut your grass?”. I answered “yes.” He then said, “That is the reason you are not rich.” What on earth was he talking about?

The answer was simple. Either you invest time, or you spend time. I was spending time. Spending time on the wrong activities and efforts. Therefore getting the wrong result. If I had spent that time working on revenue generation, rather than saving 5 bucks an hour (you can always find some one to cut your grass for 5 bucks an hour), I could get a greater result in my life. Life results are about how you spend your time.

As I looked at how I spent my time, and effort, I realized there was a direct relationship, between time, effort and achievement. That in many cases, I wasting time, spending it, not investing in the future. Later in life, I labeled this the TEA principle.

Time + Effort = Achievement

If you want any result, any achievement, you must schedule the time, and effort. Most folks do not schedule their success. They fall in to bad habits, like: eating, watching TV, lying on the couch, unproductive driving, personal errands, lunch, and getting lazy.

Recently, I saw Mark Wahlberg on a TV show. He was talking about his faith, and focus. He had an interesting comment. Every day he goes to church to “stay focused”. Every day he commits the time, and effort.

And he gets results. He has great achievements, but I imagine his relationship with GOD is doing well too.

As I got older, I started to put on weight. Recently, I lost 30 pounds in the last 90 days. The only difference was exercise for 40 minutes EVERY day. NO matter what. Time and effort equals achievement. No matter what. I got home at mid night last night after a long day, and flight. But I am committed (effort, so did my 40 minutes).

My son let his grades slip recently (hockey, work, and girlfriends can get in the way sometimes). So we applied the TEA principle. Every day for 1 hour, he must study….. Period. The Time and Effort will get achievement.

I asked Charles J Givens how he wrote 4 best sellers. He said “Simple from 7am to 10am every day I write”. There is no question I will have more books. Shame he passed away. Bet there were dozens more great books on the way.

Take the time each day. Make the effort each day. And achievement is on the way.Tea