The Perfect Salary

I often hear people tell me when they talk about personal finance that “I don’t need to be rich, I just want to make enough money where I can buy what I want without worrying.”  So….how much money it that?

To be honest, I don’t have a good answer.  A few years back the Wall Street Journal posted an article that it takes an annual salary of $75,000 before you have diminishing returns on the dollars you spend.  In other words, $75,000 salary is the minimum you can make to maximize your happiness.  But is that the answer for you.

I think that wealth people always worry about money and are constantly asking themselves is the value received for the dollars spent worth it.  They do not want to waste money on bad investments or buying things not of value to them.

I don’t define wealth as a dollar figure, or a net worth figure.  I define personal wealth as being happy with yourself, knowing your personal values, and living out those values….being happy where your feet are.  You are wealthy when you don’t have to worry about buying things, because you have saved for the items and they fit your personal values.

How do you get to this personal wealth?

1) Know what you value and where you spend your money.  If you want to see what you value, look at where you spend your time and money.  I encourage you to write down where you spend every penny for one month, evaluate it weekly, and reflect on if this spending is in accordance with what you value.

2) Look for little leaks where you spend money and receive little or no value.  Can you substitute spending money on this item for something else?  The little leak that is common for many is eating out, especially lunch.  You can easily spend $10 a day on lunch; $50 a week; $2,600.00 a year.  It is worth it or can you pack your lunch and save money.  

3) Set a budget.  Look at where you have spent money the past month, and categorize your spending, i.e., groceries, dining, fuel, electricity, Internet, TV, housing, etc.  Do you have enough money for all of your expenses?  If not, you either need to cut back or make more money.  Look for the little leaks in your spending where you can cut back without drastically changing your life style.  Ben Franklin said it best when he said “Little leaks can sink a mighty ship.”  You should stop as many leaks in your personal finances as possible.

4) Set goals. Setting goals keep you motivated.  Do you want to pay off your credit cards in the next 6 months?  Do you want to buy a new car?  Do you want to go on vacation?  Figure the cost and establish weekly or monthly steps to achieve your goals.  

5) Celebrate. When you achieve your goals, you now have enough money to do the things you want without worry because you have have the resources for them.  You are now wealthy.  You don’t have to make a lot of money to be wealthy.

Opportunity Wherever You Live

I'm often ask what it take to be an entrepreneur.  My answer is always the same:  looking for the opportunity and then having the persistence and follow-through to make it happen.  Know yourself and follow your passions.

When looking for the opportunity, you want to solve a "pain point." Can you create a solution to a problem that other people don't want to do or can't do ...can you eliminate their pain. What are some things that are causing you pain and that you would be willing to pay other to solve?  The more of a pain, the more valuable your solution. Can you be innovative and creatively solve the problem.  The answer may be just around the corner.

The find pain points, you need to become aware of others and what others are experiencing.  Observe, interact and interview others as to what things they don’t like and what they would like to be easier or simpler.  You don’t have to solve the pain point at this time; just make a list of your observations and interactions.

By writing these ideas down you are allowing your conscience and subconscious to percolate on these problems, looking for solutions.  You can later evaluate you list to see which are most viable for you to solve, given your strengths, passions and networks. Keep that notebook next to your bed so in the middle of the night, you can write down your solutions.

Keep up on social and technological trends.  Read newspapers, magazines, listen to public radio, podcast, and what the news looking for trends and inventions.  Imagine the future and how this new technology will be used in the future to solve problems.  Can you combine two or more existing technologies or product to help ease the pain of others?

Think outside the box and say yes to all possibilities.  Suspend your current reality and create a reality where anything is possible.  Do not limit yourself by self-imposed constraints. This will help you spur on your creativity to come up with solutions.  Write down your solutions so you can research the possibilities and evaluate the probable success at a later time

Entrepreneurship requires dedication, persistence, long hours and an uncertain future.  You have to know your strengths and weaknesses to be successful.  Hire or partner with people who complement your strength, not people with the same strengths.  Tom Rath’s StrengthsFinder 2.0 is a great source to help you uncover your strengths.

Know your passions and what drives you.  Your passions will help you overcome obstacles and keep you going when others say no and think you are crazy. You passions will keep you working 60+ hours a week. To discover your passions, what would you do if money was not an option? What do you currently do where time flies by? Pay attention to your daily life to find your passions and strengths.

Entrepreneurship is turning your passions into profits by solving other’s pain points and creating a product or service of value.  When you turn your passions into profit, you never have to work another day in your life.

Say Cheese

When taking on the topic of personal finance, I love hearing the stories where that voice speaks to you from the heart and leads you on the path of happy and home. 

We made a visit today to Belle Chèvre in Elkmont, Alabama and met the charismatic and delightful owner, Ms. Tasia Malakasis(Chief Cheese Officer).  I first learned about this impressive lady in perusing old publications of Organic Gardening. She left a very successful and financially rewarding career in Internet technologies to venture back to her roots and become a queen in the world of award-winning cheese making. Since that article, she has appeared in countless magazines, news shows, and newspapers and now author of two culinary books.

Her list of accomplishments are impressive but upon meeting with her in person, I found that gold nugget I love most that I see in those who pursue their passion -that positive and happy energy that radiates from inside them and just makes them glow. 

She discovered her culinary passions by taking non-credit courses at the Culinary Institute of America while on a sabbatical from her corporate career. This led her to her discovery of Belle Chèvre cheese. She eventually left New York City, a big pay check, and the stress of corporate life to volunteer at Bell Chèvre and learned the art of cheese making. After 6 months, she purchased Belle Chèvre, has grown the company considerably, increasing the product portfolio, sales and distribution to many national retail stores. 

If ever on I-65 through Alabama, take a 5 mile detour to Elkmont and visit Belle Chèvre. Pay to take the guided tour and perhaps you will have the good fortune to meet Tasia. 

Personal Finance and Passion

Personal Finance and Passion – we love it when the two come together. We meet people in all walks of life who exemplify the philosophy:  If you are doing what you love, you never have to work a day in your life. As we approach Valentine’s weekend, we are reminded how joyful that endeavor can be-- for the entrepreneur following their passion as well as those benefiting from their labor of love.

Through our Walker Homestead CSA (Community Supported Agriculture), we have the great privilege of hosting a Farmer’s Table dinner this Valentines weekend. Chef Chris Grebner is an extremely talented culinary artist. His passion is to bring together the food producer with the food consumer, over a four to seven course meal on the property where the food is produced. These evenings are exquisite with an eclectic group of people coming together to enjoy meeting new people, fine foods and conversation, and having their own beverage of choice in the beauty of a country setting.

Pursuit of his passion benefits his livelihood, that of the food producer and those who have the privilege to participate in his highly sought-after dinning events.  

Bon appetite.

Commencement Address

As we just graduated our senior class and sent them off into the world, a few parting words of advice and personal finance tips:

1.  Stay true to your values.  Roy Disney, Walt's brother said "When values are clear, decisions are easy."  Keep refining and defining your values, for they should guide your decision in the future.

2.  Go forth in your life with passion.  Stay true to your values and whatever you do, do it with passion and energy.  We all will have parts of our jobs that we do not like, but need to get done.  Use your passion and energy even when you have to "shovel out the stables."  It will make it more fun and just maybe a little more enjoyable.

3.  Love what you do and do what you love.  It may take you 5, 10, 20 or 50 years to find your true calling in life, but enjoy the journey.  You will learn something in everything you do, but may not realize it until you look back on your life.  Your life's journey has a purpose and the journey is the way to learn and discover your purpose.

4.  ALWAYS pay yourself first. Make sure you put enough in your 401-k to get your employer’s entire match.  You are responsible for your own retirement, so start early and maximize your contributions.

5.  Don't buy things you cannot afford.  It is tempting to rent a nice apartment and fill it with nice furniture....all purchased on credit, but do not give into this temptation.  Save and pay cash for the things you want and need.  You are used to living on very little as a college student.  Keep that going for a few more years and save for the things you want and PAY CASH, not credit.

6.  Remember to give back and be thankful.  It took a village to get you through college: your family, friends, teachers, professors, co-works.  Keep them in mind as you do good with your education.  Perhaps you will influence others to go to college and graduate.  Always give back to others.

7.  Keep in balance with your saving, spending, investing and giving.  Only you can control what you do with your money.  Live life fully and enjoy the relationships you make, but keep everything in balance.  Don't sacrifice friendships for career or your career for friendships, and don't sacrifice your savings and investment plans for immediate gratification.  Life is short so enjoy it as you keep your balancing point.

Personal Finance and Passion

My passion is farming and people and writing and creating. This month, we ventured into a dream of mine; starting the Walker Homestead CSA (Community Supported Agriculture). Bob will remind me that this is a business and we need to be making money at it. And I remind him that this is a passion and we need to be having fun with it; creating, experimenting, and sharing the goods and trials with our new extended CSA family. That in itself has a lot of value, and I would argue much more than a pile of money for which to select an investment option.

 

Yes, I could make much more on an hourly basis, exercising some of my other learned skills, but I earn so to keep me and my family secure and happy and so that so I can do things I want to do. Starting up a CSA -planning the events, sharing ideas between members, creating the gardens and the orchards and working with hens, thinking about milk goats (and maybe a few piglets) is joyful. And at the same time, we are earning money and reducing some of our tax liabilities.

 

Which speaks to the principle: If you find an occupation that you love, you will never have to ‘work’ a day of your life. It is graduation time. Good luck to all seniors in pursuit of your passion.

http://walkerhomesteadcsa.blogspot.com/

Maynard

This past Saturday we lay to rest my neighbor’s father. He was a famer, rancher, cowboy, gentleman, and a friend to all. He died doing what he loved doing best, checking on his cows and spraying fences. He was teaching this 50 something city boy professor how to become a farmer and I kind of think he enjoyed seeing an old dog try to learn some new tricks; a desk jockey work a field and get cow sh*t on him.

His untimely death got me thinking about balance and how we live our lives each day. Personal finance is about planning and saving for the future, but it is also about living for today. How do you find balance in your personal finance life? Do you save every penny so you can retire like my roommate from college who just retired after 30 years of teaching? Do you plan on working until you are 70+ and therefore not need so much in retirement to still afford your lifestyle? What do you plan to leave to your heirs? Someone said you lived your life right when the check to the undertaker bounces, meaning you just outlived your savings. Do you agree or disagree?

I hope you all find your passion and that you are able to do what you love to do; that you find balance in your finance goals to support that passion. Personal financial success is your definitions of success, whether it is to retire when you are 53 or never retire. The important thing is to have a plan and be proactive at that plan.

I hope we all find that balance.

- From a green farmer who is happy learning how to work cattle and smell like a famer after a hard day’s work

Modern Day Gypsy Guide: 7 Tips on How to Make Your Money Last

While in Belize with a group of MBA students, I met Vienda, self-proclaimed ‘Modern Day Gypsy’. Her life is the true essence of frugal fun. In the spirit of spring break, we invited her to share a posting on the topic of travel, fun and frugality.

Modern Day Gypsy Guide: 7 Tips on How to Make Your Money Last

I've been travelling around our pretty globe for 10 years now covering over 30 countries, with a couple of pit stops along the way; 18 months in London and 2 1/2 years in Sydney. People whom I meet along the way often ask me how I do it. I work, naturally, and have several different income streams but that's a post for another day. 

How much money you have is generally less important than what you do with that money. Travels can last much longer if you use your money in thoughtful and clever ways, and think outside of the box. Here are seven of the most poignant tips on how to make your money last.

1. Be Flexible.

Being flexible is probably the No. 1 tip I can give anyone who wants to become a traveler. That means be flexible with your plans, with where you want to go, with whom you will meet and what you will do. Leave it up to the travel gods. They will always guide you to have the best experience possible! For example, late last year I had to make a decision. I had been in the UK for a month, doing some work, and had to decide whether to stay for the winter or move on. London is an expensive city if you don't have a conventional lifestyle, and though I could have stayed and worked, my heart was yearning to go somewhere warmer. Both India and Mexico were calling my name. So I started researching flights and my decision was made for me. I found a $250 flight from London to Cancun as opposed to the cheapest flight to Mumbai in India which was $800. I saved $550 simply because I was flexible, and have been having the most incredible time in Central America ever since. This is true for so very many different scenarios. It's so important to remain open and flexible at all times when you're a modern day gypsy, as you never know when and what kind of opportunities will appear.

2. Don't Make Solid Plans.

This may seem counterintuitive for many people who haven't had a lot of experience travelling, but actually making solid, fixed plans such as hotel bookings, trips and tours may be your demise because you often can't change them if something better shows up. In many parts of the less-developed world, you won't get the best deals and experiences by booking them online. You get them by talking to the local people, making friends and connecting in "real" life. Only a couple of weeks ago I was working at the ‘Envision’ music festival in Uvita, Costa Rica. They had camping sites available for staff but I wanted more comfort (I may be a modern day gypsy but I definitely enjoy and indulge in simple creature comforts!). So a friend and I went to a local cafe and started speaking with the waiter, the owner and some other locals. Luckily my Spanish is fluent enough to make these kinds of conversations and within minutes the news was out that we were looking for a place for two people with kitchen facilities. The next day we were taken to a beautiful row of local tourist apartments, each complete with a private kitchen and bathroom, a fabulous swimming pool, hammocks, a lovely outdoor area and a five-minute ride to the festival site. We wouldn't have found this if we hadn't gotten in with the locals, and we praised and felt gratitude for our lovely temporary home every day.

3. Always Barter the Price.

This is really important. Always, always, always - ask for a better price. You won't always get it but more than often than not, you will. I do this everywhere I go because I know that my buy is valuable to the seller and that if you don't ask, you don't get. Not only did we find a beautiful place to stay in, but we also got a really good price because we asked for it. When we initially spoke to the locals about finding an apartment to rent during our stay in Uvita, we told them that we were planning to stay for 15 nights and that our budget was $20 per night for the two of us, so $10 each. We knew that the prices in the area were mostly above and beyond this unless we wanted to stay in some dodgy backpackers but we both know from experience that you generally always get what you put out to the universe. It's just how modern day gypsies roll! Because we were staying for more than two weeks, and it meant that the owner of the Cabinas had a definite income for that entire time, and we paid in cash, he was happy to fulfill our needs. The apartment we received was normally priced at $60 per night so we actually saved $600, which is HUGE in the grand scheme of things.

4. Be Generous.

This tip is based on the law of attraction. What you give out you get back, and when you're on the road there's nothing more beautiful and fulfilling than giving something to someone who is in need. Not only does it feel great, but it also has the added benefit of your generosity being reciprocated in the most unexpected ways. This may not happen directly from the people you have been generous with, but you simply never know. The amount of times that wonderful things have happened to me is countless: complete strangers offering me a place to stay, free taxi rides to airports when I ran out of local currency, a shared meal with people living below the poverty line, generous gifts of books or other things that I've needed along the road. Being generous is a wonderful attribute to take with you wherever you go, and although this act should come from a pure place without any expectation, you will find that when it is reciprocated, it will often save you money in the most unusual ways.

5. No Bills.

One of the wonderful benefits of being a modern day gypsy is that I have no bills. I don't own property, I don't have any ties, I don't have telephone, electric or gas bills. I pay for the things that I need as I go. Certainly this makes the way I care for and spend my money quite different. I'm very aware of what my expenditures are and deal with money on a day-to-day basis.

6. Stay With Friends.

After having travelled for such a long time, and having made lots of friends wherever I go, I have the wonderful opportunity to stay with friends in many places along the way. I am always so incredibly grateful for every single individual who is kind enough to open their doors to me and share their home. I always make an effort to reciprocate their kindness and hospitality by putting my homemaking talents to work and making some beautiful meals and leaving some kind of light, love and inspiration behind wherever I go. This obviously also means that I get to save on accommodation expenses which is definitely one of the biggest costs when travelling.

7. Travel Slow.

I like to take my time wherever I go. I'm not a tourist or a backpacker, I'm a modern day gypsy which means that I want to immerse myself in the place and culture that I am visiting. This means that I like to stay in one place for longer periods of time rather than move around quickly. And this can really help make your money last longer. When you live like a local, you pay local prices and you get to know the people. You can rent a place for longer periods of time at the fragment of the price of a hotel or other tourist accommodations. You learn to shop where the locals shop, prepare your own meals and live and love a more simple life. Taking your time when you travel is not only good for your pockets, but also much more fulfilling for your soul, as you get to really experience the place that you are visiting rather than just pass through it.

Life as a modern day gypsy has so many adventures, twists and turns, and how you use your money is definitely one of the important aspects that you face on a daily basis. What tips do you have to make your money last longer when travelling?

Bio: Vienda Maria is a writer, life coach and modern day gypsy. She is the creator of The Empowerment Project + the Build Your Own Business Blog guide. You can immerse yourself in her musings over at Vienda Maria, tweet her your love and joys on Twitter, as well as  join her on Facebook.



Sequester = Politician Self-Interest

We are only a few days away until the automatic government budget cuts and Congress and the President can't come to agreement on specific budget cuts and/or increasing revenue. Ramifications will be across-the-board cuts, effecting defense, education, national parks, air traffic controllers and all services provided by our Federal government.

Why can't the congress agree? To me it all comes down to self-interest, not willing to step up to hard choices and not agreeing on common values. Roy Disney is quoted as saying "When values are clear, decisions are easy." What does Washington value? “How I am going to get reelected” -not what is best for the country?

If a family is in debt, they have to agree on how they are going to reduce that debt. It typically is achieved by a combination of reducing spending and increasing income. If the family agrees to common values, decisions on what to cut and where to increase income become easy. The family looks inward on where to cut and makes sacrifices to balance their budget. The cuts are difficult but the family makes the difficult decisions and works to balance the budget.

On the other hand, our Federal Government can't make difficult decisions so everyone gets cut. It saves the politician's political career because they did not vote to cut anyone's project. Yet they can look good by restoring federal funding. As a country, we need to decide what we value.

The sequester tells me what the politicians do not value the fiscal commitments of the United States. They do not value how hard the tax payers work to earn money to pay their taxes. The sequester could put our economic recovery on hold which impacts everyone. The politicians do not value cooperation and working for the common good.

Politicians were elected to work for the common good. Now is the time to get to work, make the hard decisions, put aside partisan politics, and agree to a budget before the sequester goes into effect. Please do what you were elected to do - damn it!

One Key Thing

Last Friday, I had the opportunity to go to Hawkeye Community College in Waterloo, Iowa and speak in Mark Ryan’s Personal Finance Class. This was the first class that I visited that is using our Personal Finance book. It was really fun and exciting to be at a different college and in a different classroom and answer the student’s questions. The one question that I thought was most interesting was “What is the one key thing, or most important part of your book?”

After a little time, I answered that Chapter 1, ‘Values, Vision, Mission and You’, was the most important part of the book. If you know your values and have a vision for your future, financial decisions become easier. Whenever you make a financial decision, ask yourself if this decision or purchase is a reflection of your values. Is this really how you want to use your resource of money? Framing your decisions around your values allows you to achieve your goals and work towards your vision.

Knowing your personal mission helps you define your passions and what you do best. If you can turn your passions into profits, you never have to work another day in your life. Knowing you passions and strengths helps you find careers where you can excel.

I also shared with them that I thought our Personal Finance book was really about helping you increase your happiness. Money decisions are stressful and knowing your values, and setting your budget based on your values will reduce your stress and increase your happiness.

We hope that this blog and our Personal Finance book increases your happiness, helps you discover your vision, values and mission, and be in control of your finances. Thanks again to Mark Ryan, Hawkeye Community College, McGraw-Hill, and most importantly, the students in the class for hosting me for the hour. It was an honor to spend time with you.

All our best, Bob and Kristy

Frugal Fun Night?

As classes have started and I’m back to teaching personal finance, I have a challenge for all the students taking this class and using “Personal Finance; Building Your Future” by Walker & Walker. I want to know who can come up with the best frugal fun night. Add your suggestions and ideas by adding it as a comment to this blog. Keep it clean (PG rating), include an estimated cost and how this Frugal Fun Night reflects your values – the values that you worked on in Chapter 1. Remember, being frugal is not being cheap, but it is the wise spending of money in accordance with your values.

I look forward to reading your responses and getting ideas of how I can spend a Frugal Fun Night!

Happiness in Punta Gorda (PG), Belize

I just returned from Punta Gorda, Belize where I met with business owners in preparation for bringing MBA students for a week in January. I didn't know what to expect, for this was my first trip to Central America. We are organizing this trip through ProWorld Belize and the Toledo Association of Businesses in PG. Many thanks for their hospitality, openness, and warm reception.

A little geography lesson; Belize is south of Cancun, Mexico and just above Guatemala. I had to find it on the map before I left. Punta Gorda is on the southern coast of Belize with a view of Guatemala across the bay. It takes 1 hour be prop-plane or 5 hours by bus from Belize City. My experience with Belize is the 3 full days I spent in Punta Gorda, Barranco, looking out the window as we drove and the interactions I had with the people I met.

PG doesn't have the white sand beaches and the towns are not featured in travel magazines. PG is very rich in Garifuna, East Indian, Creole, Mopan, Q'eqchi, and Mestizo culture. The business owners I met are very entrepreneurial and scrappy, making do with what they have and creative in overcoming things they don't have. I was impressed with how sharp and perceptive they are at understanding customer needs and wants. Of note, they are some of the most genuine and sincere individuals I have met.

Driving through the bush and into the villages, I met subsistence farmers, living in thatched roof houses and huts. It reminded me of how little we need to be happy. It also made me question if all development and advancement is good. You buy a car and now you have to make money for gas, insurance, and (if you borrowed the money) to repay your loan. For this, it keeps us in the "Rat Race", always chasing the dollar to pay for goods we don't need. It made me question what we really need and what I want out of life.

Now don't get me wrong, I really enjoy the comforts and conveniences I have. But I also realize that these things don't make me happy. To me, happiness is good conversation and being around the people I love. Happiness happens when I share a meal, engage in meaningful work, and give back to my community; however you define your community.

The conversations I had in Belize were very rich with thoughtful people. Sitting in 90+ degree heat with humidity and sweating like there was no tomorrow but having rich meaningful conversation was very rewarding. Learning about Belize, PG, and the different cultures was enlightening. Meeting with and thinking of how we can help the entrepreneurs of PG was both exhausting and invigorating.

I look forward to spending 6 days with a group of Mount Mercy University MBA students in PG and sharing in their experiences. I feel we can do good for the PG community and businesses. I know our students will come back changed, richer, and with a new perspective on life.

So what does this have to do with a personal finance blog? Nothing and everything. It is always good to get out of your comfort zone and question what is truly important and what makes you happy. I hope all of you have that opportunity.

To learn more about life in Punta Gorda, Belize, check out Sarah's Blog: http://belizeyoume.wordpress.com/

Community Supported Agriculture (CSA) Basics

Question: What enables you to both eat healthy and be a good steward of your community? 

Answer: Buy a share membership to your local Community Supported Agriculture (CSA). Through a CSA membership, you are buying seasonal food directly from a local farmer. In a CSA, the farmer offers a set number of "shares" to the public. A share consists of a box of farm produce. You purchase a share up front at the beginning of the year and in return, you receive a box of seasonal produce each week throughout the season. Information about CSAs and how to find one in your community can be found at http://www.localharvest.org/

Advantages for the Farmer

• Market your produce prior to the growing season
• Receive payment early in the season, which provides cash flow
• Connect with those who will be consuming your produce

Advantages for You

• Fresh food, packed with flavor and vitamins as they will be consumed or frozen very soon after they are harvested
• Exposure to new fruits and vegetables and new ways to prepare them keeps you from getting bored with eating healthy options
• Good for the environment as you have a lower carbon footprint when there is a shorter distance from field to table

Consideration

• CSA will not meet 100% of your fruit and vegetable needs. For example, depending on the CSA, they may focus only on vegetables. You probably will find that you need to supplement your CSA share
• Eating seasonally is an adjustment. If you are not accustomed to eating seasonally, it may take you some time to transition from eating whatever is at the grocery store to a focus as to what is in season from the current week’s CSA box.  Many CSAs provide a list of what produce to expect and when
• Quantity varies. Farmers try to provide a variety of items in a reasonable quantity on a weekly basis. An important question to ask before you sign up with your local CSA is how much produce to expect to be delivered weekly as well as the expected variances throughout the full season
• Policies vary. For example, learn what arrangements can be made if you are out of town for a week; What does it mean for you if there is a bunker crop or low productions due to influences from Mother Nature

All in all, buying a share in a CSA provides you a way to invest both in your local community and in your own health, as well as it helps keep your environment healthy. Bon Appetite!

Filing Bankruptcy While Averaging $115,881 per Month?

Yes, this is what Warren Sapp, former NFL player and Dancing with the Stars contestant did on March 30, 2012.  Mr. Sapp filed for Chapter 7 in South Florida stating that he owes more than $6.7 million to creditors and back-child support and alimony.  His reported assets are $6.45 million.  What does this mean and how did it happen?

It happens because Mr. Sapp was spending more than he could afford, even more than his income of $115,000 a month.  Bankruptcy happened because of poor financial decisions, poor financial planning and thinking of the short-term, immediate gratification--not the long-term gain.  It happened because he was living life beyond his means.

Chapter 7 bankruptcy is also known as “straight” bankruptcy or liquidation and allows an individual to keep certain exempt property.    Assets are sold by a bankruptcy trustee to repay creditors and many unsecured debts are discharged.  Florida does not allow the bankruptcy courts to sell your home because the equity is protected by the Florida Constitution.  Florida also exempts IRS approved retirement and pension funds and personal property valued at $1,000 or less.  Chapter 7 bankruptcy also allows you to reaffirm your secured debt so you can keep your car, furniture or house by renegotiating with your lender.

For Mr. Sapp, he has 240 pairs of Nike Jordan shoes worth $6,500, a watch worth $2,250 and a lion skin rug worth $1,200 that will likely be liquidated by the bankruptcy courts.  However, his Super Bowl ring and 1991 national championship ring will not be auctioned off because he lost them.

Lessons Learned:

Ø  One can always spend more than he or she makes.
Ø  You need to have a budget and keep a spending limit to what you can afford.
Ø  When is enough ‘enough’? Really…how many Jordan athletic shoes do you need?
Ø  Review your values and make sure you are using money as a resource to reflect your values.
Ø  Live below your means; always pay yourself first and save at least 10% of your income.

If you want a pair of Nike Jordan shoes, contact the South Florida bankruptcy court!

Keeping Resolutions

How are you doing on your New Year’s resolutions?  Did you decide to make a budget?  Having a hard time sticking to it?  Here is a short video that we hope will help.

From the Heart

During the gifting season, it is sometimes difficult to find the ‘perfect’ present. Some of the best are those from the heart. Like the garden stone with our grandchildren’s’ foot prints, framed photos of special moments from the past year, lovely scarves from faraway places we have traveled. Sometimes the best gift can be the offer to undertake a dreaded task, like cleaning out and reorganizing a storage room or offering your services as dishwasher for your parent’s dinner party.


The very best gift is the present of presence, being there for one another, either in person or in heart. And to think – it doesn't cost a penny. How grand.

Christmas Traditions

Every year, in place of buying gifts for one another, we take a family vacation for Christmas. This year was an exception. The year got away from us. With no extra funds set aside for travel, we decided to spend time together at home. To compensate for not traveling, we  exchanged gifts with one another. We made many of the gifts, but we still felt like we needed to buy everybody something. This was way more work than we remembered. Spending money in such a short window of time for so many people, and not knowing if it is something they would like, need or want --is stressful.

It was joyful being together and has been a very laid-back week. But we all agreed that from now on: 1) each Christmas, we will start planning for the next year's trip. When everyone is together, it is easier to negotiate the dates and destination selection. 2) We will budget a savings plan for the trip that stretches over a 12-month period. The ultimate gift you can give yourself is to pay for a trip out of savings vs. on credit. 3) We will go back to drawing names for a Secret Santa, with a dollar amount cap on spending.

We all agreed that in the future, if we feel tight on time or funds, we will find a way to at least take an overnight trip as a family. We didn't appreciate how much we enjoyed our Christmas vacations until deciding to not do it this year. What a great way to help us all gauge the value we find in the investment.

Hope all is joyful where you are at this holiday.

OWS, Student Debt, Tuition Increases and Tuition Free Colleges

Higher tuition, more student loans, and greater access to higher education…what do we do? The Occupy Wall Streeters (OWS) say they are not going to repay student loans and are demonstrating on college and university campuses.  In today’s Inside Higher Ed daily updates, there is an article about how their energy might be misplaced.  This article argues that college and university administrator’s hands are tied because states are cutting funding to higher education and students are demanding quality student services and education.  They are feeling that their only or best choice is to raise tuition and fees, which ultimately increases the debt burden for college graduates.

According to DiplomaGuide.com there are 10 colleges and university with $0 tuition.  Yes that is right, $0.00 in tuition.  Perhaps we should look at these institutions to see if we can apply some best practices to reduce the cost of higher education.  Many require students to work on campus.  College of the Ozarks nicknamed “Hardwork U” requires 15 hours/week of work from the student to graduate tuition-free.  Berea College offers every student a full-tuition scholarship and a laptop computer while attending Berea and work-study to offset food, room and board.

Higher education is not free.  It is expensive to pay for buildings, professors, administrators, support staff, research and everything that makes college “the best years of your life.”  So the question is “how do we lower the cost of higher education without additional taxes and reduced quality of education and services?”

My answer is YOU!  Did you graduate from college?  Did you benefit from college?  If so, it is time to give back.  You can give back to a specific scholarship, start a scholarship, name a building or give to the general fund.  You can ask anyone who asks for donation, the amount is not important, but it is important that you get in the habit of giving.  We are all at different places in our financial lives, so whether you give $1 or $100 million, just give. This holiday season, think about giving your college or university a gift.  Contact your alumni association or foundation to see how you can help reduce the cost of higher education and designate your money to the area where you believe it would do the most good.

If you value higher education, and if our society values higher education, we need to put our money where our mouth is and give back.  College and university administrators, faculty and staff — You have a huge responsibility to do as your donors wish and be good stewards of the resources you are charged with managing.  That not only includes the fiscal responsibility, but the education you provide in the classroom and the support services in housing, recreational services and every service to the students. You are charged with providing the highest quality education and experience at a reasonable price.

I hope you have a happy holiday and take time to reflect on your personal values and where your money goes.  I’ve always said, “If you want to see what people really value, look at their checkbook and see where they spend their money.”  I hope your values and your checkbook are in agreement.

So Many Priorities, Never Enough Money

80-10-10: That is the budget we strive to achieve in our household. Live on 80%, save 10%, give 10% of our time, talents and treasure. We are not there yet but every year we get closer. Coming to the end of this year and heading into the next, we find that we have had, and will continue to have, more priority family fun than we originally budgeted for. How do we balance our priorities and our income?

• Want to pay for it in cash and continue to keep our credit card balance at zero each month? -Yes
• Want to take out of our savings or reduce our savings rate? -No
• Consider backing down on our giving? -No.

Ideally, we should bring our life style within the limits of that 80%. Selling off an asset, such as an extra automobile, is one option we discussed. We have three vehicles (car, truck, van) between two drivers. For the most part, the truck and the van sit in the garage as we typically car pool. Why is it hard to part with assets we seldom use even though they cost us money? Even if a vehicle is paid for, it still costs you in maintenance, license, insurance and depreciation.

It’s hard. Yes, a van is handy at times and we love ‘Chitty’, with her ‘Truly Scrumptious’ navigation voice and leather, heated seats, back-up camera and warning sounds when her bumper gets close to another object – which makes parking in tight spots such a breeze. We named her ‘Chitty-Chitty-Bang-Bang’ because with her laser speed control, we felt she practically drove herself.

To balance our budget, do we:

Take from savings? Take from giving? Carry a credit card balance? Sell Chitty? Change spending habits elsewhere?

Whether you are striving to live on 90% of your income and save 10%, or aiming for the 80-10-10 split --how do you keep an every changing lifestyle balanced and in budget?  What recommendations do you have?  Thank you for sharing.

Goals and Lotteries

We know it is better to save our money than to buy a lottery ticket. The odds of winning the Powerball are 1:195,249,054. Yet, when the payout climbs above a $100 million, we start to dream of what we would do with a winning jackpot.

Lotteries give us an excuse to dream of what we would do if we had an abundance of funds at our finger tips. What would you do? What would you buy? Where would you travel? These dreams provide motivation to set goals and to work to achieve these goals. It also helps you to get in touch with your values and to ask the question of what your really want out of life.

We know that we probably will not win the Lottery jackpot, but we have big dreams and goals to achieve. An entrepreneurship professor once said "if you are going to dream, dream big." and "be careful of what you dream for, it just might come true." So go ahead and dream of winning the lottery and what you would do with all the winnings. Then set goals based on your values and work to achieve your dreams.