sacrifice

Successful People Don’t Whine

March 11, 2014 By Jennifer Derrick 3 Comments

I’m always amazed when, in real life conversations or article comment trails about money related topics, someone inevitably says, “That [insert behavior that is not the norm] will never work for me. It simply cannot be done.” Either that or they quickly dismiss someone else’s success as the product of luck, incredible timing that can never be replicated, or some other gift sent down from the gods. Instead of examining what made a person successful, they choose to blind themselves to the options and opportunities that are available to them.

Choosing to be blind is easy. It’s very easy to sit back and disparage someone’s achievements, whether it’s early retirement, a comfortable lifestyle with no debt, or buying a home with cash. It’s certainly easier than doing the hard work of looking at another person’s lifestyle choices and seeing where yours may have prohibited you from reaching that level of success. And you certainly don’t want to put in the hard work required to match their achievements, so it’s best to just flop on the couch and refuse to see that you could do better.

Let’s say you’re looking at someone who successfully retired at age forty. It’s easy to whine about how lucky they were to work in an occupation that experienced a boom, or how they benefited from market timing, or how they never lost a job (or found one so quickly if they were laid off), or how their parents paid for their education, or how they got incredibly lucky to have invented the wonder widget, or even how fortunate they were to keep their expenses low during the recession so they could keep saving for retirement. What’s missing in all the whining is the work that went into the success.

Okay, the person might have had a job in a great industry. But they went to work everyday, did good work, kept the job, and probably got some promotions. That’s not all luck. And so what if the parents paid for an education? Granted, the person may have started out with less debt than someone who had to pay their own way but if they’re successful now, it’s because they used that education to its fullest. Any million dollar invention or business required a lot of work, probably more so than the guy working the corporate job. And if they managed to retire simply by keeping expenses low? That took work and creativity, as well. It’s not easy to be the guy who doesn’t have a TV subscription or a cell phone, or to eat at home every night instead of bar hopping.

But no one wants to look at the work, creativity, and sacrifices that go into success, much less try to replicate them for themselves. No one wants to admit that if they had made some better choices with money, worked a little harder, hustled more, made conscious choices to save more and spend less, or studied a little more that they could be in the same situation as their successful neighbor. Nope. It’s easier to put the blinders on and attribute someone else’s success to Fate because if you see what could be different, it puts a burden on you to change. And who wants that?

But imagine what would happen if you chose to see the work that went into that success. Even better, imagine what would happen if you tried to be more like this other person. What if, instead of saying how odd it is that Joe doesn’t have a TV, you ditched yours and used the time and money for more productive things? What if, instead of lamenting Joe’s good luck, you put in more quality hours at work (or into inventing that widget), learned some new skills, found ways to cut expenses, and generally improved your lot in life? What if, instead of dismissing Joe’s DIY lifestyle as impossible for you, you learned to tackle some projects on your own? Hmmm.

Take the blinders off and accept the challenge that comes with seeing how other people achieve success. See where you could do better with money. See how some other fantastic, creative, smart people live their lives and make their financial situations work. Many people with small incomes achieve success with money every day. It’s not just millionaires. They succeed because they see what others do not and then they change their actions accordingly.

(Photo courtesy of Seeker of Guidance)

Saving Money is Not a Sacrifice. It’s an Investment in Your Future

February 28, 2014 By Jeffrey Strain 5 Comments

One of the issues many people have trouble overcoming when trying to get their finances in order is that it requires a commitment to a lifestyle change. If your finances aren’t in order, it’s because you have been doing things that have lead to them not being in order. If you continue doing the same things that you have been doing, you are going to continue to get the same results. That means that if you aren’t willing to make the change, you’re going to have a difficult time succeeding in getting your finances where you want them.

A good analogy would be dieting. Going on a diet doesn’t work if you’re trying to get healthier. It’s a short term solution that will never have lasting effects. It’s not until you make a lifestyle change in your eating habits that you actually have the chance to get healthier. While many may complain that they can’t eat everything that they want, making the change is an investment in their future health.

In the same way, temporarily cutting costs isn’t the solution to getting your finances in order. It’s the same mentality as those who are trying to get healthy through the latest diet. It will likely have some short-term benefits, but it won’t deal with the underlying issues that need to be addressed.

Even worse, you will likely hate and complain about having to do it the entire time. You don’t really want to cut the costs, you have to against your will. You have to make this huge sacrifice because you don’t have enough money. Taking this approach to try and better your financial situation is bound to lead to failure.

One of the most important mental changes that you can make is changing your belief system that when you forego something now, it’s not a sacrifice, but instead it’s an investment in the future. Take a moment to let that sink in. You have two ways that you can look at it. Forgoing something you might want at this moment can either be viewed as a sacrifice that you don’t want to make but have to, or it can be viewed as an investment in the future that you do want.

By taking the initiative to see that the choices you make regarding money, and the choice to delay or forego certain things today in order to achieve the greater goals you have for the future, you are working for something positive. You are no longer sacrificing each day. Instead you’re investing in your future day in and day out.

Part of what makes this mental view change possible is the commitment that you really do want to change. If you are seeing everything as a burdensome sacrifice, there’s a good chance that you’re not really committed to making the changes. You’re more likely being forced to make them against your will. Once you have taken the time to find and set your financial goals, and then make the commitment to achieving them because that is what you want, you will find that everything you’re doing isn’t the sacrifice you once thought it was. You’ll see that what you’re truly doing is laying the foundation for your future and investing in it.

(Photo courtesy of Sherry Ezhuthachan)

Should Athletes Pay Taxes on Olympic Medal Bonus Money?

February 13, 2014 By S. Shugars 8 Comments

I read the article where Olympic athletes who win medals at the Sochi winter games will have to pay taxes on the money. Almost every person I’ve talked to about this says that it’s wrong, and that they should be able to get this money tax free. Although I know this is an unpopular opinion, I disagree. I think that athletes should have to pay taxes on bonuses they get from the medals that they win. These are the reason why.

Professional

Let’s be honest. Olympic athletes are, for the most part, professional athletes. While there was a time when Olympic athletes had to be amateurs, that time is long gone. Take a look at the players who make up the teams for Olympic hockey. Almost every athlete that is competing in the Olympics is a professional in their chosen sport.

Almost all of them do their sport full-time on some tour where they get paid and have endorsement deals from equipment manufactures. On their respective tours, they earn bonus money when they win events or come in the top places for the competition. The Olympics is seen as a pinnacle of events in many of these sports which is the reason that they are willing to compete in them.

If a runner runs the Boston marathon and wins, the runner will earn a cash prize as part of the purse. That prize money is taxable income as it should be. It’s part of their profession. It’s how they have chosen to make their living and get paid. It’s their job. It’s the same with Olympic athletes and their chosen sport. Like all other people who have professional careers, when they earn money from it, they have to pay taxes on that money.

Sacrifice

Another reason that I hear is that these athletes have made a sacrifice to become an Olympic athlete. While this may be true, so have a lot of other people in the jobs that they have chosen to pursue. A dedicated teacher is a great example. Someone working at a non-profit organization is another. They could earn a lot more going into business, but they have chosen their career because it’s what they’re passionate about. By choosing this course of action, they earn less than what they might make elsewhere, but they still have to pay taxes on all the money that they earn doing it.

Competing for Their Country

Another reason I hear is that these athletes are competing for their country, so they should get the bonus tax free. Yes, they are representing their country, but they aren’t doing so for only this reason. The Olympics are the “world championship” for many of these sports. While the competition is broken down by teams of countries, the athletes are also competing for themselves. It’s the individual who gets the bonus money, not the country.

Athletic Worship

I think that we continue to have a problem of athletic worship around the world. Yes, athletic achievements should be celebrated, but that shouldn’t mean that athletes get special privileges above the rest of us. When a person wins a Nobel Prize for science, they are required to pay taxes on the prize money that they receive. Again, it’s because they are winning in their chosen profession. Why should athletes in the Olympics be the sole exception of this rule?

Who Should Get Tax Free Money

In my opinion, if an athlete wins a gold medal in the Olympics, they should get a bonus just like they get prize money when they win an event on their professional tours. But just like the prize money they win in the other competitions that they compete in, it should be taxable. The Olympics is another competition, but on a grander scale. It’s like a world championship for minor sports. We would never say that the athletes who get cash bonuses when they win world championships in the NBA, NFL or MLB shouldn’t need to pay taxes on those bonuses. Why only for the Olympics?

What I think should happen is in addition to the athlete getting their bonus, another bonus should go to the Olympic organizing committee for that sport to help those interested and show promise in the sport, but who may not have the financial means to to it when they are younger. This is the who truly deserves to get the bonus money tax free.

Eventually Saving Money is Easy

June 20, 2013 By Jennifer Derrick 7 Comments

Recently, an acquaintance asked me for some financial advice.

“Give me your easiest financial tips. You know, stuff that I don’t have to work too hard at. I’ve got to pay off some debt and save up some cash for a vacation.”

Privately I was thinking, “Way to set the bar low. Wouldn’t want to work at anything, would you?” (You must understand that this acquaintance almost always looks for the easiest, laziest way to do the minimum on any task. She’s frustrating to be around, which is why I don’t refer to her as a friend.) At any rate, I started offering up suggestions.

“Open a savings account and have money direct-deposited every pay period.”

“Nope, I’d have to go to HR to get that set up and they’re a pill to deal with,” she said.

“Okay, turn off lights when you leave a room and raise and lower your thermostat a few degrees.”

“No. I want to be comfortable and I don’t like stumbling around a dark house.”

“Coupons at the grocery store?” I asked.

“Too much effort, too little reward,” she said.

“Brown bag your lunch.”

“No time to put that stuff together in the mornings.”

“Okay, cut down on or eliminate things like cable, eating out, vacations, cell phone plans, etc. Go to the library.”

“I don’t want to deprive myself. That’s hard to go without that stuff. And the library is nasty.” (This is the same person who gets grossed out by library books and other frugal options.)

“Have a yard sale and make money off your unused junk.”

“Eh. That’s a lot of work to set up and manage,” she said.

Finally after a few more basic ideas I gave up. “That’s the easy stuff,” I said. “From there it gets harder like moving to a cheaper house, getting rid of one car, drastically downsizing your life, getting a better or second job, learning about investing, or starting a garden.”

“Well, that stinks,” she said. “I thought at least some of it would be easy.”

I just had to shake my head and walk away to keep from saying something stupid like, “Lady, it doesn’t get any easier than taking a shorter shower or flipping a light switch.” But later, when I reflected on the conversation, I thought maybe I’d been too harsh in my judgment of this woman.

I’ve been living frugally for so long now that almost everything seems easy to me. I’ve downsized, bargained, and cut so many things over the years and mastered so many DIY skills that it all seems like second nature. If I think back, though, to when I was less careful with my money, I can remember a time when something like using a coupon would have seemed like a monumental effort. Not that the task itself was difficult (how hard is it to get the scissors and cut out a piece of paper, after all), but that the effort would have seemed pointless. I probably would have thought, “Saving fifty cents on a toothbrush? Will that really help anything?”

Of course now I know better. I know that every little bit counts, both in money saved and quality of life gained. (After all, frugality has allowed me to travel and have more freedom than I otherwise would.) Applying money saving tips day in and day out has placed me on the cusp of being able to semi-retire at the ripe old age of (slightly north of) forty. That’s worth all the work and learning I had to do.

What I think is lacking with my acquaintance is the will to do any work, let alone hard work. She knows she needs to save money, but she isn’t willing to do anything or sacrifice anything, no matter how small, to get there. She wants the infomercial method of saving money: Sit at home, do nothing, and somehow rake in thousands a week. And we all know that’s never going to happen.

Until she’s truly ready save, everything is going to seem difficult and stupid. Once she reaches the place where she’s serious, though, suddenly nothing will seem difficult. Sure, it might take some effort (learning how to repair your own faucet, for example, requires some education and a little practice), but nothing is insurmountable when you’re ready to live a different life. When you’re serious about making saving money a way of life, everything is easy. My acquaintance hasn’t reached that point yet. When, or if, she ever does, she’ll likely look back and laugh at how “hard” it all was.

(Photo courtesy of Gisela Giardino)

10 Things The Army Taught Me About Finances

December 14, 2011 By Guest Writer 4 Comments

By Steve Repak, CFP®

In basic training, a soldier goes through a process of mental and emotional retraining so that they can operate in an environment very different from the civilian world. I figured out I could take some of the same lessons I learned in the Army and apply them to my finances. Once I started to think differently and then began doing different things with my money, I was able to start accomplishing my financial goals.

The following are 10 Things the Army Taught Me about Finances that I want to share with you in order for you to start thinking differently about your money and to show you that you possess the same skills and tools that I have to achieve any of your financial goals

Leadership

Unless you are a new recruit, you have served in some type of leadership role. Leadership is all about taking charge of the situation and not making excuses. Use that same type of thinking. I had to quit making excuses that I didn’t have any money and start taking charge of my finances.

Integrity

Your integrity plays a major part when you are serving in the military. Integrity requires you to be candid and honest. I left the Army with a lot of credit card debt. I had to be honest with myself and admit I had a spending problem. Use your integrity to be honest with yourself and identify the areas of your finances where you are weak. Once you identify those areas, do something about it.

Prioritizing

We had many things going on at the same time when I was serving in the Army and it was important to make sure we got the things done that we were supposed to. You can identify your current priorities by measuring two factors: What are you spending your money on and where are you spending your time. I changed my money priorities by spending at least thirty minutes a week on my finances.

KISS (Keep It Simple Stupid)

We learned not to over-complicate things in the Army. The same goes for personal finances. It doesn’t get any simpler than “if you are spending more money than you are making, you need to start spending less.” One I started spending less I started having more money at the end of the month.

Accountability

When I was a Platoon Sergeant, I had to know where my soldiers were at all times. When dealing with my finances I knew if I wanted to be a good leader with my money I needed to know exactly where I was spending my money. I did that by keeping a spending journal. For 30 days I asked for receipts every time I spent money. Once I got home I wrote it down in my journal.

Sacrifice

Everyone knows what sacrifice means in the Army. I can’t count how many holidays, birthdays, anniversaries, etc. I missed because of a deployment or assignment. To be able to start spending less, you have to make sacrifices. It might be not going to the vending machine everyday or reducing the temperature on the thermostat during the winter time. In my case, I had to quit spending money on video games and going out to eat all of the time.

Planning

You are always doing some type of planning in the military. For example, when we went on field maneuvers we had to move our equipment to different locations each night. I would have to identify where we were, where we needed to go, and how we were going to get there. I used the same steps for my finances. I had to determine where I was (my income versus my spending), where I wanted to go (how much extra I wanted to have in savings at the end of the month), and how I was going to get there (the areas I spent my money on that I could either reduce or eliminate).

Flexibility

I had to be extremely flexible when I was serving because either the mission or objectives seemed to change often. I had to be flexible with my money goals. At times emergencies would happen and get me a little off track. Once I dealt with it, I got right back on track.

Team work

“Together Everyone Achieves More” was one of our mottos. I had to count on others and work with others in order to get the job done. There are times when you need to ask for help. I had an accountability partner to help keep my financial goals. If you need help, there are many people out there that can help. If you are in the Army, you can go to the ACS (Army Community Services). For those not in the military, you can find yourself a CFP® Certified Financial Planner™ professional to help you with your financial objectives.

Determination or the “War Fighting Spirit”

As a soldier in the Army, I was determined to accomplish the mission. I had to possess that same type of determination with my finances. I had a lot of debt when I left the military. There were many times where things got difficult and I questioned if I would ever be able to get out of debt. I want to tell you that I stuck with my plan, and it wasn’t easy, but I did finally get out of debt. I want to tell you something else. If I was able to do it, I have no doubt that you can reach any of your financial goals too.

********

Steve Repak is a certified financial planner and author of Dollars & Uncommon Sense: Basic Training For Your Money. He was honorably discharged from the Army in 1998 after 12 years of service. He was an instructor at the Advanced Noncommissioned Officers Course. In 1995 he was the Fort Bliss Noncommissioned Officer of the Year. He is a motivational speaker, consultant and principal at Repak Financial Services. He lives in Charlotte, North Carolina with his wife and three children.