Here is the e-mail letter from the author and I'm sharing it with all of my WP roses. It is a long paragraph, but its worth to read it all.
Dear ZionLashio,
Welcome to Get In$pired!
Each couple weeks for the first 2 months and then once a month, you will receive a short email with personal finance news you can use; these will include useful tips, eye-popping statistics, and anything we think might help you live your life from a position of financial strength. Our goal is nothing short of creating a nationwide movement where friend to friend the importance of getting money smart gets passed along. We're thrilled to have you with us for the journey. To start you off, click here http://www.onmyowntwofeet.com/files/7_money_mistakes.pdf to download our summary of "7 Money Mistakes You Can't Afford To Make.
Warmest regards,Manisha Thakor & Sharon Kedar, co-authors of ON MY OWN TWO FEET http://www.onmyowntwofeet.com/On My Own Two Feet
1005 S. Shepherd Dr.Houston, TX77019US
From the co-authors of ON MY OWN TWO FEET…SEVEN MONEY MISTAKESYOU CAN’T AFFORD TO MAKE!
As Harvard MBAs, best girlfriends, and the co-authors of ON MY OWN TWO FEET:a modern girl’s guide to personal finance, we’ve heard countless stories ofpersonal finances gone awry. From these conversations, we’ve noticed that“Seven Money Mistakes” seem to creep up over and over. We summarize themin this document in hopes of helping others avoid falling into classic financialpotholes. Our ultimate goal is nothing short of creating a nationwide movementthat encourages people - and especially women (who are two times morelikely than men to spend their golden years in poverty) - to live their lives from aposition of financial strength.As you continue reading, if you see yourself in these words, don’t beat yourselfup. We promise you that millions of other people (yes, that includes your friends,your neighbors, and your co-workers!!) share similar struggles. Personal finance isone subject where we can all benefit from on-going, life-long learning.Ironically, while knowledge of personal finance is absolutely critical to enablingus to live the lives we want to lead, most of us don’t learn about it growing up orin school. But that’s all in the past. The key point is that you are now lookingforward. With the knowledge you will gain by reading this document, you canstart the journey to financial nirvana.As we like to say, when you “Own Your Finances” you quite literally can “OwnYour Life.” By this we mean you can take (or refuse) a job for the right reasons.You can stay in (or leave) a relationship based on what’s right for you. You canpursue your hobbies and your dreams. The canvas is yours to paint when youhave your finances under control. The really good news is that good personalfinance does not have to be hard. Again, the seven money mistakes listedbelow are the most common ones we see. Simply avoiding them will put youmiles ahead of the average American. So go ahead, give yourself the gift thatkeep on giving – the gift of financial strength.With Gratitude,Manisha Thakor & Sharon Kedarhttp://www.onmyowntwofeet.com/
2008 Two Feet LLC
Seven Classic Money Mistakes You Can’t Afford to Make!
(1) Thinking Everyone Else Has It Figured Out.
Personal finance – like parenting –is one of those things we’re all expected to just “pick up” as we go along.However, lacking a formal nationwide financial literacy curriculum, millions of usare left stumbling along in the dark when it comes to our money. To add insult toinjury, while we talk about virtually everything else in our lives (our childhoodangst, our sexual predilections, etc.) rarely do we talk openly and honestly aboutmoney. Did you know that over 70% of Americans are living essentiallypaycheck-to-paycheck? This stunning statistic cuts across income lines. Itmeans that millions of American families are a few months away from financialdisaster. To be blunt, the vast majority of Americans are literally financiallyclueless. So the next time you see a guy in a fancy new sports car or a womantrotting by in her fancy designer duds, know that their external façade may bearno resemblance to their inner financial reality.
(2). Saying You’ll Start Saving When You Make More Money.
We’ve met peoplewho can save money on salaries of $30,000 a year and people who quite literallyhave no savings on salaries of $300,000 (or more) a year. We kid you not. Onceyou are making a living wage, the ability to save is a mindset. Saying you’ll startsaving “when you’ll make more money” is no different than saying you’ll startdieting “after you finish that pint of ice cream.” An interesting thing about savingis that it really is all about spending. That may sound like an oxymoron, but it’strue. The whole reason you save TODAY is so you can spend down the roadTOMORROW. Sometimes just this simple shift in mindset can help you muster upthe mental strength to balance your desire to enjoy the present with the need toset aside for the future. If you feel like you don’t know how to save, check outChapter 5 of our book ON MY OWN TWO FEET where we walk though some basictechniques that can squeeze savings out of even the heartiest of spenders.
(3) Thinking Credit Cards Are Free Money.
One of the biggest differencesbetween our generation and our grandparents’, financially speaking, is easyaccess to credit. Back in our grandparents’ day, if they wanted to buysomething they didn’t have the cash for, here’s the drill: First, they’d have tomarch their back sides into a bank. Next, they’d stare the loan officer in thewhites of his eyes (usually was a man back then…) and explain what theyneeded the money for. Finally, they’d have to explain and document how theyplanned to pay the money back. Today is a whole different world. We cansimply trot down to our mailboxes in our pajamas and whip open a credit cardoffer. To be clear, credit cards aren’t inherently bad – if used for theconvenience of not having to carry a wad of cash around in your pocket AND ifyou only charge items on the card that you can afford to pay off in full wheneach monthly bill comes in. That all said, way too many people fall into the trap© 2008 Two Feet LLC 3of thinking their credit card is their new best friend. “So easy to use, never lets medown!” Before you know it, they’ve wracked up a hefty credit card balance.“No biggie,” they think, “I’ll just make the minimum monthly payment and it’ll allwork out.” THINK AGAIN, our friend. If you make just the minimum monthlypayment on an average credit card (so with a mid-to-upper teens interest rateand a 3% minimum payment), you’ve effectively doubled the purchase price ofwhatever you put on that card. This means that $15 drink you had with that guyor gal you didn’t really even like… yes, that’ll cost you $30 by the time you’redone paying off all the interest. Bottom line – credit cards can be as addictiveas drugs. Make no mistake, credit cards are NOT free money.
(4). Underestimating The Power Of Time.
Let’s take the tale of two girlfriends – Amyand Zandra. Both save $5,000 a year for 10 years. Both women put their moneyin investments that were fortunate enough to go up 10% a year on average.Fast forward to retirement at age 65. They’re both sitting pretty – right?Unfortunately, that’s not the case. Amy is sitting on a nest egg of over $2 milliondollars while Zandra has just $300,000. How on earth did Amy end up with seventimes more money than Zandra? How did Amy end up with the ability to spend$100,000 a year in retirement while Zandra can only spend $15,000 a year? Well,it’s because Amy did her saving from age 20 to 30 (and then let the moneycontinue to grow from there) while Zandra waited until age 40 to begin her 10years of savings. That extra 20 years made all the difference. Wherever you arestarting from today, please, START SAVING NOW. These are the three mostpowerful words in personal finance. (Note: retirement spending figures assume a5% annual withdrawal rate, a level most academicians consider to be themaximum “safe” withdrawal rate in retirement).
(5) Not Paying Attention To How Your Money Is Invested.
If you went to watch aball game, you’d want to know who was playing and which team won, wouldn’tyou? The same should go for your investments. Yet year after year, we meetwell-intentioned individuals who have NO IDEA how their money is invested norhow those investments performed. Monitoring these two items doesn’t require aPhD. You won’t have to watch mind-numbing ticker tapes or scour the financialpages of your local newspaper. Simply committing at the end of each year toreview your mix of investments (called “asset allocation” in financial lingo) andcheck in with your financial institution or retirement plan sponsor to see how yourinvestments have done will put you miles ahead of the game. Part B of our bookON MY OWN TWO FEET will walk you through why and how to invest in moredetail, if you’d like to learn some more about this all-important topic.
(6) Buying More House (or Car) Than You Can Comfortably Afford.
For mostpeople their house and their car will be two of the most expensive purchasesthey will ever make. While both can bring great joy to our lives, they can also bea tremendous financial burden if you bite off more than you can chew. In theold days, tight lending standards and the use of more “traditional” loan products4such as 30-year fixed rate mortgages and car loans that tended to be 48 monthsor less helped keep our consumptive appetites in check. These days, however,our shopping habits in all arenas have become super-sized and these two areashave been hit hard. A rough (and we repeat ROUGH) rule of thumb is that youwant to keep your total all-in housing plus transportation costs to no more than35% of your gross income (that is your pre-tax income). If you have an averagecredit score, if interest rates are in a historically average band, and if you put 20%of the purchase price down – for most people this will translate into a totalpurchase price for your house of somewhere between 3.0x and 3.5x your annualhousehold income. For a car, it translates into a total purchase price for allvehicles in your household that is between 30% and 50% of your annualhousehold income (ideally towards the lower end of that range). By keepingthese two large “fixed” expenses low – you give yourself much more flexibility todeal with life’s inevitable speed bumps.
(7) Avoiding Talking Money With Your Honey.
What’s the number one cause offights in marriages? What’s the number one cause of divorce? What time andagain is cited as one of the leading sources of overall stress? M-O-N-E-Y. Yetwhat happens when you find that someone special? What do your friends askyou? Why, they say, “Are you emotionally, spiritually, and physicallycompatible?” But do they ever ask, “Are you FINANCIALLY COMPATIBLE???”Most likely not. This is a shame because learning how to talk money with yourhoney is one of the best investments you can make in your relationship. If youare thinking about taking a relationship to the next level (i.e. moving in or gettingmarried), we strongly suggest that at a minimum you exchange a list of what youown, what you owe, and what your credit scores are. This is not to judge eachother, but rather to be open and honest about from where you are starting yournew life as a couple. Once committed, the dialogue shouldn’t end there. Werecommend annual financial check-ins where you exchange the sameinformation PLUS discuss whether you met your savings goals for that year. If youhaven’t, that’s the time to discuss what changes you can make to your budget.Be sure to also review how your investments have performed, and where yourimportant financial papers are stored.
Congratulations –
You’ve just completed a major step forward in creating thefinancial life you’ve always wanted to have. By committing to continuallylearning more about your personal finances, you can… you WILL learn how tolive your life from a position of financial strength. Remember:“Own Your Finances, Own Your Life!”
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