Chapter Four: Understand The Spiritual Aspects of Money

Ramsey offers a lot of good, common sense advice on how to be debt free, but these passages from Chapter four really hit home with me. I believe they contain some wisdom that will not only help us all to grow wealthier, but also to attain true success in anything that we work for:

The author of this passage is unknown, but the advice is pretty timeless.

I am your constant companion,
I am your greatest helper or your heaviest burden.
I will push you onward or drag your down to failure.
I am at your command.
Half of the tasks that you do you might just as well
turn over to me and I will do them quickly and correctly.

I am easily managed,
you must merely be firm with me.
Show me exactly how you want something done;
after a few lessons I will do it automatically.
I am the servant of all great people and
alas of all failures as well.
Those who are great I have made great,
those who are failures I have made failures.

I am not a machine, but I work with all the precision
of a machine, plus the intelligence of a person.
Now, you may run me for profit or
you may run me for ruin.
It makes no difference to me.
Take me, train me, be firm with me,
and I will lay the world at your feet.
Be easy with me and I will destroy you.

Who am I? I am called Habit.

You know, the older I get the more I realize that habits literally “make you” or “break you.” If there is something lacking in your life, whether it is money, or time, or literally anything at all, take a close look at your habits.

The truth is, human beings are completely creatures of habits. And there is not always a distinction made between time-wasting or negative habits, and positive, productive habits. This really is some of the best advice I have seen in a book in a long time, personal finance related or not.

I think it’s the reason why so many New Year’s resolutions fail too – we create the goal but not the plan, and then we do not work at it long enough to make the plan a habit. Once things are a habit, they happen even when you don’t consciously think about them. It’s an “auto-pilot”.

How much wealthier would we all be if we sat down, and decided what we needed to do to fix our finances, and then worked hard – really hard – until those things became a habit?

One thing we often don’t recognize is that over time, those small negative habits really add up.

Smoking is a negative habit, overeating is a negative habit. Change the habit and you will drastically change your body’s state of health. The same happens when we continuously overspend or take on too much credit. It becomes a habit to “just charge something and pay it later” and before we know it, we are deep in debt.

In the case of my bankruptcy, “dealing with the medical bills later” became a habit. It even became such a pronounced habit that bankruptcy seemed like a real relief by the time I finally filed. No more worrying about the looming debt! If I had taken a proactive approach, done more negotiation, and raised my income, I could have avoided the pain of bankruptcy.

If I had known that I just needed to establish new habits, and have a little self control, then that entire process would have been much less painful. It sounds stupid, I know, but that is the deceptively simple power of habit.

Combining Habit With Education:

When you combine regular changes in habit with regular doses of knowledge, you can spring forward quickly. If you want to lose weight, you can combine the habit of eating right with the knowledge of what eating “right” actually is.

When you want to invest, you can combine the habit of investing with the knowledge of how investments really work.

It really does take both – the learned habits, and the applied knowledge.

Don’t sell yourself short. If you have any sort of a goal, please make sure that you include both parts of the “secret formula”. Learn what you need to learn, work to make it a habit.

That’s when things will begin to look effortless. And if you’ve really got the formula down, you may begin to hear people say things like “Wow, they are so lucky!!!”

But, you will know, success was never based on luck. It comes from habit, and applied knowledge.

This concludes my review of Financial Peace Revisited. Most of the advice in this book is very common sense, very basic. But it is presented in a friendly manner, and it’s an entertaining read. If you want to read the entire book, you can check it out from your local library, or buy a cheap used copy off of Amazon for under $5. It definitely gets my vote. Basic as it is, it’s thought provoking, and I’ll be keeping it in my financial library.

Have you read this book? What did you think of it? Leave me a comment below!

Keep Reading:

• Financial Peace by Dave Ramsey
• More Than Enough By Dave Ramsey Book Review Part 1
• More Than Enough By Dave Ramsey Book Review Part 2

Chapter Three: The Basics (a Foundation)

Ramsey begins this chapter with a reflection:

As a culture we are ignorant of what money is and how to handle it. Ignorance is not lack of intelligence; it is lack of knowledge on a particular subject.

If I were put in a chemistry lab, I would probably blow up something. But I am not unintelligent. I am ignorant of Chemistry.

It is almost impossible to get out of high school today without knowing what an amoeba is – now there is a really valuable piece of information – but few high school seniors can keep a checkbook balanced.

They are taught virtually nothing about the real world of money. I am not talking about Wall Street. I am talking about money on your street.

We are not taught basic principles of managing and making financial decisions for our own family.

I do agree with his conclusions here. Not everyone is taught how to manage money. The schools do not teach money management because it is the parent’s job to teach it.

After my bankruptcy I swore to myself that I would teach my kids how to manage money. If I don’t teach them, then life will. I didn’t learn my lesson until I hit bankruptcy. I’d like my kids to learn it a lot earlier than that.

Ramsey goes on to discuss the consequences of a lack of financial intelligence.

We come out of high school or even college and set up housekeeping. We don’t have knowledge of leases, but we sign one.

We don’t have knowledge of cars and car financing, but we buy one and sign the loan papers. We don’t have knowledge of the implications of credit cards and high interest rates, but we get five pre-approved cards in the first two years out of school and we use them.

We don’t know about the Rule of 78s or prepayment penalties, so we finance our waterbeds, stereos, TV’s, washers and dryers. It was all so innocent and happened so slowly that the monster in the closet was not noticeable.

Well, I’d say the situation has definitely gone from an unseen “monster in the closet” to an elephant in the room. The credit crunch is definitely on.

It’s become so normal to buy now and pay later that many, many people are in trouble. I know, I did it too. I even carried a balance on my new credit cards for a while after my bankruptcy. Something that I know now is the last thing in the world I should have done, (or ever do) financially.

Ramsey’s right, it really is education. Once I learned what compound interest was, and how long it really takes me to pay off a credit card, well, impulse spending was a lot less attractive.

I (slowly) learned that how well I managed my money was directly affected my my degree of financial education. The more I learn, the more money I have and the easier it is to hang on to it. It really does matter.

Money Is Active

I have found that money has two properties that most people don’t acknowledge or understand.

First, Money is active. Finance and money are always moving. Time, interest rates, amounts, cash flows, inflation, and risk all intermingle to create a current that is ever flowing.

Whether you choose to impact the current is irrelevant, they still go on.

If you took $10,000 and buried it in the back yard for ten years, will it buy as much when you dig it up as it does now? Obviously not. We must learn that the current or flow of the mathematical process is always effecting our money. It never stops.

Money in this sense is like a beautiful thoroughbred horse – very powerful and always in action, but unless this horse is trained when very young, it will be an out of control and dangerous animal when it grows to maturity.

The point is this: You must gain control over your money or the lack of it will forever control you.

If you don’t take action continually on your money, it, or the lack of it will take action on you. Finance is not passive, it requires you to take the imitative to control it.

In his popular book, The Seven Habits of Highly Effective People, Dr. Stephen Covey says the number-one habit of highly effective people is that they are “pro-active”. They “happen” to things, things don’t happen to them.

That is extraordinary advice, isn’t it? To stop letting life pass us by? To gain control of our situations, whatever they are, and be pro=active about them.

Money Is Amoral – No Morals

Second, money is amoral. Money has no morals. That is, it is neiter good nor bad. First Timothy 6:10 does not say, “Money is the root of all evil.” What is does say is, “The love of money is the root of all evil.”

Money in and of itself has no more moral quality than a brick. So just because you are poor does not mean that you are good, or spiritually superior; neither does it mean that you are bad or spiritually inferior.

You decide what you are. The way you act through your money or your lack of it, will show us whether you are good or evil, but the money itself is neither.

Well, I do suppose a look at our bank statements would say a whole lot about our priorities in life. One of the things that I had to do when I continually found that I was poor, was to take a hard look at what my priorities were.

Blowing money left and right indicates a skewed sense of the world and a total disregard for the future. Once I sat down and thought about my real priorities (having money in savings, investing for the future, being able to retire one day, etc.) my spending habits changed drastically.

I think Ramsey is hitting the important points here. People that manage their money well were either taught how to do it, or they sought out the knowledge on their own.

Growing your wealth and managing your family’s finances is a learning experience, not an innate ability. One thing that I do like about Financial Peace is that it does start with the common-sense beginnings of money management. I don’t feel stupid reading them, It feels a bit like talking to an older, wiser relative. He has a comfortable and congenial style.

Please come back for a visit next week when I review the next chapter of Financial Peace. If you’ve read it, and it made a difference to you, please leave a comment below.

I’d also like to send out a big thank you to the carnivals that featured our article this week:

• The Carnival of Personal Finance @ Stock Trading To Go
• Carnival of Financial Planning – March 14 2009 Edition @ The Skilled Investor’s Blog
• “How to administer your money” carnival – 03/14/2009 @ Dayamn
• The Money Hacks Carnival Thank You Edition @ Money Ning
• CoTV part whatever… @ Dodgeblogium
• March 14 Carnival of Economic Stories @ Ways to Survive Life

This is the second edition of Ramsey’s famous book, and it includes new chapters on marriage, singles, kids, and families.

Chapter 1: The Beginning: A Very Good Place To Start

Ramsey begins by giving us his own back story – the events that led to his successful Financial Peace workshops, seminars and books. As a young man, he was heavily invested in Real Estate, and this is his story.

I had arrived at “financial independence” that mystical place every young entrepreneur wants to reach. If I wanted something, I bought it – no thought required. I had done it honestly, with hard work and intelligence. So what could possibly happen in paradise?

Along with my knack for obtaining bargains, I had another talent. I had an unusual ability to finance everything. If one of my business lines of credit ran low, I would put on my custom suit, get in my Jaguar, and head for the bank. I would make sure to park in front of the manager’s window for a big impression. I had my financial statements, corporate strategy, and tax returns all bound for presentation.

All this pomp and circumstance, combined with the fact that my “deals” always worked and enamored the bankers, and they loved to lend me money.

We had every type of personal line of credit, business lines of credit, and equity lines of credit – and let’s not forget those wonderful gold and platinum cards.

If a banker would dare to indicate that I might have too much debt, I would hunt another source.

I have taken a $20,000 draw on a line of credit in a cashier’s check, walked out of that bank, and into another.

With all the “presentation” explained above and a $20,000 cashier’s check, I would “establish a new relationship”. Which meant I would deposit my borrowed cash into their bank, promise to be a customer, and in return they would give me a new $100,000 line of credit plus every platinum card and personal line of credit they had.

The sarcastic way I am explaining this to you almost makes the process seem immoral. However, we were making money, and we had a bright future, so the banks wanted customers like us.

It’s pretty easy to see why business practices like this got Ramsey into trouble. I’m sure it seemed very normal, and like a good idea at the time, but as Ramsey explains, it did end up being his downfall.

Our largest lender was sold to a larger bank. Neither pomp, nor circumstance nor my name meant anything to the new upper management.

Also, the 1986 tax act began to have it’s negative impact on real estate so all the banks began to get worried.

Upper management decided to “trim back” on real estate lending.
Most of our borrowing was in short-term notes because we resold most of our property for profit. Because we had “open lines of credit” and short term notes, the banks had the right to call (or demand that we pay) most of our debt within 90 days. And that is just what they did. The new management called all my notes.

I had 90 days to find $1.2 million. I paid virtually all of it, but doing so destroyed my business. That action started a chain reaction that ended in my losing everything but my home and the clothes on my back.

I remember the strain on my marriage. I remember the mornings standing in the shower with the water scalding my face and crying like a baby.

I remember the sheriff serving lawsuit papers for default on notes. I remember thinking of suicide, knowing I had a $1 million life insurance policy that would provide for my family better than I was doing.

It took three and a half years for paradise to completely unravel, and for me to end up broke.

That’s a magnificent failure isn’t it? I can’t even imagine living through that, and I’ve been through bankruptcy. Mine was a slow failure too – 4 years of struggling to pay medical debt, and getting further and further behind. Mine was a lot of ignorance – financial and otherwise.

I literally can’t imagine being in Ramsey’s shoes – having worked hard, struggled to build a business, played within the rules, and then to find yourself with nothing when it’s all said and done.

All because of the insidious credit trap – the dark side of easy credit that many of us experience every day, and that largely caused many of the economic problems that we’re all facing.

Is it any wonder Ramsey is so anti-credit? He was royally screwed by his bank because they had overextended credit to him. (Much like the people who have come here and left comments because their credit card companies cut their limits.) It’s not because Ramsey made late payments, or because he didn’t play by the rules – it’s because the bank over extended itself and made a business decision to limit his credit.

Ramsey’s story is a very real warning, especially to those who play the credit game well - the ones who manage their credit, respect it, and use it to further themselves. Always remember that the banks on the other side of the desk have priorities too, and they are rarely going to line up with yours – even if they do choose to lend you their money.

The Ramsey’s finally ended up declaring bankruptcy – but thankfully, their story doesn’t stop there.

Chapter 2: Enough of Anything Is Too Much

Ramsey begins this chapter with a frank look at the challenges facing our nation:

Our nation’s financial situation, with record budget deficits and bank failures, is deplorable. However, the nation’s situation is only a reflection of our own personal inability to “just say no” to ourselves. Our failure to get control of financial matters in our personal lives will have to be rectified before we can demand accountability from elected officials.

Our spoiled Congress is only a reflection of our spoiled selves. The good of our country is overlooked so our pet special-interest groups can be served, just like the good of the family is often overlooked so that Dad or Mom can have that special trinket they must possess.

Well that’s a little preachy I think, I but I agree. Especially with Ramsey’s next statement:

As a people we have forgotten how to delay pleasure. We are living in a society that microwaves everything. We must have it, we must have it now!

That’s one of the truest things I have every heard about today’s way of life. Goals (and financial peace!) take hard work, sacrifice and time. The short and easy path will usually burn you in the long run.

Many of us though, delude ourselves into think that we can just keep running faster and faster. We think that if we stay ahead of the inevitable repercussions, that they will never catch up to us. It just doesn’t work that way.

In the 1950’s you seldom would have heard of a person filing bankruptcy, being foreclosed on, or having his wages garnished for non-payment of debt.

Now, if you live in a middle income neighborhood, out of your closest one hundred neighbors there is at least one house empty from foreclosure, plus one foreclosure underway, and four to seven of your neighbors are more than three months behind on their house payment. In some areas, these numbers are double.

This book was revised in 2003. As shocking as the numbers were then, I have to wonder, what are they now? Does any one know? Please leave a comment if you know the average number of foreclosures per 100 houses?

The American family has especially felt the effects of these changes in our financial philosophy. The very core of the family is dramatically affected by this overbuying, which creates overborrowing.

Most marriages that fail list financial problems as a contributing factor, if not the main reason for the failure. Marriages of twenty – five years or more are frequently destroyed by foreclosure or bankruptcy. The “stuff” must have owned them, instead of their owning the “stuff.”

I certainly won’t argue that money problems put stress in a marriage. My own marriage was no picnic during all of the financial problems that led up to our bankruptcy.

However, I tend to look at the way money is managed in a marriage as more of an indicator of the marriage’s health. It may be the straw that breaks the camel’s back, but it’s usually just one straw in a heap of issues when things aren’t working out. If the money is being mismanaged, then chances are, other things are being mismanaged too.

What do you think?

That concludes this week’s review of Financial Peace, please check back next Sunday for a quick review of the next two chapters! Grab our free RSS feed so that you don’t miss future updates.

Thanks also go out to these carnivals, for featuring our articles this week:

• The carnival of personal development @ Through the Illusion
• The festival of frugality @ Green Panda Treehouse
• The Carnival of everything money and The money hacks carnival@ The penny daily
• Rich Life Carnival #34 @ Rich Life Equals Better Life
• The carnival of personal finance @ Free Money Finance

Chapter 1 – Different types of consumer reports, D&B, MIB and Check Systems – In the first chapter, Sam goes through the different types of consumer reports available. Most of us are familiar with the three major credit bureaus – Experian, TransUnion and Equifax. What was more interesting was Sam talking about Dun & Bradstreet and Experian business reporting. He mentioned that in the past, credit card issuers and banks did not check on business credit bureaus. But with the economy it is now, they are starting to look at those. The Check Systems is also another consumer report which used among banks to protect themselves from individual with past bad check writing. He mentions a valuable gem which is that we ar ntitled to a free copy of our check system reports.

The next gem in this chapter is the information about the Medical Information Bureau. This is like the medical version of the credit bureaus, where doctor can reports any medical claims. The book educates us on how inaccurate information may lead to someone being denied of medical insurance.

Chapter 2 – Rebuilding Your Credit/Co-signers – In the next chapter, the book mentions a very little known fact. And that is that being an authorized user on a credit card (or having a co-signer) will not help your credit score. This used to be an effective strategy to improve your credit score but FICO has stopped using this as a criteria since last 2008.

The book then also proceeds to talk about my using a secured credit card is the way to go if you are looking to build or rebuild your credit. I wholeheartedly agree with this.

Chapter 3 – Revolving Credit and Installment Credit – This chapter actually talks more about the title of the chapter itself. But I liked the way the book explained the differences between a revolving credit and an installment credit. An installment credit is line your auto loan, mortgage or furniture loan. The outstanding principle can never go up but can only go down.

Contrast this with a revolving credit like your credit card. You can have a balance of $1,000 one month and $10,000 the next. The book mentions the precise ration of these 2 types of credit to have.

Chapter 4 – Bankruptcy – When to do it, when to avoid it and divorce debt – While the author is not a bankruptcy attorney, he gives enough information that drills home the point that you do not know a lot of things and that you should probably consult a BK attorney if you are thinking of filing for one. He briefly touches on Chapter 7 versus chapter 13 filing and briefly shares his thoughts on the circumstances when one should file or not. He also talks about what is dischargable debt and what is not.

Chapter 5 – Credit Counseling with Credit/Debt Consolidation vs Debt Negotiations s credit repair – This highlights the main differences between a non-profit counseling service, debt consolidation vs debt negotiation. I like this chapter very much. It actually goes into quite a bit of detail on the little things you would not read elsewhere. The chapter spends quite a bit of time on debt negotiations as well. You should have a pretty clear idea on credit counseling, debt consolidation and debt negotiations after reading this book. Furthermore, the chapter also has some nifty tips to avoid collection calls.

Chapter 6 & 7 – Chapter 6 and & are both very short chapters very sound information on rapid scoring and how having a co-signer is now redundant and useless.

Next Sunday, we’ll conclude our review of “The Credit Book”.

If you missed the first three parts of the review, you can read them here:

• More Than Enough By Dave Ramsey – Review Part 1
• More Than Enough by Dave Ramsey – Part 2
• More Than Enough by Dave Ramsey Part 3

Good, Better, Best: Work, Discipline, Diligence

“Work keep us from the three evils: boredom, vice, and poverty.” Voltaire said.

Why do people believe they can build wealth or relationships without work? I am baffled when I meet so many people who appear intelligent, seem to have hope, and yet the idea of hard work does not even occur to them.

Work is doing it. Discipline is doing it every day. Diligence is doing it well every day. It all starts with work.

Work is another common denominator of people who win. You cannot be the best, you cannot build wealth, you cannot be or do anything of significance if you won’t work, and work hard.

The only lazy or slothful folks who are wealthy are folks who inherited oney or won it, and they are rare.

Of America’s millionaires, 80% are first generation rich. That means they got up, left the cave, killed something, and drug it home.

If you want to be wealthy and have fabulous relationships, work has to be a part of your life.

Well, it’ definitely true that hard work is pretty much the magic recipe for success – or at least the first building block!

Have you ever had someone say to you, “Oh you are so luck to have gotten that promotion / expensive object / opportunity?” Did it bother you?

If you are anything like me it did! The truth is, whatever we have, no matter how much or how little, we worked for it. Everyone works for it. And the Uber successful people often work longer and harder than their competition to get where they are. Successful people are driven to be successful. It’s an internal force that motivates you, and you can apply it to anything.

Hard work opens locked doors. The key to almost any locked door is hard work. Hard work seems to surround itself with friends: opportunity, luck, and solution to life’s greatest problems. The activity created by sheer movement stirs up wonderful things in your life.

Thomas Jefferson said “I am a great believer in luck, and the harder I work, the more I have of it.” When opportunity knocks you have to be ready not just to answer, but to apply tons of effort to making your chance happen. When opportunity knocks, don’t be surprised if it i wearing work clothes when you answer the door.

It has also been said that anything worth having in life is worth working for. Work is the difference between a much-loved pipe dream and a true reality.

Do you have dreams that could benefit from a little application of “work?” I sure do. Aside from a variety of personal goals, I’d like to have another book published, and a retirement account that I actually max my contributions to each year.

These things will all take a lot of work, and perseverance, but I am not going to give up on them. Day by day, I am going to put in the work, time and energy so that my dreams do become a reality.

Building wealth is almost imposible without discipline. I hate this because I too am human and discipline is not easy for me either. But facts are facts and most wealthy people get that way by living on a monthly spending plan, by saving money every month, and by investing money every month.

If Ben saves just $100 per month from age twenty-two to age seventy-two at 12% in a decent mutual fund he will have $3,905,833.

If he saves that amount into a Roth IRA this young man retires with almost $4 million tax free. For the price of a couple of pizzas and cable every month, $4 million seems like a deal. There is no excuse to retire broke in America today! But he has to do it every month. And so do you.

To be honest, I hate these sorts of examples. I would very much like for Mr. Ramsey to direct me to a mutual fund that earns 12% every year without fail.

However, the principle behind the math is sound. Investing a little money over a long period of time (and then leaving it alone to let it grow) is a good plan.

It’s not a “get rich quick” plan. It’s a slow, methodical, common sense method of planning your future.

Most of u aren’t in our early twenties either – but that doesn’t mean that we can’t still benefit from beginning, or increasing our retirement savings accounts.

Teach The Children:

Please teach your kids to work. You doom them toa life of frustration and mediocrity if they don’t learn a work ethic from you.

Work is a life skill, like bahting, or driving a car, and it must be taught.

Babies are cute, but let’s face it- they are little savages. Our nature at birth is not a nature that will lead us to prosperity. Our nature must be harnessed and taught.

There has never been a child born who gets up every morning, makes his bed, cleans his room and brushes his teeth – without instruction.

By removing work from a child’s life you cripple him. That child will enter into the world of adulthood without a clue as to what is coming.

Worse yet, some poor unsuspecting person may marry this spolied bum you have raised.

Work used to be necessary for survival in America’s rural past. You rose before the sun and did chores – hard ones – that brough value to the family, even if you were seven.

Character was built at an early age, and this was not child abuse.

Child abuse is a fat little boy with his butt in front of the Nintendo for hours on end eating yet another whole bag of Doritos. This child thinks of no one but himself and is in for a long and frustrating life because he has not learned the satisfaction, joy, and value of work.

That was a long quote, but I really wanted to include it here in it’s entirety. The more modern things get – the more mechanized, sterilized, homogenized, and any other “ized” types you can think of – the lazier we all get.

For many of us survival isn’t a challenge any more. We buy our food at the grocery store, drop off our laundry at the dry cleaner’s, and drive through for our dinners.

It is certainly nice that things which used to take hours can now take much less time or become someone else’s job entirely. The important thing is to make sure that we make the best use of the time that we are saving, and also, that we teach our children to do the very same thing.

No matter how many times I tell my young daughter to “pick up her toys” she will not. Until I get down in the floor and show her what to do. (She’s two). We are all either taught these things, or not taught these things.

Some people may not have had the benefit of learning these lessons as children. But that does not mean that we can’t pass the lessons we’ve already learned on to our children. No matter how young or old they are!

In Conclusion:

More Than Enough is an excellent personal finance book. It doesn’t deal with many concrete numbers, instead Ramsey chooses to dole out good old fashioned common sense with a little bit of humor mixed in.

If you ever find yourself fighting with your significant other about your money; if you are in debt and don’t know what to do; if you just can’t seem to make ends meet, then this book is an excellent place to start looking for help.

The answers in More than enough have been proven over and over again throughout the generations. There’s no real “new” material here, but it is an amazing and valuable book that gently reminds us all of what we already know to be true, but just can’t seem to do.

Have a question for us? Leave a comment below!

Keep Reading and Grab our Free RSS Feed:

• Healing Your Financial Soul
• The Complete Guide To Credit Repair
• Increase Your Financial IQ Book Review

Carnivals:

Thanks also go out to these carnivals which included our articles this week:

• Fesitval of Frugality #163rd Edition @ My Journey To Millions
• Carnival of Money Stories – Edition 95 @ Dividend Tree
• Money Hacks Carnival #50 at Curious Cat
• Money Advice from Personal Finance Blogs @ The Skilled Investor.
• 189th Carnival of Personal Finance: Super Bowl edition @ Taking Charge.

If you missed the first two parts of the review, you can read them here:

• More Than Enough By Dave Ramsey – Review Part 1
• More Than Enough by Dave Ramsey – Part 2

Chapter 5: Hope: Balm For The Soul

You will never have more than enough unless you plug into one of the most powerful traits that we as humans can possess: hope.

Hope is the powerful fuel that causes the engine of your life to develop all the horsepower it was designed to have. Values that bring vision and unity will always be put into motion when hope comes on the scene. Hope creates motion.

I used to think “cute”, when someone mentioned the word hope. I made the mistake of thinking of hope as a sissy word with flowers and valentines around it. After years of watching folks get more than enough I have realized that hope is one of the most powerful things that can or cannot happen in someone’s life.

Hope is steel covered in velvet. It can seem soft and cuddly, but hope is the core of what makes people become what God designed them to be. Hope, and it’s sister, Faith, always create action.

Hope moves us forward when logic and energy are gone.

Losing hope is the first and only stage of giving up. Once the hope is gone, there is little point in pursuing a particular point of action.

It’s easy to lose hope in difficult situations. It’s easy to let yourself sit down, give up, and wait for someone, anyone else to handle your problems.

Most of us have learned, at one point or another, that sometimes there just is no one else to hand our problems off to. That is when we must look inside of ourselves and either find a new reason to hope, or plot a different course of action where hope does exist.

They can take everything, but they only way you lose your hope is you have to surrender it.

Hope is an act of the will, it is a decision.

Loss of hope from being gut punched one too many times can happen to any of us. What causes some people to be able to get up again while others can’t seem to find the energy?

Someone once asked Paul Harvey, the radio commentator, to reveal the secret to his success. “I get up every time I fall down,” was Harvey’s answer.

Vince Lombardi said, “It is not whether you get knocked down, it is whether you get up.”

The folks who get up again and again and keep going until they get more than enough from life are the folks who do not accept failure as destiny.

Instead they are always reminding themselves that failure is not an indicator of the future, but just a building block to get there.

Dale Carnegie believed that when he said, “Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.”

If hope is an act of will rather than an emotion, then it stands to reason that we can find hope in any situation, no matter how ugly, if we simply choose to.

In fact, I would say that many of the world’s most popular works of literature all rally around this theme: Finding hope in the midst of darkness. Whether it was Frodo and Sam in the darkness of Mordor, Edmond Dantès imprisoned in the Chateau d’if, or even David as he faced the overwhelming might of Goliath.

There is nothing we enjoy more as humans than the triumph of hope over failure. And yet we look to our own lives, and see our battles as small. “Balancing a budget! Pah! That’s no triumph of hope, that’s no heroic act!”

But what if it is? Having just enough hope to take that first, all important step is an act of heroism. And it will take you on a journey as far and as fantastic as that of the greatest fictional hero.

The Real World

Life gives us some events that lend us perspective. Every so often things happen that make a real pointed statement showing us what is real, and what is important.

Those events, even if tragic, give us energy because our hope is made fresh when we have a clean measuring stick to use to measure our other problems against.

This is another universal theme – we have all had this happen. When true tragedy befalls us or those we love, it puts all other problems into the back seat.

That argument over dinner no longer has the same weight that it did once you find out a friend or a loved one is in the hospital.

If you are losing hope in your financial situation, do a quick check up on your perspective. Is there anything that is leading you to blow things out of proportion? Are there any fears that you can face to put things right again in your heart?

Chapter 6: Accountability: How To Get An “A” In Conduct

Our lives are like gardens. If fertilized with continued learning, watered with spiritual renewal, pruned from bad influence, and weeded of bad habits our lives will be beautiful.

If left unattended, the bugs of bad influence and the weeds of bad habits will take over and ruin our lives.

Ok, I’ll admit this speech reminded me a little of Dolores Umbridge, the evil headmistress of Hogwarts…

(Gratuitous Harry Potter clip below)

Frightening connotations aside, this is good advice. As is Ramsey’s advice to find a gardener:

Clifford G. Baird says we need gardeners in our lives. The gardeners will be positive influences, hold us accountable for our behavior, and insist that we make a habit of what is good for us. Accountability and support are the tools of the gardener.

I can think of people in my own life that act as gardeners for me. They bring out the very best in me, and constantly encourage me to do more, better…best.

Close friends and mentors that believe in you are irreplaceable because they help to build you up and encourage you to find your own strength. Do you have gardeners like that in your own life?

When there are no gardeners:

All too often we don’t have gardeners in our lives. Financial problems, marital problems, career problems, spiritual challenges, and health problems will attack each of us.

No one makes it through life without challenges. Some of the challenges are so big we feel we will sink under their weight.

When life ties you up and throws you in a pit you have to make choices. You have to decide what to do at the bottom.

When some folks get smacked so hard they can’t breathe, they choose to sit and examine, and talk about those scars the rest of their lives.

Clifford G. Baird says, “People wallow in mediocrity knowing what they should do.”

We know in our minds that staying in the pit isn’t smart; but it is our pit, and it feels safe.

Our very own pit is like sitting in a dirty diaper. We are sitting in a mess and it stinks; but it is warm and it is ours, so some folks choose to stay.

Isn’t that the truth? If you’re in a financial pit, or any other sort of pit, take the time to sit down with yourself and go over your options. If you’re tired of being in that pit, how can you get out?

Can you take on a second job? Work longer hours at your first job? Cut your budget and make extra payments on your revolving debt?

Whatever you choice, the best place to begin is with a plan of action. Set your goals, write them down, take them to heart, and work to achieve them. It’s amazing that many of us allow our problems to get us down, when the solution isn’t that difficult – it just involves facing our fears and admitting that we are in that pit to begin with.

That concludes this week’s review of “More Than Enough” by Dave Ramsey. If you want to read our future reviews you can grab our Free RSS feed so that you don’t miss them.

Have a question? Read the book? Leave a comment below!

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If you missed the first part of the review, you can read it here:

Chapter 3: Victory Through Vision

When you are a child, vision is like a dream complete with unclear plots and fog. You think, I want to be an astronaut when I grow up, even though you hate to fly. Or, I really have to have a pony, even though you live in the middle of a large city. Or, I will get an A on my math test, even though you haven’t studied.

For a child, vision is a kind of magical thinking about things that might happen in the future if only, somehow, everything goes just right.

Many adults think about their dreams and visions in just the same way as children do: If I’m lucky, if only somehow, everything goes right….

When you have walked with thoe who have real vision however, you understand it simply means sight, very clear sight.

When asked if she knew anything worse than being blind, Hellen Keller once said, “Yes, being able to see and having no vision.”

The ability to see doesn’t mean having 20/20 vision; it means being able to have a clear picture of your vision and how you plan to achieve it.

What is your vision for your own life? Have you taken the time to plan it out? Are you stuck in the rut of survival, living one day to the next hoping that tomorrow will be better? What are you going to do about it?

My vision led me to freelance. I worked hard for two years before I was able to quit my “day job”, but every step of the way, I planned, and I analyzed, and I put all my energy behind that goal.

Because of that vision and determination in my own life, I built a portfolio of work in two years that many people do not have in five years. Anything is possible in your life too! All you have to do is have a clear vision of where you want to go, and set a real plan into motion for yourself.

Dollars and Vision:

Why do you need vision? To start with, it affects income. Studies of people who earn $100,000 a year or more and have maintained that income level for years revealed an interesting character trait. These six-figure earners all think in five year blocks (or more) of time.

They are very unconcerned about today except for how today is a building block toward their vision, which may not be fully realized for another twenty years.

They think long term in all decisions.

Six figure earners think about the long term implications of every move they make and don’t make those moves unless they move them one step closer to their vision.

These are happy people not because they have six figures to spend (although that doesn’t hurt) but because temporary pain is just that: It is temporary.

If you think long term you become a saver and an investor. As an investor with a long term vision you don’t panic when the mutual fund drops because you are looking at what the market has done over ten years and not what today brings.

How many of us allow our inner child to control our decisions? And by inner child I mean exactly what Ramsey detailed in the quote above: The part of us that magically wants things to happen, without the work, or the sacrifice, or the goal?

Signs that inner child is at work include: regularly carrying a balance on your credit cards, living paycheck to paycheck, having no retirement accounts or heath insurance, not putting money into an employer-sponsored 401(k), not having a budget….not having a plan.

The folks at the bottom end of the income brackets who stay there tend to share the character trait of short-term thinking, making decisions based on short-term results.

That sounds harsh doesn’t it? Well if you think short term you rent to own your VCR and get ripped off. You pawn items or fall for these jerk cash advance businesses that cash hot checks.

If you think short term you work for the weekend and fall prey to pleasure-based products that in the end steal your pleasure.

If you think short term you don’t save and invest so you can’t build wealth. When you think short term, if you do invest you can’t leave money alone so you end up buying high, selling low, then thinking:”I have the worst luck.”

Luck had nothing to do with it. You simply shortchanged yourself by not carrying through on your vision.

Well I can tell you, these paragraphs alone are making me re-think my financial picture. If anything, I always tended to have a short term approach to my life, thinking no more than about two years in advance.

Given the choice, I much prefer to be in the wealthier group with the long-term goals.

I also agree that luck has very little to do with success or failure. Hard work, vision, and drive are a much better recipe for success.

What about you? What do you feel driven to do? To change about your life? My homework tonight will be working out at least a five year plan instead of a two year plan.

I also want to share with you what I consider to be a few of the very best paragraphs out of this entire book:

Making your vision a reality takes time. It takes the time to calculate how your money could be the power behind your vision. Consider this: You are a teenager who puts $2000 into a Roth IRA on your sixteenth and seventeenth birthdays.

If those two ROTH IRA’s where invested in a growth stock mutual fund that averages 12 percent annual growth, that $4,000 will grow to $1,566,333 tax free at age sixty-six. You realize that you never added any money?!

Vision leads you to wealth. Vision is understanding that investing cable and pizza money of only $100 per month from age twenty to age sixty-five, your working lifetime, will land you at retirement with $2,145,469. That is better than having to buy that cookbook 72 Ways To Prepare Alpo And Love It.

We have a retirement crisis in America today not from lack of money, but from a lack of vision.

Wow! I really think Ramsey hit the nail on the head with this one!

It is never too late to start investing for your retirement. You might be twenty, you might be fifty, but you are always going to be better off tomorrow if you invest today.

To quote Warren Buffet here:

“The best time to invest in the stock market was yesterday. The second-best time is today.”

What are your current investment options? Do you have IRA accounts set up yet? Are you contributing to a 401(k)?

What will you do with the time you have left between now and retirement? Will you take advantage of your vision and put it into action? Or will you float along, and hope that everything will turn out alright?

Vision Changes Your Family Tree:

If a sixteen year old can retire an millionaire, and a working class saver with $100 a month can retire a millionaire, what could you do? You could change your family tree!

Tens of millions of dollars can be created as wealth for the next generations.

What did the first Carnegie, Rockefeller, Vanderbilt, or Kennedy have when he started broke? Vision.

Vision causes you to face your horizons without stopping no matter how many times you fall.

Vision that is powerful enough to change a family tree is the noblest of trait.

Several years ago, an older lady with a thick German accent called in on my radio show. She wanted to tell our listeners that saving and investing, instead of spending everything, works.

She had come to America just following World War II as a widow with two young children. Can you imagine how popular Germans were in America just after the war? She didn’t care, she had a vision.

She came here with virtually no skills and worked over forty years as a seamstress. She also knew that she had to invest to achieve her vision.

At the time she called me she was retiring, and on a seamstress’s income she had paid for her home and had over $300,000 in mutual funds. Impressive? She also paid cash for both her children’s college educations and gave them each enough to pay cash for their homes.

I had to ask how she had sacrificed all that she obviously had, to achieve the goals she had. Her answer will stay with me forever: “Dave, when I came to America, I had one goal – give my children a chance. I wanted to change my family’s destiny.“

As a parent, I believe that there is no greater goal than to give your children the best life possible. I have a working vision for the life of myself and my daughter – with one more important key that Ramsey doesn’t touch on: I want my daughter to know how to do the same thing too.

That’s the second half of the equation: Not simply providing for your children by building wealth, but teaching them how to do the very same thing. Only then will I know that what I do for her will stick – when she is able to do it for herself a long time before I am gone.

That concludes this week’s review of “More Than Enough” by Dave Ramsey. If you want to read our future reviews you can grab our Free RSS feed so that you don’t miss them.

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Ramsey’s debt snowball method has helped an uncountable number of people to get out of debt and gain control of their finances. In fact, he was one of my earliest influences when I began own financial education.

While I may not agree with all of his principles, I have always enjoyed his work, and the thought that he puts behind his concepts.

More Than Enough doesn’t just concentrate on getting out of debt. Instead it teaches us how to create a budget that actually fits our lifestyles – one that we can stick to because it takes into account what our needs really are.

It also intentionally challenges the concept of “enough”.

Chapter 1: More Than Enough What?

The book begins with this quote from George Bernard Shaw:

Money is worth nothing to the man
who has more than enough.

Ramsey also begins with an anecdote. The story of a woman and her husband. The story of a marriage that had fallen apart. The couple was on their way to get a divorce when they drove past one of Ramsey’s Financial Peace offices.

Why do [my staff and I] counsel hundreds of folks – single, married, young, old, tall, short, with children and without, broke, or prosperous – who have reached a point of crisis?

Whether the crisis is real, like financial problems, or whether the crisis has evolved from being sick and tired of being a gerbil in a wheel, the people my staff and I talk to are looking at where they are financially and saying, “The price I am paying for these dollars is jut too high.”

People everywhere are saying “Enough! I have got to do something different!”

As a society, we are waking up and saying stuff – that new car in the driveway, that Cuisinart in the kitchen, those new suits hanging in the closet, those $100 dinners at fine restaurants – is not enough and we want more.

This group of people is seeking out the pain of change because the pain of same has gotten too high.

The last quote in that excerpt really rang true for me. The greatest instigator for change is definitely the fear that you cannot cope with more of the same.

Someone once said that insanity is doing the same things over and over again and expecting different results. As a society, many of us have been running around like little children with our money. No discipline, no direction, no real morality. Just an endless quest for more, and more and more things.

That’s reflected in the economic crunch that we are living through, all the way down to those still out there living paycheck to paycheck.

But what all the things in life will never do is address what it is that we really need to be happy.

I do believe that it takes a real change to reach this point. And usually that change comes as a result of great trials. Of standing up one day and saying – “I don’t want to keep doing the same things any more. I would rather deal with changing than to keep dealing with the same old results of my current behavior.”

Ramsey also believes that the way we manage (or mis-manage) our money reflects back upon every area of our lives. It is like a litmus test, a true indication of how well we are coping in all areas, not just our finances.

Whether you are talking about marital problems, money problems, or everything in between, true change comes as a result of hating your current situation so much that you would rather change anything you needed to than continue to live the way you are.

I am convinced with everything that is within me that as you apply the concepts in the following chapters to your life, your relationships, and your money, you will being the process of having more than enough.

More than enough peace and rewards in your relationships, more than enough unity in your marriage, more than enough courage to face the day as a single, more than enough patience to teach your kids hte right path, and as time goes on, more than enough money.

Yes, this is a book about building wealth, but also much more.

This is about changing your life, changing your family tree by impacting your children, even changing your community, church, or your entire city.

The principles we will explain ehre are rooted in common sense and reality. These ideas are a proven time-honored method of implementing values like hard work and diligence, intensity and focus, and patience and contentment, which affect everything you do.

Once you make them a part of your character, everything else, including money and relationships, flows out of them and demands of your life more than enough.

As you will see, these principles are a strange mix of grandma’s common sense, philosophy, theology, and hands-on application.

The material in this book has changed my life, and thousands of others. It will start you on a journey that is life changing; it is my gift to you, so use it.

It is useless to learn and not apply the knowledge. Louis Dunnington said, “You will never leave where you are until you decide where you’d rather be.”

Change is very hard and we change only when the pain of same is greater than the pain of change.

Chapter 2: The Missing Link

Ramsey believes that the missing link in our mental evolution is values.

Values matter because having principles you live by brings you joy, peace, and yes, even wealth. Being blown by whatever wind that comes because your personal rudder isn’t deep enough, or worse yet, doesn’t even exist, is to lead a life of fear, confusion, and even destruction.

Sadly, family problems and even financial problems, are seldom the real problem, but often the symptom of a weak or non-existent value system.

Harsh? Well, maybe, but I can speak of these things honestly because I have messed up in my life and have observed thousands of others who brought pain into their lives by straying from a good value system.

Well, these can be hard words to hear. Hard words to take to heart.

It’s easy enough for me to see this going on in my own life, and my own past – times when a lack of values allowed my foundations to crumble – financial and otherwise. I’ll bet we’ve all been there to one degree or another.

It’s hard to argue with the truth – I do agree with Ramsey here. Values reinforce every area of our lives, especially our finances. What do you think?

Wisdom comes from experience.

If you have messed up you get another chance starting right now. ‘Cause I’m giving you a “Get out of jail free card.” The truth is, many of us need second chances.

The story of Uncle Zed, an old mountaineer from West Virginia who was celebrated for his wisdom, tells it best:

“Uncle Zed, how did you get so wise?” asked his young nephew.

“Weren’t hard,” said the old man. “I’ve got good judgment. Good judgment comes from experience. And, experience, well, that comes from having bad judgment.”

Take your “Get out of jail free” card and start implementing the following values in your life and you’ll become a man like Uncle Zed.

Next week we’ll take a look at the next section of the book, as well as Ramsey’s “Value Keys” to finally having More Than Enough.

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• Increase Your Financial IQ Book Review 1
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Increase Your Financial IQ: Budgeting

A Budget is a Plan:

One of the definitions of the word “budget” is: a plan for the coordination of resources and expenditures.

Rich Dad said a budget is a plan. He went on to say “Most people use their budget as a plan to become poor or middle class rather than a plan to become rich. Most people operate their lives on a budget deficit rather than a budget surplus. Instead of working to create a budget surplus, many people work to live below their means, which often means creating a budget deficit.

A budget deficit is an excess of spending over income, while a budget surplus is an excess of income over spending.”

Well, this mode of thinking is definitely what sets Kiyosaki apart from the majority of other personal finance gurus. A quick search of the internet, or a glance at the finance section of any bookstore, will yield up hundreds of books and articles that focus on living below your means.

Kiyosaki on the other hand has always focused more on increasing your means. He believes that if you can’t afford to live the life you want to live you should earn more, not cut back.

I have to admit, that was a liberating idea for me when I first encountered it. While I do think it makes good financial sense to live below your means, (or at the very least within them!) it makes far more sense to make increasing your wealth the primary focus.

Think about this: I can spend ten hours a week clipping coupons, researching the best deals, travel to three of four different stores to maximize my savings, and I will be able to save money. Possibly a lot of money. People do it successfully all the time.

If we follow Kiyosaki’s mode of thought though, he would advise taking that same ten hours a week and putting it to use by finding a way to earn more money instead.

I do agree with Kiyosaki that this mode of thinking (he calls it “thinking poor”) traps people. It traps us into believing that we can’t afford things, that we must do without, and our quality of life suffers.

Instead of spending our time focusing on how we can acquire the things we want, we focus instead on how to min/max the small amount of money that we have and stay within our comfort zone.

Kiyosaki shares his own story within this book. He explains how he paid himself first, before anyone else so that he could create his own budget surplus.

Soon after we were married, Kim and I had the same financial problems many newlyweds have. We had more expenses than income. To solve this problem, we hired Betty the Bookkeeper. Betty was instructed to take 30% of all income off the top, as an expense, put that money in the asset column.

Using simple numbers as an example, if we had $1000 in income, and $1500 in expenses, Betty was to talk 30% of the $1000, and put that money in the asset column. With the remaining $700, she was to pay the $1500 in expenses.

Betty nearly died. She thought we were nuts. She said, “You can’t do that. You have bills to pay.” She almost quit. You see, Betty was a great bookkeeper, but she budgeted like a poor person. She paid everyone else first and herself last. Since there was rarely anything left over, she paid herself nothing. Her creditors, the government, and bankers, were all more important than Betty.

Betty argued and fought. All of her training told her to pay everyone else first. The thought of not paying her bills or taxes made her weak in the knees.

I finally got her to understand she was doing us a favor. She was helping us out. I explained to her that she was helping us solve a very big problem, the problem of not having enough money, and as you know, solving problems makes us smarter. When she understood she was actually creating income through expense, she was willing to go along with our plan to create a budget surplus.

For every dollar of income, Betty would take 30 cents and put it in savings, tithing and investing. She knew that saving, tithing, and investing were necessary expense to create a surplus, our first and most important expense.

With the 70 cents from every dollar left, she was to pay taxes, liabilities such as our mortgage and car payments, and then our bills such as electricity, water, food, clothing, etc.

Needless to say, for a long time we came up short every month, period. Although we had paid ourselves first, we did not have enough money to pay others. There were some months Kim and I came up as much as $4000 short. We could have paid the $4000 from our assets, but that was our money. The asset column belonged to us.

Instead of panic, Betty was instructed to sit down with us and let us know how sort we were each month. After taking a deep breath, Kim and I would then say, “It’s time to get back to Financial IQ #1: Making more money.”

With that, Kim and I would hustle around doing whatever we could to make more money. Kim, with her marketing background, often called businesses and offered to consult with them on their marketing plans. She also took modeling jobs, and sold a line of clothes.

I offered to teach investment or sales and marketing classes. For a few months, I trained sales teams at a local real estate company. I even made money by helping a family move, and by clearing some land for another family.

In other words, we swallowed our pride and did whatever it took to make the extra money. Somehow, we always made it; and somehow Betty stuck with us and assisted us with out problem, solution, and process, even though she worried more about us than we did.

Unfortunately, Betty could help us, but was unwilling to help herself. Last we heard, she’d retired and moved in with her single daughter. They share expenses, using Betty’s payments from Social Security to pay them. They do not have a budget surplus.

Ok, so that was a long section, and for most of us, I think the ideas there can be controversial. Instead of just telling you what I think of them, I would really like to know – What do YOU think of the way Kiyosaki created his budget surplus?

Do you think this is the right way to go about things? How do you approach the issue of building wealth? Please leave me a comment below, and I’ll respond!

This concludes our review of Increase Your Financial IQ by Robert Kiyosaki. If you’re interested in reading this book, don’t forget that you can buy a used copy off of Amazon.com for less than half price, or check it out from your local library. Financial education doesn’t have to be expensive!

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In this section of the book Kiyosaki takes an in-depth look at the different Financial IQ’s, beginning with number one.

Financial IQ #1: Making More Money

Kiyosaki spends some time detailing his own history here. How he graduated from school, took a job with Standard Oil, and then left that job and took a huge pay cut to voluntarily serve in Vietnam. After spending five years in the military (one in Vietnam) he was honorably discharged.

When Kiyosaki returned home he took a job with Xerox – because he wanted to learn to be a salesman, and they provided excellent training. He took the job even though it meant he would take yet another pay cut. Kyiosaki claims he did this because the education was more valuable than the immediate income.

After working for Xerox for a couple of years, and eventually becoming their top salesperson, Kiyosaki started his own business – selling nylon surfer wallets. He briefly chronicles the rise and eventual fall of this business, and then the struggle of rebuilding it.

He believes that every step of his journey made him smarter, more financially educated, and it set the stage for his current business success with The Rich Dad Company.

Every Goal Has A Process:

As we all know, every worthwhile goal has a process and takes work. For example, to become a medical doctor there is a rigorous process of education and training. Many people dream of becoming a doctor, but the process gets in their way. Let me tell you, my own process was a lot of work!

One of the reasons people lack financial IQ #1: making more money, is because they want the money, not the process. What many people do not realize is that it’s the process that makes them rich, not the money.

One of the many reasons lottery winners or kids who inherit family wealth are soon broke is because they received the money, but didn’t have to go through the process. Many other people fail to become rich because they value a steady paycheck more than the learning process of becoming financially smarter and richer. They are held back by the fear of being poor. It is this very fear that keeps them from taking the chances and solving the problems required to become rich.

Wow. That’s some of the best wisdom I believe I have ever seen in a financial book. It is the process that makes you rich. The learning new things, learning from your mistakes, failing, picking yourself back up and doing it again.

Maybe I’m odd, but I find it comforting to think of being rich as a process – a path that I am already on even if I dive into the gutter from time to time. It’s a path that I choose, and that I have control of. That is a very different thing than buying a lottery ticket each day and hoping you will get rich without the process. It’s also a very different thing from experiencing failure and deciding to stop.

The process Kiyosaki is talking about means that you pick yourself back up no matter what your failures are, and you learn from them, and you apply that new knowledge to your life.

Emotional Intelligence:

At this point it is important to point out that financial intelligence is also emotional intelligence. Warren Buffett, the world’s richest investor, says, “If you cannot control your emotions, you cannot control your money.” The same is true for your process. One of the toughest parts of my process was not quitting when I was depressed, not losing my temper when I was frustrated, and to continue to study when I wanted to run.

Another reason many people fail in their process is they cannot live without instant gratification. The main reason I mentioned the low pay I received at the start of my life was to illustrate the importance of delayed gratification. Many will sacrifice a richer tomorrow for a few bucks today. I did not make much money in my twenties or thirties, but I make millions today.

In fact, I would say that when it comes to money, emotional intelligence is the most important intelligence of all.

Instant gratification does keep you poor! I lived many years in that cycle – getting a little money, buying everything I could think of with it, and then being broke until my next paycheck. It wasn’t until I learned to save, and to wait for what I wanted, that I was really able to break out of those chains.

It too effort, time, and education as well, but mostly it took self control. Which, when you boil it down, is pretty much what this entire chapter is about: Having the self control to learn, persevere, learn from your mistakes and wait for your reward – instead of expecting the same reward without the work or discipline.

Why The Rich Get Richer:

One of the reasons the poor and middle class struggle is that they work for money and a steady paycheck. The problem with working for money is you have to work harder, longer, or charge more to make more money. The problem with physically working harder and longer is that we all have a finite amount of time and energy.

One of the reasons why the rich get richer is that every year they work to build or acquire more assets. Adding more assets does not require working harder or longer. In fact, the higher a person’s financial IQ, the less he or she works while acquiring more and better assets. You see, assets work for the rich by producing passive income.

This core concept is one of the reasons why I love Kiyosaki’s books. He is right – most people work for money – paychecks – not assets.

What he never really does hit on much (but it’s fairly obvious) is that if you are currently earning a paycheck, and have no assets, use that paycheck to buy your first assets. Rinse and repeat until you no longer need the paycheck. Then you will no longer be working for money. The longer you do this, the more assets you will build, and the more financially secure you will be.

Be A Problem Solver:

In order to grow wealthy, you must come to terms with the fact that problems will never go away. Each time you find a solution to problem, a new one will pop up. The key is to realize that the process of solving those problems makes you rich. And once you start solving not only your own problems, but other’s as well, then the sky’s the limit.

People will pay money for you to solve their problems. For example, I will pay money to my doctor to keep me healthy. I pay money to my housekeep to keep my house tidy. I shop at my local supermarket because my problem is hunger and starvation if I don’t eat. I pay taxes to public servants to provide a well-run government. I put money into the offering plate at church to support my spiritual guidance and education.

My Wife makes a lot of money because she solves a big problem; the problem of quality housing at an affordable price. The more she works to solve this problem, the more money she makes. I work hard to solve the problem of the need for financial education.

Simply put there are trillions of ways to make more money because there are trillions of, if not infinite, problems to solve. The question is, which problems do you want to solve? The more problems you solve, the richer you will become.

Many people want to get paid for doing nothing, and are unwilling to solve any problems. Or they want to be paid more than the problem they are solving is worth.

This is a very pragmatic approach, isn’t it? It’s very true. If we find a way to solve a problem, or fill a need – not just for ourselves, but for others too – then we can certainly become rich by doing it. Especially when Kiyosaki’s other tenets are put into play – learning from our mistakes, not giving up, and not working for money but rather, for assets.

Kiyosaki On Capitalism:

I included this section here at the end of the review because it made me laugh:

I am a capitlist, not a laborer….Many think of capitalists as pigs. And many are greedy pigs. Yet there are capitalists who do a lot of good, such as provide health care, food, transportation, energy and communications to the world.

As a capitalist who does my best to make the world a better place, my problem is with people who want to be paid for doing nothing, or paid more to do less. In my opinion, a person who wants to be paid more and do less, or nothing, is also a greedy pig.

Here’s to capitalism

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