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You are about to read about a process, a proven plan, to win. You will find the plan to be very simple yet very inspiring.
it. If you are looking for boring academic chirping that will put you to sleep using words only to support the author’s ego, you have not found it.
The Great Depression permanently changed the way many people handled their money. If you have a grandfather or great-aunt who was an adult during that time, he or she likely has a completely different way of looking at debt, saving, and giving than most people of other generations.
“A man with an experience is not at the mercy of a man with an opinion.”
That fooled people into believing that stupid had become smart. In other words, stupid hadn’t been stress tested in quite a while; when it finally was, it came up looking, well, stupid.
Jim Collins, one of America’s greatest business writers, wrote a book called How the Mighty Fall. In this book, he discusses the five stages of decline when a business fails, or falls.
Collins says the first stage of decline is marked by hubris. Pride and arrogance, mixed with a false notion of invincibility, lead the mighty to take huge, ridiculous risks.
Warren Buffett has a great saying: “When the tide goes out, you can tell who was skinny-dipping.”
That quest led me to a really, really uncomfortable place—my mirror.
Winning at money is 80 percent behavior and 20 percent head knowledge. What to do isn’t the problem; doing it is. Most of us know what to do, but we just don’t do it. If I can control the guy in the mirror, I can be skinny and rich.
It works because it gets to the heart of your money problems: you.
I like the way I’ve built wealth better than the way you haven’t.
Your situation isn’t your spouse’s fault (well, maybe, but we’ll talk later), it isn’t your parents’ fault, it isn’t your children’s fault, and it isn’t your friends’ fault. IT IS YOUR FAULT!
I won’t push you across the starting line, and I can’t drag you across the finish line. This whole journey from start to finish is up to you.
Savings without a mission is garbage. Your money needs to work for you, not lie around you.
For your own good, for the good of your family and your future, grow a backbone. When something is wrong, stand up and say it is wrong, and don’t back down.
The enemy of “the best” is not “the worst.” The enemy of “the best” is “just fine.”
Most people won’t change until the pain of where they are exceeds the pain of change.
You are where you are right now financially as a sum total of the decisions you’ve made to this point. If you like where you are, keep it up.
It is human nature to want it and want it now; it is also a sign of immaturity. Being willing to delay pleasure for a greater result is a sign of maturity.
Debt is a tool and should be used to create prosperity.
Debt adds considerable risk, most often doesn’t bring prosperity, and isn’t used by wealthy people nearly as much as we are led to believe.
Proverbs 22:7: “The rich rule over the poor, and the borrower is slave to the lender” (NIV). I was confronted with this scripture and had to make a conscious decision of who was right—my broke finance professor, who taught that debt is a tool, or God, who showed obvious disdain for debt.
If you are living in the bondage of debt, you’re not living. Our marriage is so much better, and there is an element of peace that wasn’t there before we had a financial plan. We feel blessed to have found this information early in our marriage and thankful to have the opportunity to teach our children to be financially responsible.
I have met with thousands of millionaires in my years as a financial counselor,
and I have never met one who said he made it all with Discover Card bonus points.
If I loan money to friends or relatives, I am helping them.
If I loan money to a friend or relative, the relationship will be strained or destroyed. The only relationship that would be enhanced is the kind resulting from one party being the master and the other party a servant.
By cosigning a loan, I am helping a friend or relative.
Be ready to repay the loan; the bank wants a cosigner for a reason, which is that they don’t expect the friend or relative to pay.
According to Proverbs 17:18, “It’s stupid to guarantee someone else’s loan” (CEV). That pretty well sums it up. Just like trying to bless a loved one with a loan, many people are trying to help by cosigning, and the result is damaged credit and damaged or destroyed relationships.
Cash Advance, Payday Loans, Rent-to-Own, Title Pawning, and Tote-the-Note Car Lots are needed to help lower-income people get ahead.
These rip-off examples of predatory lending are designed to take advantage of lower-income people and benefit only the owners of the companies making the loans.
If you use Payday Loans, Tote-the-Note, and Rent-to-Own, please understand that you are being destroyed financially. These businesses feed on the working poor, and you must avoid them at all costs if you want to win with money.
“Ninety days same as cash” equals using other people’s money for free.
Ninety days is not the same as cash.
America falls for has resulted in this: we buy things we don’t need with money we don’t have in order to impress people we don’t like.
Car payments are a way of life; you’ll always have one.
Staying away from car payments by driving reliable used cars is what the average millionaire does; that is how he or she became a millionaire.
Leasing a car is what sophisticated people do. You should lease things that go down in value and take the tax advantage.
Consumer advocates, noted experts, and a good calculator will confirm that the car lease is the most expensive way to operate a vehicle.
You can get a good deal on a new car at 0 percent interest.
A new car loses 60 percent of its value in the first four years; that isn’t 0 percent.
A good used car that is less than three years old is as reliable or more reliable than a new car. A new $28,000 car will lose about $17,000 of value in the first four years you own it. That is almost $100 per week in lost value. To understand what I’m talking about, open your window on your way to work once a week and throw out a $100 bill.
You should get a credit card to build your credit.
You won’t use credit with your Total Money Makeover, except maybe for a mortgage, and you don’t need a credit card for that.
Later, I will introduce you to the 100-percent-down plan, or if you must, how to settle for a fifteen-year fixed-rate mortgage. But if you want that fifteen-year fixed rate with a payment that is no more than 25 percent of your take-home pay so I won’t yell about it, don’t you need credit?
The FICO score is an “I Love Debt” score. According the FICO website, your FICO score is determined by:
Many mortgage companies have gotten so lazy that FICO is the only lending they do. Others simply don’t know how to write a loan without a score. But as of this writing, you can still get a mortgage with a zero score—it may just take a little longer to find a quality lender. You don’t want to have a low score; it is best to have a high one or none at all. My personal score, by the way, is zero—because I haven’t borrowed any money in decades.
