As a society, we have been taught to spend every penny we make, so it is not surprising to learn that over 50% of Americans live paycheck-to-paycheck. For many of us, these habits are destroying our chances of having any sort of financial freedom and financial peace.
This is a dangerous trap, and it’s time to get out!
The key to achieving financial freedom is simple – PAY YOURSELF FIRST!
Although it might seem obvious that we should spend less and save more, but as a society, we have been taught and are actually encouraged to spend every penny we earn. We’re constantly tempted with offers to buy now and pay later. These messages lead many to live beyond their means. As a result, they live paycheck-to-paycheck or client-to-client! This habit ends up destroying any chance we have for financial freedom and financial peace.
“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t … pays it.” – Albert Einstein
My goal through the Smart Money Tip series has been to impart strategies to help you create and grow money. One of the very best ways to grow your money is through the magic of compound interest.
Let’s start with one of my favorite stories. If you were given the choice between taking $3 million in cash today or a single penny that doubles in value every day for 31 days, which would you choose?
Last weekend, I was honored to spend some time with Maggie Allesee and David DiChiera during the spectacular dance performance by Alvin Ailey American Dance Theater at the Michigan Opera Theatre (MOT).
Kathleen Peddicord’s Top 19 Travel Tips
Whether you’re moving to a new country or taking off on a two-week holiday, here are 19 things you should know before you go:
You know what it’s like when you go on vacation. You use your credit card to book your hotel and your airline ticket, and of course, you go shopping. It’s all fun and games until you come home to a giant credit card bill to pay off. You suddenly develop a case of the post-vacation blues. This can all be avoided if you use your credit card and rewards points wisely. Let me show you how!
Last week, we talked about how to make and save money, and then what to do with it. I even mentioned that if you could save $500 a month for 20 years, you could end up with over $250,000 in retirement. So, if you missed that video, click the link below to watch it.
That video triggered a great question from one of our members. If you have questions, be sure to send them in by visiting our Smart Women’s Coaching Facebook Fan Page.
“Katana, I have a question about your latest newsletter and video. In it, you speak of needing a new $400 vacuum and finding it for $110 with shipping. I was always taught that if you have a ‘bargain-hunter’s’ mindset or an ‘I will never pay full price for anything’ mindset, that the mindset will determine who you will attract in your business, so you would attract people who always want a discount or for you to cut your price. I would love to know your thoughts about this!”
Want to know how to create an investment portfolio funded with money found in unconventional places? Of course, you do! Let me show you how easy it is.
My husband and I recently realized we needed a new vacuum. The one I wanted cost $400. My husband is fantastic shopper, and he was convinced he could find it for a better price. He searched the internet and discovered the exact model for only $80!
I’ve been watching the Dominican Republic for more than a decade, waiting for the time to place it on our short list of the world’s top havens.
At last, I believe this Caribbean nation’s time has come.
With a stable government and a steady economy that grew by 7% in 2015, the Dominican Republic is ripe and ready for expats, retirees, and investors looking for a safe and affordable option in the Caribbean.
What makes the DR so attractive right now? I put it down to these five things:
I opened my first Individual Retirement Account (IRA) when I was in my twenties. I realize I’m going to date myself, but it was back when interest rates were double digits. I still recall how excited my husband and I were when we each invested $2,000 into our IRAs.
A traditional IRA is basically an account that allows you to set funds away for retirement while the money grows tax-deferred, meaning you won’t have to pay income taxes on it until you take it out. If you qualify, you can deduct that investment from your income on your tax return. It’s a pretty cool deal – especially if you start saving when you are very young.
Several years ago, I was interviewed by Lorwai Lan, the brilliant radio show host of Your Money and Your Mindset. My topic was It’s Never Too Late to Become a Midlife Millionaire. I later discovered that this interview was the top downloaded podcast on the CEM network with over 30,000 downloads. You can access it by clicking here.
One of the things I discuss is mindset. The idea of mindset is so important because unless you have a healthy relationship with money, no matter how much you earn or have, you will never be able to keep it, grow it, or feel secure and joyful about it. This is why 70% of lottery winners squander away their winnings within a few years. We have all heard these stories and think, “I’d never do that!” Oh really?
My husband and I recently met with our financial planner, John Steves. He is my fabulous former partner at Ameriprise. Yes, even though I am a Certified Financial Planner, I still have my own advisor. It keeps my husband and me disciplined. Besides, I am a ‘big picture’ person, and John is a ‘detail’ person who does the number-crunching and also has his ears and eyes on the market daily.
Having a trusted adviser is one of the very best gifts you can give to yourself. I can assist you with the big picture, the discovery process, and help you create a game plan. However, you also want someone to run your financial plan, looking at every area of your financial life, including what would happen if you died prematurely or couldn’t do what you do anymore. Too often I hear of advisers just looking at the investments or just the insurance. True financial planning includes six areas of your life:
Two Biggest Worries Living Overseas
The Forbes reporter who interviewed me this week wanted me to give it to him straight.
“Living or retiring overseas,” he began, “is an exciting idea on the surface… but there must be downsides.
“What are the biggest concerns people have after making a move to another country, once the honeymoon is over?” he wanted to know.
“I can think of two,” I told him…
The first big-deal distress that can take hold after settling into a new home in a foreign place is missing family and friends, especially children and grandchildren, back in the place where you came from.
If you’re used to being a regular part of your grandkids’ lives, breaking that connection will hurt.
You have more good options for addressing this risk today than ever. FaceTime, Skype, and video chat technology make it possible to “see” your kids and grandkids everyday if you want.
Of course, FaceTiming with your 4-year-old grandson is not the same as bouncing him on your knee, but it can make the separation easier to deal with.
If you have children or grandchildren in your life who you want to keep in your life after you’ve relocated your life to a new country, make sure you include a generous travel allotment in your budget. Build in the cost of visiting them and of having them come to visit you and then make those visits count.
What a great opportunity for your grandchild to spend two months each summer with
Two Reasons You Can’t Afford Not To Retire Overseas
Your retirement nest egg has been marginalized, and you’re thinking there’s no way you could afford to retire overseas.
This is probably the most-often-given reason for why someone who’s interested in the idea of launching a new life in a new country hesitates or even abandons the idea altogether. And it’s the least valid. Here’s the truth: You can’t afford not to retire overseas.
I’m speaking both literally and figuratively.
A Bucket List For Paris Virgins
Two expat friends in Panama are planning their first-ever trip to Paris. They’ll spend Christmas 2016 and New Year’s 2017 in the City of Light.
What should they be sure to see and do, they’ve asked me…
In response to their question, here is a bucket list for Paris virgins.
Panama’s Trump Card
In 2008, I took my leave from the publishing company where I’d been working for 23 years. I was 45 years old and living in Paris. I spent the next three months exploring that city on foot, early to late each day, and got to know Paris well.
I also learned that three months is my limit for doing nothing, even in Paris, and returned home from a long walk one afternoon to announce to my husband that I wanted to start a business of my own.
I was talking with a friend yesterday who told me that she had lunch with several women in their late 50s and early 60s who were discussing their “Dream Jobs.” I couldn’t believe it. Most women would be planning for retirement, but instead, these ladies were dreaming about their perfect job.
Why the mindset shift? I believe it’s because many women have spent their lives living someone else’s dream. By midlife, the kids have probably left home and the spouse may be approaching retirement and looking to slow down. Many women are finding this to be the ideal time to explore, reinvent, and try something totally new.
Coming Of Age In The Caribbean
My first visit to the island of Ambergris Caye, Belize, I climbed down the stairs of the eight-seater airplane, grabbed my bag from nearby on the runway where it’d been placed by the pilot who doubled as landing crew and baggage handler, and carried it with me across the dirt road to the hotel where I had a reservation.
There I was met by the real estate agent who had promised to show me around. He wore shorts, a T-shirt, and no shoes. “Welcome to barefooted paradise,” he greeted me. I was 23-years-old.
Your Dry Cleaner Doesn’t Have To Get It
Unless you’re very lucky, your friends and family aren’t going to understand.
When you tell them you’re thinking about moving to a new country for your retirement, their responses will likely range from bemusement to shock and horror. They’ll think you’ve lost your grounding and are over-indulging in fantasy…or, worse, that you’ve flat out lost your mind.
When we start talking about the issue of money in regard to any purchase, and we are on the buying side of the table, we view the money issue as a decision.
However, when we are on the selling side of the table and the money issue arises, it often metamorphoses into the mentally and emotionally challenging category of an objection.
Your New Life Overseas With Kids
The advantages to raising children abroad are many, from a second (or even third) language to a second passport. Children raised overseas are generally self-confident, open-minded, and resourceful. They learn to make friends easily and to adjust and to adapt quickly.
If you’re hesitating making an international move because you have children, you’re making a mistake.
That, however, is not to say that raising kids in another country is easy.
“Money Monster” (2016). Cast: George Clooney, Julia Roberts, Jack O’Connell, Dominic West, Caitriona Balfe, Giancarlo Esposito, Christopher Denham, Lenny Venito, Dennis Boutsikaris, Emily Meade, Condola Rashad, Aaron Yoo, Carsey Walker Jr., Greta Lee, Makhaola Ndebele, Darri Ingolfsson. Director: Jodie Foster. Screenplay: Jamie Linden, Alan DiFiore and Jim Kouf. Story: Alan DiFiore and Jim Kouf. Web site. Trailer.
We’re all no doubt aware of the notion that “actions speak louder than words.” However, many of us may be less familiar with the corollary that “consequences speak louder than actions” (even though we’ve often personally felt its impact). So how do we cope with the potentially troublesome effects of this principle? It often comes down to a question of responsibility, a concept explored from multiple angles in the gripping new thriller, “Money Monster.”
One Of The Often Overlooked Challenges Of Retiring Overseas
Planning for a retirement that includes spending some or even all your time in another country is an increasingly appealing idea. As a result, it’s easier than ever to find help making a plan to retire overseas. However, one challenge you will face as you launch your new life in a new country is seldom discussed. I call it the panic stage.
No matter how long you’ve planned for this or how much research you’ve carried out, there is a good chance that, sometime during your first year in your new country, perhaps even during your first month in your new home, you’ll wonder what in the world ever possessed you to think leaving home was a good idea.