Why is it that some people seem luckier than others? How come some people constantly receive better results, and others do not receive those same results? Do you want to become luckier? In this post, I’m going to talk about how you can create your own luck and get on to achieving whatever goal you want.

In many areas of life, sports, career, relationships, etc., some people seemingly always are achieving, finding success, and getting what they want.

In those same areas, we see others who are catching bad breaks, having a tough time finding success, and never seem to get it right.

Are you a person who falls into the first category, or the second category? Are you someone who is “lucky”, or are you someone who is “unlucky”?

Do you want to find more luck? Are you looking to find success in your life and are just looking for your big break?

In this post, I’m going to talk about how you can create more “luck”, and what you can do to change your life for the better – starting from today.

“The harder I work, the luckier I get” – Samuel Goldwyn

Is Luck Real?

First, is luck real?

Scientists and statisticians have spent many years studying if luck is real or if luck is just a series of fortunate random events.

While statisticians and scientists believe that luck is the interpretation of a series of random events, other people believe luck is real and is part of something bigger (a supernatural force, fate, karma, etc.)

In the first case, scientists believe that people look at a series random events and give more weight to the positive events, i.e., say that those events are lucky.

While an event might be unlikely, just because it occurred doesn’t mean that it was luck.

Also, as I’ve experienced in the past in casinos, while someone might be winning one night, you never know how many other nights they have sat and lost in the same exact chair.

On the other side, people believe that you can create luck through doing good deeds, praying and magic.

While I agree with the scientists and statisticians, I also believe you can improve your chances of having positive results in your life. I do believe that you can manifest your own reality through intentional action, however life might not always manifest in exactly what you expected.

I believe you can create your own “luck” – i.e., improve the chances of you succeeding – through your own efforts.

“Luck is when preparation meets opportunity.” – Seneca

How People Create Luck in Life

Whether luck is real or not from a scientific standpoint, I believe that anyone can CREATE their OWN luck through hard work and preparation.

Think about this scenario for a second: you are at work and there is a new management opportunity in your department.

This new position requires a certain certification that you have – a certification that took 300 hours of studying, many long hours of homework and preparation, and a massive test to top it all off.

Some other people in your team don’t have this certification, and others have different certifications.

At the end of the hiring process, management gives you an offer to take this new opportunity because of your previous work and experience.

In this case, are you lucky? Is this an instance of luck?

It might seem like luck, in that the position could have required any number of different requirements, but it wasn’t luck that you got a demanding certification and have been successful in your work.

In this situation, your preparation and work created your own luck. 

Have you experienced situations like this in your life? Have you seen where someone suddenly receives something unexpected?

What you maybe didn’t see is the hard work, the preparation, and dedication of that person before.

Overnight success is 5 years in the making, and to create your own luck, you need to have a plan and strategy to reach your goals.

A 5 Step Plan to Create Your Own Luck

Below I’ve laid out 5 steps for you to consider for creating your own luck. Wherever you want to go in life, whatever you want to do, doing the steps below will get you closer to you goals.

You can keep scrolling or click on the following links to go to the section you want.

1. Take Full Responsibility for Your Life
2. Decide Today to Start Living Intentionally With Purpose
3. Create Daily, Weekly and Monthly Goals and a Plan to Achieve Those Goals
4. Understand that Setbacks and Stretches of Bad Luck Will Happen
5. Stay Consistent and Don’t Give Up

Below, I’ll go into detail to give you more details on these steps.

1. Take Full Responsibility for Your Life

The first step in making this year the best it can be is deciding to take full responsibility of your life.

You are the only person that can positively affect what happens in your life. Likewise, if something doesn’t go right, then you have to fix you.

If you want more, you need to go and get it – no one else is going to give it to you.

Taking responsibility of your life means you are the sole owner of your future life and only you can do what is necessary to find success.

While you might believe some people are just more lucky than others, you can begin to create your own luck through your work and habits.

2. Decide Today to Start Living Intentionally With Purpose

Ideas, goals, and dreams are worthless without action.

Today, you need to make a decision that is going to change your life forever.

Today, you need to decide that you are going to live with purpose.

Starting today, you are fully responsible for your life, so are you going to let it slip away, or are you going to attack it with all your power and strength?

Today, make a decision to do the right thing for yourself and those around you that you care about.

Today’s the day you start making positive changes and get on the path to achieving your wildest dreams.

3. Create Daily, Weekly and Monthly Goals and a Plan to Achieve Those Goals

The process of setting goals is not too hard.

However, the process of setting goals which you will actually achieve is a little tricky.

Make no mistake though, you can definitely learn the steps to setting good goals, and get in an action based mindset to achieve your goals.

When creating goals for your life, career, health, money, etc., there are a few things you need to do:

• Deconstruct your destination and goals and break them into smaller sub-goals
• Set both short and long-term goals
• Write down your goals and keep them somewhere visible
• Share your goals with friends and family

First, you need to understand exactly what you want in life.

Do you have personal development goals? Do you have career goals? Are you wanting to get into better shape? Is there anything you want to be able to experience with you family?

All of these questions are important for you to determine exactly what you want.

After answering these questions, you can work on creating goals to achieve in the short term, and in the long term. Creating a daily plan to attack the short term goals is critical and will guide you on the way to success.

After creating your plans, you can hold yourself accountable by telling friends and family, and making sure they keep you on the path to success.

4. Understand that Setbacks and Stretches of Bad Luck Will Happen

Without failure, there is no success. If you achieved everything you set your mind to, where would the growth be? How would that be a great story?

Failure and struggle is part of human nature, and overcoming that struggle is how you grow and become better.

Being honest with you, setbacks happen and they suck. I’ve set savings goals and had appliances break down unexpectedly. I’ve been injured in sports. There have been people who let me down and made me reassess my time and goals.

Each time though, I was able to get through these tough times and get to the other side.

You can bounce back from any mistake and get back on the road to success. You are capable of achieving anything and it’s important to understand that failure is temporary.

As long as we don’t make it a habit of getting into rough patches, you’ll be able to get back on track in no time.

5. Stay Consistent and Don’t Give Up

As I mentioned above, overnight success is usually 5 years in the making. It’s going to be a lot of work, and it’s going to take consistent efforts over time to get to your goals.

The path to success is lonely and demanding.

Here’s the thing though: all it takes is a simple decision and dedication on a daily basis.

Simple daily disciplines will add up over time into massive results.

At first, it’s going to seem like you are trudging through mud and you aren’t going anywhere. Over time, it’ll get easier and easier.

Then all of sudden, you’ll get your breakthrough and you’ll be well on your way to your goals.

All it takes is doing a little bit each day and staying consistent.

I know you can do it, because you have a tremendous potential. You can do whatever you want, and you’ll be on your way to creating your own luck.

Are You Going to Start Creating Your Own Luck Today?

Whether luck is real or not, you can create your own opportunities and put yourself in a better position to achieve your goals.

Achieving your goals might not happen next year, it might not happen the year after, but by working a little bit each and every day, you can accomplish anything you want.

I hope that this article has given you some food for thought on how you can create your own luck in your life, and how you can get on the path to greater and greater success.

Real estate is a great investment class, and with property pricing booming, it might make sense to see if real estate investing is for you.

The Millionaire Real Estate Investor, is consumable, practical and gets you motivated to go out and try to find deals in the real estate market!

Why do I like real estate as an asset class? Real estate is:

• Accessible – Anyone can buy it
• Appreciable – Can increase in value over time
• Leverageable – You can buy on margin and borrow against equity
• Rentable – Cash flow baby!
• Improvable – Through sweat equity or contracting out
• Deductible/Depreciable/Deferrable – Amazing tax benefits

I’m an investor. I’m building financial wealth. Is today the day I find an opportunity and make a deal?

Summary of The Millionaire Real Estate Investor

Like most personal finance books, The Millionaire Real Estate Investor starts out by touching on the “personal” side of personal finance. Keller goes into a number of common myths which most “non-investors” believe as facts. One example of this is investing is complicated and I’m not smart enough to do it. As many of you reading this probably know, investing can be simple if you learn a set of rules and have a system to identify good deals. Investing is a learn-able skill.

Next, Keller gets into his tips on how to become a Millionaire Real Estate Investor. He has a four step framework for real estate investors to master:

• First, a real estate investor must “Think a Million”
  • If you want to be a Millionaire Real Estate Investor, you must think and dream big.
  • In this section, Keller talks about getting into the investing mindset by emphasizing growing your net worth, defining your why you want to invest and become financially wealthy, and think about taking action.
• Next, a real estate investor must “Buy a Million”
  • This isn’t as straightforward as it sounds. To be a successful investor, you need to be smart about your purchases. By purchasing at below market prices and having all your criteria met, you can start making money from day 1.
    • “You make money when you buy, not when you sell”
  • This sounds easy, but it will take a consistent effort to understand the values of the properties in your target location, understand the cost of any repairs or problems with the prospects, and make purchases which will make your renters happy.

“You make money when you buy, not when you sell”

• Next, a real estate investor must “Own a Million”
  • Once you have “bought a million”, it’s time to pay off the debt and build equity in the properties using the cash flow generated.
  • Keller goes through tips on building your network of contractors, property managers, accountants, lawyers, etc. in this section.
    • Ask the two questions with everyone you meet:
      • “Who do you know that I should know?”
      • “What would you do if you were me?”
• Finally, a real estate investor must “Receive a Million”
  • At the end of the day, you will be at the top of the mountain and be able to “receive a million” in passive income. That is the goal, to be able to sit back and let the rents come in while your property management company does the work for you!

Meaningful Quotes from The Millionaire Real Estate Investor

Here are some meaningful quotes and insights from The Millionaire Real Estate Investor:

• Life is too big to think small. If you want to lead a big life, your thinking has to lead the way.
• “Deals aren’t found. Opportunities are found. Deals are made.” – Dyches Boddiford
• Be an investor, not a collector, a speculator, or an observer.
  • Investing requires action. Successful investing requires the right action. Investors take action, minimize risk, and buy based on investment value.
• Your criteria should be based on the following factors: price range, discount, cash flow, and appreciation potential.
• Be a shopper, not a buyer.
  • Be skeptical.
• Learning has four stages: understanding, knowledge, wisdom, and power.
  • Understanding means you are aware of something; you get it mentally.
  • Knowledge means you have studied it and see how you could do it.
  • Wisdom means you have experienced it and know it works.
  • Power means it has become a part of you and you do it habitually. You are now unconsciously competent.
• Negotiate everything! (Price, financing costs, closing costs, possession date, etc.)
• Make associating with talent your number one priority.
  • This is similar to what Felix Dennis talked about in his book, How to Get Rich (book review).
• Get creative with your financing: lease-option, seller financing, wrap, etc.

Action Steps and Takeaways

As with all books I read, I want to be able to takeaway a few points and apply them in my life. Takeaway one is to start building my network of real estate professionals. I’m going to reach out to the agent I used when I purchased my house to chat about his thoughts.

Next, I want to define my criteria for a property: a 3 bedroom, 2 bathroom property with a decent lot perhaps? Finally, I want to get in tune with the market in the location I determine most fruitful. The neighborhood near my house would be fantastic to get another place, but the inventory is very tight right now (only 3 houses under $400k in a 3 mile radius circle).

Opportunities are out there, I just need to find them!

Focus, driven by motivation, supported by knowledge and skill causes one to take action without a thought about not succeeding. Never underestimate the power of purpose and focus.

Our Recommendation for The Millionaire Real Estate Investor

I could write 10,000 words on my notes, thoughts, and findings from this book. Keller has given me a framework to work through when looking to invest in my next property.

My next steps after reading The Millionaire Real Estate Investor is to define my criteria, start scouting the market to determine the value of properties in my cross hairs, and finally start networking with other real estate professionals and agents. I recommend The Millionaire Real Estate Investor to anyone looking to build financial wealth using real estate. You won’t regret it.

Readers: Do you currently invest in real estate? Do you want to in the future? What would you recommend I do? Are there any other real estate books which would be beneficial for me to read?

Previously, we discussed the two steps to financial success. Tracking your income and expenses is part one of the two step process for financial success.  Step number two is to further your financial education.

Right now, you are doing a great job by reading these articles on personal finance, but your learning should not stop after you leave this site (I hope you never leave, but I know responsibilities call)!

But if it does, one of the best ways to further your financial education is to listen to podcasts.

Here, I will be sharing with you five great finance podcasts which inspire, motivate, and provide entertainment to thousands of people.

5 Finance Podcasts to Listen to for Motivation and Inspiration

Whenever I get in the car for an extended period of time, I love listening to podcasts, especially podcasts about people who are pushing their boundaries, becoming wealthy through the principles of personal finance, and doing unique jobs and side hustles in pursuit of success.

There are five podcasts I’ve been listening to lately in the Personal Finance space which I believe you should listen to in 2019 and beyond to further your financial education:

• ChooseFI
• Stacking Benjamins
• FIRE Drill Podcast
• Millennial Money Minutes
• Moneysplained

ChooseFI

Are you interested in financial independence? Would being able to walk away from your day job in five to ten years interest you? How can you get started?

The ChooseFI podcast is all about financial independence and how everyday people are building wealth, retiring early, and now looking to influence and help others who are just starting their journey.

What is awesome about ChooseFI is the combination of episodes with interviews of highly successful individuals, but also episodes where Jonathan and Brad unpack the highlights from the previous episodes and draw wisdom from them.

The ChooseFI podcast will get you motivated and inspired to take action. Their interviewees are first in class, and the stories are amazingly interesting and great for someone interested in building wealth for the future. Check out the ChooseFI podcast here: motivation and inspiration for financial success, ChooseFI.

Stacking Benjamins

Live from Joe’s mom’s basement, it’s the Stacking Benjamins show!

The Stacking Benjamins show aims to make finance more approachable, interesting, and fun. At the end of the day, the hosts of the show, Joe and OG, want to make finance someone everyone takes seriously.

But, that’s not to say they won’t be joking around with their guests and each other.

What’s amazing is the first bullet from The Stacking Benjamins Creed is Personal Finance is Personal – hey, that sounds familiar!  You know what they say, “Great minds think alike!”

I really enjoy listening to this podcast as it is light hearted, but also provides some great advice. You want a laugh to go with some amazing information? Check out the Stacking Benjamins show here: Stacking Benjamins, light hearted perosonal finance advice!

FIRE Drill Podcast

Run by two enthusiastic and amazing young women, the FIRE Drill podcast is all about inspiring stories about financial independence and side hustles.

Are you interested in achieving financial independence through interesting and unique ways? The FIRE Drill Podcast is a great place to start. Each episode features a different, highly successful person who is either on their way to or has reached financial independence.

Gwen and J, the hosts of the FIRE Drill Podcast, do a great job of keeping the conversation light, while also diving into the strategies and activities the interviewees are doing in their daily lives for financial success.

This podcast is more focused towards Millennials, but the stories and people featured can help someone at any stage in their career or life. Check out FIRE Drill Podcast here: a podcast about financial independence and side hustles , FIRE Drill Podcast.

Millennial Money Minutes

These days, we can’t seem to focus for more than ten minutes on a single subject. That’s fine – Millennial Money Minutes are quick hitting episodes where the hosts, Grant and Matt, distill tough personal finance topics in five minutes or less.

There’s so much to learn in the world of personal finance – listening to the Millennial Money Minutes will help your knowledge base as you look to grow your financial education.

Millennial Money Minutes is geared towards Millennials (as the title suggests), but again, will be helpful to all people trying to build wealth. In addition, the hosts are highly successful Millennials with great stories. Check out Millennial Money Minutes here: Millennial Money Minutes, focused advice for people wanting financial success.

Moneysplained

Moneysplained has one purpose: clarity. There are so many confusing concepts, products, and strategies in the world of finance. Moneysplained looks to shed light on these concepts.

Ally-Jane, host of Moneysplained, talks about the basics of personal finance by performing a deep dive on a different subject each episode. For example, in one of her recent episodes, she did a deep dive on taxes for freelancers and had a CPA on the phone with her – very interesting for a small business owner like me.

I’m excited to see what the results of her work are in 2019. Moneysplained is relatively new, but is in a great spot to grow and influence in the coming year. Check out Moneysplained here: Moneysplained, a top personal finance podcast.

What The Mastermind Within Community Members are Listening to for Financial Education

One of the great things about having readers is being able to ask them about their strategies for financial success. A number of people contributed on the question of what they are listening to for podcasts about finance.

Dom, a high income blogger from Gen Y Finance Guy, listens to Invest Like the Best.

Cynthia, an avid reader of The Mastermind Within listens to a number of podcasts:

I like Your Money, Your Wealth very much.  I also like Retirement Answer Man and ChooseFI.

I also subscribe to Fire Drill Podcast, Her Money with Jean Chatzky, Financial Independence Podcast, Masters of Money, and I listen to Dave Ramsey once a month when he airs his Millionaire’s Theme Hour.

Scott, from Making Momentum, a true listener of a ton of amazing podcasts for life improvement, loves Marriage, Kids, and Money and The Stacking Benjamins show.

Lots of great podcasts here to choose from! I’ve really enjoyed FIRE Drill podcast for the few months it’s been out there! I’m looking forward to exploring more into this space and seeing what is out there!

Conclusion

Education does not stop after you leave school. Ideally, it should never stop. Keep learning something new each and every day.  Whether that’s something on investing, personal finance, tax, wealth creation, business, accounting, or self-improvement, if you take a bit of time each day to improve yourself, I know you will reach your goals.

My favorite quote is directed related to learning and improving oneself:

Your level of success rarely exceeds your level of personal development, because success is something you attract by the person you become.

Get out there and listen to these great personal finance podcasts!

 Are You Happy?

Take a minute. Assess where you are in life. Do you feel happy, or even remotely ok with your life? Is your job not the right fit? Could your relationships be better?

What if the issue isn’t your relationships or your job, but how you’re spending your money?

Two professors, Elizabeth Dunn and Michael Norton, set out to find what truly brings joy and happiness with money. Their book, Happy Money: The Science of Happier Spending is the result of their journey.

Happy Money covers five principles the researchers found to spend money in a more fulfilling way. The best part is you can start today. You don’t need to be Warren Buffet to use these principles, or even in a higher income bracket. They are scientifically validated  actionable principles that everyone can use.

Summary of Happy Money

This is a review of the five principles outlined in Happy Money and some actionable advice you can begin using right away for a happier and more fulfilling life. At the end, I will give an overall rating based on the quality of the advice and how actionable the advice it is.

Principle #1: Buying Experiences

When it comes to happiness, what do you think generates more happiness per dollar spent: material possessions or experiences? The professors argue buying experiences is one way people begin enjoying their lives more.

Instead of looking at bigger houses or nicer cars, the professors argue buying experiences is the way to go. From what their data showed, experiences such as travel, going out with friends, and going to events generated the highest forms of happiness. This still proved true even if the individuals in the study thoroughly enjoyed their purchases. Think of a person who loves cars buying a Porsche or Ferrari. Of course they will get a huge boost in happiness because it’s a possession they enjoy owning. Even when controlling for those individuals, the professors found experiences still showed to be the best happiness per dollar spent.

What You Can Do:

Fortunately, this is a fairly simple and straightforward concept. When deciding on how much you want to spend on your next big material purchase, take a minute and pause. Ask yourself, is there anything or anyone I would rather do or see? Have I wanted to travel with someone or go somewhere new? The professors argue those purchases would yield a far more enriching life, than buying the latest BMW or having the biggest house on the lot.

Principle #2: Make it a Treat

    “An over-indulgence of anything, even something as pure as water, can intoxicate.” – Criss Jami

The quote above pretty much sums up the next principle. If human beings overindulge ourselves, the things we love end up hurting us. The professors argue the same point for your spending patterns as well. If you consume too many things you like too frequently, then the treats that once gave you joy end up making you feel worse off.

The professors argue the key to this principle is balance. By restricting yourself the access to some of the things you love even just a little bit can help you savor the experience more.

What You Can Do:

    Personally, I found this point pretty intuitive and incredibly easy to implement in one’s life. For example, I love sushi. I mean, I love sushi. That being said, I know what can happen if you eat too much or too often. That’s right, stomach aches for days. The stomach pains are almost worth it, but I have noticed times where I would eat sushi just because it’s available and not savor the experience. Applying this principle helped me realize my treat was becoming an expectation and not the savory experience that gave me joy.

What I did to balance it out is now I only consume sushi once a month. If I do any more than that, it loses its appeal. A question I have for you is, what did you overindulge on? What’s no longer a treat you’re glad to spend money on?

Principle #3: Buying Time

This principle is a fun one. It really makes you question why you want money in the first place. The professors found the Gross National Happiness Index. This index measures the overall happiness for specific countries. After a few hours of digging in the article and the data, the professors saw some peculiar findings.

In the United States, people’s happiness typically doubled when they increased their overall income by $10,000. For example, people making $40,000 per year were measured at twice as happy than people making $30,000 per year. However, according to the professors, there is a stopping point. After around $70,000 the relationship between in income and perceived happiness begins to diminish. This means every increase after $70,000 gross income, the person doesn’t receive as big of a boost of happiness.

Let that sink in for a minute. Every $10,000 dollar increase typically doubled a person’s happiness until $70,000. Then, people only got small bursts of overall happiness for every increase in their income. When I read this I was a little flabbergasted. If the six figure salaries of people were only getting them so much happiness, what were they missing?

The professors say time. In their research, they noted many of the people with higher incomes were actually becoming unhappier because they worked more than ever, but felt they had no time. However, the professors had a counter-intuitive suggestion to get more time back in the day.

What Can You Do:

    The professors argue that giving time is a great way to remind yourself how many hours you have in a day. When the participants of the study were asked to devote a half hour to another person for the sake of simply giving them the time of day something interesting occurred. The participants started feeling like they truly had more time in the day, than what they felt previously. By donating time to other individuals the professors saw people filling in some gaps where money was thought to make them happy.

The simple act of donating a half hour gave the perception of having more time. I definitely, thought this concept made a lot of sense. Plenty of people have felt like they have more money when they donate, why would time be different?

Principle #4: Buy Now Consume Later

This principle is a little counterintuitive. The professors stated their participants reported a higher level of happiness when they purchased an item and then waited to consume it. The underlying assumption they tested was to see if the “hype” built with waiting would make the experience of using the item more fulfilling. When the participants were left to their own devices, they would day-dream about what they ordered. Even the thought was enough to get them through the day, and the item hadn’t even been delivered yet.  When they looked at the data it was the opposite of what happens with credit cards.

People typically use credit cards to buy now and pay later. Credit card companies have played on the immediate gratification impulse within human beings for decades. In the book, the VP of Visa admits to manipulating that impulse within human behavior. Fortunately, there are ways to protect yourself, which is covered in other posts.

What Can You Do:

For future purposes, you can try ordering something way ahead of time to give you the ample chance to build the “hype” around it. In one case, I ordered a video game called Persona 5  ahead of time to test the principle. If I am being honest, this principle didn’t really stick for me.

I felt next to no increase in happiness while waiting for the game. In fact, I almost forgot I ordered it. Now, this may not be the case for other people, and I would hate to take a good experiment for other people to test on their own time. The overall principle makes sense with an effort to delay gratification, but I personally did not get much out of it.

Principle #5: Invest in Others

This principle is golden. By far one of the best chapters of the book and one of the best principles to act upon. Much like buying time, the professors found the more people gave and invested in other people in their lives, the happier and more fulfilled they were. Now, this seems pretty cliche, but this principle does have its place. The experiment they ran to test this assumption was pretty cool.

They had a graduate student standing on a street corner outside of a Starbucks. The graduate student would hand people a note with a couple bucks in it. The letter said they had to either spend the couple bucks on themselves or on another person. Typically the vast majority of the participants spent the money at Starbucks. The graduate student followed up with them afterwards and recorded their overall happiness. The results?

The study showed even spending as little as a couple bucks can give a boost in overall happiness. When the professors looked at the data, the people who ended up spending the money on someone else were significantly happier than the ones who spent in on themselves. This shows you don’t need to be Warren Buffet or a money mogul to boost your overall satisfaction in life.

What Can You Do:

The action the professors suggest is keep it simple. Even paying for someone else’s coffee counts as investing in others. Even the smallest act can give you a much needed boost in overall happiness and satisfaction in life. In order to apply this principle, I bought a friend of mine lunch. Before meeting up I wasn’t in the greatest of moods. The work day wasn’t going as well as I thought it would be, some family issues arose, but as soon as I offered to pay for lunch I noticed something.

Not only did my friend express her gratitude, but simply changing my frame of reference from myself to the other person was enough to change my general outlook on the day. It was a great lesson in simplicity because sometimes all you need to do is get outside yourself and do something kind for another person.

Overall Grade:

I would say overall Happy Money is a 4 out of 5. All the principles are very actionable and for the most part I had no problem with applying them. The only one that didn’t stick as well was pay now, consume later. The point makes sense, but applying it didn’t help me feel any happier, nor did it give me a benefit by waiting to play the video game.

That being said, Happy Money overall is very actionable and simple to use. The authors really put a lot of time, effort, and planning into how they apply the principles. Happy Money itself is also a decent read for non fiction fans. Since reading Happy Money, I’ve been applying the principles to create and sustain a healthier view of spending.

My questions for you are, what principle do you want to practice? How will you practice the principle?

When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is. – Oscar Wilde

Money – Master the Game, by Tony Robbins is a how-do guide on how to achieve financial freedom. I read this book as a suggestion from a friend and was certainly not disappointed in spending a few days getting through this book. Many times when I go to read a book, I am trying to learn different concepts and ideas to help me improve in my life. Money is a 600 page book filled with good information on investing, saving, and life. That being said, there were some drawbacks to the book, which I will outline later in the post.

I am drawn to books on financial freedom because I’m interested in managing my money appropriately. I plan to read more books like this in the future.

Summary of Money – Master the Game

Money is about learning about how we as investors can become financially free. Robbins has been a life coach for many years and has wrote this book for people who want to improve their financial situation. Coming from a relatively poor family, he has been able to build a strong following as a life coach and has influenced many people. I’m interested in reading more of his material after reading Money.

Money is broken into 7 sections:

1. The first section is essentially 80 pages getting you motivated to improve your financial well-being. By saying “yes” to pursuing financial freedom, you are setting yourself up to become the best person you can be.
2. The second section talks about becoming an insider to the world of mutual funds and finance. Robbins talks about the 9 myths of the finance industry; many of these myths have been talked about for years. A summary of the myths is: mutual funds and actively managed funds do not beating the market despite charging high fees. In addition to the funds charging large fees for under-performance, target funds are not much better.
3. Section three helps you determine your “number”. How much money do you need to retire comfortably? How much do you need to retire and have no worries? How can you reach retirement faster? Robbins discusses tax efficiency, index funds, and decreasing spending in this section as well.
4. Section four talks about different asset classes and defines the Security Bucket, the Risk Bucket, and the Dream bucket that should be a part of every person’s asset allocation. The security bucket is made up of cash, cash equivalents, bonds, your house, pension, annuities, and a few other things. the risk bucket is made up of equities, options, commodities, foreign currencies, and real estate. The dream bucket is whatever is left for pursuing your dreams! He discusses how important asset allocation is and how true diversification is the only free lunch.
5. In the fifth section, Robbins continues to discuss asset allocation. He interviewed Ray Dalio (CIO and Chairman of Bridgewater Associates) and David Swensen (CIO at Yale University) to discuss their optimal asset allocation. Here, Robbins provides you specifics into creating a strategy which has performed well in the recent past. Ray Dalio believes a near-optimal strategy is to have even risk across the following categories: inflation, deflation, rising economic growth, and declining economic growth. His target asset allocation would look something like this: 7.5% gold, 7.5% commodities, 30% stocks, 40% long-term bonds, 15% short-medium term bonds. David Swenson, on the other hand, has a slightly different view: 20% US Equities, 20% Foreign Equities, 20% REIT exposure, 15% Long-term bonds, 15% TIPS, 10% Emerging Markets. I believe both of these asset allocations could be good and I’m doing more research into what would be best for me.
6. The sixth section is a compilation of interviews with titans of the investing world. These interviewees include Charles Schwab, Carl Icahn, David Swensen (CIO at Yale University), Ray Dalio (CIO and Chairman of Bridgewater Associates), Mary Callahan Erdoes (CEO of J.P. Morgan Asset Management), T. Boone Pickens (Energy Investor), and a few others. These interviews are beneficial in they provide us additional perspective on the financial markets.
7. The seventh and final section talks about the future and how once on the path to financial freedom, you will be a much improved person. Robbins emphasizes showing gratitude and giving back to charity once you achieve financial freedom. This is best captured in the quote by Winston Churchill, “We make a living by what we get. We make a life by what we give.”

Money is fairly comprehensive in the concepts and material it covers. It covers topics from investing in index funds to reduce investment costs and fees, dollar cost averaging and buying and holding, saving more as you get raises, etc. It was very beneficial to me in that I was able to learn about investing in gold, annuities, or different commodities. One downside is, the book did not go into detail on these subjects.

My Takeaways

One big takeaway I had from Money was to switch my 401(k) to a Roth 401(k) from traditional. With a traditional 401(k), you don’t pay taxes now, but will pay tax on any withdrawals, (effectively paying tax on any gains in the future). With a Roth 401(k), you pay taxes on the amount now, but in the future, your withdrawals are tax-free. Robbins argues that in the future, taxes will most likely be higher than lower (look at the world’s debt!).

And Criticisms…

Some criticisms I have of Money are for how long the book is, it could be shortened. There were multiple chapters that seemed to go on and on about things we had already learned earlier in the book. “Repetition is the mother of skill”, but at times it was a little excessive. In addition to repeating himself throughout the book, he constantly is plugging in sales pitches for his companies and friends. I get it, he is a successful businessman and entrepreneur and wants to advertise his great products. However, at times, it seemed that was his intention. I could be wrong.

Another criticism is many of the products that Robbins talks about can only be accessed by the rich. When a person reaches retirement, hopefully they will be rich; however, during the accumulation phase of life, you won’t be able to access a lot of the different investment vehicles he discusses.

Meaningful Quotes and Passages

Here are some meaningful quotes and passages from Money:

• Realize how lucky you are and all the wealth you possess in love, opportunities, health, friends and family. Don’t get rich, start rich.
• You can be young without money, but you can’t be old without it – Tennessee Williams
• The man on top of the mountain didn’t fall there – Vince Lombardi
• Money is better than poverty, if only for financial reasons – Woody Allen
• Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. – William A. Ward
• Remember the golden rule: he who has the gold makes the rules – Unknown
• Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves. – Peter Lynch
• When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is. – Oscar Wilde
• We make a living by what we get. We make a life by what we give. – Winston Churchill
• Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful, that’s what matters to me – Steve Jobs

Our Recommendation for Money: Master the Game

All in all, Money is a decent book on the topic of financial freedom. I would recommend Money for people who are looking for to improve themselves and get motivated to improve financially; . That being said, Money lacked substance and stayed at the surface on a good amount of the content covered. It did open my eyes to thinking about investing in other products, such as precious metals, annuities, etc., but the book did not go into enough detail on these products.

I’m still curious on these other investment vehicles, but will have to do more research. There are definitely better books out there for details to achieve financial freedom.

Have you read any material of Tony Robbins? What books on financial freedom would you suggest I read? Which have been beneficial and influential to you?

Managing business finances can be daunting, especially when faced with unexpected challenges and economic uncertainties. However, getting your business finances back on track is essential for long-term success. Whether you’re struggling with cash flow issues, mounting debt, or simply want to improve your financial management, here are some steps to help you regain control of your business finances.

Assess Your Current Financial Situation

The first step in getting your business finances back on track is to assess your current financial situation. Review your financial statements, including income statements, balance sheets, and cash flow statements. During this assessment, identify areas where you’re overspending, underperforming, or accumulating debt, and be completely honest about it. 

Create a Realistic Budget

Once you’ve assessed your finances, create a realistic budget that outlines your income and expenses. A well-thought-out budget will help you allocate resources more effectively and prevent overspending moving forward. Be sure to include all fixed and variable expenses, such as rent, utilities, payroll, and marketing costs, within this, but that your budget is flexible enough to adapt to changing circumstances.

Reduce Unnecessary Expenses

Now you have a budget laid out, identify and eliminate unnecessary expenses that are draining your resources. This could involve renegotiating contracts with suppliers, cutting back on non-essential services, or finding more cost-effective alternatives. Every pound saved can be reinvested into your business or used to pay down debt.

Improve Cash Flow Management

Cash flow problems are a common issue for businesses, but they can be managed effectively. Monitor your cash flow regularly to ensure that you have enough working capital to cover your operating expenses. Consider offering discounts for early payments from customers and negotiate extended payment terms with suppliers. Explore financing options like lines of credit or business loans to bridge cash flow gaps.

Seek Professional Help

Sometimes, getting your business finances back on track may require professional assistance. Consider hiring an accountant or financial advisor to provide expert guidance and help you make informed financial decisions. They can also help you navigate tax planning and compliance, ensuring that you’re taking advantage of all available deductions. 

Another way you can get professional help focuses on improving your cash flow. For instance, if you have cash flow problems due to late payments from clients, invoice factoring services can be a valuable tool in your arsenal for getting your business finances back on track. It can help alleviate cash flow problems by providing quick access to funds that might otherwise be tied up in accounts receivable. 

Working with a broker, like fundinvoice.co.uk, for invoice factoring can streamline the process and help you find the most suitable factoring company for your business’s needs. These professionals have industry expertise and a network of factoring providers, assisting in negotiating favorable terms, comparing rates, and finding a factoring company that specializes in your specific industry, ultimately saving you time and potentially securing better financial arrangements. 

Set Up an Emergency Fund

To protect your business from unexpected financial setbacks, establish an emergency fund. This reserve of cash can help you weather economic downturns, cover unexpected expenses, or seize opportunities when they arise. Aim to set aside three to six months’ worth of operating expenses in your emergency fund.

Focus on Debt Management

If your business is burdened with high levels of debt, it’s crucial to prioritize debt management. Create a debt repayment plan that includes a clear schedule for paying off loans and reducing interest costs. Prioritize high-interest debts first and consider consolidating or refinancing options to lower interest rates.

Improve Revenue Generation

Increasing revenue is another way to strengthen your financial position. Identify opportunities to expand your customer base, introduce new products or services, or raise prices if necessary. Additionally, although it will require an investment, if you set aside more budget for marketing and sales strategies, you can boost your brand’s visibility and attract more customers. To grow, you have to invest. 

Invest in Financial Education

Investing in your own financial education can be one of the most valuable steps you take to get your business finances on track. Understanding financial principles, accounting practices, and business economics will enable you to make more informed decisions and be proactive in managing your finances.

In conclusion, getting your business finances back on track requires a combination of careful planning, disciplined execution, and continuous monitoring. By assessing your current situation, creating a realistic budget, reducing expenses, and focusing on debt management and revenue generation, you can strengthen your financial position and set your business on a path to long-term success. Remember that financial stability is an ongoing effort, and staying committed to sound financial practices will help ensure your business’s resilience and prosperity.

It seems like technological advancements are coming much faster than we may have anticipated to a point where it is hard to keep up. Let’s look at Blockchain technology for example.

It was first introduced in 2013 and now it is worth billions of dollars and represents an entire eco-system where apps and games are built on top of it.

Nobody predicted that! And for those ones who did, they’ve made a lucky guess and are now enjoying their millions.

As of now, you probably already know about cryptocurrencies, unless you have been living under a rock.

However, we never knew the potential of such technologies and their use cases in industries like gaming, until now.

Blockchain and crypto games have started to emerge bringing all new features to the table. One of the most interesting features is the ability to own a certain digital good.

This led to the birth of virtual horse racing games, where horse racing enthusiasts can finally become racehorse owners, train and breed horses and compete in online events for money.

Zed Run is one of the first platforms to bring crypto technology and the world of horse racing together. It is a digital simulation where they are also looking into being able to bet on virtual horse races, just like you would do on TwinSpires for the Breeders’ Cup.

But is Zed Run legit, and should you invest in this platform?

Let’s find out.

What is Zed Run?

To put it simply, Zed Run is a blockchain-based game where you can buy, sell breed, and race digital horses. The digital horses come in the form of NFTs (non-fungible tokens) that are recorded on the blockchain and they have different traits just like you’d find diversity in real-world horse racing.

These horses are named Zed Runners, and they have different speeds and other performance characteristics that can be improved over time. In order to participate in the game, you must purchase a horse NFT from OpenSea, which costs less than $10.

The idea is for people to own digital horses, participate in online events, and possibly earn crypto. It is probably the closest thing to becoming a real-world horse owner.

How is the Outcome of a Race Determined?

We’ve all seen online simulation games that are based on an RNG (random number generator) much like Slots in a casino, but Zed Run is different.

The outcome of a race is determined by a few different factors such as race conditions, horse stats, training, and of course some randomness and uncertainty. This is just like the Breeders’ Cup in the real world.

So, there is no way to predict the winner of the race. Your goal should be to own a horse with great stats, which will increase your overall winning chances.

The Good Side of Zed Run

Zed Run might be a good investment for those who are really into horse racing. This is a realistic horse-racing simulation where you get to experience what is like to become a racehorse owner.

On top of that, you can earn some money in the process. In fact, there are multiple ways you can earn money, such as through competing in races, breeding and selling, and stud fees.

Similarly, in real life, if you own a male horse in Zed Run you can put it up in a Stud Farm and people might pay Stud Fee to use your horse in the breeding process.

Things to Consider Before Investing

Since we are talking about crypto-investment, we can all agree that the market has been going through a wild rollercoaster in the past couple of years. This means that the market is volatile and anything can happen.

We went through a phase where NFTs were purchased for millions of dollars that are now worth next to nothing. But nobody can predict the future of NFTs and where the Metaverse is heading.

Another thing to consider is regulations. Most countries are still in the grey area when it comes to crypto regulations, so make sure you get informed about such investments.

Should you invest in Zed Run?

We can all agree that Zed Run is an amazing platform that opens a new chapter into virtual horse racing. However, whether you should invest in Zed Run should be a thoughtful process and depends on your situation, goals, familiarity with this technology, and personal preference.

You need to weigh all the positive and negative sides of this investment and find out whether or not it is the right one for you.

Recently, cryptocurrencies have hit the world by storm. Bitcoin, in particular, has seen a quick rise in value, and more people are looking to get involved in this exciting new market. Unfortunately, most of those interested don’t know where to start. Luckily for you, this article will share tips on building personal wealth with crypto. Let’s get started.

Buy And Hold On Cryptocurrency

Buying and holding on to cryptocurrency can be a great way to build wealth over time. When done right, it can provide you with the potential for significant returns while diversifying your investment portfolio. There are things to remember when buying and holding cryptocurrency, such as picking the right currency, timing your purchases, and storing your coins safely.

If you pick a currency with good fundamentals and a strong community, you increase your chances of seeing appreciation over time. It’s also important to time your purchases right: buying when the price is low and selling when it’s high.

Finally, storing your coins in a secure wallet is crucial to protect them from hackers. Therefore, you should consider ease of use, security, and whether or not it supports the coins you want to invest in when choosing a wallet. Picking one with the lowest fees is also essential, as you don’t want to lose a large chunk of your profits to transaction fees. You might even want to go one step further and invest in a cold wallet as a means to store your cryptocurrency offline to further protect your coins. If this sounds like something you might be interested in, you could look into someone like the UK’s leading hardware wallet reseller and see what they have to offer.

By following these tips, you can give yourself a much better chance of building wealth through buying and holding cryptocurrency.

Crypto Trading

Many believe that the only way to increase their earnings is to invest in traditional assets such as real estate. However, you can also increase your wealth through crypto trading.

When you trade crypto, you can take advantage of price movements to generate profits. Over time, these profits can add up and help you to increase your wealth. Additionally, trading crypto allows you to diversify your investment portfolio and reduce risk exposure.

Another way to increase your income is through day or swing trading crypto on a platform like Bitcoin Apex. This involves buying coins while low and selling them when high on different exchanges. You can also scalp the markets, a technique where you make small profits through frequent trades.

Moreover, you can invest in ICOs or initial coin offerings. These are new cryptocurrencies that are being created and sold to investors. By buying ICOs, you can get in on the ground floor of a new currency and see a significant return on investment if the currency is successful.

Before you do get started in trading crypto, whether you opt for day trading, swing trading, scalping, or buying ICOs, be sure to do thorough research on how to succeed, as well as the best tools to support you in your trading endeavors. You can do this research online by exploring platforms such as 2dots, or by talking to friends and acquaintances who have valuable previous experience in the crypto world.

Crypto Mining

In addition to crypto trading, crypto mining is another way to build personal wealth with crypto. Crypto mining entails verifying transactions on a blockchain, then adding new blocks to the chain. In return, miners are rewarded with cryptocurrency.

Crypto mining can be profitable, but it requires expensive equipment and a lot of electricity. It also takes time to learn how to do it effectively. For those reasons, it’s not something everyone can or should do. However, if you’re interested in it, plenty of resources are available online to help you learn more.

Crypto Social Media

Are you a social media expert? Great! You can use your skills and earn crypto. There are a few different ways to do this. The best way is by creating content on YouTube, Facebook, Twitter, or Instagram. You can also join an online forum and share your knowledge with others.

If you’re not a social media expert, don’t worry! There are still plenty of ways for you to earn crypto. For example, you can start a blog and write about your experiences with cryptocurrency. Alternatively, you could create a podcast and share your insights with the world.

Staking And Lending

Another easy way to make extra cash with crypto is by staking or lending it out. Both options allow you to earn interest on digital assets without much work.

To stake your crypto, you need to hold it in a wallet that supports staking. Then, the wallet will automatically start earning interest for you. The interest you earn will depend on the coin you are staking and the current market conditions.

Lending your crypto works similarly to staking, but you must use a lending platform like BlockFi or Nexo. On these platforms, you can choose to lend out your crypto for a set period and earn interest on it. The interest rates on these platforms are usually much higher than what you would earn from staking alone.

Both of these options are relatively low risk and can help you grow your crypto portfolio without having to throw in some money.

Conclusion

With the growing popularity of cryptocurrencies, it’s no surprise that more and more people are looking for ways to make ends meet. This article mentions ways to get started in building personal wealth with crypto. You can apply these tips whether you’re a complete beginner or have some experience in the field.

Increasing your credit score is not too hard to do once you know the credit score formula and steps to improve your credit score.

Credit score is another one of those confusing financial concepts. Everyone has a credit score, but not many people actually know how it’s calculated, or how to improve it. Make no mistake, increasing your credit score fast can be tricky, but with the right formula, you can definitely improve your credit score.

In this article, I will discuss what a credit score is, the importance of having good credit, which factors are used in the credit score calculation, and give you 9 actionable steps to improve your credit and increase your credit score.

In addition, I have included some commonly asked questions about credit score at the end of the post.

What is a Credit Score?

A credit score is a number calculated from your credit history. Your credit score is used by lenders to determine your creditworthiness for a mortgage, loan, credit card, etc. Credit scores vary between 300 and 850, with 300 being the lowest credit score and 850 being the highest credit score.

The average credit score in the United States is 687.

The Importance of Having Good Credit

Consider the following situation: you are looking to buy a house and go to the bank for a mortgage loan. The loan officer at the bank types in your information and says, “You have a credit score of 653 and as a result, we will give you a loan at 4%. If your credit score was 700 or higher, we could get you a  loan at 3.75%” While 0.25% doesn’t seem like much, it can add up to A LOT more interest over the time you are paying down the loan.

For a $200,000 30-year mortgage loan, a 0.25% interest rate increase will cost an additional $10,000 in interest over the life of the loan! Below is a table with the total interest paid and total cost of a $200,000 30-year mortgage at various interest rates.

One other point is if your credit score is very low (less than 600), some banks and lenders will not even consider extending credit because they believe you are not creditworthy! That being said, you can fix this and increase your credit score.

“A man in debt is so far a slave.” – Ralph Waldo Emerson

Next, let’s talk about the factors that go into determining your credit score, so we can talk about how to use these to your advantage if you’re looking for ways to increase your credit score fast.

Which Factors Determine Your Credit Score?

A person’s credit score is calculated based on a combination of factors.

Payment History (35%)

Payment history looks at if you have made your credit payments on time. Credit reports show the payments submitted for each line of credit, and the reports indicate if the payments were received 30, 60, 90, 120 or more days late.

The best credit quality borrowers have 0 late payments.

Utilization (30%)

Utilization is the ratio of money owed to the amount of credit available. For example, if you have a credit card with a credit limit of $5,000 and you owe $1,000, you have a utilization rate of 20%. An important note here, utilization does not take into consideration loans.

The best credit quality borrowers have a utilization rate lower than 30% of their total credit limit.

Length of Credit History (15%)

As a general rule of thumb, the longer an individual has had credit, the better their score. Credit scores take into account how long the oldest account has been open, the age of the newest account and the overall average.

If you have accounts that have been open for multiple years, you will have a higher credit score. The best credit quality borrowers have a history of 10 years or more.

Credit Mix (10%)

Creditworthy borrowers will generally have a mix of loans and credit lines on their history. These loans and credit lines could be student loans, auto loans, mortgages, credit cards, etc.

A high credit score will have a number of different loans and lines. I have four credit cards and a mortgage, and have had a student loan and an auto loan in the past. The best credit quality borrowers will have at least 15 open accounts.

Applying for New Credit Accounts (10%)

Let’s say you are a bank and you see someone apply for three credit cards and a mortgage in one week. This probably isn’t good sign. The person who applied for those new accounts probably isn’t in a great position financially, otherwise they wouldn’t need to apply for four credit accounts. As a result, the bank views situations like these as risky.

Inquiries for new credit accounts stay on your credit report for two years. After two years, the inquiries no longer show up on a person’s credit report. Generally, the best credit quality borrowers will have less than four inquiries on their credit report.

9 Tips to Increase Your Credit Score Fast

Below are nine tips to help boost your credit score! Some of these tips will take a little time before you see an impact, but others you can take action on immediately to help you increase your credit score fast!

1. Review Your Credit Report and Identify Areas of Improvement

What gets measured gets managed. First, go to AnnualCreditReport.com and request a free credit report from each of the big three credit reporting companies:

• TransUnion
• Experian
• Equifax

By law, you’re entitled to one free credit report each year. After obtaining your report, dive into the details!

Ask yourself the following questions:

• Do I have any accounts with late payments listed? Are these accounts accurate?
• Do I have any unpaid bills listed? Is this information accurate?
• Are there any other mistakes or errors on the report?
• Which factors need improvement? (Payment history, utilization, credit history, credit mix, opening new accounts)
  • Do you have late payments?
  • Is your utilization rate above 30%?
  • Do you need more credit history?
  • How many different credit accounts do you have?
  • Did you recently open a bunch of new accounts?

Click for more detail on how to check your credit report.

After understanding your current credit situation, you are ready to start improving your credit score! Note: these credit reports will not tell you your credit score for free. If you have a Mint account, you can look at your credit score for free. I’ve found it to be a decent estimation, but slightly lower than real inquiries. You can also see your FICO credit score for free using Discover’s Credit Scorecard tool, which is available to anyone even if you don’t have a Discover card.

2. Correct Any Errors on Your Credit Report

Does your credit report have any errors in your personal information, accounts, or payment history? Are there any missing accounts? Are there any bills which you believe you have paid but the agencies don’t believe you have?

To correct these errors, do the following:

1. Contact the credit bureau and the organization that provided the information to the credit bureau
   • Both of these parties are responsible for correcting inaccurate or incomplete information in your report under the Fair Credit Reporting Act.
   • The credit bureau must investigate the item(s) in question – usually within 30 days – unless they consider your dispute frivolous. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should:
     • Clearly identify each item in your report you are disputing.
     • State the facts and explain why you are disputing the information.
     • Request deletion or correction.
2. Follow up with the organization that provided the information to the credit bureau
   • Again, include copies of documents that support your position. Many providers specify an address for disputes. If the provider again reports the same information to a bureau, it must include a notice of your dispute. Request that the provider copy you on correspondence they send to the bureau.
3. Expect this process to take between 30 and 90 days.

If you know the error is an error, don’t be afraid to dig in. Make sure to keep all documentation and notes on the subject. This woman sued Equifax for $18 million over an error on her credit report!

3. Never Miss a Payment

35% of your credit score calculation is payment history. Keep it simple! Pay your bills on time!

Seriously, this is the biggest component of your credit score. By staying current on all of your accounts, your credit score will go up over time.

4. Keep Your Utilization Rate Below 30%

Your utilization rate makes up 30% of the credit score calculation. Remember, utilization rate is your outstanding balance divided by your credit limit.

If you don’t want to decrease your spending, you can pay down your highest debt, increase your credit limit, or open another line of credit (credit card).

5. Increase Your Credit Limit

Increasing your credit limit will decrease your utilization rate. You can increase your credit limit by calling your credit card company or going in to your bank directly and asking for a credit increase on your credit card or loan. These days many companies make it as easy as requesting a credit increase online right on their website. A good time to do this is when your income has increased – by showing an increase in income, you’re showing that you’re able to theoretically borrow more money responsibly and will more likely be granted the credit limit increase.

Early in 2017, I increased my credit limit $7,500 and saw a 20 point increase in my credit score!

6. Open Another Line of Credit

If you don’t want to increase your credit limit on your current credit lines, you can open another line of credit. There will be a slight hit to your credit score because you are opening a new account, but over time, your credit score will increase because your utilization rate will decrease.

7. Pay Down Your Highest Utilized Account

Paying down your highest utilized account will have a direct impact on your utilization rate. If you have two credit cards, one that is 100% utilized and one that is 10% utilized, the smart move would be paying off the 100% utilized card.

8. Mix it Up

Having a diverse mix of credit accounts shows the credit rating agencies you have a handle on your finances and credit situation. Having a few credit cards, an auto loan, and a mortgage would look much better than only a credit card. That being said, I wouldn’t recommend taking a personal loan out just to build credit… you have to think about interest payments!

9. Stay Consistent

Building your credit will take time (credit history, aka time, is a variable in the credit calculation!) By staying consistent, paying your bills on time, and ensuring errors stay off your credit report, your credit will increase over time.

I’ve been building credit for a few years now. When I started out, my credit score was between 600 and 650. I had a student loan and a credit card. The next year, I bought a house and applied for a mortgage. My credit score was about 680 at that point. The following year, I bought a car and paid off my auto and student loan. Throughout this whole time, I’ve been current on my payments and kept my utilization below 30%. After three years of consistency, my credit score is between 725 and 750.

You can do it! You can improve your credit score!

“A journey of a thousand miles beings with a single step.” – Lao-Tzu

Common Misunderstandings and Questions about Credit Scores

There are a number of common misunderstandings and questions people have about credit score. I will address a few of those misconceptions here.

Am I Building Credit Faster by Keeping a Balance on my Credit Card?

NO. You are not building credit any faster by keeping a balance on your credit card at the end of the month.

If you are keeping a balance on your credit card, this could actually have a negative effect on your credit score (your utilization rate will be higher compared to if you paid it off in full).

PRO TIP: Pay off your credit card in full each month. You aren’t building credit if you have a remaining balance any faster than if you have a $0 balance. In addition, if you have a remaining balance, 20%+ will be tacked on in interest to next month’s outstanding balance.

How will Consolidating Debt Accounts Affect my Credit Score?

It depends on the situation. From a financial standpoint, debt consolidation generally is a good thing. From a credit standpoint, things get a little hairy.

If you have maxed out a few credit cards and you consolidate that debt into an installment loan, your credit score will take a slight hit. Your credit score will decrease because you opened a new account and you have no credit history on that account.  After a few months, your credit score will begin to increase because you will be making payments on time, your utilization rate will be lower, and your credit history will be building through that loan.

From a financial standpoint, consolidating debt is generally beneficial. Credit cards generally have 20%+ interest rates. Debt consolidation can reduce the interest rate. As a result, you will pay much less in interest when paying down your debt.

 Should I Work with a Credit Repair Agency?

It depends. There are a few situations where working with a credit repair company may make sense:

• If you have legitimate errors on your credit report and don’t want to fix them yourself
  • The main function of any credit repair service is to remove errors from your credit report. These could range from errors in lender reporting to simple errors in your personal information.
• If you have errors that can’t be verified
  • A little known fact about your credit report is that every detail in the report needs to be verifiable. If an item cannot be verified, you can get it removed from your report.
• If your lenders are willing to work with credit repair agencies
  • Some lenders don’t like working with credit repair services. Some lenders aren’t willing to negotiate. However, for the lenders who are willing to listen, this is a good way for credit repair services to raise your score.

A word of caution on working with credit repair agencies: if you choose to work with a credit repair agency, make sure you pick one with a high reputation. In addition, make sure you pay them ONLY after the work is done. There are a number of companies that will ask for payment up front and not get the job done.

Click for some more information on credit repair agencies.

Will Closing Accounts have an Effect on My Credit Score?

Yes. If you close a credit card, your overall credit limit will go down and your utilization rate will go up. In addition, your credit mix and credit history will take a hit. If you close a loan account, your credit mix and credit history will take a slight hit.

My recommendation on whether to close an account or not is to think about your goals and financial situation and make sure it makes sense for you.

If you have a student loan and want to be debt free, don’t worry about your credit score. Destroy that debt!

If it’s a credit card, you can make one purchase a month and pay it off at the end of the month. I have two credit cards that I spend about $25 a month on just to keep the credit history building. In this case, I wouldn’t recommend closing the account.

Start Improving your Credit Score Today!

With the tips above, you will be on your way to a higher credit score fast. Remember: never miss a payment, keep your utilization rate below 30% and have a diverse mix of credit accounts. Over time, your credit score WILL increase.

Lastly, make sure to pay off your credit cards in full each month, and be careful when working with credit repair agencies.

“The most difficult thing is the decision to act, the rest is merely tenacity.” – Amelia Earhart

Which steps have made the biggest impact on your credit score? Did I miss any critical points?

Erik

Tracking your personal finances is the most important task to perform to become wealthy. There are many personal finance metrics to track, but in this post, you’ll learn the top 4 personal finance metrics to track and understand the importance of tracking your personal finances.

Becoming financially successful might seem a little complicated, but it’s not too difficult with the right strategy. The most important thing you can do to become wealthy is to tracking your income and expenses.

However, total income and expense aren’t the only metrics which you should be tracking. Knowing all of your income and your expenses on a monthly basis is a great starting point. However, just tracking our expenses and income doesn’t tell us anything about the way we use money.

Are you a saver?  A spendthrift?

Without digging a little deeper into the data, you won’t know whether you’re on the path to success, or if the ship is sinking.

How do you track your finances? What factors are important when it comes to personal financial success.

In this post, I will be sharing with you:

• How to calculate each of these personal finance statistics
• Why each of these metrics are important
• Why it’s important to track your personal finances
• Tools you can use to automate the calculations

Let’s get it tracking!

4 Personal Finance Statistics to Know and Calculate

There are potentially hundreds of financial metrics you could track, but there is beauty in simplicity.

The 4 metrics you need to know for personal financial success when it comes to tracking finances are:

• Net Income
• Gross Expenses
• Savings Rate
• Net Worth

Net Income

Tracking your net income over time will give you a picture of what you are working with financially.

Let’s start off with an easy one: net income. What did you make in income, after taxes, for a given period?

The easiest way to do this is by just looking at a recent pay stub.

You’ll see your gross income listed out, which is what you made before taxes.

It should also list out all of your deductions, like FICA, federal, your state tax (if any), etc.

If you have investment income, or have any other freelancing or consulting income, you can find your gross income by adding up what you are paid each month.

Below gross income, if you’re looking at your pay stub, you’ll find your net income, which is the income remaining after all taxes.

Essentially, your net income is what you have to work with each month and year.

If you make $5,000 a month after taxes, then you know you have a maximum of $5,000 you can live on for all of your expenses and saving goals.

Hopefully, over time, this number will go up as you become more experienced and valuable to your clients or employer.

For me, I use income to judge how effectively I used my cash in a given period.

If I received a windfall or had a good quarter consulting, I might have a month where my income increases by $1,000 to $2,000. This sets the stage for increased contributions into savings or my investment accounts.

Tracking net income allows you to plan what to do with that income to best set yourself up for financial success.

You can’t base your financial planning on gross income (for instance, your yearly pre-tax salary number) because you will surely overestimate how much you’ll actually have to work with since taxes will be a chunk of that money you won’t see on a regular basis.

Tracking your net income allows for accurate money management.

Gross Expenses

Your total gross expenses is a very important financial statistic to calculate for yourself.

After income, calculating gross expenses – the total amount of money you spend during a month – will help you identify any weaknesses in your budget.

You can track your expenses however you find most effective. I split my expenses into some broad buckets, and then dive deeper to get a better understanding of where my cash is actually going each month.

• Discretionary Spending
  • Food and Drink
  • Shopping
  • Recreation
  • Travel
  • Hair
  • Home Improvement
  • Cash Withdrawal
• Utilities
  • Internet
  • Gas
  • Electric
  • Water
• Mortgage/Rent
  • Principal on Mortgage
  • Interest on Mortgage
  • Home Insurance
  • Property Taxes
  • Private Mortgage Insurance
• Auto
  • Gas
  • Auto Insurance
  • Maintenance
  • Auto Loan Principal and Interest
  • Parking
• Other Insurance
  • Health Insurance
  • Dental Insurance
  • Umbrella Policy
  • Life Insurance
• Other
  • ATM Fees
  • Other random charges and fees
• Taxes
  • Federal
  • State
  • Social Security
  • Medicare

If I had kids, I can imagine having more line items for diapers, clothing, child care, sports, saving for college, etc.

Like I said, you can categorize your expenses anyway you’d like. Personal finance is personal! 🙂

For example, I lump food and drink together. Splitting them up makes sense as well, but I don’t drink as much anymore, and as a result, I simply have kept it as food and drink.

As part of your overall financial picture, tracking gross expenses can reveal areas of improvement (are you spending too much on a cable subscription when you rarely watch TV?). Over time, you can make tweaks and grow to make sure you are on the path to financial success.

Savings Rate

Savings rate is a very important personal finance metric to track.

Once we have our income and expenses for a certain period, we can move on to a slightly more complicated metric: savings rate. No, it’s not too complicated, just some division added to the mix 🙂

A person’s savings rate is the percentage of income which a person saves in a given time period.

Simply put, it can be calculated as (net income – gross expenses) / net income.

Let’s say a person makes $5,000 in a month. They spend $2,500 of it and the rest is saved in their savings account. Then, their savings rate for the month is 50%, or ($5,000 – $2,500) / $5,000.

Now, it gets a little bit more complicated once you start to factor in contributions to investment accounts and principal payoff of debt.

For me, I don’t count these as expenses. With contributions to investment accounts, you aren’t giving your money to someone else, rather you are putting it somewhere else for your future self.

For paying down a debt, I do consider interest to be an expense.

At a minimum, people should aim to save at least 10% of their income. Personally, I’d suggest aiming for 25%+ to help you become wealthy more quickly.

Net Worth

The final piece of financial information to track for your personal finances is your net worth.

What is your net worth?

It is your assets minus your liabilities.

What are assets?

Assets are things a person owns which have value. Typical assets include houses, cash, stocks, bonds, cars, precious metals (jewelry, etc.), currencies, businesses – and the list goes on and on.

Next, what are liabilities?

Liabilities are things a person owes, either to a bank, a financial institution, or another person or business. These include credit card balances, mortgages, auto loans, personal loans, liens – and the list here goes on and on as well.

To calculate your net worth, subtract your liabilities from your assets.

It’s great if the resulting number is positive – this means you have a positive net worth.  Your assets are worth more than your liabilities!  Great job!

If you have more liabilities than assets, that means you have a negative net worth.  Your liabilities are greater in value than your assets.

If you have more debt than assets, there’s no sense in wallowing – it’s time to destroy that debt!

Over time, you want your net worth to be increasing. If you have a positive savings rate, then your net worth will be increasing since you will be increasing the asset side of the equation.

I focus on increasing my net worth over time. In the 3 years, I went from a negative $15,000 net worth (in college with my student loan), to a positive $125,000 net worth.

My assets include my house, my car, my cash, my IRA and 401(k), and my business. I have a mortgage, a HELOC, and 4 credit cards which I pay off faithfully in full each month.

To increase my asset base, and continue to grow my net worth, I’m focusing on contributing to my retirement accounts, paying down a little bit extra on my mortgage each month, and growing my business.

Knowing your net worth is crucial to tracking your finances. Focus on growing your net worth and you’ll be on your way to financial success.

Some Other Favorite Personal Finance Metrics

One of the great things about having blog readers is being able to ask them about their strategies for financial success. A number of people contributed when asked how they track their finances each month:

Diego, a good friend and avid The Mastermind Within reader said the following:

A steady and overachieving monthly and yearly savings rate is the key for me.

I love it – savings rate is truly a great indication of where you are!

The Grounded Engineer, a fellow blogger, says he used to compete with a friend to see who could save more:

I used to look at what other people were doing. For example, one of my best friends and I would see who’s 401(k) had the larger balance. It was fun and we are both competitive, so it worked out great because we were both saving a significant amount of money. My friend has slowly succumbed to lifestyle inflation, and hasn’t been able to keep pace. I’m trying to get him on the financial independence bandwagon, but I have been unsuccessful in my attempts.

I’ve never seen that in practice! I’m glad you have kept up with your contributions!

Cynthia, another reader and friend of mine, said:

We track net worth over time. If net worth is going up over time, we are happy.

I couldn’t have put it any better myself!

The community members agree: tracking personal finances through knowing your savings rates and tracking your net worth over time will lead to financial success.

5 Personal Finance Softwares and Tools for Millennials

Tracking your finances over time is critical for financial success.

What gets measured, gets managed.

Not everyone is a spreadsheet or Microsoft guru. Luckily, there are many softwares and tools out there to help automate and track your finances over time.

I love spreadsheets and developing new algorithms and ways to calculate and track what I’m doing in my life. Technology is something I love, and as a programmer and statistician, I’m able to play with different technologies at work every day!

There are six tools I want to highlight that are critical for your financial success. These tools range from simple spreadsheets to calculators to full blown applications:

• Mint
• Personal Capital
• Mad Fientist Financial Independence Calculator
• Financial Mentor’s Calculator
• Different Personal Finance Blogger’s Spreadsheets and Tools

Mint

The pinnacle of free web and mobile applications, Mint is at the front of everyone’s mind. I love it because I can input 95% of my accounts, and it allows me to see my net worth in real time.

With Mint, you are able to connect all of your bank accounts, retirement accounts, debt accounts, and see all of the balances and information in a neat and tidy fashion.

I use Mint in tandem with my personal income statement spreadsheet. Mint is a great starter application for people who are looking to get their finances in order.

Personal Capital

Tracking your investments over time can be a struggle. You sell a little bit of this stock, and buy some of that bond. We aren’t all programmers and developers, and can’t track our profit and loss and portfolio value over time easily. That’s where Personal Capital comes in.

Personal Capital is like Mint, but has much greater capability for tracking investments over time.

With Personal Capital, you will be able to see your exposure to different asset classes, as well as get your income and expenses over time.

Personal Capital is a great tool to add to your finance tracking portfolio.

Mad Fientist Financial Independence Laboratory

How far are you away from financial independence? With the Mad Fientist Financial Independence Laboratory, you can know right now!

This web application allows you to enter in your monthly financial data and it automatically charts your progress to FI. It’s an easy to use and cool application.

In addition to being able to use your current expenses, you can forecast using your future expenses to see what financial independence will look like.

Check it out here: Mad Fientist Laboratory.

Financial Mentor

Financial Mentor has eighty financial planning and personal finance calculators on their site.

Eighty! That’s insane. Many of these are pretty simple, but it’s still pretty cool to see all of them in one spot. Plus, they are free!

Hopefully there is one for you. Check these calculators out here: Financial Mentor Calculators.

Other Bloggers Spreadsheets and Tools

Since I started blogging, I’ve seen a number of bloggers posting their own spreadsheets and tools. I love seeing what other people have created, as there are many, many smart people in the world, and everyone has a unique take on life.

Three bloggers that have tools I’ve been recently using are Life and My Finances, Physician on FIRE and ChooseFI.

Derek from Life and My Finances, has a collection of spreadsheets, all for free!  I actually ended up drawing inspiration for my Debt Destruction tool from Derek’s debt snowball calculator!  Check him out here: Life and My Finances.

Physician on FIRE has a great spreadsheet as well. As a doctor, he knows a thing or two about finance as well! Check him out here: Physician on FIRE.

Finally, the ChooseFI Vault has a great wealth of information. If you love their podcast, then you’ll definitely want to check out the vault here: ChooseFI Vault.

The Importance of Tracking Your Personal Finances

Tracking your personal finances and knowing where you are financially is so important to financial success.

But why?

I have two friends: Jack and Jill. Jill tracks her income and expenses, and Jack doesn’t track his income and expenses.

Jack and Jill work at the same company and are in the same team, both making $5,000 a month.

Jill, the Tracker

Jill, the tracker, wants to retire someday, and a few years ago, she started putting away $500 a month into an investment account. Now, she is married and just gave birth to her first kid. As a result, her expenses have gone up but she still has kept in mind this goal of saving for retirement.

Before having her child, she was spending $500 a month on food and drink with her husband. Now, since they have another mouth to feed, she realized that their combined food spending would about $750 a month if she kept eating out. Instead, she changed her habits and started bringing her lunch from home a few days a week.

With this simple change, and even with an extra mouth to feed, Jill is still only spending $500 a month on food, did not alter her lifestyle too much, and is still on track for retirement.

Jack, the Non-Tracker

Jack, the non-tracker, wants to retire soon, but doesn’t know where he is at on a monthly basis. He puts $500 into his retirement account because he heard that it was a good idea on some radio show. In addition to this, he has been saving on average a few hundred dollars a month in cash which he adds to one of his investment accounts here and there.

Recently, he got married as well, and recently gave birth with his wife to a newborn. His expenses have increased, but he is not really sure how much.

One of the things he loves is watching football, and in particular, going to games at the local stadium. Even with his newborn, he still wants to go to games.

With the increased expense of having a kid, his cash savings goes to 0, and now he isn’t getting those additional savings.

A few months later, he realizes he can’t make his usual investment account contribution and is a little puzzled, “oh well, I guess we just bought a few more diapers than I thought, I’ll make the investment next month.”

His next investment is never made because he has no idea how much cash he is saving each month.

Who’s going to be more successful in the long run?

Who is going to be more successful financially in the long run? Jack, the non-tracker, or Jill, the tracker?

I’m going to guess Jill is going to be more successful financially.

She knows exactly where her money is going at the end of the day. Jack on the other hand does not.

I hope this example helps paint a picture of why it’s important to track your income and expenses over time.

You never know when life is going to rear it’s ugly head and throw some unexpected expenses at you – but with proper tracking, you can navigate these rough roads much easier!

Grow Wealth Over Time Through Tracking and Consistency

Keeping track of how you are doing financially WILL lead to personal finance success.

With these four metrics in hand, you will be ready to take on the world of personal finance. Tracking your income and expenses, savings rate, and net worth over time will help you understand where you are financially, what you can improve on, and how to take action.

Calculating these ratios and metrics are not difficult – basic addition, multiplication and division will suffice.

With these tools in your financial toolbox, I know you’ll be well on your way on achieving your financial goals and dreams.