Wednesday, March 24, 2010

Stay Focused on Your Dreams
Written by Jack Canfield

“When you’re up to your ass in alligators, it’s hard to remember that your initial objective was to drain the swamp!”



I just spent a day conducting my Success Principles Workshop for 200 unemployed men and women sponsored by the Workforce Institute in San Jose, California.

It was a very revealing day.

First, I was struck by the diversity of the people who have lost their jobs due to the cutbacks caused by the recession—computer programmers, salespeople, managers, artists, trainers, architects, landscapers, lawyers, actuaries, truck drivers, painters and teachers.

Secondly, I was struck by the mood of resignation and depression that was present in the room when we began in the morning.

The prevailing belief was that there were not any jobs available and that it wasn’t going to get any better anytime soon. People were preparing their resumes, going to job fairs, going to interviews, but with little or no results.

I was reminded of Spencer Johnson’s book Who Moved My Cheese?, in which he reports how rats in a laboratory maze are trained to press a certain buzzer with their noses, and once they are reinforced with a reward of cheese, will keep going back to press the same buzzer even though they are no longer receiving cheese for pressing the buzzer. Their noses will become bloody and they will eventually die rather than press a different buzzer.

Human beings do the same thing. They will repeat a behavior that used to work over and over and over again, even though it is not producing the desired result, hoping that someday it will work again.

There is something to be said for perseverance in the face of an obstacle, but sometimes you have to come to grips with the fact that a particular opportunity may never exist again.

In my book The Success Principles I teach a formula called E + R = O. It stands for Events + Responses = Outcomes.

If a certain response (job search) in the face of a certain event (the current economic situation in your area) is not creating the outcome (income) you want, you may have to change your response.

You may have to try something different, which could include employing a more creative approach to presenting yourself, moving to a new location where the jobs are, changing fields (which might require retraining or re-education), becoming an entrepreneur and starting your own business venture, joining a multi-level marketing company, partnering up with other people to start a service of some kind—all of which may require you to step outside of your comfort zone.

A good example of what I am talking about is a woman I read about in USA Today. After losing her job she noticed that all the homes that were being foreclosed in her neighborhood were left in shambles, just as the angry people who were forced out of them. She called the local banks and offered to clean them for a fee so that they would be presentable when the banks tried to rent or sell them. Her little venture was so successful that she had to hire several other people to help. She now has a successful house cleaning business.

I saw a story on CNN about another jobless woman who opened a store to help buy and sell used furniture from the people who were forced to downsize as they were being foreclosed upon or forced to move to smaller apartments. She sold some locally and some on the internet. These are all examples of finding a need and filling it, of getting creative instead of sitting passively by, doing the same old behaviors that are not working.

By the end of the day in San Jose there was a different mood in the air—one of excitement and enthusiasm about pursuing all of the possibilities that lay before them.

They had come in at the beginning of the day simply hoping to figure out how to find a job. By the end of the day they were leaving focused on how to create the life of their dreams.

They had transcended the limited goal of getting back to ground zero and replaced it with a goal of “thrival” rather than mere survival.

No matter what is going on in the economy...

  • hold fast to your dreams,
  • visualize them with feeling twice a day,
  • keep your self-talk positive,
  • surround yourself with positive people,
  • read uplifting books,
  • trust your intuition,
  • take continuous action,
  • expect the best,
  • respond to feedback by making the necessary corrections,
  • and persevere until you get the result you want.

It’s a formula that always works.

After the workshop had concluded, one of the participants came up to me and said...


“You know, I used to set goals and do the things you were teaching us today when I was younger. I guess I’ve just stopped doing the things that work.”


Whatever you do, don’t stop doing the things that work. I promise you, if you work the principles, the principles always work.

Jack Canfield, America's #1 Success Coach, is founder of the billion-dollar book brand Chicken Soup for the Soul©Inspirational Books)© and a leading authority on Peak Performance and Life Success. If you're ready to jump-start your life, make more money, and have more fun and joy in all that you do, get FREE success tips from Jack Canfield now at: www.FreeSuccessStrategies.com/.

Tuesday, March 16, 2010

The Roth IRA – Not Just For Grownups Anymore!

Did you know that there is no minimum age requirement for starting an IRA? Did you know that you could actually start an IRA for your child while the child is still a minor, even if the child is a newborn? Talk about a creative retirement plan. This isn’t something new; it’s just that, for the most part, people don’t know about it. I know I didn’t!

The catch is that the child needs show verifiable earned income. There are also other restrictions associated with IRAs, for instance, you must fall within a certain income bracket to be able to qualify for one, and you can only contribute up to a certain amount per year; however, right now you are probably just wondering how in the world are you going to get verifiable earned income for your child in the first place!

Here are some general examples of ways children can earn income (just to show that it is possible and to give you some ideas):

Selling Products
  • Lemonade stand
  • Bake Sale
  • Crafts
Services
  • Modeling Fees
  • Lawn services
  • House Cleaning
  • Baby Sitting
Roth IRA or Traditional IRA?
If your child were able to get verifiable earned income and you were thinking about getting him an IRA, then the Roth IRA is the way to go. With this type of account, original contributions can be withdrawn at any time for any reason. (That said, earnings generally cannot be withdrawn before age 59 1/2, without triggering taxes and a penalty.) Granted, it's pretty much always a better idea to simply let the account grow until retirement, at which point withdrawals can be taken completely tax free. (Don't underestimate the significance of this: It's a huge gift from the government.) But this might be an easier sell if you explain to your child that he doesn't have to wait roughly four decades to access his summer money.

In contrast, if your child contributes to a Traditional IRA (which offers an upfront tax-deduction on contributions), most or all of the subsequent withdrawals will be taxed. Furthermore, withdrawals before 59 1/2 will be hit with a 10% penalty tax, unless the money is used for certain IRS-approved reasons (one of those reasons is to pay college costs).

Another reason for shunning the Traditional IRA is because your child may not actually be entitled to any tax deductions for his contributions. Why? Because an unmarried dependent child's standard deduction automatically shelters up to $5,700 of earned income for 2009 and 2010. So unless your child's job paid more than $5,700 or he had income from other sources (like dividends and capital gains from a trust or custodial account), contributing to a traditional IRA won't generate any current tax savings.

Finally, the fact that your child owns an IRA (Roth or Traditional) won't cause him or her to lose out on any financial aid benefits at college time. Why? Because the financial aid number crunchers don't count IRAs as assets. In other words, IRAs are invisible when it comes to determining financial aid eligibility.

How I went about setting up a Roth IRA for my seven year old son
After finding out this information and already knowing the Time Value of Money, I wanted to get a Roth IRA set up for my child ASAP! My recently learned knowledge of this information led me to a little “experiment” with my seven year old son that would be a good lesson for him … as well as for me. In the following paragraphs, I will show you the steps I took to document verifiable earned income for my son that allowed me to set up a Roth IRA for him:

1.) The first thing I did was to research how my son would be able to get verifiable income. I read Young Bucks: How to Raise a Future Millionaireby Troy Dunn that gave great suggestions of types of jobs that children can do to make money as well as ways to have your children’s enthusiastic participation in the process. I also read The Kid's ROTH IRA Handbook: Securing Tax-Free Wealth From a Child's First Paycheck or Money Answers for Employed Children, Their Parents, the Self-Employed and Entrepreneursby Tracy Foote that showed simple ways to have the child document their income, as well as how to do their own taxes.

So, based on my research, I also found out that there is no minimum or maximum age limit set on when you can start a business! Starting your own business can help with the documentation, if your child doesn’t get a W-2 with the income that is made. So, we made the decision to start a business for my seven year old son. Here are the steps we took to create the business:
  • The first step for starting a business was to identify the type of business my son would go into. It was decided that we would go down the path identified in The Kid's ROTH IRA Handbook as the Self-Employed Child (we decided to provide a service instead of selling a product because, with selling a product, keeping a sales log that keeps track of materials, profits and losses as well as doing taxes that would require a professional would make things much more difficult -- and not as much fun).
  • The next step was to research for any licensing fees that our state may have. We just went to http://Google.com and searched for “[state] business license”. I found that for a Services business there was no need for a license in Maryland, but for a Sales business you would need a Tax Account License. However, for both Services and Sales you need to register with the Department of Assessment and Taxation. Also, for a nominal fee of $25.00 we could have registered for a Trade Name (the name of the business that you created). We took the easy route by creating a Services business and we didn’t register for a trade name, so all we had to do was register with the Department of Assessment and Taxation for free.

    The registration form asks for your Federal Principal Business Code Number (the type of business that you creating). You can get the full list of these codes in the Schedule C Tax Form's instructions page or at http://www.taxalmanac.org. Here are some examples:
    • Lawn Mowing = 561730 for Selling Landscaping Services
    • Babysitting = 624410 for Child Day Care Services
    • Dog Walking/Cat Feeding = 812910 for Pet Care Services
    • Elderly Assistant = 624100 for Individual & Family Services
    • Retail Selling (crafts, etc.) = 453220 for Gift, Novelty, Souvenir Store

    If your business does several of the above then the business is an “odd jobs” business and the code would be 624100 for Individual & Family Services (assisting families). That’s the one we chose!
  • Finally we sent in the registration form. The address and fax number to send it to were both located on the form. (I would recommend just faxing it in so you can get your unincorporated business number immediately. Using the snail mail could take up to two weeks.) And that is it! Not too painful and now my son was really in business!
2.) After the business was created we then had to figure out what “odd jobs” my son could do to earn some income. (If you get stuck at this point, I would really recommend you reading the Young Bucks book that I mentioned earlier.) We didn’t have to look far considering it was during the record-breaking winter that we go three blizzards in a row! My son was excited to make money for his new business by shoveling snow. Every time my son shoveled snow he would religiously fill out his income sheet, because you need to keep good documentation if you are to have verifiable earned income. Here is an example of the Income Sheet, Expense Sheet and Sales Sheet that I got out of The Kid's ROTH IRA Handbook. (We didn’t need to use the Sales Sheet because we created a service business and we didn’t need to use the Expense Sheet because we had no business expenses at this time.)



3.) Next, with his earnings, I wanted to go to the bank and set up a checking account for my son, because, I wanted him to be able to write the check to get his own Roth IRA. However, I found that you need to be at least 16 years old to get a checking account. So, I got him a savings account where he would store all of his earnings. I let him fill out his own deposit slip and showed him how to balance his register on his next deposits. My son was really excited and proud to be doing this and I found it to be a great father-son bonding time.

4.) Now, that he had earned the income, we wanted to be sure it was verifiable earned income. So, we decided to follow the instructions in The Kid's ROTH IRA Handbook to do the taxes. Why do taxes when he probably didn’t make enough to need to file? Because we wanted to make sure we had good documentation. This was also another great lesson in following instructions and understanding how to fill out tax forms. My son did not need a W-2 because he had his own business and was now self-employed! He only needed a few forms and they were pretty easy to fill out:
  • Form 1040
  • Schedule C: Profit or Loss from Business
  • Schedule SE: Self-Employment Tax
5.) Finally, now that earned income was fully documented and verifiable, we were able to start that Roth IRA that we originally talked about! With the potential of over 50 years of compounding returns, even a modest amount of money in a Roth IRA now can turn into very big tax-free bucks.

During this process I would tell family and friends about my son’s new business enterprise and subsequent plans for setting up a Roth IRA and I would only receive positive remarks and questions on how they could do something like this for their children. I even indirectly got some other work lined up for my son while describing our plans to some family members. My brother-in-law was soon to be getting married and his wife-to-be offered my son a job of placing stamps on the envelopes of their wedding invitations. Hey, now that’s an “odd job”! So, I hope you can see that there are all sorts of opportunities out there.

Overall, this was a very enriching and fulfilling experience for me and my son and I would recommend anyone with a child, grandchild, niece or nephew to go through this or a similar exercise. It is never too soon to start investing for a child’s future. Opening an account early can give them valuable lessons in finance, as well as a head start on saving for retirement. And remember, Roth IRAs are not just for grownups anymore!

I'm so excited to share this information with you. If you have enjoyed the information or feel that it would benefit someone else, please share it. If you have any questions or comments, please feel free to contact me.

Friday, March 5, 2010

Expand Your Prosperity Consciousness
Written by Jack Canfield

Understanding the relationship among consciousness, action, and prosperity is crucial to your success.

In my seminars I sometimes stand in front of the room and hold up a $100 bill, state that I’m willing to give it away, and ask if anyone would like to have it.

Usually lots of people raise their hand – and do nothing else. I keep waiving the dollar bill until someone finally jumps out of his or her chair, walks or runs all the way up to the stage and reaches up to take the bill.

There are two lessons here. One is that money goes to the person who takes the necessary action. The other is that a certain state of consciousness makes it possible to take action – or to avoid it.

When I ask people what kept them from walking up to the front of the room to claim the money, I always get the same answers: they felt shy. They worried about what other people would think. They thought it was a trick. Those answers come from a consciousness dominated by fear, scarcity, and cynicism.

The same forces can operate in our daily lives. In each moment we either feed those forces – or replace them with something better. Following are some essential ways to expand your prosperity consciousness and claim the wealth you deserve.

Monitor Your Conversations

We swim in a sea of conversation. Every time you attend a meeting, make a phone call, or send an email, you start up a conversation. Whenever you listen to an audio recording or pick up a book, you start a conversation with an author. And whenever you write in your journal or just take a few minutes to sit and think, you start a conversation with yourself.

Consider the combined effect of those conversations. My friend Jim Rohn liked to say that we are the average of the five people with whom we spend the most time. The quality of our conversations creates the quality of our lives.

Who are the five people that dominate the “conversation space” in your life? What did you talk about the last time you saw each person? And did that conversation build up your prosperity consciousness or tear it down?

Stay in Prosperity Conversations

Make it a point to drop out of the “ain't it awful” club – toxic conversations with people who dwell on resentments or complaints. Instead, get engaged in conversations that support your path to prosperity.

For example, spend more time with the people who are already doing the kind of work you want to do. Ask them how they entered the field and what it takes to succeed.

In addition, read at least one book per week. Focus on uplifting stories and biographies of successful people. Read more and learn ways to build your skills at managing money, raising happy children, creating loving relationships, and maintaining your health. Feed your prosperity consciousness with a constant stream of useful, positive ideas.

Keep Catching Your Dream

Have you ever shared your dream with someone who then doubted your ability to achieve it? This happened to Mark Victor Hansen and me during a conversation with the publisher of Chicken Soup for the Soul. We asked him how many copies of the book we should expect to sell. The publisher said that we’d be lucky to sell 20,000 copies.

Believe me, that was NOT our dream! Our goal was to sell 150,000 copies in six months and 1.5 million in 18 months. Our publisher just laughed out loud and said it was impossible.

We ended up selling 135,000 copies in six months and 1.3 million in 18 months. We didn’t quite meet our initial goals, yet we sold much more than our publisher estimated. That first book went on to sell over eight million copies in America and 10 million copies around the world.

Whenever you have a dream-killing conversation, you have two options. Give up your dream or return to your original intention with even more energy and commitment. Focusing on your original intention sends an urgent message to your mind: I am going to persist until my dream manifests. Starting right now!

Support this deeper level of intention with affirmations, such as:
  • I always attract the perfect people to work with me.
  • No matter what is going on in the economy, I attract people I can help – and who can help me.
  • Our customer base is expanding.
  • Repeat business and referrals keep coming my way.
Then add supporting visualizations. See yourself holding bigger paychecks, rent checks, or royalty checks in your hands. Visualize people handing you cash.

Give Back

Round out these images with visions of sharing the wealth. Many of the world’s wealthiest people are dedicated tithers, meaning they give 10 percent of their income to charitable organizations.

Visualize yourself doing the same thing. Those who give also receive, and service always comes back multiplied.

Jack Canfield, America's #1 Success Coach, is founder of the billion-dollar book brand Chicken Soup for the Soul©Inspirational Books)© and a leading authority on Peak Performance and Life Success. If you're ready to jump-start your life, make more money, and have more fun and joy in all that you do, get FREE success tips from Jack Canfield now at: www.FreeSuccessStrategies.com/.

Monday, March 1, 2010

Pay Yourself First and Get Your Life in Order

You might have noticed that money comes directly out of your paycheck before you even receive it, at least in the United States. The government understands the concept of “Pay Yourself First” (or paying itself first), by taking out taxes before you get your hands on your income. However, this concept can also be used to your benefit, by applying it to saving money.

Most people go to work each day for 2 main reasons. One, they work to receive money to pay their bills. Two, they work to have money so they can spend it to enjoy themselves. (Notice that you didn’t come in first place.)

Why is everyone else more deserving of your money than you?

Yeah, they’re your creditors and you have an obligation to pay them. But what about the obligation you have to yourself? The concept behind paying yourself first is simple: save money before giving it away. If you don’t pay yourself first, there will always be something that money could be spent on instead of saving it. There never seems to be a perfect time to start saving money, so you just have to jump in and do it.

Some reasons to start saving now instead of waiting until next year (or the year after):

  • When you pay yourself first, you’re mentally establishing saving as a priority. You’re telling yourself that you are more important than the electric company or the landlord. Building savings is a powerful motivator — it’s empowering.
  • Paying yourself first encourages sound financial habits. Most people spend their money in the following order: bills, fun, saving. Unsurprisingly, there’s usually little left over to put in the bank. But if you bump saving to the front — saving, bills, fun — you’re able to set the money aside before you rationalize reasons to spend it.
  • By paying yourself first, you’re building a cash buffer with real-world applications. Regular steady contributions are an excellent way to build a nest egg. You can use the money to deal with emergencies. You can use it to purchase a house. You can use it to save for retirement. Paying yourself first gives you freedom — it opens a world of opportunity.
I’ve never met anyone who does not wish they had started saving earlier. Nobody tells themselves, “Saving was a mistake.” No matter what your age, begin saving now. And if you already save, consider boosting how much you set aside each month.

View YOU as a monthly expense

Viewing your savings account as a monthly expense – one that takes precedence – is a quick and simple way to build a financial cushion, and you don’t need to pay yourself a lot. Start small and deposit 5% or 10% of your weekly or monthly income. Once you’ve gotten used to the idea, increase your deposits. Naturally, it’s easier to spend than save; therefore, you may have to fool yourself into saving money.

Automate deductions

Talk to your employer about automated deductions and have money from your paycheck automatically transferred into a savings account. Also, several banks feature programs where a specified amount is automatically drafted from your checking account and deposited into a savings account.

After you get used to the pay yourself first concept, you really won’t miss the money. It is a good idea to put that amount into a separate account, so you will not be tempted to spend it.

Here are three accounts that you should have:

  • Emergency Fund -- Enough money to cover the unexpected expenses
    • The washer breaks
    • Need a new tire for the car
    • A job loss
  • Short-term Fund -- Enough money to cover the things you want in the next few years
    • Maybe a vacation
    • New car
    • New appliances
  • Long-term Fund -- The saving that will be for the major events in your life
    • Retirement
    • College funds
    • Weddings
Planning for the future is very important, and the earlier you start saving, the better. If you pay yourself first, you know you will have a certain amount in a number of years. Even if you already have a pension or other retirement fund, it’s still a good idea to pay yourself first to accumulate more money for the future.

Remember, it is always the noble thing -- to be selfless and to always think of others before yourself. But a line must be drawn, because if you are taking care of others your entire life, who is actually taking care of you?

Do you pay yourself first?

I'm so excited to share this information with you. If you have enjoyed the information or feel that it would benefit someone else, please share it. If you have any questions or comments, please feel free to contact me.