Sunday, January 30, 2011

Our Love-Hate Relationship with Money
Written by Darren Hardy

Money, Money, Money… We want more of it; we love it and all that it affords. Yet it can be the root of some of life’s most devastating experiences—divorce, bankruptcy, foreclosure and destitution.

However, money isn’t the problem.

Just like guns don’t kill people, people with guns kill people, the same misplaced blame is applied to money. Money isn’t your problem; your relationship with money and what you do (or don’t do) with it is the problem.

Your relationship with money and what you do (or don’t do) with it is the problem.

Last month I showed you how you can take something that scares you and fear it no more by simply changing your perspective about it. Just in case you don’t recall, the subject was selling, and I had you take the four letter word S-E-L-L, cross it out and replace it with H-E-L-P. Focusing on helping rather than selling not only makes the entire experience far more comfortable and enjoyable, but it’s actually the key to being successful at it.

This month, I want to alter your mindset about this all-important force in our lives, now formerly known as M-O-N-E-Y. Take this five letter word money and cross it out. Now replace it with V-A-L-U-E. Stop thinking about money as money, and start understanding it as value.

That’s all money is: paper that denotes value. How do you get more money? Create more value. Period. That’s it.

If you are employed, why does the company you work for pay you money? Mistakenly, most people say, “for my time.” That’s incorrect. If that were true, you could just come in and sleep. No, they pay you for the value you deliver during the time you are working. If you deliver lots more value than is expected during that time, they will want to pay you even more money—in bonuses, raises and promotions—to keep you and the value you bring. If you deliver less value during the time you are working for them, they will stop paying you money. Or as our friend Donald Trump likes to say, “You’re fired!”

This is not simply a semantics issue; this is a completely different philosophy, mindset and way of operating in the world in relationship to money.

Instead of asking… How can we increase our revenue? Ask, How can we create and deliver more value? Instead of asking, How can we expand our business? Ask, How can we expand our value? Rather than asking, How can I become wealthier? Ask instead, How can I become more valuable?

Therein lies the secret to money. Money is just a tool to exchange value. The only way to obtain tons of money is to create tons of value.

And tons of value is what we have in store for you in the next issue of SUCCESS. While the cover price might read $5.95, the information and advice you will discover to further increase your value (thus, your wealth) is, well, priceless.

So spread the wealth—share SUCCESS with a friend!

Content republished with permission from Darren Hardy, Publisher of SUCCESS magazine. For more great insights, tips and strategies on success and achievement go to http://DarrenHardy.SUCCESS.com. More about Darren Hardy can be found at: http://DarrenHardy.SUCCESS.com/About.

Sunday, January 23, 2011

What is the Most Important Factor in the Wealth Equation?

In Football there are many different players on a team. But, if you ask people who the most important player on the team is, most people would probably say that it is the Quarterback. I don’t have any proof that this is the correct answer and some people may debate this answer, but I am just reporting to you what most people would say if asked that question.

Okay, so maybe the game of Football is not my strong suit, but one thing that I do know is the "Money Game". And in the "Money Game", there is a Wealth Equation. Unlike Football, the Wealth Equation has only three players – Money, Interest Rate and Time. Usually when I ask anyone what they think the most important factor of the Wealth Equation is, I usually get, “Duh, Money of course is the most important! Then Interest Rate and then finally Time.”

But unlike in Football, I am sure what the most important factor in the Wealth Equation is. And, as a matter of fact, I even have proof to back it up. Despite what most people would say, Money is not the most important factor. The most important factor in the Wealth Equation is Time. In fact, if you were to order them by their importance it would be Time followed by Interest Rate then Money.

I am not trying to give you a math lesson here, but I can’t think of an easier way to prove the importance of Time in the Wealth Equation without actually showing you the equation! Because of financial calculators and other financial applications, most people don’t even know what the Wealth Equation looks like. I, however, believe that it is important to at least see the equation and identify all of the players, so you can understand what is going on in the background after you enter your numbers and press the “Submit” button. Here are two different scenarios of the Wealth Equation:

The One-Time Payment Wealth Equation figures out the Future Value (FV) or the Wealth you would earn from investing a one-time sum of Money and leaving it alone to grow at a certain Interest Rate over a certain period of Time. In this equation, PV stands for Present Value and this represents Money, i represents the Interest Rate and N represents Time.
The Periodic Payments Wealth Equation figures out the Future Value (FV) or the Wealth you would earn from investing a sum of Money over a certain frequency of Time (i.e. monthly, bi-annually, or annually) at a certain Interest Rate over a certain period of Time. In this equation Pmt represents Money, i represents Interest Rate and N represents Time.
Even if you don’t remember anything about Algebra, I'm sure you probably at least remember which variable in the above equations carries the most weight. If you are thinking the variable N then you are correct. The N carries the most weight because N (Time) is exponential.

The Wealth Equation Factors in the Order of Importance:

3.) MONEY, believe it or not, is the least important factor in the Wealth Equation, because Money is linear. Meaning, for example, if you double the Money and leave the Interest Rate and Time the same, then the results will double too. It's a one-to-one relationship
  • $2,000.00 @ 8% for 30 years --> $20,125.31
  • $4,000.00 @ 8% for 30 years --> $40,250.62 By doubling the Money from $2,000.00 to $4,000, the growth is $20,125.31 which is double.
  • $8,000.00 @ 8% for 30 years --> $80,501.24 By doubling the Money from $4,000.00 to $8,000, the growth is $40,250.62 which is still only double!
2.) INTEREST RATE is the next important factor in the Wealth Equation. If you take the same Time and Money and keep doubling the Interest Rate, you can see that the changes in growth are not linear.
  • $2,000.00 @ 2% for 30 years --> $3,622.72
  • $2,000.00 @ 4% for 30 years --> $6,486.80 By doubling the Interest Rate from 2% to 4%, the growth is $2,864.08.
  • $2,000.00 @ 8% for 30 years --> $20,125.31 By doubling the Interest Rate from 4% to 8%, the growth is $13,638.51!
Here's a great article demonstrating the importance of the Interest Rate in the Wealth Equation:
1.) TIME is the most important factor in the Wealth Equation. If you take the same Money and Interest Rate and keep doubling the Time, you can really see the exponential growth.
  • $2,000.00 @ 8% for 10 years --> $4,317.85
  • $2,000.00 @ 8% for 20 years --> $9,321.91 By doubling the Time from 10 to 20 years, the growth is $5,004.06.
  • $2,000.00 @ 8% for 40 years --> $43,449.04 By doubling the Time from 20 to 40 years, the growth is $34,127.13!
Here are some other relevant articles that stress and further explain the importance of Time in the Wealth Equation:

So, now that you understand how important Time is in the Wealth Equation I hope you are inspired to stop procrastinating and start investing for your future as soon as possible, if you haven’t already. And I hope that you in turn pass on the knowledge of the importance of investing as soon as possible to others too.

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.

Monday, January 17, 2011

Three Ways to Express Appreciation for Greater Impact
Written by Jack Canfield

The period between Thanksgiving and New Year’s Day is the time when most people tend to demonstrate their love and appreciation. But wouldn’t it be nice to experience that level of joy, love and appreciation every day of the year?

The process begins with us.

Someone once gave me a card that said, “The love I give to you is second-hand because I experienced it first.” In other words, for us to love someone else, we first have to feel the love within us.

To develop the ability to maintain a state of love and gratitude on a more regular basis, we need to make it a habit. We do dozens of things every day on automatic pilot, such as eating our meals, taking showers, or doing the dishes. We don’t have to spend time visualizing these activities or putting them on our to-do lists. We simply do them out of habit. Expressing appreciation on a daily basis will help you turn gratitude into a daily habit with multiple benefits.

3 Kinds of Appreciation

For your appreciation to hit the mark, keep in mind that there are three different kinds of appreciation – auditory, visual and kinesthetic. These are the three ways that our brains take in information, and everyone has a dominant type they prefer. Tailor the type of appreciation you give to suit the person you want to honor.

1. Auditory people like to hear appreciation. Expressing thanks verbally is the best way to let them know how much we appreciate them. Auditory people are very sensitive to the tones of our voices, so speaking in a caring and compassionate voice is highly effective.
2. Visual people like to receive things they can see. Letters, cards, flowers, plaques, certificates, pictures and any other gifts are perfect for these individuals.
3. Kinesthetic people need to feel appreciation. My wife is a kinesthetic person. She loves to do things that make her feel good, such as hiking, getting massages or picking out clothes that feel good to the touch. The best way for me to express appreciation to my wife is with a hug, a kiss or simply spending time with her.

Blend for Impact

When in doubt, use all three types of communication. Tell them, show them and give them a pat on the back. For example, put your arm around your kids when you tell them how much you appreciate them and then follow up later with a card.

Using multiple forms of communication also can strengthen your message. Although I am very visual, I’m also a big fan of physical touch. If you give me a hug, a handshake or a high five, the physical touch multiples the appreciation I feel by a factor of 10!

Keep Score

New habits take 30 to 60 days to lock in. An Appreciation Scorecard is an easy way to build the habit of expressing your gratitude.

When I was working to consciously lock in this new habit, I carried a 3” x 5” card in my pocket all day. Every time I acknowledged and appreciated someone, I would place a check mark on the card.

I set a goal of appreciating 10 people every day. I would not go to bed without achieving my daily quota. I would appreciate my wife and children, write letters to my mother or stepfather, or e-mail my staff. I did this every day for 6 months, until I no longer needed the card as a reminder.

As we build the habit of appreciation, it helps to expand the circle of people whom we appreciate. Our society flourishes because of connections. We literally couldn’t survive without other people. Nobody pumps their own petroleum, turns it into gas, and trucks it into their own town. Other people do it. The food we eat probably has 30 to 40 people involved in it before it gets to our tables. Although they may be strangers, the people who serve us by doing their part in making our society function deserve our thanks, too.

Build Your Appreciation Muscle

To build the habit of appreciation, I encourage you to keep a daily scorecard as I did. Express your appreciation to at least 10 people a day, both individuals you know intimately, as well as virtual strangers who touch your life. Experiment with the different forms of appreciation, and observe how much more deeply your appreciation is received when you find the right way to deliver it for each individual.

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, January 10, 2011

The Cost of Waiting
Written by Jeff Olson

I’m sure you’ve heard about the power of compounding interest before. In fact, you’ve probably heard about it many times. What makes this different?

Nothing – unless you act on it.

The single most important thing I can tell you about The Slight Edge is this: it’s already working, right now, either for you or against you. So don’t wait.

My hope for you – my request for you – is that before you reach the last page of this book, you will have put in place a Slight Edge financial plan for yourself so that you are consistently building your equity. Some simple, daily (or weekly, or monthly) discipline that over time, will buy your financial freedom.

Easy to do? Surprisingly so. Easy not to do? Tragically so.

To give you a sense of the cost of waiting, look at the following example.

Let’s say you and your best friend are both twenty-four years old; you both read The Slight Edge and decide you’d like to start putting away $2,000 a year into an IRA so you’ll retire at age sixty-five with over a million dollars.

Your friend starts doing it now. You wait. You don’t get around to it this year, or next, or the next … in fact, you procrastinate for the next six years.

At the beginning of year 7, you ask your friend how his IRA is doing. You are stunned when he tells you he’s finished: after investing $2,000 a year for six years at twelve percent, he’s all set. By the age of sixty-five, the little financial ball he’s started rolling will have snowballed into over one million dollars – even if he never puts in another penny!

That’s it, you decide, it’s time for action. You start putting in your $2,000 each year. How many years will it take before you’ve caught up to your friend? In other words, by what age will you be able to stop investing your annual $2,000, like he did?

You can’t believe your eyes when you see the answer: you’re going to have to keep investing that $2,000 every single year until the age of sixty-two! Your six years of procrastination has cost you thirty-three years of investing – that’s twenty-seven more years and $54,000 more invested just to arrive at the same place!

“But what if I’m not twenty-four – what if I’m forty-four? Or sixty-four? Does that mean I’ve missed the boat – are you saying it’s too late for me?”

Not at all. You’re never too old, and it’s never too late, to start applying Slight Edge tactics to achieve your dreams, financial and otherwise. In fact, best-selling author David Bach has written an excellent book titled Start Late, Finish Rich, addressing exactly that issue. Like all the other books I list in the Appendix, it’s a great companion to The Slight Edge. My point is simply that there is a cost to waiting.

It’s never too late to start.

It’s always too late to wait.



Your Friend

You

Age

Payment

Accum.Total

Payment

Accum. Total

24

$2,000

$2,240

0

0

25

2,000

4,749

0

0

26

2,000

7,559

0

0

27

2,000

10,706

0

0

28

2,000

14,230

0

0

29

2,000

18,178

0

0

30

0

20,359

$2,000

$2,240

31

0

22,803

2,000

4,749

32

0

25,539

2,000

7,559

33

0

28,603

2,000

10,706

34

0

32,036

2,000

14,230

35

0

35,880

2,000

18,178

36

0

40,186

2,000

22,599

37

0

45,008

2,000

27,551

38

0

50,409

2,000

33,097

39

0

56,458

2,000

39,309

40

0

63,233

2,000

46,266

41

0

70,821

2,000

54,058

42

0

79,320

2,000

62,785

43

0

88,838

2,000

72,559

44

0

99,499

2,000

83,507

45

0

111,438

2,000

95,767

46

0

124,811

2,000

109,499

47

0

139,788

2,000

124,879

48

0

156,563

2,000

142,105

49

0

175,351

2,000

161,397

50

0

196,393

2,000

183,005

51

0

219,960

2,000

207,206

52

0

246,355

2,000

234,310

53

0

275,917

2,000

264,668

54

0

309,028

2,000

298,668

55

0

346,111

2,000

336,748

56

0

387,644

2,000

379,398

57

0

434,161

2,000

427,166

58

0

486,261

2,000

480,665

59

0

544,612

2,000

540,585

60

0

609,966

2,000

607,695

61

0

683,162

2,000

682,859

62

0

765,141

2,000

767,042

63

0

856,958

0

861,327

64

0

959,793

0

966,926

65

0

$1,074,968

0

$1,085,197

Reprinted with permission from SUCCESS Media ©2011. As a best-selling author and noted personal-achievement expert, Jeff Olson has spoken to more than a thousand audiences throughout the United States and around the world. Over the past twenty years, he has helped hundreds of thousands of individuals achieve better levels of financial freedom and personal excellence. For more information on Jeff and his popular book, The Slight Edge, or to purchase the book in print or audio CD editions, visit www.SlightEdge.org.

Monday, January 3, 2011

Will Your Life Work the Way You Want It to This Year?
Written by Jack Canfield

As I mentioned earlier, this year may bring greater uncertainty and more unsettling economic news than recent years, but these circumstances should compel us to take a deep breath, and pause to think about our lives.

When things happen in the world that seem so far beyond our individual control, it can feel unsettling.

Don’t give up on your goals and dreams just because “the time isn’t good”... you can still make this year the year you uncover a whole new you for the better!

Even in tough times, you get to decide how to respond to certain conditions, opportunities, and outcomes—both good and bad.

Life will always be a series of choices and YOU get to decide on what will move you closer to your goals, or farther away from them. External forces will always be part of the equation, even during the good times when the world is thriving.

When people ask me about the single most important ingredient to success, I always share the same response: realizing what’s making you achieve success, and then realizing what is stifling your success.

Sometimes recognizing the things that are NOT working in your life can be painful, yet VERY powerful to shaping the life you want.

Don’t try to rationalize them, make excuses for them, or hide them. This is when it’s even more critical to take personal inventory and evict those excuses, rationalizations, and hidden habits that don’t serve you. These things will keep you from the life you want to be living. Let me give you some examples. Ask yourself if you relate to any of these questions:

Do you want to be active, fit, and strong? Then you have to stop making excuses about your weight, diet choices, and lack of exercise.

Do you want to be in a loving relationship based on friendship and respect? Then you have to stop rationalizing why you and your partner are not communicating well.

Do you want to embrace Monday mornings and feel excited about going to work every day? Then you have to stop hiding your true passions and go after whatever it is you really want to be doing day in and day out.

Do you want to lose the debt forever? Then you have to stop ignoring your spending habits and get real about a creating budget that will pull you out of debt and allow you to reach financial freedom.

Do you want to feel more connected to the people in your life, such as your children, friends, and colleagues? Then you have to stop complaining about your poor relationships and figure out why you don’t feel as connected as you’d like to be.

These things can be painful to look at because the truth is that you have to do something about them in order to make it work in your life.

You’ll have to say no to the second helping of dinner and the dessert to follow and go through the awkward stage of getting into shape... You’ll have to confront your partner about the areas that need work... You’ll have to get past fears about changing your job or professional path... You’ll have to cut back on your spending and be frugal... You’ll have to take a good hard look at your personal relationships and perhaps consider your own shortfalls and weaknesses in communicating your needs and concerns.

Plain and simple, you will have to do something uncomfortable.

Successful people don't waste time in denial (or complain or make excuses for that matter). They face situations like a warrior. They look for the warning signs, they find out why things aren’t working, and they go about fixing them- even when fixing requires problem solving, hard work, risk, and a level of uncertainty.

It’s okay to identify a problem even though you haven’t a clue about how to go about solving it right away.

The first step is just recognizing the issue, and then having faith that you’ll figure it out with careful attention to it. That’s how successful people live—in constant focus on goals, on results, on problem solving, and on the actions that get them to where they want to be.

Following are three things to do constantly in pursuit of your goals and dreams, however big or small:
  • Awareness: Keep your awareness on the feedback you are getting from life and decide to address the situations immediately. Don’t bottle up feedback, cast it aside, and avoid it like you would a pile of dirty laundry or a stack of unopened bills. Life tells you things every day. Do this. Don’t do that. Think about this. Try me. Forget that. We live in a world that seemingly encourages us to live on autopilot. Successful people fly manually every day and so should you. When those feedback signals come in, listen to them and use them in planning your next step.
  • Commitment: Commit to finding out why things aren’t working and learn what will fix them. Once you start the process it will be much easier to continue. Nothing fruitful stems from inaction.
  • Trust: Trust that making changes to the situation will ultimately bring about the best results. Sure you might go through a bit of discomfort during the change, and some unlikely or unwanted outcomes, but in the end you will triumph!
So are you ready to admit the things that just are not working out?

Make a list of the things in your life that are working against your success and ask how the situation can be improved. Commit to tackling just one of those issues and be brave!

If you need help organizing those “things” in your life, try using the following list of categories. I recommend reflecting on each of the 7 areas and ask yourself, what’s not working here in each one and then brainstorm 3 potential solutions.

1.) Financial Goals, 2) Career/Business Goals, 3.) Free Time/Family Time, 4.) Health/Appearance Goals, 5.) Relationship Goals, 6.) Personal Growth 7.) Making a Difference

Remember, by facing what is not working, you can only improve your life!

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/.