These books all tell you the same thing. Oh, they may have a different twist or two; something you’ve never thought about or they may use a new word they’ve made up and copyrighted. But one thing’s for certain, the principles of financial success haven’t changed much in thousands of years.

That doesn’t necessarily bode well for the financial gurus selling those books! But we can’t deny the fact that “there is nothing new under the sun” especially where it concerns personal finance. The main difference in each of these personal finance books is the approach each one takes and the motivations they provide. That is literally the biggest difference in virtually any generic personal finance book you read – the approach and the method of motivation.

The principles of financial success

• Spend less than you earn
• Learn to earn more
• Pay off high interest debt
• Build an emergency fund
• Max out your retirement savings
• Reduce your taxes legally
• Invest your money sensibly
• Live wisely

Spend less than you earn

This principle is listed in virtually EVERY personal finance book and the reason? It’s the basic foundation of financial success. Compare how much you make to how much you spend and hopefully there’s a gap. If there isn’t, you’ll have to either increase your income or decrease your spending … or both.

Learn to earn more

It’s hard to get ahead by just spending less. You’ll need to earn more money eventually and there are dozens of ways to earn more money if you’re willing to give it a try. And new ways to make money pop up all the time.

How’s this for a way to make extra money? My daughter has a friend who rented a meeting room at a local hotel, brought in a DJ, and then charged his friends $15 each to come to the party. Over 260 people showed up. The DJ cost $300 and the room was $150. You do the math, but to my way of thinking, this is a smart young man who sees a need, fills it, and profits.

Pay off high interest debt

The Internet is full of fantastic examples of people who paid massive amounts of debt in relatively short periods of time. It all depends on your personal motivation level and your willingness to use self-discipline. I personally paid off more than $120,000 in debt in just 52 months (a little over 4 years). My wife and I were INTENSE fanatics about getting that debt paid! How intense are you?

Build an emergency fund

Again, look to the Internet. Like me, tons of other writers have extolled the virtues and the peace of mind that grows when you have a safety cushion called Emergency Fund. How much you keep in it is up to you, but I personally recommend no less than 6 month’s living expenses. Notice I said living expenses – food, shelter, transportation, insurance – and that’s it. No private school, no dining out, no new clothes, no gifts, nothing but what is absolutely necessary to keep you afloat. You’d be surprised at how little you can live on when you HAVE to.

 Max out your retirement savings

Once you’ve gotten your debt paid off and have a cushiony safety net, the next step is to max out your retirement savings. If you meet the qualifications (most people do), head over to Scottrade or better yet, optionsXpress (it’s cheaper) and set up a Roth IRA. You don’t get any tax savings now with a Roth, but your earnings are tax free once you reach 59 1/2 years old.

Reduce your taxes legally

Have you ever read about those incredibly rich people at the turn of the century? People like John Rockefeller, J.P. Morgan, Andrew Carnegie, and the Vanderbilts had an advantage you and I don’t have – there wasn’t an income tax back then and even when it DID become enacted in 1913, only those with incomes over $450,000 (inflation adjusted) had to pay … one percent. The highest rate was 6 percent on incomes over $11 million plus!

Why bring this up? The more you can reduce your taxes (legally), the more money you get to keep. Make sure you watch out for audit triggers and report ALL your income.

This year use Turbo Tax – the #1, best selling tax software!

Make sure you don’t overlook any deductions (especially sales tax deductions) and look out for the top 57 Avoidable Tax Mistakes!

Invest your money sensibly

The best way I’ve found to invest is to regularly put cash into a savings account, then when you have $1,500 to $2,500 saved up, move it to your online brokerage account and invest it (read How a Second Grader Beats Wall Street). How does a second grader beat the Wall Street moguls – by investing in broad based exchange traded funds that put money in stocks, bonds, and even commodities based on your own tolerance for risk and volatility.

Of course, if you’re uncomfortable making your own investment decisions, make sure to use WiserAdviser to find a financial advisor. WiserAdvisor has hundreds of advisors in their network and YOU get to pick which one matches your needs best. There’s no cost to use the search system, no obligation if you do, is confidential, and since WiserAdvisor WiserAdvisor isn’t a financial services company and doesn’t offer any financial advice, there’s no conflict of interest.

Click HERE to find a financial advisor ideally suited to your needs and preferences. Its FREE!

Live wisely

Living wisely means living frugally – but not living like a miser. While it’s true that you don’t “save yourself to wealth”, it makes no sense to wantonly waste money on things you don’t need or on things that won’t hold their value or will break shortly after purchase.

Living wisely means using banks like PerkStreet for the debit card rewards, writing a will for your heirs, living your life on a budget, and maintaining the proper amount of life insurance, car insurance, and homeowners insurance. It means maintaining your credit report and understanding your credit score and what impacts it.

Living wisely means managing your money in a way that allows you to bless others, and take care of yourself and your family.

Principles are timeless

Principles never change. If you want to avoid reading all the books in the picture above, just remember to:

• Spend less than you earn
• Figure ways to earn more
• Pay off your high interest debt
• Build an emergency fund with 3-6 months of living expenses at a minimum
• Contribute as much as possible to your retirement savings
• Reduce your taxes legally
• Invest your money sensibly, either on your own or with an advisor
• Live wisely and frugally

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Did you use a credit card this past Christmas? You are not alone. On average, people spend almost $1,000 on Christmas while carrying credit card debt of $9,000 to $12,000! So chances are better than even that most, if not all, of that $1,000 was on credit. What about you? Did you go deeper into debt this past Christmas?

How to beat your Christmas debt

First of all, don’t beat yourself up. Wanting to spend money to buy presents for family or friends isn’t a character flaw. Let’s look at a few ways to beat your Christmas debt and make plans to insure that next year’s Christmas is debt free.

1. Sell some excess stuff

Opportunities are all over the place from Craigslist to eBay to auction sites galore. Don’t neglect your local newspaper though … ours allows you to list any item free if its prices is less than $100.

2. Make some extra money

I’ve written several articles about making extra money:

• 26 Ways To Make Extra Money And Keep Your Day Job
• New Ways to Earn Extra Money
• 10 Businesses You Can Start for Peanuts (or less!)
• Need Extra Cash? There Are Only 4 Ways to Get It
• Mining the Miners: A Different Way to Make Money

So long as you use the extra cash you make to pay down your Christmas debt, you’ll be able to beat it. The problem is always that we want to spend what we see as “excess” cash.

Don’t.

As soon as you receive any extra money, use it as soon as possible to pay down your debt.

3. Move your credit card debt to a zero interest card

The best option here is The Discover More Card because of their “long duration balance transfer” — zero interest for up to 18 months! You can make a lot of progress on credit card debt when there’s no interest involved.

4. LOWER your interest with a peer-to-peer lending company

Your two options are:

• Prosper
• Lending Club

Both offer rates better than your average credit card and both have moved from mere curiosities to lending powerhouses. Lending Club will loan over $250 million in 2012 and Prosper will lend $70 million. Both claim that the vast majority of their borrowers use the money to pay down their credit card debt. You really aren’t alone!

Rates for borrowers are LOWER than you can believe! Check out Prosper HERE!

5. Take on an extra job

Kind of a yucky option, but it’s one you may have to consider if you want to beat that Christmas debt.

6. Move your checking account to PerkStreet

PerkStreet is a checking account that pays you debit card rewards similar to credit card rewards. Paying you up to 2% on all your non-pin debit card purchases can mean an additional $600 or more to you for next Christmas. For a huge number of PerkStreet customers, Christmas of 2011 didn’t mean debt because they used their debit card rewards to pay for it.

Move YOUR checking account to PerkStreet and make certain that Christmas 2012 is debt free … paid for by debit card rewards from your PerkStreet checking account.

7. Save a tiny amount from each paycheck in an online savings account

I use two main banks for my online savings:

• Ally Bank
• ING Direct

No matter how small the amount, saving just a little from each paycheck for next Christmas will mean less stress in a few short months. It’s like a gift you give yourself. Set it up to be automatic and you’ll never miss that cash.

Make the right choices now

By taking a few minutes to make some changes now, next year your Christmas can be a lot more enjoyable … and it can be completely debt free.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

A while back I wrote an article entitled 26 Ways to Make Extra Money While Keeping Your Day Job. It quickly zoomed to the top of the search engines and I’ve gotten a TON of positive feedback from that post. It seems that people around the world are clamoring for ways to make more money to better their lives and the lives of their families. But there are far more ways to make additional cash than the 26 I listed. In reality, the freedoms we enjoy make the options for making extra money limited only by your willingness and creativity.

When I wrote the original 26 Ways to Make Extra Money, most of the options I listed involved generally involved YOU doing the work alone and in a single task, and though there are still a few of those options listed here, I wanted my new list of money making ideas to focus more on ways to multiply your efforts. Let’s face it: you’re extremely limited when you have to do all the work yourself – there’s only one you! If you can find a way to make extra money that doesn’t involve your own efforts, or multiply your actions by involving more than one task at a time, or work once but get paid again and again, you’ll be freed up to make even more money.

Here are some additional ways to make extra cash that I didn’t list in the original 26 Ways to Make Extra Money:

1. Don’t change a thing

That’s pretty easy, huh? But it isn’t entirely true – you’ll need to make a few minor changes such as:

• Changing your primary checking account to PerkStreet, spending like normal, and getting cash back on your non-pin debit card purchases. Open an account by clicking here and getting the details. You don’t even have to close your account at your old bank!
• Transferring your high interest credit card balance to a Discover More card and using the interest savings to pay down your debt. The last time I checked, they were offering an 18 month ZERO percent balance transfer.
• Quit thinking you can outsmart the investment markets and start using a fee based financial advisor to help you avoid buying high and selling low. You can easily find a financial advisor matched perfectly to your needs and preferences by going to WiserAdvisor (in business over a decade).

By making a few very minor (and easy) lifestyle changes, you’ll free up extra cash on a continual, repetitive basis (read How to Switch Banks in Six Easy Steps).

2. Blogging

Yes, blogging can make some serious cash IF you’re serious about it. It really doesn’t matter what you blog about, if there’s an opportunity to make some advertising revenue from it and you’re halfway decent at writing and web publishing, you can probably make more money that you think. You’ll need a computer, an Internet connection, and a web host (such as HostGator) … and a lot of hours and creativity. But the good thing is that over the course of several years, you can work once, and be paid again and again.

3. Teach others

People love courses that help them expand their horizons. The Food Network makes cooking look easy. It isn’t. But if you’re adept at putting together a great recipe, find a venue in your city that will allow you to teach others to cook and you can make some serious extra money. This might be a kitchen showroom for a building materials supplier or a friend with a large home (and kitchen). By drawing in multiple students, you’ll multiply your efforts. It’s just as easy to teach one student how to make a killer chicken pot pie as it is to teach 8 students. And you make 8 times the money.

The Food Network isn’t the only television show that makes the complex look super easy, HGTV is quite the culprit as well. Building a deck, building a garage, even building a home, is a process and if you’ve been successful at any of these ventures before, you can probably teach others how to do it themselves and they will pay you for it! The venue doesn’t have to be complicated – just a classroom at the YMCA or the local library – and with a field trip or two to show your students what you’re talking about, you’ll establish yourself as an expert AND make some good extra money.

I once took a class like this on building my own home. I was one of thirty people who paid $500 for a 4 week course. You do the math.

4. Nighttime babysitter

Could anything be sweeter than making extra money while you sleep? I know someone back in my home state who “babysits” for parents who work the third shift at a factory (third shift is 11pm to 7am). Yes, she has all the necessary insurance, business licenses, and credentials. Parents drop off their pajama clad kids at 9:00pm, and shortly thereafter, they go to bed. The parents return around 7:30 the next morning to find their children rested, fed, and ready for day-care or school. Since she keeps 7 kids, she makes 7 times the income as keeping one – while she sleeps. Yes, the kids sometimes have bad dreams or wake up in the night, but generally it works out very, very well.

5. Get creative

The possibilities are truly endless. My oldest daughter is quite good at drawing and painting. She buys very inexpensive canvas shoes and paints them in college football team colors. People love them. And they’re very willing to pay for these custom creations.

But you don’t have to be creative in just a graphical way. You could write and sell eBooks on the Internet, or write songs, or create online courses on training your dog. The possibilities are only limited by you!

If you ask me to name the proudest distinction of Americans, I would choose- because it contains all the others- the fact that they were the people who created the phrase “to make money”. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity- to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. –Ayn Rand

Making extra money isn’t impossible. It’s all up to you, but that’s a good thing. No one cares as much as you!

This article was included in the latest edition of the Carnival of Personal Finance hosted at Financial Success for Young Adults.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Almost a year ago, Gorday Murray, a former bond salesman for Goldman Sachs, passed away from complications resulting from brain cancer. Before he died, he was able to write down his thoughts and ideas on his top five investment guidelines. They crystallize his decades of experience on Wall Street and will be applicable for decades to come:

Five investment guidelines

These ideas were first published in an article in The New York Times and then in a book that Murray penned with co-author Daniel Goldie called The Investment Answer.

1. Use ONLY fee-only financial advisors

This is the primary reason I highly recommend WiserAdvisor. This site helps you search for and FIND a financial advisor that is ideally suited to your needs AT NO COST TO YOU. Plus they offer:

• Objectivity – no hidden agenda or conflicts of interest
• Quality – only the best advisors are part of WiserAdvisor
• Accuracy – advisors are matched to you based on your needs AND preferences
• Simplicity – the search can take as little as five minutes
• Confidentiality – your information is provided ONLY to the advisors you choose

Remember – it doesn’t cost you a dime! Click HERE to get started with WiserAdvisor today.

2. Divide your assets into three groups:

• Stocks and bonds
• Large and small companies
• Value and growth

3. Once you’ve picked out your advisor, discuss your asset allocation

You’ll need to allocate your assets between varying asset classes: foreign and domestic, equity and debt instruments, real estate and commodities.

4. Decide if you want to be an active or more of a passive investor

Passive investors do better. Read my review of How a Second Grader Beats Wall Street for more details along those lines. In the book, author Alan Roth details with number after number where investors who constantly tinker with their portfolio get it wrong and do FAR WORSE than the market.

5. Rebalance often

Regularly review your investments and do the unthinkable: shave the profits from your winners and buy more of your losers. This is where you absolutely NEED the unemotional advice and counsel of a financial advisor. Rebalancing forces you to do what the most successful investors do: Buy Low and Sell High!

Great financial advice is timeless

After spending his life pushing bonds on mutual fund managers, Murray eventually went to work for Dimensional Fund Advisors, a mutual fund company that speaks out against actively managed investments in favor of passively managed portfolios.

Gordon Murray and Daniel Goldie thankfully were able to finish the book before Murray passed away in January of 2011.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Building a dividend portfolio is like being a landlord without the hassle. Considering that investing in real estate and investing in dividend stocks both have income potential and capital appreciation potential, they are similar. The good thing about creating a dividend portfolio is that you won’t be awakened at 3AM Christmas morning by a tenant with a leaky toilet.

Building a passive dividend portfolio

Let’s first get one thing out of the way, few investments are truly passive. Even a dividend portfolio has to be rebalanced, reviewed, and re-evaluated on a regular basis to insure top performance. More on that later.

1. The first step in building a passive dividend portfolio is the most obvious but it’s the most neglected: you have to set up a brokerage account. Without one, reading this article is only a mental exercise and ACTION is what is needed. So, set up your brokerage account at:

• Scottrade
• TradeKing
• optionshouse
• Zecco
• E*trade
• optionsXpress (now owned by Charles Schwab)

None of these online brokerages requires more than $1,000 to set up your account and a few require no money up front! What are you waiting for?

2. Your second step is to purchase quality dividend stocks. Make sure:

• The stocks are from different types of business’ or sectors. You might purchase shares of an energy company, a financial company, a technology company, a retail company, and/or a manufacturing company. Having shares of different types of companies insures that your risk is spread out.
• These companies must have increased their dividends for the past several years. Increasing dividends is the key. Not level – increasing.
• These companies are mature, dependable, and financially able to maintain their dividend payouts. The more history a company has the better.

Where do you find these stocks? Use a stock screener (read Use An Automatic Filter to Screen Your Investments) or hang out and read great sites like The Dividend Guy Blog or Dividend Growth Investor.

3. Put your saving and investing on auto-pilot. To build a large, strong passive portfolio, it will be important to put as much cash into it as you can and by setting things on auto-pilot, you’ll do just that. You don’t want to ever force yourself to choose between spending and investing so make it as automatic as possible. One commonly overlooked source of investing income is the checking account rewards program at PerkStreet.

As your income increases over time or as cash is freed up from paying down your debt (read Should You Invest While You’re In Debt), increase the amount you consistently put into your savings account.

4. Reinvest all your dividends. Don’t even think about spending them. Set up all of your share purchases to automatically reinvest those dividends, putting the magical effect of compounding to work for you.

5. Every time your savings reaches $1,000 buy more shares. Regularly set aside cash into your savings account and then transfer it to your brokerage account. Many accounts can be set up to automatically transfer a certain amount when your balance reaches a pre-determined level. Use this automatic feature to make certain your investable balance grows and grows.

Are you uncomfortable making investment decisions alone?
Let WiserAdvisor match you with a screened, highly qualified, fee-only financial advisor. Click HERE for details.

6. Review your portfolio of investments every two to four months. Share prices can swing wildly so don’t check too often if you can’t handle the emotional roller-coaster, check your portfolio every four months instead of two. It’s hard not to check on your shares I’ll readily admit, but it’s critical that you not get in and out of stock positions over and over. Even using a discount broker, if you churn your own portfolio enough, you’ll lose your shirt in commissions.

What should you check for?

• That the company is doing well financially (more on that in a future posting)
• That the company’s sales are steadily increasing
• That the company’s executive management team is behaving well (Google them all)
• That the dividend outlook is favorable

What should you do if the company appears shaky? First double check everything. You don’t want to allow yourself to make an emotional decision based on incorrect information. Then evaluate if the conditions causing you concern are temporary or permanent, if the company has made some expenditures that will benefit you in the future, or if the company is in for a long period of decline and your dividend payments and capital appreciation could suffer as a result.

Increase your investments as your income increases

As your income increases from raises or bonuses at work, invest at least 50% of the after-tax increase. It isn’t easy. I know, but it’s critical to building your portfolio into a money-producing machine that will support you long term.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.