Gravity is the physical force that pulls two objects together and the power of this force depends on two things: the mass of the two objects and how close they are to each other.

Gravity has its effect on each of us. Physical gravity keeps us from floating off into space and keeps our atmosphere secured to the earth. Social gravity binds us to our friends, families, jobs, churches, and communities. Psychological gravity binds us to habits (good and bad), commitments, and areas of our lives where we “feel comfortable.”

Debt has its own type of gravity and the closer you are to it, the stronger its pull on your finances and your psyche. It’s just so hard to break away.

When a rocket launches, fully 80 to 90 percent of its fuel is used to overcome the force of gravity. When I was working to escape the gravity of high interest debt, the hardest part was getting started. Most of my cash, my time, and my self discipline was used to overcome the massive gravitational pull of debt.

In some ways, I’m still in orbit, floating around my little planet of debt – I still have a mortgage and I still have a small student loan. But I’m working on getting even farther away from both of those and every blast of my cash thrusters propels me farther from that gravitational pull.

The same will hold true for you. Most of your energy will be used in getting things underway, getting to that state of semi-weightlessness where you can relax and know the freedom that comes from escaping gravity. But most people quit just before they get to that stage. Things get too hard, the car needs a new transmission, the air conditioner goes out, the roof has to be replaced, or some other catastrophic event pops up  that costs more than the $1,000 that’s saved in their fledgling emergency fund.

Don’t give up! Your personal persistence will help you eventually overcome debt’s gravitational pull and before long, making financial decisions that don’t involve going into debt will become second nature and you’ll be one of the few who can focus their energies and efforts on your passion, your social network, or whatever motivates you. At that point, no one can pull you down.

Photo by nasa1fan/MSFC

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I’m not talking about the birthday money your grandfather gave you, or the allowance you got for taking out the trash or washing the dishes. I’m talking about money you earned from your own work and effort.

The first thing I remember buying with my own money was a metal detector when I was about 11 years old. It was a cheap little model that excelled at finding nails and other little metal objects in our yard, though it didn’t find the treasures I hoped. I can remember seeing an “incredible opportunity” in the back of one of my Superman comic books for people who were willing to sell Christmas cards and other greeting cards door to door. I was the little entrepreneur who sent off for the BIG catalogue and followed all the sales instructions. And yes, I got paid. Sometimes in cash, other times in prizes, but the company allowed you to determine which. MY first paycheck was that metal detector and it motivated me!

I can still remember the intense excitement when the UPS man drove up to our house. I knew what was in that log box and the only thing I needed at that point was 4 D-cell batteries.

The amount of commissions paid per sale wasn’t significant (as I recall it was about one dollar per box) but what it taught me was that labor meant profit and it put me in control of getting the things I wanted. I learned to ask questions of the little old ladies in the neighborhood such as, “Have you ever wished you didn’t have to go to the drugstore for a greeting card?” or “How much did you spend on Christmas cards last year? I can save you some money!”

I was a regular little salesman and I insisted on getting referrals. Looking back on it, my own social ignorance of how much of a pest I was had to have partially contributed to my success. Of course, those little old ladies were just happy that someone was visiting …

What’s the first thing you remember buying with YOUR own money? How did you earn it?

Leave your replies in the comments and yes, a jaded recollection of ancient history is allowed!

Photo by Hippycritical – thanks for the memories!

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You Need A Budget — yes you do, and to help spread the word about budgeting the YNAB way, I’m giving away one copy of their software to a randomly selected reader of The Wisdom Journal on February 1st, 2010. All you have to do to be entered in the drawing is leave a comment! Only one entry per person but you get two entries if you give me a topic you’d like to see discussed in the future.

If you just can’t wait until February to start using YNAB and you’re convinced (as I am) that it is the BEST budgeting software available, use coupon code WISDOM when you check out and you’ll receive a 10 percent discount.

Why am I so excited about YNAB? Perhaps it’s their 4 Rules of Budgeting that permeates their system:

1. Stop living paycheck to paycheck. You’ll be blown away by how their system eliminates paycheck-to-paycheck from your life. I’ve never seen anything quite like it.

2. Giver every dollar a job. This is what’s referred to as “zero based budgeting” and it turns the traditional budgeting method on it’s head — completely upside down. Zero based budgeting traditionally is time-consuming and exhaustive but NOT with YNAB.

3. Prepare for the rain. You know the day is coming when you’re going to need a lot of cash to cover an emergency, a semi-annual insurance premium, or new tires for the car, so YNAB helps you prepare for those events.

4. Roll with the punches. Even with the most sophisticated and thorough planning, you can overspend in a category, so YNAB spreads that overage across the next month’s budget where it can be absorbed more readily. YNAB designed their system with a buffer to help you cover accidental overspending.

YNAB isn’t fancied up for intense investing purposes, it isn’t designed to handle your overseas accounts in the Cayman Islands, or your multiple IRA’s. YNAB is designed to be the budgeting software that helps you follow the first basic tenant of sound personal finance: create and live by a budget. But YNAB took it a step further and created a planning system within their software that helps you stop living paycheck-to-paycheck. And since “living within a budget” is a fantasy in most households, I’m hoping that my enthusiastic endorsement of YNAB will help regular readers and others get out of the paycheck-to-paycheck cycle and begin living a better life.

Can you just imagine NOT living paycheck-to-paycheck?

Check out YNAB today and be sure to leave a comment if you’d like to be included in the drawing for a free copy of their software!

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Yeah, I know. It’s just gotten started … 2010 that is. Back in the 70’s when I was just a kid, I thought that by 2010, we would have a colony on the moon, be flying around in hovercraft, be easily curing cancer and would have eliminated world hunger and disease. We still have some obstacles to overcome in hitting those goals, but on a personal level, it’s never to early to begin designing 2010 to be the best year of our lives.

What do you think 2010 holds for you?

When you look back on this year in about 361 days, what do you want the highlights to be?

• Will this be the year you finally got your emergency fund in place?
• Will this be the year your budget became something real to you and your family and you put it to work for you?
• Will this be the year you quit chasing returns and begin investing with index funds, matching the market rather than trying to beat it?
• Will this be the year you finally begin spending less than you earn and begin making progress on a savings account?
• Will this be the year you decide to finish your degree?
• Will this be the year you actually lose that weight or start exercising?
• Will this be the year you make that ONE decision you know you need to make?

Or will you look back, like so many other years, and think, “Yeah, I really gotta work on that someday.”

That’s the essence of a “resolution” – finally deciding that someday is TODAY, that you’ve had enough of coulda-shoulda-woulda and you get motivated and get moving.

Movement, ANY movement toward your goals and resolutions is progress. And progress has a motivation all it’s own.

Close your eyes and imagine for a moment celebrating New Year’s Eve by marking that really special goal as DONE. Imagine the peace and joy of paying off that credit card, fitting into those jeans, running that marathon, finding that job, funding that Roth IRA, or having a Christmas without financial headaches and worry. For me, THAT’S really motivating!

So get started and make some sort of progress, creating your own highlights for 2010.

Photo by trudesign

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I’m amazed at the number of half constructed homes that have been abandoned by builders, developers, homeowners, even banks. I’ve seen entire subdivisions abandoned, concrete slabs exposed to the elements, plumbing pipes erupting from the ground, rotted framing, and deteriorating roads and driveways. At one point, this home was a bank’s asset, a builder’s goal, and a customer’s dream.

How is your financial house? I hope it doesn’t look like this one: half finished, abandoned, and overgrown with weeds – essentially abandoned. Admittedly, some parts of your financial house may be under construction, but are you still making progress or have you taken a “time out” that shows no sign of ending?

End your time out

What was your original motivation for getting your finances in order?

• Cut down by collection calls?
• Weary of the worry?
• Fearful of the future?
• Preoccupied by payments?
• Money monopolizing your mind?

If you’re going to get back on track, you’re going to have to relive those moments.

Avoid lifestyle inflation

It’s easy to fall off the wagon if you’ve hit a certain income level that allows you to more comfortably make those insipid payments, I know it was for me. When I had a little more breathing room, it was very easy to make those minimum payments and use the excess for lifestyle inflation.

But in essence, I was “broke at a different level.” On many occasions I’ve had to refocus my efforts to get rid of debt, save for the future, and make extra money. I had to do it by digging deep and remembering my WHY.

What about you? Are you sitting in a perpetual time out or have you been able to stay on track? Is your house half finished or are you still making real progress?

Photo by Dia-trib3

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In the current economy, and with the increased interest in frugality and thrift, we’ve heard time and time again about needs vs. wants. We’ve heard over and over to focus on our needs, not our wants, that “wants” are frivolous, they’re excessive, they’re going to put you in the poorhouse. Everyone asks, “What do I really need?”

Of all the forces around us, whether environmental, physical, emotional, or mental, perhaps the most powerful is the language we speak to ourselves. What we think and say to and about ourselves can have a far greater impact on our own success than just about anything. That’s why it becomes important to focus on what you really want rather than what you need and to change the way you think about needs and wants.

A “needs” focus will keep you from success

How? Needs are the language of obligation. I need, I must, I should, I have to …

• I “need” to pay the mortgage (so I don’t lose my home and die of exposure).
• I “must” keep THIS job (it’s unfulfilling, yes, but I’ll put up with anything to keep food on the table).
• I “have to” go to this meeting (even though I have much more pressing obligations).
• I “gotta” pay my credit card bill (despite not knowing where the money will come from).
• I “need” a job (so I’ll take anything, do anything, compromise my dreams, and live in constant desperation).
• I “need” to create a budget (so I just throw something together without thinking it through).
• I “really should” get my emergency fund in place (but I don’t know how I’ll fund it).
• I “need” to [fill in your own blank].

A “needs” focus doesn’t fulfill, doesn’t motivate, doesn’t help you develop self discipline, and doesn’t propel you toward anything resembling success. “Needing” to ace an interview is a sure way to botch it. No one wants to hire a needy interviewee.

A “wants” focus motivates and inspires

How? Wants are the language of intention. I will, I am, I’m going to, my goal is …

• You are required to pay your mortgage, but deeper down what you really want is to have no mortgage at all. Now, you have a goal, a dream to strive for. What’s your next step?
• Maybe what you really want is to follow your passion and start your own company so you can create the life that YOU want. What’s your next step?
• Your boss may force you attend that meeting, but what you really want is to finish your degree and become the boss. What’s your next step?
• Credit card payments can’t be ignored, but what you really want is to make extra money and get free from that burden of debt. What’s your next step?
• A budget is a great thing, but what you really want is the freedom that a budget gives you. What’s your next step?
• Yes, an emergency fund is also a great thing, but what you really want is the peace of mind it provides. What’s your next step?

It’s more than just semantics

It’s a change in focus, and change in attitude, and a change in your world-view. Focus on your goals, focus on your wants, abandon the language of obligation and begin speaking the language of intention. Don’t let yourself be defined by what you “need.” After all, what you truly need is a very, very small list. Instead become a person defined by clear goals and intentions and lift the burden of needs from your shoulders.

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photo credit: James Jordan

Forms of procrastination:

• Classic Procrastination – where someone delays getting started on a task
• Contract Procrastination – where someone doesn’t do what they’ve previously agreed to do
• Completion Procrastination – where someone just cannot seem to finish a task they’ve started
• Contra Procrastination – where someone doesn’t STOP doing something they should

The reasons we all procrastinate are many. And yes, we all procrastinate, don’t try to fool yourself.

Ninety percent of all people procrastinate at some point … the other ten percent are liars. — Author Unknown

1. Procrastinators may have poor time estimation skills and grossly underestimate the length of time required to complete a task.

2. Procrastinators may delay action because they’re really comfortable where they are at the time … literally or figuratively.

3. Procrastinators may have falsely convinced themselves that they work better under pressure when they really just crave the adrenaline rush of an approaching deadline.

4. Procrastinators may have convinced themselves that they will be more motivated tomorrow, or next week, or next month, and motivation is what they need to get started.

Procrastination is like a credit card: it’s a lot of fun until you get the bill. —Christopher Parker

5. Procrastinators commonly say, “I’m too tired right now,” failing to realize the rush of energy they’ll receive when they get going on a task and get it completed.

6. Procrastinators believe their “feelings” should determine whether they work on a task or not. “I don’t feel like it,” isn’t a valid reason.

7. Procrastinators may actually fear the responsibilities that come with success.

8. Procrastinators may alternately fear failure with it’s responsibilities and consequences. They put off a task so they don’t have to face that fear.

Procrastination is the bad habit of putting of until the day after tomorrow what should have been done the day before yesterday. – Napoleon Hill

9. Procrastinators may delay getting started or completing a task because they worry that they can never achieve perfection.

10. Procrastinators may take on too many projects at once and subsequently feel they are overwhelmed.

11. Procrastinators may have poor time management skills and not realize who quickly time can get away from them.

12. Procrastinators may just be lazy.

How soon “not now” becomes “never.” — Martin Luther

The reasons are many but the solutions are the same: break your task into small, easily achievable victories and get started right away. Reward yourself when you’ve completed a project and remind yourself constantly of the benefits you’ll receive when the task is 100 percent complete.

In delay, there lies no plenty. — Shakespeare, Twelfth Night, Act 2 Scene 3

So go ahead, get started on that project or task you’ve been putting off. You know you’ll feel great when it’s finished!

What steps or tips do YOU have to avoid procrastination?

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Once upon a time there was a frog named Fred who fell into a deep wagon rut. Though he tried and tried, he just couldn’t hop out. He hopped along the length of the rut but it seemed to go on forever. Then his friends showed up and though they coaxed and encouraged, he just couldn’t hop out of that rut.

Frank, one of his friends, asked him what he was going to do. “I guess I’ll just be stuck here forever. I just don’t feel very motivated anymore.” It seemed hopeless.

A few days later, Felicia saw Fred on a lily pad. “What happened, Fred?” she asked. “How’d you get out of that rut?”

“Well, after you guys left, a wagon came along and I HAD to get out!” explained Fred.

We’ve all been in a rut, stuck in an endless circle of circumstances that we couldn’t seem to shake off. Sometimes, those circumstances change on their own, but most of the time, we have to change them ourselves. Some people say a rut is simply a grave with the ends kicked out. If Fred hadn’t gotten out of his rut, that certainly would have been an accurate description!

How do I get out of a rut?

– Set short term goals. When I set a short term, easily achievable goal, I get to experience the rush of success that makes getting out of a rut seem possible.

– Reduce my fear of failure. When I’m afraid of failing, I seem to freeze up but it’s helpful to remember an old saying in Silicon Valley: “If you’re going to fail, fail fast, and fail cheap.” The quicker I recognize that things aren’t going well, the more money I save and the sooner I can get on to something that works.

– Hedge my bets. I hedge my bets by always having a plan B and sometimes a C and a D! I find that having a backup plan reduces a sense of hopelessness.

– MAKE momentum. Once I get one step under my belt, I’ve found it important to take TWO more steps, not just one. Two more steps moves me much further along.

~~~~ooooOOOOoooo~~~~

Of course, the first step to getting out of a rut is to recognize you’re in one. You may be stuck in a “busy-ness” rut, or a lack of studying rut, or a job rut. You may need to make extra money, repair a relationship with a spouse, or update your resume. To get out of these or any other rut, set some short term goals, fail fast and cheap, hedge your bets, and take two more steps and you’ll be back on the lily pad in no time.

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I was thrilled when Harper Collins contacted me to begin reviewing their new books but What Makes You Tick was a let down. The book DID make some good points and I’ll review them here.

To begin, the book’s authors, Michael Berland and Douglas Schoen, assert that there is no one way to achieve success, but that success is achieved by enhancing your innate skills. Don’t try change your personality (it never works anyway), but use your own personality to chart your own course.

The book asserts that many people confuse success with winning, and I think that’s a valid point. Though they can be sometimes intertwined, they aren’t necessarily the same. Success is more of an internal, emotional, and personal thing whereas winning is usually much more quantifiable. Winning can be part of success, but it is just functional to successful people and is simply something they do along their path to success.

The authors break down successful people into four primary categories:

• Natural Born Leaders – self confident from an early age, this personality type sees a big picture and naturally takes charge. They rarely get stuck on the details and have the innate ability to inspire others. They help other people succeed and fit well within large, complex organizations. They do things faster than the average person and are comfortable delegating. They usually put the company and its needs ahead of personal needs. Examples are Bud Selig of Major League Baseball, Brenda Barnes of Sara Lee Corporation, and Richard Parsons of Citigroup.
• Independence Seekers – wanting to constantly live life on their own terms, independence seekers do what they want when they want. They are very goal oriented and also exude self confidence much like the natural born leaders. Failure is never an option for them and they have a risk-taking, entrepreneurial spirit. They don’t take themselves too seriously and don’t have to be the best, just good enough to meet their definition of success. They thrive on high profile recognition and are more interested in personal success than in organizational success. Examples include Bobby Flay of the Food Network, Heidi Klum of Project Runway, and Sergio Zyman, formerly the Chief Marketing Officer of Coca-Cola.
• Visionaries – doing and seeing what others do not, visionaries have a strong desire for change and ask “Why not?” rather than “Why?” They look at issues from many angles and have a strong creative nature. They believe they were born for a mission and have a relentless drive, regardless of the setbacks that pop up.Less concerned with recognition than with personal fulfillment, visionaries generally prefer to do things themselves and surround themselves with true Kool-Aid drinkers true believers. Examples include Mark Burnett, executive producer of Survivor, Arte Moreno, owner of the Los Angeles Angels of Anaheim, and Brian France, CEO of NASCAR.
• Do-Gooders – motivated by their strong moral compass, these leaders are more than comfortable with criticism since they’re working toward a high ideal. They’re naturally optimistic and serious about their work. They are willing to sacrifice, both themselves and others, for what they see as the “greater good.” They also have a strong preference for like-minded people and strongly identify with their cause. Examples include Craig Newmark of Craigslist, Roger Barnett of Shaklee Corporation, and Gwendolyn Sykes, CFO  of Yale University.

All that information was in the first 14 pages, the next 257 pages are “interviews” that read more like a questionnaire answered by the different people that the authors put into one of their five categories. Wait. FIVE categories? I thought there were four! They slipped one in without any discussion of it and made the book a little confusing. The fifth category was Independents Who Follow Their Dreams and that section follows the same “interview” process.

The “interviews” begin with what feels like an introduction at a graduation ceremony, and follows with the interviewee writing about his or her ideas, history, failures, ideas, thoughts, and philosophies. In essence, the book was written by interviewees and edited by the authors.

The interviews are rambling, some are vaguely interesting, many are quite boring. Some are very short, some are far too long, and none really seemed to follow the premise of the book, namely finding out what makes someone “tick?”

Late in the book, the authors reveal their political leanings and it’s the same old, tired, Bush bashing rhetoric. Yes, they actually mention names and say that Bush was a bad, “independence seeker” who lost interest in the Iraq war and Obama is a great, natural born leader who’s election to the Senate was a natural progression in his quest for goal achievement (conveniently forgetting that the highly popular Republican he was running against was caught up in scandal late in the campaign). In reality, Obama fits the classic “do-gooder” profile, serious, idealistic, pursuing what he believes is the greater good over the interests of the organization as a whole, and a management style based on personal contact and connections. Then I read that the authors were Democratic strategists and it all began to make sense. “Natural born leader” is much more flattering. When you look at who all they “interviewed”,” it really shows through. At some point, all this political nonsense needs to end.

Buy or Don’t Buy?

Don’t buy. Period. This wasn’t a particularly inspirational or motivating book and held no information that isn’t readily available on this blog or any one of a number of others.

Hopefully, my first review of a Harper Collins book won’t preclude me from an invitation to review others,. Even though the first 14 pages and the last 6 pages were well written and somewhat informative,  this book struggled to reach the level of “mediocre at best” in my opinion.

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Back when I was a little kid, my aunt and uncle had a chicken farm with two very large chicken houses. On one or two Sundays each month, my parents would take my brother and me to spend time with our relatives where we learned to talk with a very country accent and learned to appreciate air conditioning. In all seriousness, we loved going to visit my great-grandparents, aunts and uncles and other relatives and it’s odd how so many of the little things I learned have stuck with me. Sayings like:

Boy, no one can get your goat unless you tell them where you tie it. –my great-grandfather, Otis Hancock

He was referring to our tendency to get irritated and then be vocal about it!

Have you ever heard the phrase “running around like a chicken with its head cut off?” Once, when I visited my Aunt Hazel and Uncle Spencer’s home, my Aunt went outside to “harvest” a chicken for our Sunday evening meal. Now, nothing tastes as good as Aunt Hazel’s fresh fried chicken, and no chicken was as fresh as hers. On this occasion, she tied the bird to some wire on the fence just outside the kitchen door and proceeded to cut it’s head off and allow the blood to drain (if this is disgusting, remember that we’re far too removed from the realities of where our food comes from). All the other times I had witnessed this event, the bird went through a brief spasm and expired there on the fence, but this time, the wire wasn’t tight enough and, though HEADLESS, the bird escaped the bonds of it’s ankle wires and began running all over the yard with Aunt Hazel and all the grandkids and nephews chasing it. It was pure pandemonium.

After about 40 seconds, the poor bird ran into the road and was hit by a pickup truck. Talk about having a bad day!

When you have too many goals, you’re a lot like that crazy chicken — running all over the place, people chasing you, out of your mind, and probably about to be hit with something big that will stop you in your tracks.

If this describes you, take these steps so you don’t end up as someone’s dinner:

• Slow down and breath.
• Think.
• Choose one clearly articulated goal at a time and focus like a laser on it.
• Bring that one thing to completion (completed tasks rarely come back to bite you).
• Repeat as necessary.

You don’t have to live a crazy life if you take some time to slow down, take a deep breath and work on one thing at a time. After all, you can’t do more than one thing at a time, at least you can’t do more than one thing at a time really well.

One well defined, measurable goal can motivate you to action more than multiple goals with various deadlines and will generate a feeling that hitting your goal is imperative, not merely desirable.

photo credit: hildgrim

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