A Life Philosophy

Successful people have a positive outlook on life and believe in their country. They are happy that they live in the United State. They believe that this is a great country to live in, where you can start anywhere and end up where you want to go. The positive outlook helps people make it through good and bad times.

Live Within Your Means

This is the hardest of the 12 for most people. Financially successful people understand that if you make a dollar, you cannot spend a dollar-fifty, at least not for long. If you make twenty-five thousand, can you live on twenty-three thousand? If you make fifty thousand, can you live on forty-five thousand? If you make one hundred fifty thousand, can you live on seventy-five thousand? The answer is yes! I have met people who were broke that had substantial incomes. The reason they were broke was that they were spending beyond their means. I have met rich folks that have never received large salaries. The difference between the two was what each did with their earnings.

Buy or Invest in Things that Have the Potential to Rise in Value

One of the greatest sources of wealth in the United States is home equity. Successful people rarely rent their home, they buy their home, often through a mortgage. Although we have experienced severe declines over the recent years, in normal circumstances, over the long haul, property values increase and add to your balance sheet.

Successful people invest through employer-sponsored plans or choose IRAs, mutual funds, ground, rental properties, real estate, businesses, limited partnerships, stocks, bonds, gold, silver, collectibles, savings accounts, and CDs. These types of assets have the potential to go up in value. Contrarily, consumable goods, such as clothing, electronics, household goods, while fun to buy, will normally be worth less or completely worthless in a few years.

Successful people have their money working for them. They understand that money can work twenty-four hours a day, seven days a week. Essentially, your money can work harder than you! 

Remember that investing in things that have the potential to go up in value can involve certain risk levels.

Systematic Savings Plans

It is easier to live within your means if your money is gone before you can spend it! I hide my money from myself. I know that if it is at my fingertips (my checking account) it will very possibly be spent. I have found that successful people put money into things that help avoid this problem. Automatic savings deductions for IRA's, company stock plans, or systematically buying savings bonds are examples of systematic savings plans.

Needs Versus Wants

I need food, clothing, and shelter, but I want a new car! The questions are, "Do I need a new car?" "Do I need that boat, four-wheeler, timeshare, hunting camp, RV, or motorcycle?" I have met people so busy working to pay for their toys, they have no time to enjoy them! They fell prey to the temptations of our society and soon found themselves immersed in debt. The cycle is even worse when these items are bought using loans. The payments with principal and interest can be overwhelming. Often folks find themselves working only to make payments and cover living expenses with little, if anything, left at the end of the month.

Compound Interest

There is an old saying, “The rich man earns interest while the poor man pays interest.” The reality, in our society, is that most of us have some debts, but successful people try to eliminate unnecessary or frivolous debts. They may have a home mortgage, but they have no credit card balances. They might have to take out a student loan, but they pay off their loans quickly once they have a job. The understanding of compound interest motivates them to save and invest. The Rule of Seventy-Two states that if you take an interest rate and divide it into seventy-two it will equal the number of years it takes money to double. For example... If you average ten percent on your investment, ten goes into seventy-two seven point two times. This means that an investment will double in seven point two years. This concept can work for you and also against you. A loan balance works the same way. A credit card charging 18% on a $10,000 balance costs $1800 a year or $150 a month. This is a horrible use of anyone's resources and should be eliminated as soon as possible. My website offers several calculators that are fun and easy to use.

(The Rule of 72 is an approximation and is based on compounding a fixed rate of return over a long period of time. However, most investments generate fluctuating returns so the period of time in which an investment can double, cannot be determined with certainty. This is a hypothetical example and is not intended to represent a real investment. Both the principal and returns of investments vary over time. Seeking higher rates of return involves greater risk.)

Frank goes into detail explaining the Rule of 72. To watch this video click "Watch Video" below.

Find a Good Life Partner

Divorce is expensive. If you keep dividing your assets in half, it takes longer to create wealth. Be selective on who you decide to spend your life with, but, once you have made the decision, strive to be the best spouse you can. Do not neglect your family on your success journey. Many successful people regret not spending more time with their children while they were growing up. Plan activities and vacations; be involved in your family’s life.

Taxation

Successful people have more than a basic understanding of the tax system. Our government uses the tax system to encourage and discourage certain actions. The successful take advantage of the incentives that are offered and use them to their advantage. For instance, understanding and utilizing deductions for college expenses & traditional IRAs & enrolling in their 401k.  Once successful people have placed their money in tax-advantaged vehicles, they rarely withdraw the money until the tax system allows them to do so penalty-free!

The Law of Sowing and Reaping

The farmer knows that if he works hard planting the field and then waits patiently that the harvest will come. Successful people have learned from the farmer. They understand that success takes time and hard work.

You study so that you can get good grades that allow you to enter a good career, college, or training program. You spend time in that program so that you can get a better job. These actions, hopefully, put you in a position that allows you to earn more money. These habits begin when you are a child. Hard work and patience is the key. A financially successful man told me once that he became successful by working half days; his average workday was twelve hours. I am not encouraging you to become a workaholic, but sometimes it takes more than eight hours a day of effort to get to where you want to be.

Money Does Not Make You Happy

Money certainly does make it easier to be happy and I believe that everyone should strive toward their full potential.  I have always stressed that you should... Live for today while planning for the future and that life is a journey, not a destination... Enjoy the ride! Unhappy people think that when their bank account reaches a certain amount or if they could only own certain things they will be happy.  Remember that the only thing in life that you have absolute control over is your attitude.  Be Happy!

Invest in Yourself, Your Family, Your Faith, and Your Community

Investing in yourself is as simple as reading an educational book or taking a training class versus watching a movie. I am not saying that successful people do not watch movies, but they do practice balance. They interact with others; they learn from others. They are active in their church or something greater than themselves, and they participate in community activities. You cannot succeed by yourself. If you end up with a million dollars but ruin your marriage, or have no friends, are you successful? Successful people sow and reap in all aspects of their lives.