I Challenge You to be Awesome in 2016

Hidden GemPhoto: Josiah William Gordon

2015 comes to  a close and it is the first day to 2016. A new year always brings excitement and fear all at once.

I’m excited because a new year makes you think of new beginnings and letting go of the past. We start setting goals about getting stronger and eating healthier, and we all feel like we can get a jump start on the new year.

One thing is that only about 8% of people are successful in achieving their New Year’s Resolution. I feel that one of the reasons is that people who look to goal setting are really setting long term tasks to finish other than actually setting long term goals. What’s the difference between a long term task and a long term goal?

A long term task is something that you can give a breath of relief when it’s done. An example is paying off your credit card debt. Tasks are not motivating to your soul, and you don’t find any joy in the journey. You will ultimately find relief from completing the project.

A long term goal on another hand is something that you will always strive to achieve, and in the process it will give you joy while on the road to attaining it. For instance, instead of paying off your debt, the ultimate goal is to be financially free, or not having to worry about money in retirement. Goals are activities where it causes you to continually grow.

Margee Kerr Ph.D. wrote an article on Psychology today on “Forget New Year’s Resolutions” says that saying that you might want to focus on why you were awesome and what you feared in 2015 to jump start 2015.

Here is a list of questions from her article. I challenge you to be awesome this year.

Margee Kerr

Merry Christmas

Merry Christmas

From my family to yours. Merry Christmas, and have a great day with your family.

Goal Setting 2016 – Part 3 Brain Storming Goals

SulepPhoto: Sherwin Ulep

In this series we’ve covered how to set goals and why you should set them. Where do you go from here? How do you know what goals to set? How do you even know what you even want?

This is where we get to pretend we’re in Disney’s movie Aladdin, and we get to have Genie as our own personal scoffer. You’ve just gotten out of the Cave of Wonders, and Carpet lands in the desert. You get a minute to look around, and you glance over at at Genie, you get your thoughts together, and you tell Genie, “You know, I kind of know what I want, but I’m embarrassed to tell you what I really want. I’m afraid of what other people will think of me.”

Genie tells you, “Well kiddo, Do you want the best things in your life? You better let me know what you really want because that’s the only thing holding you back. What I want you to do is to write down all of the things you want and all of the things you want to do for the rest of your life. It doesn’t matter what other people think because it’s your life, and it’s up to you to live it the way you wan to. I only have one rule. You have to write out all the things you might want in your life 3 minutes or less.”

He sets a timer and you start writing anything that comes to mind. As you begin to write Genie keeps telling you “Not enough, Still not enough! Think bigger!” Keep going until your time limit is up. (if this reference doesn’t make sense to you, go watch it on Netflix.)

Now go do it. Really, set a timer for 3 minutes and write down as many things as you want in life, the goals you want to achieve, the places you want to go, and even the things you wan to eat. After time is up you may have a long list or a small list. It doesn’t matter how long your list is, just as long as you have things on there that will excite you to get up out of bed to achieve. You won’t have to achieve everything the list and that’s alright. The exercise is for you to get out of your own way, and to let go of all of the thoughts that have been holding you back in your life.

A few of my goals

  • Have a positive net worth by December 2016
  • Find a blog / business mentor
  • Set 1-2 hour a night to creatively write and read between 7:30 PM and 9:30 PM
  • Go to Crossfit Monday, Wednesday, and Friday.
  • Become more educated on stocks by reading at least 1 new book a month
  • Have over $100,000 in investments and cash in 5 years. (Crazy at this point in time because i’m about $40,000 debt)

The goals follow the SMART criteria. Just as quick recap they are

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-Bound

I’ll go over breaking down your goals into specific categories and how to take action in the next post. See you then.

Part 1 SMART Goal Setting
Part 2 Why You Should Set Goals

Goal Setting 2016 – Part 2 Why You Should Set Goals

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Photo: jonahkalaikai

Goal setting gives you an idea of what you want to achieve in the future (as long as it aligns with your values, which is a whole different topic all together). It also allows you to create smaller goals to make sure that you’re on track to your overall goal. You want to see progress along the way. If you’re unable to see progress, you will no longer be motivated and stop reaching for your goal.

Mindtools.com says that “By setting sharp, clearly defined goals, you can measure and take pride in the achievement of those goals, and you’ll see forward progress in what might previously have seemed a long pointless grind. You will also raise your self-confidence Add to My Personal Learning Plan, as you recognize your own ability and competence in achieving the goals that you’ve set.”

A Caveat

You don’t want to have too many goals because you’ll run yourself ragged. There is only so much that your mind will able to handle. Essentially, starting a new goal is like starting a new habit. There has been research that says that your self control is an exhaustible resource and you will get tired from overexerting yourself mentally.

In the book Switch: How to Change Things When Change Is Hard by Dan Heath and Chip Heath, it says that “the bigger change you’re suggesting, the more it will sap people’s self control. And when people exhaust their self-control, what they’re exhausting are the mental muscles needed to think creatively, to focus, to inhibit their impulses, and to persist in the face of frustration or failure. In other words, they’re exhausting precisely the mental muscles needed to make a big change.”

 

 

Part 1: SMART Goal Setting

Goal Setting 2016 – Part 1 SMART Goal Setting

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Photo by Kapua

American philanthropist Elbert Hubbard realized that many people failed in their endeavors. They failed not because they lacked intelligence or courage, but because they did not organized their energies around a goal.

Goal setting can be complicated if you don’t know what you’re looking for in your life. One of the top reasons why people are unable to achieve their goals are listed at lifehack.org on the  “Top 10 Reasons Why People Don’t Reach Their Goals“, by Robert Chen, is creating vague goals.

A person doesn’t know what to achieve, if he doesn’t know what he is trying to achieve. This might be common sense at first, but try to think of a time when you wanted to become more fit. What exactly does that look like? What does the being fit mean to you? It rises it so many questions that you don’t know what you’re trying to achieve. Being fit is like saying I want to save more money in the future. What are the actions you can take now to save more money? Exactly how much do you want to save?

In my research of habits and goal setting, one of the easier acronyms to keep your goals actionable is using the SMART goal setting technique. I use this technique to make sure  that my goals don’t leave me in a direction where I cannot achieve them or have a gray area of what I’m looking to do.

SMART stands for

  • Specific: Pick a specific area for improvement.
  • Measurable: quantify, or at least suggest, an indicator of progress.
  • Attainable: Is the goal something that you can achieve?
  • Relevant: Is the goal going to fulfill you as an individual
  • Time Bound: When will you complete the goal?

Next post will be examples of what I will be planning for 2016. See you soon.

Key to wealth: Tracking Your Expenses

HighOnHI

photo by: HighOnHawaii

Can you tell me what your income is? Not your annual gross income, but your net income. Do you know about how much you spend on non-essential expenses?

A Gallup poll from June 2013 says that 32% or one out of three people “prepare a detailed written or computerized household budget each month that tracks income and expenditures.”

If you’re the one out of the three good for you. If you’re, not listen up.

Where is it all Going?

A poll from SunTrust Bank  noted that almost a third of Americans making over $75,000 a year are living paycheck to paycheck. 44% of the people polled, blamed their situation on lifestyle purchases such as dining and entertainment. Tracking your monthly expense allows you to know where you are spending on lifestyle purchases.

Write It Down

If you’re not making it a habit of tracking expenses, you’re making it a habit not to.

Start at the beginning of the month and keep an account on excel or in a notebook so that you can make sure that you log anything that you buy for that day. This is so that you can keep a running total of what is going on in your financial life. When you get paid make sure that you add on to that list too. As the month goes on, make a financial health check and see how well your doing. You might find out that you’re spending too much during that part of the month, and you’ll be able to make the necessary adjustments.

Build a Lifestyle

It doesn’t matter how much or how little you make, the reason why you’re living paycheck to paycheck is the same reason. If you’re spending money on things you can’t ever remember buying, you won’t figure out what where the problem lies.

It’s important to keep in mind that this exercise is to allow you to make better decisions about your money. As you get better at tracking, you’ll figure if you like to “Treat Yo Self!” more than you like to save moeny for a later date. It’s about creating financial awareness and creating positive money habits.

I look forward to writing about the different types of budgets in the future.

3 Reasons to Keep a History of Your Financial Information

Akaka Fallsjpg

Working at my computer last night I found that I had added a duplicate bank account in the Quicken, and I didn’t know how to fix it. I spent about 45 minutes trying to fix the problem, and then I got frustrated. I had a bright idea , and I thought to myself “Quicken has a restore function, lets restore the system when I didn’t have this problem.”

Before I did the “Restore to a Previous Date” function, I decided to do a backup before any major changes. After the backup completed, I started to download all my bank information from their websites, and then I thought I was almost done.

I got to one of the accounts that I manually put into Quicken, and my heart dropped into my stomach. I thought I didn’t have the information. Luckily, I remembered that I just did a backup. It’s a good thing that I did because I forgot to download information for two accounts.

Two hours later, the restoration was complete and I learned three very important things.

1. Keep Good Records of Your Financial Information.

You never know when you’ll need fix a a problem with a computer program or when you’ll need to report records to your accountant. Having a good system to keep your financial information intact is a must.

Make sure you keep a lock box or an area designated in your home for your important financial records. You never know when you’ll need your social security information, life insurance policy, or passport.

For electronic records, properly have information saved where you can easily access it. Have a system of backing up the information once a month.

2. Money tells a Story

Your financial information tells a story of what you did in the past and what you spent your money on. Recently it reminded me of being able to take my father-in-law out for his birthday. It was fun and we had a great time trying new food.

It also tells you of the mistakes that you have made financially in the past like taking out student loans and not paying them back, or having invested in business deals that didn’t go well.

Your history is a learning tool. Learn from your mistakes and success and use that information to make better decisions in the future.

3. What You Spend Your Money on is what is Important to You

It took me a while to understand, but where and how you spend your money says a lot of where you spend your time. A great teacher said “Where your treasure is, there your heart will be also.

Rick Warren said “Here’s how you know what’s really important to people: Look at their calendar, and look at their bank statement. The way we spend our time and the way we spend our money says what’s really important to us.”

Money Quotes

Kalalau Beach Kalalau Beach by @bozbut

A few quotes that challenge your ideas on money as the holiday season starts courtesy of the Quotations Page:

Annual Income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery. – Charles Dickens (1812-1870)

Money was never a big motivations for me, except as a way to keep score. The real excitement is playing the game. – Donald Trump “Trump: Art of the Deal

The only way not to think about money is to have a great deal of it. – Edit Wharton (1862 – 1937)

Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy. – Groucho Marx (1890 – 1977)

One of the greatest disservices you can do to a man is to lend him money that he can’t pay back. – Jesse H. Jones. The New York Times Magazine, July 2, 1939

Be rich to yourself and poor to you friends. – Juvenal (55 AD – 127 AD)

Never spend money before you have it. – Thomas Jefferson (1743 – 1826)

Perhaps the most important use of money – it saves time. Life is so short, and there’s so much to do, one can’t afford to waste a minute; and just think how much you waste, for instance, in walking from place to place instead of going by bus and in going by bus instead of taxi. – W. Somerset Maughamm (1874 – 1965). The Razors Edge, 1943

Personal Finance in Paradise – Debt Elimination Series: Mindset

Kahana Bay

Debt elimination strategies should always start with how you think about money and how you use it.

I feel that it is easy to blame ourselves for the debt situation that we are in. it is easy to be the victim and take no responsibility for what we have done to ourselves. Does take a bit more courage, and small tasks to step up and take real responsibility to pay off all of the debt we have accumulated.

At the same time,  we have a chance to remember that we have more than 80% of the people in the world.  It is better to focus on what is going right in our lives, and to appreciate what we already have what we have right now.

Marie Forleo has a great video about how to have a mental shift around money. I find it really helpful because the six steps she talks about are ways all of us should be reminded about how we can make small changes in mindset. It’s always the small things that can do on a daily basis to feel a little bit better about our situation.

Carol Dweck also has a great book called Mindset. Its main focus is to teach us about the growth mindset. This is where we look at the positive side of the situation, not in a sense where we pretend that the negative isn’t there, and seeing the situation or how it can make us be a better person.

It is a chance to grow from the struggle, and a chance to work through the problem to be a better person. Paying one small debt, choosing not to buy a cookie or a DVD, and finding ways to save money will help build new habits and get us one step closer to financial freedom.

Money is a powerful force that can destroy you if you let it. You have to learn to control your money instead of letting it control you. If you don’t, you will never get out of debt and will continue to dig a deeper hole.

Be honest with yourself, and and really examine the reasons why you are and that. Be aware of your desires and you wants.

Personal Finance in Paradise – Veteran’s Day – How You Handle Your Money: Mindset

How mental accounting affects your spending

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It’s Veteran’s day!

I want to thank all the veterans who have served our country. Thank you for being able to protect the freedom we take for granted and are able to take part of today.

Let’s talk about how we label money affects our buying decisions as some of us shop online and at the stores.

The Scenario

Let’s say this morning you wake up and start the day off great with a good breakfast, and you even got to sleep in. Then you go online and start shopping at your favorite clothing store site. You see a great looking shirt that you think you would look great in, and you buy the shirt on credit. For the moment, it makes you happy, and you don’t give it a second thought because you can just pay it off later.

Later in the day, you go on a hike with a few friends and you have a blast being in the sun. On the way home, you see your favorite coffee shop, and you haven’t had anything to eat since breakfast. You remember that they the best coffee cake. You and your friends decide to go take a peak. Once inside, you find that your favorite barista is working. You ask him to make a large iced caramel macchiato. You have a few laughs with the barista, and he gets your name wrong again on your cup. You pull out your credit card again, and you notice you have a dollar and some change in your wallet. Feeling generous, you place the money in the tip container as you leave.

Then in the evening, you take it easy and you go to a movie with your friends. You have a great day celebrating veterans, sharing some laughs, and enjoying life. Then later in the month you get your credit card statement, and you are confused on why you spent so much. What happened?

Mental Accounting

Why did we decide to go out and spend more money than we wanted? We’ve fallen victim to mental accounting. It is a concept where we treat dollars differently depending on where it comes from and how we have labeled the use of that money. The difference is that when we pay for merchandise with cash or with checks we see immediate consequences. The obvious answer is that that we have less money to spend.

We place less value on money we put on credit cards because we do not see the immediate consequences. At the same time, we don’t see that buying merchandise on credit is more expensive because of the interest that gets charged when we use the card.

Small Amounts of Money

People who have harder time holding onto small amounts of money, like putting small amounts into tip jars, have a harder time saving money. It’s because that the money we have wasn’t labeled for anything important. I”m not saying that you shouldn’t be grateful and tip your barista, it’s that if money isn’t labeled for a specific use, we will find a way to spend it.

Takeaway

To get around mental accounting, place money in accounts that are labeled for a specific purpose. For instance, a savings account, which was marked for the down payment of a house. We would be placing a higher value on the account because it limits what we are willing to do with the money.

Pre-spend money before you have the chance to spend it yourself. Let me say it this way, have your money sent over to a savings account, or investment account before you have a chance to see it in your account. Psychologically it’s much easier to set your money aside this way than by writing a check to your savings or investment account.

Track your spending at the end of the day, and keep a list of your expenses.

Have a great veteran’s day. Please feel free to comment, and let me know if there’s anything you want me to talk about.