Keys to Financial Freedom
Part I: Escaping the Credit Trap
Credit
cards are handy and easy to use, but can be deadly. More than one college
student has ended it all because they got lost in a sea of debt and couldn't
find a way out. Don't fall for the credit trap! This month and
next, we'll look for tips from those who've found paths to financial freedom.
Panelists will include Julie Bordelon, Bill Borden, and
Steve Miller.
Sources
of Financial Wisdom
Money Management Gurus:
http://www.daveramsey.com
- Dave Ramsey hosts a popular talk show, helping people move from paying
debts to building wealth.
http://clarkhoward.com - Consumer
advocate who has advice on buying cars, finances, avoiding scams, etc.
http://www.vanguard.com - Articles to
learn about investing in stocks and bonds.
Interest Rate Calculators
(Lots of these on various sites.)
http://www.bankrate.com/gookeyword/rate/calc_home.asp
- Offers many helpful online calculators for car payments, mortgages,
investing, etc.
http://www.tcalc.com/tvwww.dll?Save - Play around with interest
calculators like this to find out how fast your money will grow as you invest
various amounts of money at various interest rates.
http://www.cardratings.com/creditcardtrapcalc.html
- Calculator to find out how much you pay over time if you carry a balance on
your credit card.
Sites recommended by the
Atlanta Journal for Compulsive Shoppers
www.stoppingovershopping.com
- Gives treatment options.
www.4therapy.com/consumer/assessment/taketest.php
- Take a self-assessment to see if you need help for a shopping addiction.
www.debtorsanonymous.org A
12-step recovery problem, including self-assessment questions.
www.addictionrecov.org/spendaddict.htm
From the Illinois Institute for Addiction Recovery.
Some Good Financial Books to
Read (with a critical mind!) Read reviews on Amazon.com to learn the
strengths and weaknesses of each book.
- The Millionaire Next Door, by Thomas
J. Stanley, Ph.D. and William D. Danko, Ph.D. . Americans in general
manage their money pitifully, digging themselves further and further into
debt, while saving little or nothing for the future. Stanley and Danko
decided to study the successful to discover what we might learn from them.
They began their search for the wealthy in upscale neighborhoods, but
discovered something odd. Many of those living large were not wealthy, but
strung out on debt. Most of the wealthy were hidden away in quiet middle
class neighborhoods driving affordable cars. That's why you just might find
a millionaire living "next door." Most of them don't look like
millionaires. Read this book to find out how the successful got that way and
stay that way. Surprisingly, it's the way many normal people with normal
salaries can get there, if they follow in their footsteps. Don't worry that
it's 250 pages long and written by Ph.D.'s. It's written clearly and
practically.
- The Millionaire Mind, by Thomas J.
Stanley. Another winner by Stanley. Lots of practical advice.
- The
Total Money Makeover: A Proven Plan for Financial Freedom, by Dave Ramsey
(Nashville, TN, Thomas Nelson, Inc., 2003). Don’t be daunted by the 240
pages. The font is large and includes many testimonials, making it an easy
read. Popular financial talk-show host Dave Ramsey writes and speaks with
the passion of a man who took his family through the emotional hell of
bankruptcy, but learned from his mistakes and achieved financial freedom.
According to Ramsey, most of us are managing their money like idiots. Hard
statistics indicate he’s right. We desperately need someone to tell us
frankly how stupid we’ve been. Like the little boy in “The King’s New
Clothes," Ramsey points out our financial nakedness, but follows
through with a clear path to financial freedom. His answers include working
smart and hard, living within our means, setting aside 3 to 6 months of
wages in case of an emergency, paying off our debts “with gazelle
intensity”, avoiding future debt like a plague, investing for the future,
and giving to the needy. A strength is that he confronts the psychological
factors that lead to financial problems, such as the peer pressure to
"keep up with the Joneses."
- The
Richest Man in Babylon, by George S. Clason (Penguin Books). This
delightful long-time best-seller has over 2 million copies in print. Many
successful people refer to it as the book that most impacted their success.
Learn the basics of acquiring wealth, not from dry discussions of facts and
figures, but from intriguing stories set in ancient Babylon. A fun and
life-changing read! His main principles are:
1. Save 10% of your income.
2. Live within your means.
3. Invest your savings wisely.
4. Make your home a profitable investment.
5. Plan for your future needs.
6. Increase your ability to earn through growing in wisdom and skills.
- Financial
Peace, for the Next Generation, by Dave Ramsey. (a high
school curriculum)
- Forty
Eight Days to the Work You Love, by Dan Miller (Broadman and Holman), 224
pages. You'll do better at your job if you love your job. In light
of this obvious thought (duh), shouldn't we be all about discovering who we
are so that we can find a job we can really get into? Read this book to help
you discover who you are and how to find the right niche for your personal
temperate, desires, skills and abilities.
- Anything
by Larry Burkett or Ron Blue. Wise, insightful faith-based
authors.
-
Think and Grow Rich! (
The Original Version, Restored and Revised, Aventine Press), by Napoleon
Hill, 412 pages. Hill spent decades studying over 500 of America's
wealthiest, most successful people. The result is a classic that
influential speaker/author Brian Tracy calls "the best single book on
personal success ever written."
-
The Wealthy Barber,
by David Chilton, (Prima Lifestyles,
3rd edition), 224 pages. The Book
of the Month Club called it "quite simply the best financial
self-help book." It's appeal, like The Richest Man in Babylon,
is that it gives sound, ageless, financial advice in an appealing, often
funny, story form. In brief, a teacher, business owner and plant worker need
financial advice. They are told to consult with a local successful barber
who gives them sage advice. The introductory kind of book that people give
to newlyweds and parents to pass on to their children and grandchildren.
-
Mary Hunt's
Debt-Proof Living: The Complete Guide to Living Financially Free (Broadman
and Holman) 346 pages, Mrs. Hunt found herself saddled with $100,000 worth
of unsecured debt and had to radically change her lifestyle. This book shows
how. Many say that it changed their lives. A faith-based guide to getting
out of debt and staying out of debt.
-
Rich Dad, Poor Dad:
What the Rich Teach Their Kids About Money-That the Poor and Middle Class Do
Not!, by Robert T. Kiyosaki (Warner Books), 205 pp. USA Today
called it "a starting point for anyone looking to gain control of their
financial future." Its appeal? He teaches principles of accumulating wealth
in the form of his life story - how he learned money management growing up. His real dad was an educator with a Ph.D. His other
"dad" was the father of his childhood friend. Surprise! The poor
dad is the one with the Ph.D.! A great book for driving home the need to
focus on building assets rather than just getting a raise. Also a great book
to pique students' interest and get them discussing. Weaknesses: 1 -
His criticisms of formal education may come across too strong to some. 2 -
He comes across as if the accumulation of wealth is almost everything. 3 -
Some advice is rather ludicrous, like promoting short-term stock trading
with the claim that he successfully invested in "a new undervalued oil
company that was about to find some oil deposits." (p. 155) So where do
you find insider information like that, unless you're pretty tight with God?
we're_about_to_strike_oil.com?
Yet, in my view, the strengths of this book outweigh its weaknesses.
-
How to Get Out of Debt
and Live Prosperously, by Jerrold Mundis (Bantam), 320 pages. Provides
the motivation to stop accumulating debt and start paying it off.
