Regular readers may have noticed that in my “Featured Links” section there are several links for payday loan companies.

Since my site doesn’t really rank for that phrase I’m not sure why, but I get quite a few companies wanting to purchase links for payday loans on this site.

One notable offer came in a few days ago. What made it interesting was that the person who wanted me to write a review of their site or service began their proposal assuming that I would be against payday loans and they felt that they needed to defend their business.

I consider myself a business person and someone who believes in personal responsibility so I feel that I could at least offer a balanced viewpoint on payday loans. I thought it would be fun to explore some of the issues around these loans in a blog post and see what others had to say.

The Payday Loan Bonanza

In my niche site days, I made quite a bit of money from the payday loan niche. I can tell you it is BIG business. Since most of it can be automated it is also the perfect candidate for serious money online. The foot traffic size of market limitations for the insta-cash store on the street corner disappear in cyberspace.

On my niche site, a payday loan company would pay between $20 and $30 just to have someone fill in a form just to inquire about a payday loan. They didn’t even have to actually apply and I made a big commission…that should give you an indication of the amount of money that these companies are making.

Fact 1: The payday loan business is very lucrative (but very competitive).

Who are the Clients?

When I did my market research for my niche sites, it became clear that no credit check payday loans were often used by poor people. Terms involving minorities, working poor and military were commonly targeted.

It was obvious that the clients of payday loan companies are primarily going after one type of people; the financially illiterate. To be able to offer such a lucrative payout to affiliates, the life-time value of a payday loan company has to be high, which means that most of their clients are likely repeat customers.

Fact 2: Payday loans are targeted at financially uneducated people.

Who’s to Blame?

I don’t really believe in innocent victims in situations like this. Since people are free to use or not use these services I can’t really see any reason to say that payday loan or cash advance companies are evil.

That said though, it does take a certain kind of mindset to make money from people by providing a service which is likely to contribute to solve a short term problem, and make them worse off in the long run. You’d only need to take a glance at the diet industry and much of the pharmaceutical industry to see how widespread that particular business strategy is currently used.

Fact 3: It serves the payday loan companies well to keep their clients financially illiterate.

How would I Run a Payday Loan Company?

I may be naive but wouldn’t it make more sense to view a payday loan client as someone who needs long term financial education and products rather than someone that you can make a few easy bucks from while you drive them deeper towards poverty.

By offering financial guidance in saving, budgeting and financial planning these payday loan clients could be converted into clients for personal loans, mortgages and investment accounts. In short educate them up from the desperate range of the financial product line up to the much more lucrative and empowered banking products.

Fact (okay Guess) 4: Payday loan companies could make more money in the long run (and sleep better at night) by moving into the financial education business.

What do You Think?

I’d like to hear you thoughts on these high interest rate loans. Would you allow them to advertise on your site? Ban the business altogether?

Are Payday Loans Evil? is a post from: Art of Money

An interesting week…seems like blogging slipped a couple notches on my priority list for the past few days.

The list looked something like this:

1. Find a place to live (since we’ve been given notice because our landlord wants to sell our place)
2. Getting the real estate investing bug while in Phoenix; I’ve spend the better part of a week chasing down a deal on a $2.75m fixer upper hotel (think condos)…looks like I may let this one go, unless I can find someone who can write a check for ~$500k. Is that person you; more details if yes?
3. Building a blog network…a well documented saga
4. Blogging on Art of Money

Unfortunately I ran out of day just about where 3 ended and 4 began each day.

My apologies for that.

Today I sold $480 dollars of link ads, so I feel kinda like I better get my butt back in the saddle and start making those advertisers some money

Some Speedlinkage: 

My buddy Tyler wants you to help him win a contest for a satellite radio; what’s cool is that by helping him win it…you can win it. He’s going to give the prize to someone who helps him win the prize.

A special thanks to Brian at Baby Biotechs for his awesome article about the WordPress 5 minute install. That post has brought in some very decent links *applause* …even though it is a bit humbling that the guest bloggers all did better than me.

Art of Money didn’t get a headline remixed by CopyBlogger. (a clue…5th one down in the second group).

A good article about flipping websites on SitePoint. Very thorough and something I’ve really wanted to try. My pal Jscott tells me that a bank actually lent him money to speculate in domain names, so I’m sure that financing website purchases with “virtual” mortgages isn’t far away.

Adobe is planning a free online version of Photoshop, but while we wait (until late 2007) you can check out fauto, an uber-cool web 2.0 free, online photo editor with layers and mucho other swank goodness.

- Jon Symons
I don’t feel so guilty about stealing his bylines know that Ze has killed The Show.

OMG – Where Did That Week Go? is a post from: Art of Money

The next stop in my “Ways I’ve Made Money” saga was a brief summer job I had when I just turned 17 and my dad got me a job in the factory he worked at. There were two of us, son’s of a couple of the workers, hired on as “Materials Handlers.” Officially it was our job to gather the plastic and other materials needed to assemble large Plexiglass signs like the kinds in front of most businesses.

The signs made in the plant were actually really cool and I admired the work my dad did there. His work was to be seen all over Vancouver and as our family drove to visit my Grandparents he was always taking a little detour to show us some new sign that he had worked on.

The tools in the factory were fantastic. Huge presses for shaping plastic into huge molds and massive cutting beds with computerized routers that would cut the plastic to shape. They also had a sign-painting department where they had “real” painters that painted billboards by hand from stencils. My mind boggles that they actually painted them by hand, but it sure was cool to watch the sign painters.

Money

The money was good, as I recall I was making more than any of my friends. In those days the unions were strong and demanded top dollar for there workers. The plastic plant was owned by Vancouver billionaire Jimmy Patterson and things didn’t stay tipped in the workers favor for too long.

The Clock

When I look back now it is amusing to me that there was a buzzer to mark start time, all breaks beginning and end, lunch beginning and end, and quitting time. There was also a time clock and you had to punch your card in before the start buzzer and out after the end buzzer or else the ink of the time stamp was a different color…a bad thing.

Always Look Busy

I remember on one of my first days I had completed the tasks I had been given and was waiting for the foreman to come and assign me something to do. I hopped up on a work bench and relaxed while I waited.

My dad, spotted me and bolted across the room and in a tone that I knew to obey, told me to get down and look busy.

I think that was a defining moment for me, as the horror of being a grown-up crashed through my consciousness. It was painful to realize that perception was valued so highly in this bizarre world, that it was important to look busy, even if every one knew you weren’t.

Carving the Mediocre Path

After a couple weeks, I had gotten over and accepted my always look busy lesson and was settling in to the swing of things. The foreman had assigned us a big project of clearing up an huge warehouse of old signs and we were making good progress.

One day a particularly rough looking, long time worker cornered my co-worker and I in an aisle in the old warehouse [which was pretty much deserted].

“You guys shouldn’t work so hard.” Even though the tone of his voice was almost joking, the look on his face was dead serious.

“Do you understand what I mean?” I was scared now, hoping he wasn’t going to actually hurt us to reinforce his point.

What he was telling us was that we were getting too much work done. We were raising the bar and if we continued to work in the same manner, the bosses would notice and soon everyone would be expected to work harder.

I know I was scared to death. No, I didn’t tell anyone and I don’t remember consciously working less hard, but he never bothered us again.

Destroying Neon

It’s sad when I look back, but the warehouse I was cleaning out was actually a storage place for tons of old neon signs. These days they would have been valuable antiques, but we spent the better part of 2 months loading up dumpsters with them. Yes, at the time is was loads of fun, we got to toss these signs from the second story loft into a huge dumpster and watch them exploded to pieces. It didn’t get any better than that for a 17 year old guy.

Some interesting lessons were learned at that job. I was only there for 2 and half months and I went from isolated, inexperience teen to having my eyes wide open on the not so pleasant world of working for a paycheck.

Soon September came and I was off to take physics and calculus and computer science at university. The clash of realities of being the first person in my family [ever] to attend post secondary education was the next big lesson on the agenda.

- Jon Symons

P.S. this article is a part of my “Ways I’ve Made Money” series.

Ways to Make Money – Unionized Factory Worker is a post from: Art of Money

Now this article is going to date me so for all you young Internet whipper-snappers who are reading this, hang on to your hats – here comes a history lesson.

When I was about 11 I got my first job as a paperboy – I know that is a terribly politically incorrect term, but that’s what we were called back then. These days I’m sure the term is more gender neutral.

Paperboy, was a completely awesome job. As I was thinking back on which jobs to include in this series, I realized that it may have been the best all around learning opportunity I ever had.

This job had it all terms of business skills. These days the system is completely different, but back in the seventies when I was delivering newspapers it really was a franchise type system.

Sales

When I wanted new customers or to make more money, I had to go door to door and cold call, asking people if they would like to subscribe to the local daily paper. That was hard, but I guess at age 11 I wasn’t quite a self-conscious as I would be doing the same thing at 22.

Distribution

Six days a week, at about 3pm all the “carriers” as we were called, would meet at the Barnett Highway drop-box collect our bundles. This was a big newspaper and carrying 30 of them at a time, on a Saturday, could sometimes feel bone-crushing on my small frame. Port Moody was an extremely hilly town and a bike wasn’t
any help, most of the time would be spent pushing it up a hill or trying to not crash or go out of control [loaded with papers] on the way down.

Another aspect of distribution was to constantly be thinking about ways to improve the time it took me to do the route. The path followed had been taught to me by the person who had the route before me, but because I used to spend so much of my time exploring forests and green belts in my town, I was able to shave significant time off of the delivery schedule with a few strategic short-cuts through the forest. Remember, the population wasn’t as dense as it is today, these routes spread over several miles.

Helpers

One thing I remember about delivering the paper was that my friends often wanted me to play hockey or football but I had to go directly after school each day and do my route. What I learned was that if I presented it just right, I could get them all to help me with my papers and finish my job in about a quarter the regular time. It is an important skill learned to be able to motivate people to help you out – and no I didn’t pay them.

Obstacles

Besides the weather, there were only two obstacles: big kids and dogs. I don’t recall ever having anything really bad happen, but there was one particular “big kid” who liked to threaten and torment me.

One day, while I was complaining about it at home, my mom said, “just look him in the eye.” I took her advice the next time we crossed paths and sure enough the pleasure he seemed to glean from tormenting me deflated like a balloon with a slow leak. Standing up directly to confrontations has served me very well ever since.

Dogs turned out to be pretty much the same story. I can’t remember who told me, but someone said that a dog only barks if they know you’re afraid. So I would just act confident and realize that they were probably more bark than bite.

The other skill learned with dogs though, if I really did feel threatened, the paper went on outside of the fence – learning proper boundaries of what is acceptable and what isn’t. In case you’re wondering these papers were too meaty to be folded like the way the kids in the Hollywood movies do it. If you practiced though, you could hold the rough end of the paper and aiming the fold at the doorstep you could kind of project [slide it edge-wise] the paper to the doorstep from about 10 or 12 feet away.
This tip saved time and also avoided some dog confrontations.

Getting Paid

When I delivered papers, I had to do my own collections. So at the end of every month as I delivered the papers, I also stopped at every house, banged on the door and collected for that month’s deliveries.

Then I received an invoice from the newspaper [The Vancouver Sun] that I need to pay. Whatever was left over I got to keep. Sweet! As I recall, I delivered 30 heavy papers, over a couple miles of hills, 6 days a week for about $30 a month.

Looking Back

As I look back, being a paper boy really was an amazing job. All of the elements of a real business were present and they were lived and learned everyday.

The only problem was that I didn’t really know what I was learning. What would have made this the coolest job ever would have been for the paper, or some community organization, to help us realize what we were really learning.

A tiny bit of business theory and reinforcement for the kids doing these jobs and you would have had mini entrepreneurs at age 13 ready to transform their lives…never looking for traditional jobs. For me it wasn’t until I hit age 30 that I really put myself in a position with as much business potential as I had in that paper route.

- Jon Symons

P.S. this article is a part of my “Ways I’ve Made Money” series.

Ways to Make Money – A Paperboy is a post from: Art of Money

I was reading over Yaro’s business timeline and it got me thinking about how I got to this point of my life. Yaro’s version, I printed it out, is about 17 pages long and I’m a lot older than he is, so I’m going to have to edit the story dramatically or Greenpeace will be after me for needlessly killing forests … and we wouldn’t want that.

Therefore, what I decided to do was to look back at all the various ways that I have earned money in my life and see what skills and lessons I’ve taken from each one.

Here’s what to look forward to in the coming days [no not weeks].

The Paper Route

• Dodging cars, dogs and bullies to make a couple bucks a week

Unionized Factory Worker

• Always look busy, but don’t work too hard

Duradeck Installer

• From $6/hr to $50/hr subcontractor

Waiter / Bartender

• A taste of the underground economy

Tree Faller

• Sorry Mr. Greenpeace, but the money was great

Construction Worker

• Cutting concrete at 20 below zero

Screenwriter

• Never sign a contract where you get paid after the words “Net Revenue.”

Wood Furniture Artist to Picture Framer

• “What do you make?” I asked the 70 year old man standing in front of me. “Mostly sawdust” he replied.
• Part One – The Make or Break Decision, my chance to go big and get rich…did I pull it off?

Systems Analyst

• My brief career as Dilbert

Online Entrepreneur

• The last couple years trying to play nice with Google wearing hats of various shades of gray.

That should keep me busy for a while. There were some meaningful lessons learned in each and every one of those jobs. The time-spans spent in the jobs range from one day to 11 years.

Obviously, I’ve been cursed with a rather short term view of things career wise and only now, in my mid forties am I getting the value of taking a longer term outlook on making money.

It’s like I said to a friend of mine recently, you may not be committed to anything beyond getting out of bed the next day [he has suffered from the same job cycling syndrome as me], but despite that you probably are going live for 35 or 40 more years; so commitment is not really an issue. You are committed to having to earn enough for food and clothing a shelter for a long time to come, whether you like it or not.

If you take a wise approach to it the path can be made a lot easier.

I know that I have got it now and I do take a long term view and know that sticking with one direction is the easiest way to leverage my time to greater earnings.

A look back at all the mistakes made and valuable lessons learned seems to be really appropriate right now and I hope you find it interesting and informative.

Please do join in on your site and send me a link – even it’s just one post. I’ll save them all up and include them all at the end, or on each post if there are enough.

Watch for the Paper Route…coming soon,

- Jon Symons

Update:

• Kimber from No Limits Ladies has joined in with Selling Vegetables to City Folks.

Ways to Make Money – Lessons Learned From Jobs I’ve Done is a post from: Art of Money

Kind of a morbid topic for the holiday season, but since Darren brought it up [What Happens to Your Blogs if You Die], I’ve bumped it up on my “to blog about” list.

My wife and I have been systematically working our way through a review of our entire financial situation lately and of course the topic of wills and living wills and estate planning has come up.

Sad to say it is something that we have completely ignored until now and to be honest I find the whole topic a bit overwhelming. Not having the resources to just hire out the job, but having enough resources to make it necessary is a bit of a sticky spot. We’re trying to do our homework and with the help of a d.i.y. kit, we will at least get something in place soon.

Now back to Darren’s post, which is more of a nudge in the direction of business succession planning. He provides some excellent tips, “she” is his wife since that is who would be taking on the blogs in a worst case scenario:

• Contact details for partners – I have a number of blog partners that would be able to help her navigate some of the logistics of managing my blogs
• Contact details for trusted other bloggers – a few others who know enough to be useful
• Passwords and Contact details for Advertising Programs and Affiliate Programs – to be able to access and manage income
• Contact details of bloggers who work for me – a number of my blogs are written these days by others.
• Contact details for web hosts – without these the blogs fall over and income disappears
• Passwords for Paypal accounts
• Backup details – for blogs and computers
• Blog and hosting passwords – to give her (or those who help her) access
• Instructions on what to do – a few notes on what I’d suggest she does. Which blogs she could sell (and who could help her sell them), which to allow to run (and who to write on them), what my agreements are with different people etc

I would add to this list is to have a significant other as a signing authority for your business bank account. I have set my wife up for my business so at least she can write a check to get money out of the business if necessary.

In general the tips Darren has outlined are much more than just “worst case scenario” planning. Since the goal for any business should be to run and grow without the owner’s involvement the information outlined above must be laid out in a set of guidelines so that basically anyone could step in and continue with the business.

I wish I could tell you I had mine laid out in the manner that is laid out above, but my wife and I are spending a little time each weekend on this important planning activity. Hopefully not too far into 2007 I’ll be able to rest in peace I mean sleep easier, knowing it has been taken care of.

Useful Resources:

• Suze Orman Will & Trust Kit
• Prepare Your Own Will, 6th Edition: The National Will Kit (Prepare Your Own Will)
• Prepare Your Own Will: The National Will Kit (Legal Self-Help Series)

Also, check your local library, you may be able to pick up a copy of a do it yourself kit there and only need to purchase the forms.

What Happens to Your Web Business if You Die? is a post from: Art of Money

Muhammad Yunus

Last night I caught a fascinating interview with Muhammad Yunus [book: Banker to the Poor: Micro-Lending and the Battle Against World Poverty].

Mr. Yunus started a bank in one of the world’s poorest countries. His first loan was for $27 dollars and it was shared between 42 people…and it made a big difference in their lives.

He gave loans to people who have no collateral, he busted the business model of every major bank that came before him by challenging the “truism” that poor people were not credit-worthy, and he did it with trust and hand-shake loans.

The video below is just a teaser for an hour long video [costs about $2.99 from Google Videos - now free, see update at the bottom of the post] but it will give you the idea of how Mr. Yunus got started.

Mr. Yunus’ bank [Grameen], which lends money, based on only trust to the poorest people in the world who have zero collateral, has a 98% repayment rate. I’m guessing that traditional banks are just a weeee be jealous of that number.

So how did he do it?

He gave the highest priority to the people who needed the loans the most. The poorer you are the more likely you are to get a loan. This decision was based on the belief that these people had a sincere desire to build a life for themselves and that they realized that a loan was a golden opportunity to create something of lasting value.

Compare this to charity or a donation that does not have to be paid back… Mr. Yunus realized that a loan taught the borrower a lot more and therefore created a more powerful and independent person. The gained pride, strength and confidence in their abilities when they successfully paid off a micro loan. Then they were ready for the next step financially.

Lending to the Poorest was only Part of the Equation

The percentage of loans in a traditional western bank by gender?

Men = over 90%

Mr. Yunus’ bank wanted to do something radical and make half of its loans to women. But then they began to notice something amazing:

Loans made to women were doing a much greater good to the borrower’s family than loans made to men!

Yikes, I’m sad to say that it makes sense. Mr. Yunus’ bank tossed the 50/50 lending ratio out the window and now lends 97% to women.

The poverty rate in Bangladesh has decreased 25% since Grameen began its micro lending practices, and is on target to reach 50% by 2015.

An amazing story…on December 10, 2006 Mohammad Yunus will receive the Nobel Peace Prize in Oslo, Norway. Yes, the peace prize, undoubtedly sending a message about the relationship between poverty and peace.

Click here to view the embedded video.

UPDATE: Very cool news on this post, since I originally posted, VISA has sponsored the full length Yunus Microlending video and so now you can watch it for free in one of 100 different languages. Thanks to Maria for the tip.

Micro Lending and the Decline of Poverty is a post from: Art of Money

Cashflow 101 Game

To hell with other people…I’ve been having such a struggle trying to find other people to play the Cashflow 101 game with I just decided to play alone.

Welcome to the second installment of Rich Dad Wednesdays. Last week it was The Other Side – Too Much Money so logically this week I’m changing the subject completely with:

How to Kick Butt at Cashflow 101.

Here’s what I learned…my advice to myself after playing the game is:

• give up your illusion that money is real.
• never evaluate whether or not to complete deal based on whether or not you have the money or can afford it. Evaluate based on whether or not it is a good deal and then borrow or partner based on that fact.
• you can’t get out of the rat race if you don’t take action [buy assets].
• the real game is played on your income statement / balance sheet, not on the game board.

Cashflow 101 takeaways for real life:

• learn to evaluate the assets you purchase so that you increase your odds of picking long term value propositions rather than gimmick opportunities.
• build and maintain a great credit rating and relationship with your banker so you have access to funds when you do find a worthwhile asset to purchase.
• you must accumulate [purchase, build or inherit] assets that put money in your pocket if you want to get rich. Sitting on the couch and dreaming of 6 month vacations or freedom from a job or buying a lottery ticket don’t count as real action.

Even playing the game by myself I learned a ton. I’m a good player now, basically I can kill the game every time, but in real life my skills haven’t caught up to my game play.

In the game I have no fear of losing money, in real life it is still there. It is clear to me that this is the single most determining factor of success in the world of finance. Fear clouds decisions and its best friend greed will mess with you big time on the other side of the coin.

Give up both of those and you’ll be rich in no time, I’m sure of it. Therefore the beauty of the game, a chance to taste that freedom with without having to eat from dumpsters if you mess up … and before long that lovely taste of freedom from fear and greed will begin to seep into your real life financial psyche.

How to Kick Butt at Cashflow 101 is a post from: Art of Money

Robert and Kim Kiyosaki on the Celebration Show

While stumbling around on the Rich Dad forums a couple days ago I found a link that my buddy emorgan had posted to a video of Robert and Kim Kiyosaki being interviewed on a TV show that I hadn’t heard of called the Celebration show.

It looks like a kind of soft sell Christian show [I know Robert sometimes get taken to task for mentioning the Bible in his books, so maybe he was on there for a little bit of PR building].

Nevertheless, as usual I found the interview informative and inspiring. The real reason for the interview was the launch of Kim’s new book Rich Woman: A Book on Investing for Women – Because I Hate Being Told What to Do!

You can watch the show on RichWoman.com.

Like I said the tips that Robert and Kim gave really affected me, particularly when they spoke about tithing, saving and investing.

They mentioned that when they didn’t have much money, they still put money aside for each of these three things BEFORE they paid their bills.

I realized that I, like many other have a me first attitude. When I get more money then I’ll save for my future, invest and give money to other worthing people. I know money and life in general doesn’t work like that.

First commit and then the universe will work to support your commitment. I’m still letting the resolve in me build for this one, but I know that is a very important ingredient in success to first move into the way of being that you want to achieve, even if it is at first in a limited capacity.

I’ll be writing more about this topic in the days to come.

Jon

Kim Kiyosaki – Rich Woman is a post from: Art of Money

This morning during my morning bike ride…

brief tangent: it’s funny now that I’m working at home I have imposed an artificial”commute” onto myself. I found that rolling out of bed and plopping straight down at my computer wasn’t very productive. I needed to get out into the air a bit to wake up my brain, so I go for a random bike ride to start every day…

Today I happened to ride past a retirement home in my neighborhood, which I had done many times, but today as I watched the residents coming and going something different occurred to me.

I’ll be there some day!

My apologies if that fact seemspainfully obvious to you, but it never came inside me with such clarity before.

Why not Jon?

Good question, I really think that I’ve lived the past forty-odd years in serious denial. For whatever reasonI just never really thought that I had a future.

I realize that it is common among teenagers and folks in their early twenties to have the sense that they will never get old. But at some point they must get over it, or they would never settle into a career, a marriage and a 401k.

I mean biologically it was obvious I was aging but I just never “saw” myself as old.

Why I’m telling you about this on my money blog is that I believe this is a big cause of poor financial planning and career decisionsthat I’ve made my whole life.

If a future is not real to you, why would you do things like build a career or create a nest-egg for retirement and beyond?

Today that all changed. I could see myself in that home and it was very real to me. Now fortunately I have the time and facility to make up for lost time, which I intend to do.

I’m not knowledgeable or a deep enough thinker to know why, but since very few people have any real savings or plans for their senior years, I can’t help but wondering if this denial of a future is a common psychological quirk?

I’m Getting Old…Are You? is a post from: Art of Money

Lets take a moment to put our desire to get rich into perspective. I stumbled across Freegan.info and it was kind of a sobering site to visit. It’s fine to want to make money and all, but lets not lose sight of the effects that a globe full of rampant consumers is having on the Earth that we are dependent on.

Here’s the definition of a Freegan:

Freeganism is a total boycott of an economic system where the profit motive has eclipsed ethical considerations and where massively complex systems of productions ensure that all the products we buy will have detrimental impacts most of which we may never even consider. Thus, instead of avoiding the purchase of products from one bad company only to support another, we avoid buying anything to the greatest degree we are able.

And when they say “total boycott of the economic system” they mean it…looking down the list of categories on their website you’ll find a list of “foraging sites” ie. Dumpsters, including pictures of the coveted goodies found within.

Personally I know this extreme approach would not be for me although I totally see the merit in their message. Also I’ve never really believed in boycotting as an effective method of change, it only works if you can reach a ‘critical mass’ of participation. Besides that trying to inflict pain on someone or something [even a corporation] in order to get them to stop inflicting pain seems counter productive and a bit hippocritical.

To me the economic system, as messed up as it currently is, presents many opportunities to be worked with and to be channeled towards goodness. It’s worth having a look at the Freegan site though and trying their message on for size, but you probably won’t be bumping into me during your next dumpster dive.

Can You Opt Out of Consumerism? is a post from: Art of Money

1 family in 69 declared bankruptcy last year

Average credit card debt is over $8500

89% of all divorces are caused by financial arguments and quarrels

The average family spends 10% more than their take-home pay

Money can be tough to come to terms with as it touches on our deepest concerns for survival. I guess that it has become “the” symbol of survival in our modern world. Amazing really, since it was, historically at least, very recently when money was almost an insignificant factor to a person’s survival.

Quick and Ugly Financial Facts is a post from: Art of Money

Here’s a slice of the letter that I received from my credit card company the other day. Have a glance and then I’m going to ask you to answer a simple financial question.

“Dear Jon,

Spring is here, Summer is around the corner. Make the most of you MNBA MasterCard credit card account.
If you had the chance to enjoy new experiences, make improvements around your home, or strengthen your financial picture, you’d do it right?
No transaction fee – on these cheques [ed: that's personal checks for you yanks] only!
You’ve got a $10,000 credit line. You’ve got a low promotional 2.99% Annual Percentage Rate (APR).
You’ve got enclosed access cheques. Put them together and what do you get?

• A big-screen TV (and surround sound)
• Professional landscaping (for once!)
• A new deck or patio (with furniture to boot)
• A much-needed getaway
• Whatever you like!

Your MBNA MasterCard credit card account has promotional 2.99% APR on Access Cheques and Balance Transfers, valid until your statement date in December 2006…”

Here’s my quiz…one question…Do you take the money?

I like how in the pre-blurb it says “…strengthen your financial picture” as one of the options but in the list of what you can get, it has all doodads.

When I first read the letter I was mildly outraged. It is obvious [I hope!] what their game is. Stimulate your associations between the improving weather and the urge to spend money so you can enjoy the summer season. So they make it so easy for you to increase your debt, but why not, the money is cheap right? In the long term, it definitely will not be cheap.

Anyways, it is this marketing pitch that has seduced the average North American to spend 1.07 for every 1.00 that they make. Ouch!
So do you take the money?…of course the answer is no, right?

Well that was my first answer…and if you are the average North American, and content to stay that way, then that is definitely the correct answer. But then I remembered that my goal was to become rich and that I’ve spent a lot of time and effort adjusting trying to adjust my thinking patterns; which I believe is essential to becoming rich.

Let’s take a look at the question again, this time pretending we have the mind of a rich person…let’s be Donald Trump’s mind for a moment. First off, forget the enticements of doodads, of course we aren’t going to waste money we don’t have chasing feel-goods.

But $10k for 7 months at 2.9% interest? Could I put that money to work in a way that makes more than 2.9% [make sure you read the fine print!]?

Hell Yes!

Even a conservative dividend paying stock or corporate bond should get you 6%. In six months you have made 150 dollars just for having a bit of financial moxy. Of course if you have educated yourself and you are sitting on a dozen deals that are just begging for a couple thousand dollars to get them rolling and profitable then much greater returns are possible.

To summarize, it is really our financial intelligence that determines our wealth. I get these kind of credit card offers constantly. It really only takes a slight shift in your thought patterns around money to see the difference between being rich and middle class. In most cases the rich know how to use other people’s money and other people’s time to make money for them.

Am I recommending that you grab every offer of “free” and “low cost” money that every greedy bank throws at you and dump it into the stock market?

Hell NO!

But I am suggesting that it only takes a slight opening and some financial education to start on the road to moving beyond the limitations of the middle class mind.

Take My Financial Intelligence Quiz is a post from: Art of Money

“Money is better than poverty, if only for financial reasons. ”
– Woody Allen

“The most remarkable thing about my mother is that for thirty years she served the family nothing but leftovers. The original meal has never been found.”
– Calvin Trillin

“Someday I want to be rich. Some people get so rich they lose all respect for humanity. That’s how rich I want to be.”
– Rita Rudner

“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 David Copperfield 

“If you can count your money, you don’t have a billion dollars.”
– J. Paul Getty 

“A bank is a place that will lend you money if you can prove that you don’t need it.”
– Bob Hope 

…more money quotes.

Quotes is a post from: Art of Money

The Rich Aren’t Any Happier Than You and Me…

Funny how we expect that they would be. In our mixed up world we have some how created a connection between money and lack of problems.
Anyways I’ve been travelling this week and some stewardess threw a newspaper at me while on route to Vancouver. Normally I never read them but on the front page was the following story:

“What do the rich fret over? Lazy offspring” [you can download the original research paper on the T. Stenner Group True Wealth website]
The article features a summary of questions asked to 165 high net worth [> $10 million] individuals in Canada. The number 2 worry for these folks was the lazy offspring one featured in the headline, the gist of it was that many of the people interviewed were self made entrepreneurs and they feared that growing up wealthy would reduce the drive, motivation and work ethic of their children…probably a valid concern.

The number 1 worry of the high net worth individual was that they would not be able to maintain their current lifestyle. This one I find very interesting. There’s a saying “Better to have loved and lost than to never have loved at all” but it seems when it comes to money this in not the case.

It’s not hard to see why. Once you get used to the “good life” of being able to spend almost at your heart’s content, going back to the world of financial constraint could be a cause for serious depression. It’s easy to use money as a feel good and anyone who does will naturally have fear that the good times will end.

So knowing that money won’t make you happier you won’t want to check out Forbes’ look at the most expensive private islands.

The Rich Aren’t Any Happier Than You and Me is a post from: Art of Money

It’s my first Carnival of Personal Finance since moving to my new home here at Art of Money. I entered my story: You Don’t Really Want to Be Rich and I’m exciting to not be worrying about my blog dying from the traffic bulg.

Enough about me already! Check out the Carnival of Personal Finance over at the new Money Blog Network. Read it here and learn a bunch.

Highlights:

• Weekend homework: where do you stand? evaluate your current financial situation.
• A Weekend Conversation “Ugh, my financial advisor called, it’s time for my yearly ‘check-up’.”
• Emergency Fund. Get one.

Happy reading.

Carnival of Personal Finance #37 is a post from: Art of Money

Net Worth Tool: track, share and compare your net worth.

Net Worth Tool is a post from: Art of Money

Why do you want to be rich? Or if you won’t admit to wanting to be rich, why do you want to have money? Or why did you buy that lottery ticket? Or why did you enter that draw for the new Benz, like I just did?

When I was growing up good behavior was rewarded with love, food, gifts or even cash. Poor or unacceptable behavior was rewarded with actions that produced feelings of shame or guilt or worthlessness. In many families a child can believe they are loved or not loved based on their actions: grades in school, success on the football field or performing well in the school play.

Basing a reward system on our actions can create a person, or a whole society of them, that believe that money can solve their problems. They believe that money can actually make these wounds better.

That money can buy anything more than surface satisfaction is probably the great fallacy of our world. Of course, we all know better, but if you peal back that ever so thin veneer of being ‘above all that,’ we secretly dream of giving the boss the finger, showing up at the high school reunion in a Rolls or buying a trophy wife to make it all okay inside.

There really is not a way to benefit in any meaningful way from being rich. My guess is that being rich is like a magnifying glass for your heart. If you have a strong heart and have your feet solidly on the ground, then money makes it all a little bit sweeter. But if your heart has even the slightest fissure being suddenly blessed with a windfall will likely tear it apart.

In the pretend world of smiley face “how’s it going”…”good, how about you” while not really wanting anything more than a stock answer, being rich seems like the ultimate prize. But just under the surface, in the world of broken dreams, pent up resentments and aching souls, being rich is a powerful drug that is best kept high up on the top shelf, high above needy arms.

I know that I have always felt that decent money was always been just beyond my grasp and lately I’m begining to see that this may be just the way some more intelligent part of myself wants it to be, and that may just be the biggest blessing of all.

You Don’t Really Want to Be Rich is a post from: Art of Money