Tyranny of the Urgent

As we approach the end of the year and I prepare my plans for 2012, I am reflecting about what worked, areas I need improvement and lessons learned. One of the areas that I want to share with you based on the countless meetings, conversations with family, friends and business partners is the management of time. Specially this time of the year, where we should be filled with Joy; many seem stressed and worried.

Many people seem to be "running out of time" and wishing for a 30-hour day. I am sure that if we had an extra six hours every day that would solve our problems; or would we end up as frustrated as we are now with our 24-hour days? Is the problem that God did not provide for us enough time for us to complete our tasks or is the root of the problem our choices of priorities? In 2004, Ipsos (a global marketing research firm) announced that almost everybody agrees with the statement "There is never enough time in the day to get done what I want to get done". Americans were among the most likely to agree with this statement with 64% of us agreeing with it.

Back in the 60s, Charles Hummel published a short booklet that became a quick hit in the business community called Tyranny of the Urgent.  In this classic, Hummel argues that there is a constant tension between what is important and what is urgent. He goes further to say that in most cases the urgent wins. We live in a world where the urgent tasks collide with the important tasks. The urgent tasks are constantly screaming for attention and demanding to be addressed now! Whereas the important tasks many times does not have to be done right now, what if you missed dinner with your wife tonight?, what if you missed your daughter's ballet recital?, what if you missed your son's basketball game? There is always tomorrow, next recital and next game.

The momentary appeal of a "business opportunity" screaming at you and wanting to pull you away from home and your important tasks, seems irresistible. However, when put under the light their deceptive prominence fades. Then you realize that it is not that urgent, then with a sense of loss and frustration we realize that time is not forgiving and we look at the important tasks that we pushed away to attend the urgent. That is when it hits you that you are a slave to the tyranny of the urgent.


If we stop to evaluate  the situation, we will realize that the root of the problem goes much deeper than shortness of time and that the real problem is how we establish priorities. In other words, many times we allow the "urgent", though less important, to be elevated in our list of priorities, and therefore the important is put on the back burner. We see this happening at work and home all of the time,  we focus on the urgent things in front of us, and at the end of the day, the things we really care about — the important — were barely looked at. We leave undone the things that we have to complete and attend and complete the tasks that we did not have to.

Hummel in 1967 identified the telephone as among the "worst offenders" against our peace. That was before we decided to carry the offending equipment with us everywhere (and I mean everywhere). As Hummel stated back in 1967 it is true today, the issue is not that we have a shortage of time, the real problem is our priorities. The greatest danger to our peace is letting the urgent things crowd out the important ones.

God invented time to keep everything from happening at once. Looking ahead to 2012, do not expect to have time to do everything you want to do. However, resolve that you won't let the urgent get the upper hand on the important events in your life.

Estate Planning

Estate planning is an area that most people avoid talking about. They pretend that if I ignore it, it will take care of itself. It is understandable the aversion to talk about your estate since it has to do with the planning of our end. There is not easy way to talk about this topic, it is painful and it is a reality. Regardless of how difficult this subject may be to you, you must address it if you want your assets after your death to pass to the proper hands.

John D. Rockefeller founded Standard Oil in 1870 and became the richest man on the planet. When he passed away, his accountant was asked, “How much of an estate did he leave?” His accountant’s answer was: “All of it.” During his lifetime John D. Rockefeller accumulated many assets. He also gave generously
both during his lifetime and through his estate. But he also understood Psalm 49:16-17, “Do not be overawed when a man grows rich, when the splendor of his house increases; for he will take nothing with him when he dies, his splendor will not descend with him.” (NIV)

During our lifetime we work more than forty years to accumulate assets and spend approximately ten years conserving what has been earned. However, the sad reality is that on average we do not spend even two hours to plan for distribution of those assets accumulated. Many times there is little planning and in some cases no planning at all. The chaos that often occurs following the death of a loved one can be burdensome. However, this burden can be eased, through proper planning.

A key element of proper planning is the implementation of an estate plan. The basic document in any such plan is a will and many plans also include a trust. I have prepared a Guide to Planning Your Will and Trust which is designed to encourage you to think about how you want your assets to be distributed at death and assist you in gathering the information your attorney will need to prepare a will and trust that accomplishes your goals. This will help you organize your thoughts and save you time and money in professional fees.

If you are a Christian, you understand that through proper planning, a legacy of love and care that you leave for your family and friends can be encouraging and in many cases even inspiring. The Bible tells us, “If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever.” 1 Timothy 5:8 (NIV). Part of becoming a “good and faithful servant” is to create a good plan for your family, regardless of the size of your estate. This important stewardship of the property that God has entrusted to you can both protect and provide for your family.

The reality is that every day has 24 hours – 1,440 minutes – 86,400 seconds. Or does it? A short day is coming for all of us – a day when we will not reach the 86,400th second, and will pass on to our final reward. We may have lived a long and useful life, filled with great memories. First, the “learning” years – youthful and vibrant time spent in school with classmates. Second, the “earning” years – that first job, building a career and meeting many friends and business associates. Third, the “retirement” years — when you finally have time to enjoy visits with all of your family and friends.


I encourage you to take time, sooner than later, and prepare or update your estate planning. If you are interested in the guide I have prepared, please email me and I will gladly send you the guide at no charge to you. The guide will be emailed within 48 hours after receiving the email (emails will start being sent January 3, 2012).

As was true with John D. Rockefeller, everything will be given to someone or for some purpose.

Reality Check: Most Americans Don’t Have a Retirement Plan

The population may be aging, but that hasn’t gotten a lot of Americans to plan for retirement. According to a survey released by ING Retirement Research Institute, 71% of Americans lack a formal investment plan to help them reach their retirement goals.

The study, conducted by the ING Retirement Research Institute, showed that nearly half (48%) of respondents aged 25 to 69 who are employed full-time and earn at least $40,000 a year don’t feel prepared for retirement. That’s despite the fact that 75% of that same group do contribute to their workplace’s retirement plan. The study also found that only 43% of those surveyed calculated how much money they will need to continue their current lifestyle once they retire. And only 28% are working with a financial professional to help meet objectives.

Basics of Personal Finance

As we approach the end of 2011, we must reflect about the accomplishments during the year and the areas that we could have done better. One area that I would like to encourage all of you that read my blog is to take the time to build a solid financial future. Just like when a builder constructs a house on a solid foundation to withstand the elements, you need to have a solid financial foundation. 

The development of a solid financial foundation are the same regardless if you make $25,000 or $250,000 a year. It is important that you understand that mastering personal finance goes beyond the development of a budget. Personal finance covers a sleuth of topics that range from budgeting, taxes, debt, insurance to name a few. It is also critical that you understand how these areas of personal finance relate with each other and its impact to your financial goals.

Today I want to share with you some principles or pillars that will help you develop a solid financial foundation for your family. The information shared here comes from my personal experience, many conversations with people from different generations over the last twenty years, and thousands of books read in the area of financial planning. One thing that came to my attention is that our grandparents and great-grandparents were much better at savings than the most recent generations. There is a lot of wisdom we can learn from them and we better pay attention if we want to get this country back on its feet.

The principles that I will share with you today are very basic, these principles are tested and true. However, over the years we lost focus and the results are known to us today. The financial markets and economic trends may come and go, but saving money never goes out of style. I invite you today to revisit these principles and apply them today.

1. Frugality - our ancestors were shrewed and frugal. We made fun of them, while the spending party was good and it did not seem to end. However, they had a better understanding about money and expenditure. They only spent on the important and critical things for their families, they focused on value. Here are some ideas from the past that you may want to apply to your finances today:

* If a "newer and cooler" version of something is released this holiday season, wait to buy it until the one you have no longer works.
* Teach yourself skills that expand your practical knowledge.

 

2. Accountability - The only way to gain control over your finances is by being accountable of the money spent. Our grandparents knew the money spent because they truly felt it in their wallets. However, today credit cards create a "swipe and reconcile later" mentality. This mentality also creates a disconnect between the expenditure and the accounting (or responsibility) for that expenditure. The "reconcile later" became more like I will "figure it out later". However, our grandparents had a more visual experience of their expenditures since it was a tangible experience.

What can you do differently today? 

* Avoid the excessive use of credit cards. Only use them when they are truly necessary.
* Learn to live within your means.
* Review your spending on a daily basis.
* Keep track of your expenditures.

3. Be Grateful - The generation that lived through The Great Depression experienced great challenges and learned to be truly grateful for everything that they had. The challenging experiences made them painfully aware of the potential for future hardships and what foolish financial behavior can cause to a family.

*  Stop the self-entitlement attitude: You only deserve what you have worked hard for.
* Nothing is free in life.
* Be grateful for what you already have.
* Be honest with your "wants" vs "needs".

4. Learn to Save - Saving does not make you wealthy. However, when savings have accumulated sufficiently they should be used to buy assets. Also, savings are used to create emergency reserves. Most of us know that we should save money, however doing it is a different story. It takes self-restraint, determination, and strength-of-mind to resist “keeping up with the Joneses” or buying the latest iGadget.

* Work on liquidity
* Create a reserve equal to three months of your household expenditures.

5. Patience - I am sure that you have heard “patience is a virtue.” This is a vital lesson in finance as well as in life. The desire for immediate gratification drove us into this current recession. When this trait is left to run out of control it will lead a person to financial ruin. The use of credit cards, combined with the constant temptations and enticements of advertising, provides the perfect vehicle for immediate gratification.

* Start teaching your children the gift of patience through the allowance given to a child. Teach them the principles of building a savings account and spending less than what they will need to buy what they want.
* Be patient in the implementation of your personal financial program. Don't expect it to magically disappear what it took years to make the mess.

Our Battle To Save Family Values

The rat race is on and families are the big losers. In a society that is running at unhealthy speed, our families, which are our most precious blessing, are being left behind. There is a thief in the house. Like the rest of America, the Christian family is facing great challenges. How do we live in a environment that is constantly seeking immediate gratification, idolatry of money, and unhealthy views of wealth.

We are seeing the tragic effects in our American families and unless something changes soon, we will find many tired and worn out families and many that wont make it and fall apart. At the center of this battle is one of the most poorly managed resources we have, the use of our time. Making time for the family, which is vital to build strong communities as well as Godly family traditions, is becoming more challenging. Many times it seems impossible, if you follow the expectations of a consumerist society; a society that expects you to demonstrate your love by the amount of gifts you put under the Christmas tree.

The problem is not a lack of time, the real problem is the lack of prioritization. Unless you take control of your time, someone or something will. If you do not take control of your time, the tyrant "Colonel Urgent" will control your schedules for you. The results at the end is not pretty; feelings of unfulfilment, frustration, pain, guilt to name a few. See Colonel Urgent does not care about values, principles, boundaries, balance, humility, and priorities. All he cares is about having more and now. He does not care about what will the consequences will be later, how many casualties we have in the end as long as the reward is immediate gratification.

Make it a conscious effort this year to fight the temptation of immediate gratification. Teach your children the importance of delaying gratification and developing discipline which will build in them character. Without discipline, we all have the tendency to accept short-term rewards regardless of the consequences. It is evident now that this short-sighted behavior does not work; actually it is destructive. In this recent recession we are living, bankers AND investors engaged in business transactions that generated short-term gains for a few, which in turn created tremendous losses for them and the rest of the country. Unfortunately their short-sighted view and their desire for short-term gratification not only affected them, in the process many innocent families were destroyed in the name of greed.

This holiday celebrate the importance of families, family life and community. Remember that values such as honor, courage, generosity and truthfulness begins at home. This year make it intentional to develop a plan to preserve values, priorities and unity of your family. You may be one of the few in your neighborhood, don't worry. Remember that your are doing this for a greater cause and not to please your neighbors. Your investment in your family will be greatly blessed.

Time Is Running Out! Special Charitable IRA Rollover Expires Dec. 31

The charitable IRA rollover legislation allows you to transfer lifetime gifts up to $100,000 using funds from your individual retirement account (IRA) without undesirable tax effects. This opportunity is only available through Dec. 31, 2011.

IRA funds are heavily taxed whenever you draw them out, at rates as high as 35%. What’s more, the tax burden never goes away – even your heirs will pay income tax on IRA funds they receive from your estate, and federal estate taxes may apply, as well. You can increase your usual gift to qualified organizations by the amount of tax that otherwise would have come due on your required distribution. For example, let's assume that you normally give your home church a check for $5,000 every year. Instead of writing a check, you could instruct your IRA trustee to send them $5,000 directly from your IRA account. If you had withdrawn the $5,000 from your IRA, assuming you are in a 25% tax bracket, you will be subject to $1,250 in taxes. In other words, your $5,000 withdrawal become a $3,750 donation and you would have to send a letter to the pastor telling them that the government kept the other $1,250 you intended to donate. However, if you send the funds directly from your IRA, your retirement funds would have more impact as 100% of the funds would go towards the benefits of the church programs – and you will have increased your support by one-third, paid for by the IRS.

Important: IRA gifts, under this special tax law, must be made by the trustee or custodian of your IRA. The funds cannot go to you and you deliver them to your local church or qualified organization.

You may contribute funds this way if:

    * You are age 70½ or older at the time of the gift.
    * The gifts total any amount up to $100,000 in 2011.
    * You transfer funds directly from an IRA.
    * You transfer the gifts outright to one or more qualified charities, but not to supporting organizations, or for gift annuities, charitable trusts, donor advised funds or any gift from which you receive a personal benefit.

Who benefits from the IRA Rollover?

• Donors who do not depend on their required minimum distributions for income and are interested in making a highly tax-advantaged gift of significance.
• Taxpayers who don’t itemize their deductions. The IRA rollover most benefits the nearly two-thirds of Americans who do not itemize deductions on their annual income tax returns and therefore do not receive a tax benefit for their charitable contributions. Non-itemizers include lower- and middle-income taxpayers, as well as an estimated 5.2 million higher-income individuals.
• Itemizing taxpayers who’ve reached the charitable giving limit. Donors who itemize their taxes are prohibited from deducting more than 50% of their AGI for the purpose of making charitable donations. However, donations from an IRA are excluded from the percentage limit, allowing individuals who have reached the 50% threshold to give more.
• Taxpayers whose tax deductions decrease as their income increases. Several federal tax deductions – dependent and personal exemption deductions and deductions for medical expenses and non-business casualty losses, for instance – become smaller as a taxpayer’s income increases. By making charitable donations from an IRA, rather than making regular, required distributions that qualify as income, taxpayers keep their annual income down and qualify for other tax deductions.
• Qualified charities that are depending on significant gifts this year more than ever to help support the ongoing and growing needs in our both locally and globally.

What are the requirements to take advantage of the IRA Rollover?

• Age Requirement. You must be 70½ years old or older when the distribution is made. The legislation is very clear that you must be 70½ at the date you make the gift.
• Donation Limit. Your total combined charitable IRA rollover contributions cannot exceed $100,000 in any one year. Charitable contributions from an IRA totaling more than $100,000 will not be eligible for tax-free treatment and will be counted as part of your annual gross income.
• Eligible Charities. Any charitable contributions you make from an IRA must go directly to a public charity. Contributions to supporting organizations, donor-advised funds, and private foundations, except in narrow circumstances, do not qualify for the tax-free treatment.

Important: Before making an IRA rollover contribution, contact the recipient charity to confirm that it is eligible to receive tax-free gifts from IRAs. The charity’s determination letter from the IRS will indicate whether it is a qualified charity, exempt under Sections 501(c) and 509(a)(1), 509(a)(2), or 509(a)(4) of the Internal Revenue Code; or, if it is an ineligible supporting organization, exempt under Section 509(a)(1)(3).

• Eligible Retirement Accounts. Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs. Charitable donations from 403(b) plans, 401(k) plans, pension plans, and other retirement plans are ineligible for the tax-free treatment. You can give your required distribution to a qualified charitable organization without having to count it in your taxable income.
• Directly to the Charity. Distributions must be made directly from the IRA trustee payable to the public charity.
• No Gifts in Return. You cannot receive any goods or services in return for charitable IRA rollover contributions in order to qualify for tax-free treatment. Ineligible benefits include auctions, raffle tickets, fundraising dinners, or any other type of quid-pro-quo transactions.
• Written Receipt. In order to benefit from the tax-free treatment, you must obtain written substantiation of each IRA rollover contribution from each recipient charity.
• Qualification Towards Your Minimum Distribution Requirement. If you have not yet taken your required minimum distribution, the charitable IRA rollover gift can satisfy all or part of that requirement. Contact your IRA custodian to complete the gift.
• Multiple Organizations. Under the law, you can give a maximum of $100,000. For example, you can give to two organizations $50,000 each this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.
• Combined Efforts of Spouses. If you have a spouse (as defined by the IRS) who is 70½ or older and has an IRA, he or she can also give up to $100,000 from his or her IRA.

Before making IRA rollovers, consult with your tax advisors about how you can benefit from this opportunity.

Basics of Retirement Planning

Retirement planning is probably the number one reason why people do personal financial planning. Most people like to daydream about the things they hope to do someday when retire. Making those dreams come true is an important part of the retirement planning.

There is a lot information available on this topic, sometimes I think too much. However, it is important to remember that your retirement goals and objectives are unique and should not be based on a "cookie-cutter" approach. This is one area that you should not be cutting corners. Retirement planning is an interactive process of clarification and adjusting of goals as our lives unfold and new circumstances evolve. 

Mapping out a retirement plan is particularly complicated for today’s middle-aged baby boomers. They face financial pressures that other generations have not had to deal with - such as supporting kids in college while at the same time providing help to aging parents. This squeeze forces many to postpone retirement planning. Also, the current situation of our economy has put undue pressure on their retirement planning.

Another mistake that should be avoided is treating retirement planning as purely an investment planning exercise. Even though the financial aspect of the retirement planning is critical there are other factors that must be taken into consideration. As our lives  unfold, new circumstances emerge, new values are embraced and new emotions may develop. The retirement planning process is a delicate balance between the financial and non-financial  realms. According to age, personal characteristics, and circumstances, the range of applicable investment tools varies too. For example, annuities are not  for the 30 years old, while sector funds are not for people in their seventies, even though there are both good financial vehicles.

Because of what we have discussed here, it important that retirement planning be started early and be reviewed on an annual basis. There are many ways to develop a proper retirement plan, do not allow that your plan to be designed around the goals and objectives of another person, you wont be happy with the results. Finally, a sound plan requires the ongoing counsel of a financial professional who can help you obtain your retirement objectives.

DETERMINING THE RIGHT CASH BALANCE

Today I continue sharing my toughts about business cash flow management. As I mentioned on my previous posting, the information being shared here can also be applied to your family cash management.

One of my main complaints with bookkeepers, accountants and other professionals in the accounting and financial profession is their obsession with net income when advising their small business clients, instead of focusing on cash flow.  As I mentioned on my previous posting, cash flow is the life blood of any business. However, for a small business it is even more critical to have a tight grip on cash flow management. Small business owners must insist their accountants, CFOs, bookkeepers, CPAs to help them with the cash management instead of worrying so much about the net income.

Why is cash flow management so important for a business? 

The main reason, your business could go bankrupt while you continue showing profitable financial statements. Many of you may be thinking; What? When you have been in this industry for over 20 years you have seen your fair share of things that will make you go hmmm. This is one area that baffles many small business owners; "But my CPA showed my financial statements last six months showing me a profit...." when they get hit by a Mac truck in the middle of the highway when the news hit them that they are bankrupt or in a serious cash flow deficiency.

When looking at cash flow management you must look at both extremes, another mistake that many financial professionals make is to only focus on the cash flow deficiency side only. If your business has been blessed with excess cash, the excess cash should never be idle (i.e. invested in marketable securities, buying productive assets (such as computers or machinery and equipment), reducing debt, etc).


How much cash balance should I hold?

This is an awesome question and the answer is depends. The answer to this important question is not so simple since it is affected by many external factors:

1. State of the economy - If economic uncertainty exists, the conservative
strategy is to retain higher cash balances.
2. Rate of return from marketable securities you can earn
3. Uncertainty about future cash flows
4. Ability to borrow on short term notice
5. How long funds are needed?




To name a few.

If there is an inadequate cash balance, you face the following adverse effects:



1. The negative impact on your credit rating of not paying a creditor on time.
2. The possibility of losing a cash discount and incurring late fees.
3. The inability to make a bargain purchase because of lack of funds.
4. The payment of brokerage and administrative fees when marketable securities are sold or a bank line of credit is used to obtain funds.
5. The possibility of having to borrow at high interest rates.
6. The need to sell assets to derive cash, such as selling accounts receivable to a
third party.

The goal of cash management is to have sufficient cash balances for transactions while avoiding excessive balances. It is a delicate balance that must be watched on a regular basis, which baffles me how can business owners (or their respective person in charge of their financials) operate without looking at their financial statements for several months. Once again, cash flow is the life blood of your business. More time is spent on the type and quality of their stationaries (not to say that it is not important) than in the most important aspect of business which will determine if the business will be around to see the use of the stationaries.

How To Handle Habitual Socializers

Yesterday during a conversation with a friend, one of the topics that came up is the amount of jobs the United States has lost to off-shoring. Which brought up the obvious question, why? and what can we do differently.? My friend being in the corporate sales training arena, highlighted that the main reason is the lack of productivity.

So this conversation has made me think, what are the major causes of inefficiency in the United States and what can we do differently? One that comes quickly to mind is those poorly planned meetings. Worldwide respondents to a recent Microsoft Office survey say they feel unproductive for as much as a third of their workweek. Wow! unproductive for as much as 33% of their work week. The top three time wasters, according to survey participants, were ineffective meetings, unclear objectives and lack of team communication. 

In the United States, 42% cited procrastination, 39% picked lack of team communication and 35% chose ineffective meetings among the top time wasters, according to the same survey. However, one that was not mentioned and I think that we overlook is the excessive socializing in the office during work hours.

There are two main forms of time wasters in our offices; Interruptions and distractions. Eventhough some of the interruptions cannot be prevented, there is one that is easy to avoid and the focus of this article. I am talking about the visits from the infamous "habitual socializers". Even though socializing is  important for the work environment, team and career, it's better to set aside some specific time for socializing with your colleagues in a way that represents a win-win for everyone.

Interruptions are inevitable in the corporate world, specially if you are the "go to person" in your office. Whether you answer difficult questions, provide
guidance, or point people in the right direction, helping others can be a valuable service to your team and your company. However, unplanned interruptions can become a time waster and lower your productivity. Therefore, to be able to increase your productivity you must take action to reduce the number and frequency of unexpected interruptions, particularly the ones that end up wasting your time, without sacrificing your team's productivity in the process.

If you are facing this problem at work right now, you should consider implementing a unique strategy to handle these interruptions. The key is to avoid inviting them in with friendly question,s instead you may need to use a less inviting statement to discourage the interruption unless it is truly important.

For example:

Visitor: "Got a minute?"

You: "Actually, I'm in the middle of something right now. Can this wait?"

or

You: "I'm really busy right now, is it something urgent?"

The majority of habitual socializers will realize you don't have any interest in socializing at that moment and try to find someone else to talk to. If they do have something legitimate to discuss they will say so and you can then decide how to proceed. You should reserve this tactic only for people that you've identified as habitual socializers through repeated patterns of abuse. The rest of your colleagues and staff deserve the benefit of the doubt.

Also, do not overlook for the interruptions in the form of text, chats, emails, facebook, tweeting, social/personal phone calls that eat up into your productivity.  Here are three simple steps to address habitual socializers:

1. Make your office a work place. When habitual socializer drop-in, go and meet them at the door, a clear message that right now the communication needs to be kept short and sweet.

2. While client droping-in your office is important make sure it is productive. If the request will only take a minute or two of your time, complying will bolster your relationship with the client. However, if what the client wants is going to take up more time than you can afford to lose, or they start abusing your time, politely ask him or her to come back later or make an appointment. Most people won't mind doing so.

3. Be firm and clear with the abusive habitual socializer. Some people are more
persistent than others and just "don't get it". You may have to just talk to them, set some boundaries, and ask them to respect them. Make it clear that while you value your relationship with them, you'd rather socialize at a different time. Offer to have a chat with them during lunch, or during a pre-arranged coffee break.

Socializing should not be eliminated all together, it is an important part of effective team building. However, you do have the right to decide when you want to socialize and when you want to work. Like everything else, having a balance is the key. I have written an ebook that you will find very useful if you are interested in improving your efficiency - Making Time Work For You.

Cash Flow The Lifeblood of Any Business

Today I will address a subject geared to the survival of every business. One of the areas that every business must constantly maintain a tight grip on, after income taxes, is cash flow. Even though the article was written with business owners in mind, many of the tips and warnings here apply to the business of running a family.

Cash flow is the lifeblood of any business; If you don’t have it, your business won’t grow. However, many business owners struggle with the management of cash flow. When the cash that’s coming in and the cash that’s going out don’t balance you find yourself in a cash flow gap which in many cases can be hard to climb out of.

Cash flow should not be confused with financial profit or bottom-line (shown on the profit and loss statement). Cash is liquidity, most of us understand it; it is the inflow of cash that is available for the acquisition of assets, pay debt down/off, invest, etc. Profit is recorded in the financial statements when they are earned (accrued) rather than when the money is actually in hand. A business' cash flows and accounting profits must of the times does not occur at the same time. Due to this difference, it is important the your business generate reports that track the cash position and cash flow at a given time. This difference is such that many companies go broke eventhough their financial statements are showing a profit, which I know it baffles many business owners. Sound cash management is the instrumental to the survival of any business. Successful business owners put their money to work for them productively.

My advice to the business owners is to go beyond the traditional profit & loss statements and analyze cash flows. If you have an accountant, bookkeeper, or CPA helping you with your business financial activities, ask them to help you understand the cash flow of your business. Without monitoring your cash—measuring it, investing it, borrowing it, and collecting it—you will must likely end up in trouble with creditors and in bankruptcy.

Having "enough" cash means having enough cash available at the right time. Poor cash flow can mean the loss of attractive opportunities such as the chance to buy inventory at bargain prices or to pay vendors early in exchange for discounts. This applies to all type of businesses and families, regardless if you are organized as a nonprofit organization. A nonprofit organization that poorly manages it cash flow will have a limited reach and will lose grants as a consequence of this.

What are signs of cash flow trouble?

• Cash on hand has been declining for several months
• Receivables are taking longer to collect
• Payables are increasing
• You’re putting aside bills that you typically pay on time
• You’re unable to pay yourself a regular salary
• You’re getting calls from vendors asking about invoice payments
• Your inventory levels are increasing
• You overdraw your checking account expecting new sales to cover it
• You loan the business personal funds to meet routine expenses

What can I do if I have Cash Flow Problems?
Before you borrow more, consider the following:

1. Accounts receivable - many times you have the cash in your balance sheet. Review your receivables turn over ratio and your collection policies. You may want to consider the factoring of receivables if possible.
2. Equipment - if you have excess equipment, consider the sale of the excess equipment to improve your current cash flow situation.
3. Inventory Management - Money tied up in inventory can dramatically impact cash flow. Retailers should regularly gauge their inventory turnover ratio (cost of goods sold divided by the average value of inventory) to make sure it is within industry norms. Old or outdated stock should be cleared out through end-of-season sales to turn stale assets into liquid ones. Manufacturers can use supply-chain management tactics to have just enough inventory on hand to keep product lines running and meet customer commitments without tying up critical cash.
4. Debt restructuring - negotiation of the term of your existing debt, for example lowering your interest rate on your loan or even establishing new payment terms that can provide the necessary cash flow needed today.

Tips to Prevent Cash Flow Difficulties
• Keep a tight grip on bookkeeping and your cash flow. A great way to keep an eye on your business’ cash flow is to balance your business’ books at the end of each month.
• If your business allows customers to be billed for your services or products, then make sure that you have an invoice ready when their items are delivered. This way, you don’t add to the time that they have to pay the invoice if they are on a net-30, 60, or 90.
• Have clear customer credit policies. Keep an eye on customer’s credit lines with your business and when you start to see problems with an account, cut their credit line back to help prevent a large loss. This is a great way to see which customers are paying on time, and which you need to work on.
• Provide an incentive for customers who pay their invoices on time, such as a 2-5% discount off their entire order if they pay before the 30 day mark. This will help your invoices get paid faster, since most customers will want to get that discount, no matter how small it is.
• If you provide services, develop a deposit policy to help cut down on up-front expenses. By placing a deposit on your services, you already recoup some of your costs, and your customers aren’t as likely to not pay the invoice since they have already put out part of the total up front.
• Hire a good credit and collections person(s). Having someone who knows how to handle credits and collection issues will also help to cut down on overdue invoices and missed payments.
• Hire a good bookkeeper, not necessarily the cheapest one. To be successful you need to surround yourself with qualified professionals. Work closely with that person and empower that person so he/she can help you manage your cash flow. Depending on the size of your business, you may need a professional that acts as a CFO for your enterprise. If you cannot afford a full-time CFO, hire one on a part time basis.

Successfully managing the cash flow of the company requires an active participation from the owner or an assigned office manager and a clear understanding of the costs of operations and the efficiencies of accounts receivable and inventory. Also, successful cash flow management requires consistent measurement and input from your several advisors; banker, accountant/CPA.

Using Tax Credits To Lower Your Tax Bill

We are now in the last quarter of 2011. Now is the time to make all of the necessary adjustments to achieve your tax and financial results. One of the areas that should be considered in your tax plan is the use of tax credits to lower your tax bill.

What are tax credits?
Tax credits are not deductible from income; they directly reduce tax. As a result,
they are a great way to reduce taxes on a dollar for dollar basis.

Earned Income Tax Credit - IRC§32
This is a refundable credit for low-income working individuals and families.

Child Tax Credit - IRC§24
This credit is for people who have a qualifying child. The maximum amount of
the credit is $1,000 for each qualifying child. This credit can be claimed in addi-
tion to the credit for child and dependent care expenses.

Child and Dependent Care Credit - IRC§21
This is for expenses paid for the care of children under age 13, or for a disabled
spouse or dependent, to enable the taxpayer to work.

Adoption Credit - IRC§23
Adoptive parents can take a tax credit of up to $10,000 (adjusted for inflation)
for qualifying expenses paid to adopt an eligible child. The credit may be allowed for the adoption of a child with special needs even if taxpayer does not have any qualifying expenses.

Credit for the Elderly and Disabled - IRC§22
This credit is available to individuals who are either age 65 or older or are under age 65 and retired on permanent and total disability, and who are citizens or residents.

Education (American Opportunity) Credits - IRC§25A
There are two credits available:
1. Hope Credit - for the payment of the first two years of tuition and related expenses for an eligible student for whom the taxpayer claims an exemption on the tax return. and
2. Lifetime Learning Credit - available for all post-secondary education for an unlimited number of years.  
A taxpayer cannot claim both credits for the same student in one year. In 2009, the Hope Credit was modified and renamed the “American Opportunity Tax” credit.

Retirement Savings Contribution Credit – IRC§25B
Eligible individuals may be able to claim a credit for a percentage of their quali-
fied retirement savings contributions, such as contributions to a traditional or
Roth IRA or salary reduction contributions to a SEP or SIMPLE plan. To be el-
igible, you must be at least age 18 at the end of the year and not a student or an
individual for whom someone else claims a personal exemption. Also, your ad-
justed gross income (AGI) must be below a certain amount.

Work Opportunity Credit - §51
The work opportunity (formerly the targeted jobs) credit (§51) was created to
encourage employers to hire persons from the following groups:
(1) A vocational rehabilitation referral,
(2) A high-risk youth,
(3) A qualified veteran,
(4) An economically disadvantaged ex-felon,
(5) A qualified summer youth employee,
(6) Members of families receiving cash welfare benefits, and
(7) Individuals 18 to 24 who are in families that have been receiving food
stamps for at least a six-month period ending on the date of hire.

Welfare-to-Work Tax Credit – Formerly IRC§51A
The TRA ‘97 provided to employers a tax credit on the first $20,000 of eligible
wages paid to qualified long-term family assistance (AFDC or its successor pro-
gram) recipients during the first two years of employment. The credit is 35% of
the first $10,000 of eligible wages in the first year of employment and 50% of the
first $10,000 of eligible wages in the second year of employment.

This credit expired in 2005; but was recently expanded and reinstated through 2011.

Combo Credit - IRC§51
In 2007, the Work Opportunity and Welfare to Work tax credits were
combined under §51. The total amount of the credit is not changed but
the computation is made easier by coordinating the definition of “qualify-
ing worker.” However, separate computations apply for recipients of
long-term family assistance and summer youth employees.

Research & Development Credit - IRC§41
Increasing the amount spent on research and development provides a credit of
20% on qualifying expenditures exceeding average expenses in a base period. It has been extended through December 31, 2011.

Rehabilitation Tax Credit - IRC§47
The credit is 20% for rehabilitation of certified historical structures and 10% for
other qualified building originally placed in service before 1936 (§47(a)).

To qualify for the credit, the law requires the retention of at least 75% of the ex-
isting external walls, including at least 50% as external walls as well as, at least
75% of the building’s internal structural framework.

Low Income Housing Credit - IRC§42
Section 42 creates three separate credits that may be claimed by owners of resi-
dential rental projects providing low-income housing. The credit rate is set up so
the annualized credit amounts have a present value of 80% or 30% of the basis
attributable to qualifying low-income units, depending on the income of the ten-
ant qualifying for the credit.

The goal of tax planning is to arrange your financial affairs so as to minimize your taxes. Now is the time to review your tax situation to determine what are the last minute tweaking needed to achieve the desired goals.

How Did We Get Ourselves In This Mess?

This is a question that I would like us to think about today. Not to torment ourselves about the current situation, but to learn from it. One of the problems I see constantly in the financial news is the incessant desire to know when are we going to end this recession. The media worried about what should we called this period; "The Great Recession", "The Big Bust"; who cares. The right question that we must be asking ourselves is, What are we going to do different?

To answer that question, we must be able to determine how we got here. What drove this blessed nation into the brink of ruin. If we do not ask ourselves this question, we are bound to fail. One of the main question we must ask our politicians is what is going to be done different. What do politicians have in mind to not only get us out of the recession but to prevent this from happening again. Otherwise, we will be heading towards the same results. There is no other way around it; same actions leads to the same results.

Our society was promoting greed as an acceptable behavior. Desiring more at all cost. Marketing companies have been bombarding us with their catchy ads to tell us "what we should aspire" and presenting an illusion of wealth that was distorted. We created an industry of a fantasy world that we call "Reality TV"; how real is it? These reality shows have achieved to influence the poor minds of people by selling them the idea of what they are missing or what they should have. Instead they are bringing into our homes the wrong kind of values and the wrong kind of role models for us and our children. It is sad to see how many of families measure themselves to these people, people that instead of idolizing we should feel sorry for them. We should feel sorry, since they have become puppets of the media and advertising companies. The only way to help these people and our families is to turn our TV to another channel or turn off the TV; we must stop giving importance to those shows.

Remember, greed is never good. Never allow that idea to be sold to you and your family members. Greed in fact is a vice and never a virtue. It is a disease that will consume you and will destroy you. It takes the focus of the financial market's to an extreme level self-interest without restrain. It takes the focus of the good that can be achieved with wealth and instead force someone to intensify other vices that in the end will destroy you.

"And in their greed they will exploit you with false words. Their condemnation from long ago is not idle, and their destruction is not asleep"

2 Peter 2:3

 We need to take this time to reflect about what got us into this mess. We must ask the important questions and stop worrying about when are we going to get out of the recession.  We must learn from our past mistakes and make the necessary corrections. The leaders of this nation must stop their political games and serving their interest groups and put the interest of the people of this nation first.

Setting SMART Goals

Being motivated to set goals has to be one of the most difficult aspects of our lives. Many times we start all exited about setting goals and after a couple of days the steam wears off; we have lost the motivation. Many times we loose interest because we feel like every time we attempt it turns into a failure. However, many times we have a predisposed attitude towards being organized, planning and setting goals. This attitude causes us to look at goals in a very wrong way.

Goals are are a critical aspect of our lives and will determine your chances of success. Many of you by now have heard of the acronym SMART, which stands for Specific, Measurable, Actionable or Attributable, Realistic, and Timed. Setting SMART goals is the proper way to ensure that you not only set them but that you will stick and follow through with your goals. If you want to succeed, you need to set goals. Without goals you lack vision; "Where there is no vision, the people perish" (Proverbs 29:18). Goal setting will allow you to take control of your life's direction. Without vision we are vessels in the ocean at the mercy of "luck".

I do not think any of you would be part of a cruise that departs with no specific destination. However, that is what we do when we live our lives in the dark. No idea about how we are progressing towards our values in life. If the only measurement you have about your success in life is the amount of money in the bank then you are destined for a sad and empty life.

Many of us get frustrated with the goal setting process because we do not know how to set them. You can't simply say, "I want" and expect it to happen. Goal setting is a process that starts with careful consideration of what you want to achieve, and ends with a lot of hard work to actually do it. However, in the middle of all that there are defined steps that must be taken for each goal.

How do we set up SMART goals?

S (Specific) - Specificity is the key. Your goals cannot not be vague, for example a goal to “Be more successful in 2011” or "To lose weight" are too vague as it doesn’t define your success. A better goal for a business person is "I will get 10 new clients (this can be further refined to meet your specific business - i.e. you can define the type of clients you are looking for) in 30 days" or "I will lose 10 pounds by X date".
M (Measurable) - To have effective and achievable goals, they must be measurable goals. Quantify and qualify your goals. Being measurable will allow you to tell how near you are to your goal, or, even more, if you’ve actually achieved it already. Another advantage to having measurable goals is that when you are very specific, you tend to have more confidence in the goal, and with true confidence, you are able to achieve true progress.  When you set a goal to acquire 10 new clients in 30 days, you have a specific and measurable goal. It is clear if and when you have achieved your goal. Also, measuring your goals gives you an idea of what it takes step by step to reach that goal, and you are able to monitor your progress.
A (Actionable or Attributable) - It would be silly to set a goal for your
favorite sporting team to win the league if you cannot directly influence that outcome. Goals must be backed by action. If your goal is to lose a specific amount of weight, you must take action and go to the gym and change your eating habits. Just writing it on a piece of paper wont make the weight to melt away.
R (Realistic) - This is where I think most people get frustrated with their goal settings. Setting a goal to "be the number one life insurance agent in the country" when you do not have experience in the industry or to "beat Kobe Bryant on a one-on-one basketball game" when you have never played basketball may be a stretch of you imagination. Setting challenging goals, Aim High Attitude, is great when we take small steps towards the ultimate goal.
T (Timed) - A well thought out goal must include a timescale and must not be open ended. When we set up the goal of acquiring 10 new clients, we also defined by when. If the goal is to get 10 new clients is too vague.



Finally, the key to successful goal setting is to avoid having too many goals. Many times we overwhelm ourselves by setting 23 goals to achieve this week. In fact, I would suggest that you work on one or two goals at a time. Having too many goals makes things complicated and requires a more complicated system for keeping track of your goals. It will also frustrate you; keep things as simple as possible if you can. When you focus on a small amount of goals at the same time it allows you to focus your energies which will make you more effective.

Success and Optimism

Life is filled of choices. You may choose to have a pessimist's view and live a self-defeated life or you may choose to take the optimist's route and have a challenging and fulfilling life. In contrast, optimists expect the greatest. They tend to think defeat is just a fleeting delay, that its causes are confined to this one case. Optimists tend to center on and plan for the 'difficulty' at hand. In other words, they most likely reinterpret an off-putting experience in a way that helps them discover and mature. Such people are unfazed by a bad situation, they perceive it as a challenge and try harder.

Bright expectancies of optimists also forecast better reactions during transitions to new environments, unexpected tragedies and unlikely turn of events. If they fall, they will stand up. They see opportunities instead of obstacles. People react positively to optimists. Optimists are upbeat and less dependent on others for their happiness. They find no need to control or influence people. They usually draw people towards them. Their optimistic view of the world can be catching and influence those they are with. 

Optimism seems a socially desirable trait in all communities. Those who share optimism are generally accepted while those who spread gloom, panic and hysteria are treated unfavorably. When the going gets tough, optimists get tougher. Pessimists are more likely to quit trying when difficulties arise. Optimists typically maintain higher levels of subjective well being during times of stress than do people who are less optimistic; They persevere. They just don't give up easily, they are also known for their patience. Inching their way a step closer to that goal or elusive dream.

Optimists are healthier and live longer. Medical research has justified that simple pleasures and a positive attitude can cause a considerable boost in the body's ability to fight disease.

Protect The Elders During This Medicare Open Enrollment Period

Open enrollment period started on October 15, 2011, which provides seniors and disabled to enroll and make the necessary changes to their Medicare Advantage plans available from the private insurers. However, with every open enrollment period comes the batch of leeches who want to take advantage of the senior community. Fraudulent operators pray on a vulnerabel population that is generally more trusting and open to friendly faces at the door and friendly phone calls. It is imperative that we protect our seniors from Medicare scams.

Here are some tips to help you minimize potential scams during this open enrollment period:

1. Be wary of unsolicited calls or visits at home.
2. Do not take calls from someone claiming to be from Social Security or Medicare. They Do Not Call Beneficiaries.
3. Avoid high pressure sales and requests to switch or cancel your existing plan.
4. Read carefully AND understand the health plan information being offered. if you do not understand it, have someone you trust review it for you and explain it to you.
5. Consult family and friends before you make a purchase of any health plan.
6. Consult free tools being provided by your state and Medicare (i.e. Medicare Plan Finder - http://www.medicare.gov/find-a-plan ) or call the Health Insurance Counseling and Advocacy Program 1-800-434-0222.
7. Avoid falling for the "too good to be true" plans.
8. Insurance agents must be licensed with the state you reside. Also, Verify that the person you are dealing with has a proper authority to act on behalf of the plan being presented to you.
9. Remember that Medicare has no official sales representatives so they do not send people to solicit your business. 
10. Federal regulations prohibit unsolicited sales call, and marketing in educational or care settings.
11. Federal regulations also prohibit offers of free meals for listening to a sales presentation or for signing up in a particular plan. Also, be ware of other tactics to coarse you to sign up. If the person seems desperate and hard selling you, you may want to consider walking away or getting the information for further review later.

11. Guard your personal information. Never give out your Social Security number, bank account numbers, or credit card information over the telephone.

Governmental agencies are have limited resources to actively prevent and prosecute all of the claims brought to their attention. Therefore, it fall in us to protect our elders from falling victims of fraudulent and deceptive practices, which in most cases results on consumers to lose their medical coverage and much-needed health care services or prescriptions.

Please understand that not all insurance agents are bad. The majority of the insurance agents are very good, caring and professional. It is important to establish a professional relationship with them and understand their business practices.

Medicare Open Enrollment Starts October 15

The open enrollment period for Medicare starts tomorrow (October 15). The open enrollment period goes from October 15 to December 7, 2011. Medicare is available to all those age 65 and over and younger people with disabilities as well as those with kidney failure requiring dialysis or a transplant. Many people under 65 do not know that they may qualify.

With more benefits, better choices and lower costs, it is important that people with Medicare and their families begin reviewing drug and health plan coverage options for 2012 early.  Due to the Affordable Care Act, people with Medicare can get certain preventive services for free and can get more affordable prescription drugs.

Open enrollment is seniors’ chance to review their Medicare choices and pick the plan that works for them, or keep the plan they have today. The open enrollment period, provides the people with Medicare to evaluate their options for 2012 and maximize the benefits. Starting early in the enrollment period process will give you the time you need to properly evaluate your needs without the pressures of procrastinating until the last couple days of the process.

A recent survey by PlanPrescriber, an online insurance comparison tool and seller, found that 65 percent of 475 seniors enrolled in Medicare's Part D prescription drug program weren't aware of the change in the time-line. I urge you that if anyone in your family or neighbor is a participant of Medicare or potential candidate for Medicare to contact their local financial advisers to properly educate them in the best plan for them.

If you are in Florida, please contact me and I will refer you to people that will properly guide you in the decision process. You can send me an email to gonzalezconsultingintl@gmail.com.

Beware of Bogus EFTPS Email Scams

The IRS is advising employers to be aware of a bogus e-mail scam involving payments allegedly rejected by the Electronic Federal Tax Payment System (EFTPS). The e-mail contains a link that, if clicked on, may result in the download of malicious software. The software is often designed to provide the scammer with personal and financial information on the employer's computer that the scammer may use to commit identity theft.

Remember: The IRS does not initiate e-mail communication with taxpayers regarding EFTPS or tax account matters. All unsolicited e-mails that claim to be from either the IRS or any other IRS-related area, such as EFTPS, should be reported to: phishing@irs.gov. 

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Attitude Determines What Happens to You in Life

 "Faith and initiative rightly combined remove mountainous barriers and achieve the unheard and miraculous. An enthusiastic attitude is nothing more than faith in action."

Henry Chester

"Keep your heart with all vigilance, for from it flow the springs of life"

Proverbs 4:23

This week I was looking over Proverbs 4:23 and it is what prompted me to write to you today. Many people go in this journey we call life without truly understanding how their attitude towards the many events in our lives will impact them. Many people go in life hapahazardly making decisions in life without realizing the root causes of their successes or failure. This proverb is short, powerful and true.

Most of the NLP (Neuro-Linguistic Programming), self-development industry has a foundation in this short proverb. The power of your mind. In simple terms, the proverb can be translated; Be careful how (what) you think, because what (how) you think will result in actions that will have either a positive or negative impact on you. In other words, what you plant and grow in your mind determines your destiny. Your attitude clearly determines what happens to you in life. Attitude defines how you look, what you say and what you do. Attitude affects how you feel both physically and emotionally. It will also affect how successful you will be in achieving your goals.

Life is filled with challenges. What makes a difference between you and the next person is how well do you handle the challenges. Do you stay on the floor after you fell short from your goal? Or do you get up immediately and go at it again? Your attitude towards difficult tasks determines how well and if you will finish your task. You get from life exactly what you put into it. If you have a bad attitude towards life, you will feel like everyone is picking on you and that "life is unfair". If that is happening to you, it might be time that you check your attitude and how you are being perceived by others.



The good news is that you can change your attitude; you have control over your thoughts. A positive attitude starts with you having confidence in yourself. Confidence translates into reinforcement in your capabilities, positive energy, increased mental faculties and increased strength. When you make up your mind that you will accomplish the goal, the constant affirmations of your ability to succeed will lift you over the difficulties.

Constant positive affirmations increase courage and courage translates into the backbone of confidence. Many of the great achievements in life were accomplished by people with positive attitude. They had absolute faith about their chances of succeeding, even when that attitude seemed ridiculous to outsiders. They did not care, they were determined to accomplish their goals. Positive attitude puts your mind in a condition to succeed, it sharpens your perceptions; it helps you see your visions more clearly.

Therefore, do not fret over the challenges in your lives. When you fall, get up, dust yourself off, review the cause of the fall, determine how to improve and go at it again. Our character is formed over the duration of our lives. Each thought or feeling adds or diminishes our character. Each decision we make contributes to it. Everything we take into our minds (impressions, experiences, etc) helps in molding our character. Those attitudes and behaviors that develop from hate, discontent, evil, falsehood eventually will destroy us and will prevent us from achieving greatness that each one of us is capable of. It is your choice, regardless of the circumstances to be either cheerful or not. You won't gain anything from being gloomy, grumpy or even mean, so why be it? If you develop the right attitude, you will find that others will respond the same way towards you and things will begin to go your way. Positive attitude will yield positive results; life will give you exactly what you put into it.

Debt Slavery

Debt Slavery is nothing new. Many historical books, including the bible, will talk about debt slavery or debt bondage. Debt slavery is defined as a situation when a person provides a loan to another and uses his or her labor or services to repay the debt. The problem with debt slavery is when the value of the work, as reasonably assessed, is not applied towards the liquidation of the debt, the situation becomes one of debt bondage.

According to the Anti-Slavery Society:

Pawnage or pawn slavery is a form of servitude akin to bonded labor under which the debtor provides another human being as security or collateral for the debt. Until the debt (including interest on it) is paid off, the creditor has the use of the labor of the pawn.

The United Nations has defined debt bondage as a “modern day slavery”. The focus of the UN and other governments is towards the abuses and atrocities committed against families in under and developing countries. However, today in the United States we have debt bondage. Many people do not agree with me, but the truth is that we do. In simple terms, debt is bad because it restricts your freedom. Debt is bad even if you’re borrowing to put yourself in a better position long term, because you’re still restricted by having that debt load hanging over you and your life. One of the most frequent exhortations from Scripture is the warning against debt can be found in Proverbs, the reader is warned that the "borrower is servant to the lender." And in Paul's letter to the church at Rome, he tells them flatly: "Owe no man anything." (Romans 13:8).

We can make an argument that leveraging the acquisition of a piece of land or real estate is a good use of debt. It is possibly true, if the repayment of that loan does not enslave you into the servitutde to the financial institutions for the rest of your lives.

Many families sell their souls to companies for a job which they, in reality detest, do perform just for the pay so they can stay afloat. This is the typical debt bondage we have in our society today even in most developed countries. Therefore, we become slaves to those who pay us to perform a specific task and most times against our values. Being in control of your spending and finances liberates you, in a nutshell, it is financial freedom.


What is financial freedom?
Many families work so hard and give so much of their lives to provide a better life to their families. They want financial freedom. However, what is financial freedom? It can simply be defined as “the freedom to make choices in your life without having to worry about the day to day financial implications”. You have the freedom to chose the place where to work, regardless of the pay. When you find a career that you’re passionate about, you’ll truly enjoy what you’re doing and the money will follow.

What can be done now?
The best thing that all families of WBN can do is to develop financial plans to liberate themselves from debt. Transform their focus to own and invest. Focus on a financial plan address your debt balance and focus on debt reduction and then towards financial freedom. Trust me that you will breath better after you become financially free.

Simple Steps to Make Your Life Happier, Healthier and Wealthier

Wealth is more than the amount of money we accumulate. Wealth is living an abundant life; a complete life. Living a life were we are a blessing to others.

Today I decided to share with you a couple tips on how to make our lives happier, healthier and wealthier. You probably know that laughter, hope and optimism make a life more enjoyable. Even though we know this we see people around us that are constantly sad and pessimistic about life. It does not matter what the situation is (it is rainy, sunny, the have money or no money at all) they seemed to be wired for sobriety. They do not seem to see the good in life. It is possible that some of this is due to genetics or past experiences. However, there are still plenty of things you can do to influence how you feel each day and make a positive impact on those around you.


I understand that during these difficult times we are going through right now, makes the task a big challenge even for natural optimists. Now think about the energy it takes to be somber, gloomy, complain and worry about problems. How about if we take that energy and apply  it to the solution of problems and how we can benefit those around us. Here's a list of simple things you can do to give your attitude a boost:

1. Do what you love - You already know what you enjoy doing -- if you
can find a way to make a living at it great, otherwise consider spending time doing it as a hobby or just for fun.

2. Make time for family - I think that many of us in the chase of money sacrificed the well-being of our families. During the recent recession, many came to the realization that after all the family just wanted your love, affection and respect. There is a video by Casting Crowns that I enjoy and better explains this point Click Here To View The Video .

3. Build a Strong Spiritual Life - To achieve success and build a wealthy life, we must build a strong spiritual life. I say this without apology nor hesitation despite the fact that many people believe that we should not talk about religion in business. I am not going to go into a long theological discussion here, all I will say is that a life without a strong spiritual reserve is an empty life.


4. Be Grateful - If you focus on what you do not have, you will never have enough. Instead, every morning when you get up be grateful for what you have. This morning while I was working out, a man comes into the gym on a wheel chair. The man is missing both legs. Now this man could have stayed home complaining about what he does not have. Instead he came to the gym to workout with the rest of the guys. Not only did he come to the gym, he walked in with a great attitude, a big smile and ready for the work out. Every day write down 10 things to be thankful for. Gratitude has the power to shift your focus from what your life lacks to the abundance that is already present. You will see the change in your life; you will be happier, healthier and your stress level will be reduced.

5. Exercise - I think enough have been said about the benefits of exercise in our physical and mental health. Chose the best way for you to exercise, Just do it! Stop looking for excuses.
6. Reward Someone Else - Nothing feels better than making someone else
feel special and appreciated, even if it's just a simple smile and "Thank You" for a job well done. Thank someone today for their well done job.

Have an awesome day!

Lets Talk About Money

"The wise has valuables and oil at home, but a fool soon runs through both."Proverbs 21:20

Last week we talked about fraud. Today lets talk about money. I will get to basics and for many of you, it will be too basic. However, it is important for the benefit of all of our readers.

To begin, I would like to clear the air and get rid of the myth that money is not important and it is bad or evil. Lets set the record straight. Money is important, extremely important if you want to live in today's society. If you are planning to live in a desolated island, money may not be important. The reality is that money is an important part of our lives, whether you want to accept or not. Pretending otherwise is foolish. Without money we cannot provide shelter, food or clothing to our families. Without money we cannot be generous and fund ministries and help the less fortunate.

What is money? Money is the harvest of our production. What we receive for our production and services, which allows us to obtain the production and services of others. You may hear people say "Money won't bring happiness", but as I travel in this journey we call life I notice that money brings more happiness than poverty. I am not saying that money is the most important thing in life and that we must elevate money to the level of God. I am just saying that money is important. To think otherwise is foolish. To be able to develop wealth this must be clear in your head.

Money is not bad nor evil by itself, what is bad or good about money depends on what we do with our money. If you take your hard earned money and provide the basics to your family, help the poor and fund ministries then your actions would put the money to good use. If you take your hard earned money and use it to fund your vices and develop illegal activities, then your actions put your money to bad use. In my opinion what is bad is your desire for money above all things and at all cost. That is when you become a slave of money.

However, the pursuit of money leads to your own destruction. It is proven over and over, just look around. Have you noticed that those who go in the pursuit of money (aka money slaves) are those heavily in debt, work grueling hours for a compensation that does not cover their basics, money is never enough (the more they have the more they spend), money never lasts (the faster they earn it, the faster they spend it), are constantly worrying where they’re going to get the money to pay for they bills and are willing to do almost anything to get it (money slaves?).

Money has the ability to reveal our true person. It is easy to say "I am a good person", "I am a Christian", "I help the ones in need", blah, blah, blah. I tell them, show me your checkbook and we will see. The way YOU use money reveals more than words. The use of money reveals who you really are. If you are greedy, money simply shows your greed. If you are dishonest, money will highlight this characteristic. If you’re poor minded, money doesn’t help you because you can’t control it. If you are a fool, you’re soon parted from it.


Having a clear understanding about money and its proper place in our lives and use of it will help us be better prepared to develop wealth. Does money equal wealth? Definitely not. Money is only a small part of wealth, it is only one of the many resources available to build wealth. Money in the hands of the unwise just makes a fool with money and the prime candidate for frauds and devoured by alligators. Money is just a tool to serve us, never for us to serve money. Having a clear understanding of the proper place of money in our lives will prevent us from ending up being slaves of money.

Let's Talk About Fraud

Today let's talk about fraud and how we can protect ourselves from it. Money is hard to come by; it takes hard work and diligent stewardship. We must be astute and alert of potential frauds that can be committed against our families. Fraud is devastating to a family's self-esteem and wealth.

The best insurance against fraud is education; being intelligent stewards and investors. Education and dissemination of fraud prevention material will increase the level of awareness in people and reduce the amount of frauds being committed. It is our responsibility to educate ourselves to protect our hard earned money from these scammers. Please understand that the main focus of a swindler is to gain access to your money as soon as you have it in your possession. They are studying you and your weaknesses.

The main challenge we all face is how to identify one of these snakes before they reach you. Even though not two scammers are the same, there are some common traits that you can use to increase your awareness that you are near of a potential scam. Please understand that the list I am providing to you does not cover all of the potential traits of a scammer, but it will give some good ideas about some of them:

* they are narcissistic, self-centered, and grandiose
* they have feelings of entitlement
* they think they are special and entitled to live a good life

If achieving that good life means they have to engage in deceptive, immoral, and illegal behavior, that is fine with them. The means justify the ends. They justify their crimes since they believe they are entitled to the good life; even if to have that good life they must take your money by whatever means possible, after all they need to feed their families too.

* they have large egos, this leads them to think that they are too smart and they wont be caught.
* they believe to be innocent.
* they lack a conscience or remorse
* they are flamboyant
* many of them lack an education and/or have money problems
* they have a "gamblers attitude", no clear plan just "go with the flow"
* they love to show you their fancies (money, girls, houses, cars, famous contacts, etc); this is how they lure you into you handling your hard earned money to them. After all you want some of their candy too, right? Also, this way you are blinded by all the lights and forget about asking questions and request documents to support their claims.
* signs of insincerity, shallowness and superficiality
* they are typically male

Why do they commit the scam?

Scams are not easy to put together. One of the main reasons for them to put together these scams is their lack of education. Bottom-line, they are low class worms that are incapable of developing a real sustainable business. They see the scam as their way to gain access to your money without investing in an education or learning to provide value in return for your investment. A sustainable business requires a plan, a clear vision, it takes time, money and hard work. However, these worms are not interested in developing a business they want the rewards without providing value in return. Why work hard and diligently in a business when they can take it from you?

How to protect yourself from scams?

1. Be wise - think with your head and not your heart.
2. Ask questions:
 * Why is this "investment" good for you?
 * What kind of investment/company is it?
3. If the investment requires the investment in a company; Is the company registered? Where? What is the value of the stock?
4. Request audited financial statements, whenever there is a corporation behind the "investment".
5. What are the risks? - remember there is no zero risk investment
6. Is the investment registered? - Where?
7. Who are the auditors? Who is the legal advisor? - check them out, make sure that they are really involved and certifying the investment. Request permission to contact them or your trusted advisor to contact them.
8. Always request for WRITTEN information. It takes time and it is easier to catch a flaw in the presentation when it is written. Many times the scammer does not have the know-how in putting together a presentation that is consistent and coherent.
9. Have all written information reviewed by your trusted advisor.
10. Contact the BBB and your State Attorney regarding potential complaints filed against them.
10. Never send money to anyone you do not know. Never send money to anyone who is not willing to meet with you and your trusted advisor face-to-face. If they believe in their product or service, have them invest in their "presentation" and come to meet you and do their dance in front of you.
11. Never reveal your critical financial data (social security, bank statement, credit card numbers) to people that contact you over the phone.
12. Become an intelligent investor. The best insurance against fraud is knowledge. Only invest in registered companies and only after a careful analysis of the expected return.
13. Obtain a prospectus. Legal investments are required to comply with Federal and State regulations. They are required to provide written documentation to potential investors from where they can assess risks and make educated decisions.
14. Verify claims made by the presenter. If they claim that they have a patent, where is the patent? If they claim to have an oil field that produces 2 billion barrels of oil per day, where is the oil field? who certifies that production?
15. Never speculate on a get-rich quick scheme. They do not work and they will cause pain.
16. Do not "buy" into a company that requires you to recruit others to become distributors as the formula for success. If the company does not have a solid product with a market for it, the chances are it is pyramid.

I hope this information is helpful to you. I am currently working on an e-book on fraud prevention and decided to share some of the information you will find in the ebook. The link to the book will be published shortly.

Financial Intelligence

Naturally, most if not all of us want and crave for something better. It is all part of us, if we want a bigger car, a better house, buying good things for the family. We keep hoping for more but, in order to get what you don't have, you have got to do something you have never done before.

What makes a person wealthy is not real estate, mutual funds, and businesses. Not even money makes you wealthy. What makes you wealthy is "Financial Intelligence" (information, knowledge, wisdom and know-how). Money is the hands of an unwise person, just makes a fool with a lot of money and a great target for sharks, piranhas, and vultures to devour this fool. Let me give you an example, a new top of the line tennis racket, by itself, does not make you a better tennis player; what makes you a better tennis player is training, taking tennis lessons to develop knowledge of the game.

Wealth is developed with Financial Intelligence. Financial Intelligence consists of:

1. Increasing cash-inflows - increasing your income potential by creating more value on our products and services.
2. Reducing cash-outflows - creating a budget that will allow you to live well and still be able to direct funds to investments, charity, entertainment and education.
3. Protecting your wealth - developing plans that protects your estate from taxes, uncertain events, etc.
4. Leveraging your money - knowing how to maximize your return on your money. Benjamin Franklin once said "Money makes money and the money that money makes makes more money" Learn how to put your money to work harder instead of you.
5. Improving your financial knowledge - gain an understanding of the basics of finance to be able to make better financial decisions. Never allow your financial advisors to take control of your finances. Let me explain, going back to our tennis analogy the tennis coach will be there to provide you training, advice, helping you to increase your knowledge of the game, but they do not play the game for you.

In my opinion, one of the main causes for the recent recession is due to the fact that most people lacked financial intelligence. Most people were playing a game that they did not understand the rules of the game. People were unprepared and were slaughtered, they became easy targets for scammers who sold them these "financial products" that were bound to fail from the beginning. For that reason, we have prepared a short Ebook "Increase Your Financial IQ" with the goal of helping you increase your Financial Intelligence. As a subscriber of the Wealth Building Network we will make this ebook available at no cost to you.

Retirement Planning - Important Questions You Must Ask Yourself

The decision of how to handle your retirement is entirely yours. You can either develop a plan of action or leave the burden in the hands your children. One thing that is for sure is that every day that goes by we are all getting closer to our retirement; we are all aging.
On January 1, 2011 the first baby boomers turned 65 and they will start they next phase in life. In the past, retirement used to be blissfully perceived as being a delightful transition from a busy life filled with responsibilities and burdened with the costs of raising the children to the peaceful financial and physical freedom of retirement; how wonderful :)

The reality is that retirement has become for many a nightmare. We are living longer, many times outliving our savings, social security does not cover our retirement expenses, the cost of health care continues to increase at paces that were never imagined. Conclusion: The rules of the game has changed; retirement is not what it was for your parents.

Unfortunately, hope is not a viable strategy. The only solution is to properly plan for your retirement years. Currently with the new events in our economy many feel confused, even scared. However, "doing nothing" about it is the worse strategy you can take. Now more than ever your must plan for your elderly years. Once again the decision is yours on how you want to live those years.

Planning for your retirement doesn’t have to be hard, but there are a number of bases that you must have covered to accomplish success. To make sure that you are on the right track to seeing the retirement future you always dreamed of, there are a number of important questions that you will first want to ask yourself. The answers to these questions are important when developing a retirement savings plan.

1. What does retirement mean to you? Each person has their own definition of retirement. Some would slow down the amount of hours they are working right now. Some people may consider starting their own business, write a book, or become consultants. For others, retirement is taking over a new hobby, travel, and volunteering their time and resources to the mission(s) that are close to their heart. This question will define the amount of resources you need to sustain the lifestyle you want during retirement.

2. When do you want to retire? Your expected retirement date is critical since it represents your goal date. Based on your goal date your retirement savings plan will be determined. When setting this date, it is important to be realistic. The sooner you want to retire the sooner you must start building your funds to meet the lifestyle you defined in question number 1. Also, the earlier you want to retire (even if you plan to work part-time) the harder your retirement funds must work to ensure that they last for the duration of your retirement.

3. Am I making use of my company’s 401(k)? Are you employed? If so, do you have a 401(k) through your workplace? If you are employed full-time, you should. Are you contributing to your account? If not, this is a step that you must start taking now. It doesn’t matter whether you want to retire in 20 years or in 5 years, any bit of money that you can put aside will help. This is because your funds in your retirement funds are tax deferred. Also, if you are one of the lucky ones that still have a 401(k) with company matching (regardless of the amount) it will help you build up retirement funds on a tax deferred  basis. Company matching is "free money" being deposited in your account; you should consider maximizing this benefit.

4. Do you foresee any potential health problems? This is difficult question for many to address. I think we need to be honest with ourselves so our retirement planning be successful. Are you aware of family health problems?

5. Am I in debt? Once again, another difficult question but extremely important. If you are in debt, now is the time to start taking action. Debt can have a negative impact on your retirement goals and dreams. If the answer to this question is "Yes", now is the time to create a budget for yourself. The money that you are able to save can be spilt to repay your old debts, as well as add more money into your retirement savings.

These are not all of the possible questions to ask as part of your retirement planning. My goal here is to motivate you to take action. Now is the time to meet with you trusted financial advisor (whomever that person is; CPA, attorney, life insurance agent, etc) and develop a retirement savings plan. Your financial advisor can help you with tax aspects , financial projections, help you with the preparation of a budget, etc.

I hope you find this information help you. I welcome any ideas and questions you may have about this subject.