Protected: Why US Real Estate is a Good Investment Right Now
So you’re getting 300 to 600 dollars in a tax rebate check
A few days ago I posted my thoughts about the proposed “economic stimulus” where the government will be giving back about 300 dollars per tax payer in a retroactive tax cut from 2007’s tax year. You can read my thoughts about this tax rebate here. In short though I believe income tax is theft and I am for any and all cutting of income tax for anyone from the poorest to the most wealthy. On the other side though I think this rebate is bad for the country because there will be NO SPENDING CUTS on anything to fund it. All we are doing is going deeper in debt. Again read my full post on this to understand this better.
What I wanted to ask though today is what will you do with your 300-600 dollars in rebates?
Since I posted that orginal post I have been getting many visitors each day finding my blog from Google, they are all searching for things like
- “when do we get our tax rebates”
- “government giving out rebate checks”
- “will we get stimulate the economy checks?”
- “when will we get our government rebate checks”
- “800 dollar rebate checks government”
- and you have to love this one “government giving 300 dollars to everyone“
Now I am not here to criticize anyone but my guess is most of the people doing these searches are just itching to get that “free money” and blow it. Indeed that is “the plan”, yes indeed Uncle Scam (not a misspelling) wants you to spend every dime on consumer goods to “stimulate the economy”. The theory is more spending is good because more money is in circulation.
So please comment below after you read this post and tell me what you plan to do with your money. As many may suspect mine will be invested and many in the government want to not give the money to people like me that will save it. No they want “good Americans” to spend the money and “put it to work”.
So what are you doing with your refund?
- Taking a vacation
- Just blowing it
- Saving it
- Paying on debt
- Investing it
- Not sure yet?
Let us know because it is interesting what happens when you really ask yourself what you will do with extra money. Perhaps just perhaps thinking about this may make a few more of us think about saving this refund for a really rainy day. Trust me if you remember 1978 times are really not that bad right now.
Keep in mind this is not some government “entitlement” this is indeed your money, your tax dollars that you paid being returned to you. To do so your government has grow our debt by BILLIONS more. Again I am 100% for any rebate, any tax cut, any tax abolishment. Just realize that our elected officials did not think about how to fund this thing, they are just buying your votes from you with your own money and charging it along with interest to your children.
So knowing that how will you be spending your money, remember it is indeed yours it is not a gift from our exalted officials.
Filed under Business & Marketing | Comments (58)Taking a dream trip on safari in Africa
One of my someday dreams is to take an extended African hunting safari vacation and by extended I mean several weeks. I also keep bouncing around the idea of doing a more conventional 7-11 day trip. For the big game hunter nothing can compete with Africa on price, service and the amount of game you can see and hunt.
To put it in perspective you can easily spend 6-7 thousand dollars to hunt Elk in Colorado or Wyoming. For you money you get the chance to shoot one Elk and you get a good chance at not shooting anything. You will hunt for 7-14 days up and down mountians and if you really push hard you may very well end up with bloody feet. You will eat decent camp fire chow, sleep in a sleeping bag and have to do a lot for yourself.
Contrast it to Africa when for 5-7 thousand you will see more game then you can imagine, hunt 7-12 days, be waited on hand and foot, fed like a king and have the type of service you might get on a cruise ship. You will also generally harvest 7-11 bg game animals and end up with trophy’s you will cherish for the rest of your life. For me it is just a matte of when I am going to make the time to go.
I grew up reading the works of Teddy Roosevelt, Robert Raurk and Peter Capstick and eventually taking a trip to the dark continent will let me see the sites, smell the smells and feel some of what those great writers painted into my mind as I grew up.
One really great website I have found with some exceptional hunts is called T. Jeffrey Safari Company. If you have ever dreamed of a safari check out there website, excellent packages, great pricing and beautiful images.
Filed under Vacations | Comment (0)Why you should be making money online
In the future I will discuss many specific ways that you can make money online. Remember key to our philosophy here at cut that bill is not just reducing expenses but keeping more of your money, investing it wisely and most importantly increasing your cash flow in to your household or business. There is quite simply no easier or more passive way to earn some additional money today then to do it online.
Let me be clear though, “how to do it”, is irrelevant until you get your head around the why and until you grasp how a very “small success” can drastically change your future. Let’s take three very doable numbers and consider how they could impact your life to really grasp how powerful an additional income stream from the internet can be. These figures are
- $100
- $250
- $500
Now trust me making these types of additional monthly income figures is very doable for just about anyone with a willingness to do some investing, learning and work. You will have to work harder in the beginning but such is life. Again though for now let’s stick to why you should and what it can mean. What do each of these figures mean to you,
An extra $100 dollars a month can smash 1200 dollars of out standing additional debt a year which is a good start. Paying off 1200 dollars in additional credit card or other high interest debt actually saves about 5000 dollars of long term interest if it is applied on top of your existing payments. Add 100 dollars to a typical house payment on say a 120,000 dollar mortgage and it can shave GET THIS almost 5 years off a 30 year loan. Invested at 10% and just put away it will add a quarter million to your retirement in 30 years, do it for 40 years and it is now worth about 600K added to your golden years. Remember that is only 100 dollars a month more!
An extra $250 is a lot more powerful as you might imagine, with investing you don’t just get 2.5 times the effect as compounding creates an exponential increase. Invested over 40 years of your working life that 250 dollars a month turns into over 1.5 million at simple 10% interest. Of course you can do much better then that with some creativity and participation in your financial planning. Turn to debt and you can pay down an addition 3000 dollars in debt annually which can save many in credit card debt over 20,000 dollars over the live of debt!
Step up to an additional $500 in income into your monthly cash flow and you can begin to really make a massive impact. Try 6000 dollars in additional debt destroyed per year. This alone would destroy the average of 20K in consumer debt most middle income Americans are living under in just over three years. Get out of that type of debt in three years or less and you can save massive amounts of interest. Investing gets interesting, 30 years of 500 a month at 12% interest equals GET THIS over 5 million dollars. There is even more power though!
500 a month would allow you to buy a modest second home if you wanted for vacations in some beautiful part of rural America. Don’t believe me? Fine I own a beautiful modest second home in an somewhat tourist area of the South up in the beautiful Ozarks. The place sits on 5 acres, is 15 minutes to town, 20 minutes to a beautiful lake and only about 10 people live all the dead end road the place is located on. Everyone owns at least 5 acres so the houses are very spaced apart. My total payment? With taxes and insurance 523 dollars a month. How I just looked hard enough.
Now the real beauty here is what I call my “Plan B”. Let’s say that my companies all go bust, I can’t find a job and my wifes income all of the sudden can’t cover our bills at our primary residence. Now this is not to say that everyone should invest extra income in a second/vacation home, it just begins to open your mind to the types of things you can do to build and preserve wealth with just a few hundred extra dollars of income a month.
Filed under Business & Marketing | Comment (1)Getting rid of the poverty consciousness
This post is an extension of my post on, not resenting people doing better then you from a few days ago because that is also part of a “poverty consciousness” but today I am going to go deeper into this concept that I call financial cancer. So what is a poverty consciousness? In short it is the belief that money and wealth are scarce. That you have to be lucky or crooked to become rich and that cheaper is always better.
Now given my blog URL is CutThatBill.com you would think I would be all over the “cheaper is better” philosophy but I am not. There is a place for it,
- When it comes to a mortgage get the lowest rate
- When it comes to phone service pay the least
- When you buy a car negotiate the lowest sales price you can
In essence when you buy a specific item of a given quality there is no reason not to pay less if you can. Unfortunately this is not how most of the psychologically broke thinks.
I remember the first time I went back to the little coal town I grew up in after having built a successful career and life. I was going to go off on my own and do some fishing and stopped by a local donut shop for a coffee and a couple of old fashioned donuts. I was going to grab them and go but decided to sit down and enjoy my breakfast because I was on vacation and had all day.
Being alone and just browsing at a paper I heard quite clearly all the conversations around me. One word was used over and over by the mostly elderly crowd in their chit chat. That word was “cheaper”, this was “cheaper” here, that was “cheaper” there, Joe was a crook because his gas was two cents higher a gallon that at Tony’s where it was “cheaper”.
I got up and left, I just couldn’t listen any longer. Cheaper, cheaper, cheaper it was like being subjected meat grinder. While I fished that morning for small mouth bass with the sun on my back enjoying life though I realized that I used to be exactly the same way. When I lived in this town I remembered driving to Tony’s Gas Station to save the 2 cents, (5 mile drive in a car that got 10 miles to the gallon). I remembered all of it and I realized it wasn’t success that shed this constant “cheaper” search from me it was getting away from a culture married to it.
I can’t blame the people of that town, specifically the elderly on “fixed incomes” it is a poor place that never really recovered from the depression back in the 1930s. In fact my Grandfather used to say, “the Great Depression came, then it went, we never noticed.” Yet what I realized is this mentality of poverty is a big reason why my town is still poor to this day. The people all think they are poor, they expect to be poor and so they are.
After that day I realized much of this mentality was still in my head. I had shaken some of it off but not enough. I was still limiting my vision of success, of retirement of what I could expect to gain in life. I was still driving exta miles for pennies off a gallon of gas. Today I use the gas station on the side of the road that is best for when I need to pull out back into traffic.
I was still standing in supermarkets evaluating which package would have me pay less per ounce, today I buy the size that best fits my needs. Indeed even though I had money, even though I had started to build a second business and even though I was saving for retirement and paying off debt I was still on some level the poor kid from that coal town.
I believe most Americans today are still carrying their own “coal town” poverty mentality with them. It is what makes you limit your dreams one day then the very next day be stupid about how much you spend the next. Believe it or not this poverty consciousness is why people buy 50K dollar cars when one half the price is much better suited to their needs and budget. The expensive do dad makes them feel rich even though they are cash poor it helps them run from the fear or poverty.
On the other side they do things just to be cheap! They buy a 9 dollar garden hose that is kinked and useless in a year. They buy the cheapest refrigerator and it wastes electricity. They think a guy that makes 20K more a year is “rich” until they get there too and then they think the next guy 20K further up the food chain is rich.
This all stems from “poverty consciousness” if you see yourself as poor you will figure out a way to keep yourself poor. If you always look for cheaper, cheaper, cheaper then you will always have the poorest and cheapest things in your life. You will cheapen joy, you will cheapen your personal value and you will cheapen your dreams. Try not to use the word “cheap” as a positive thing.
Save cheap to describe junk. Save cheap to describe bad service. Save cheap to describe a stingy miser. Save cheap for negatives and use terms like “good value” and “excellent price” when you find a lower cost on a good item. This is just one step to removing the poverty demons from your subconscious but it is a good start.
Filed under Wealth & Investing | Comment (1)Advice from the broke is useless
I know this seems so obvious, never take advice on money, investing and business from the broke. The problem is it is not always easy to recognize the “broke”, when I refer to people that are broke I am not saying they live in a “poor house”, make very little money and eat mealy porridge. I simply mean they are broke as in more money goes out that comes in.
Broke people live next door to you, they live in neighborhoods that are both two steps down and two steps up from yours. Broke people are everywhere, most of the people in America are broke by my definition. They are the people in huge 50K dollar SUVs that they justify as being needed “to cart the kids around in”. Jeez, how big are these kids? They have beautiful homes, nice furniture and perhaps even lawn care service. Many have vacation homes or time shares or other true luxuries. How can I call these people broke?
Easy they are broke, they have very little to no surplus cash flow, they save next to nothing other then what perhaps goes automatically into a 401K (Thank God for that at least). They have TVs on credit, cars on credit, pools on credit, some have charged the very paint on their walls and the sofa they sit on. Cut off their income for 30 days and most would loose every thing they have. They are broke because they have no “wealth” only things, stuff and the appearance of wealth.
Such people are always big talkers. They tell you “now is the time to buy” or that “that business deal seems risky” and other wonderful nuggets of advice. They tell you how great that new SUV is, how wonderful owning a plasma TV is and they always have investment advice for you.
My advice is, don’t take their advice. If you follow the advice given by most people it will lead you down the same path they are on. In other words take advice from your uncle who has that beautiful house, nice cars and kids in top schools and you may just get their yourself. Yet you will probably do it “his way” (the normal way) and be in debt up to your eyeballs and working into extended retirement years just to pay the interest on all of it.
So where do you go for advice? To the successful, to the millionaires next door. Look for the guy that pays cash for everything, the woman that has a 6 figure job and a 150,000 dollar house and a sensible car along with a nice savings account, a good team of advisers and a very fat and growing Roth IRA. These people are not “broke” they could go with out work 6 months to a year with just a bit of sacrifice if they had to.
How do you find them? There are many of us, just talk to people and you will know right away.
- The broke talk about how expensive gas is and the wealthy talk about how efficient their cars are.
- The broke think rich people are “over paid” and “thieves” and the wealthy think the rich are “generous” and “admirable”
- The broke shop for “deals” on consumer goods, the wealthy look for “deals” on real estate and investments
- The broke think cars are status symbols and the wealthy think cars are a “necessary expense”
- The broke talk about “saving money” by spending it, the wealth talk about budgeting and investing the savings
Just realize it is not income that separates the broke from the wealthy. In my town I can show you people with a household income of 100K or more that are “broke” and I can show you some with a household income of say 70K that are very “wealthy”.
Just remember this and consider it when anyone advises you how to spend your money, what to buy, how to invest and on what is important or what is safe vs risky. Now I am not saying that no broke person ever gives any decent advice. Sure many times they do, just don’t let the broke counter your instincts or justify what you know to be a mistake for short term gratification.
Filed under Wealth & Investing | Comment (1)Spend Cash
Now this may sound a bit odd for a blog that is about saving money and building wealth but I mean what I say, spend cash. The key is spend cash rather then spending your money by writing checks or using debit/check cards.Each week plan your spending on everything, meals, groceries, etc. Then with draw the cash you need for the week and pay in cash at all times. Now this does not mean you can’t use your debit card if you need to or write a check when it is called for. It simply means to do the bulk of your spending with cold hard cash.
Why?
Simple you will spend less money!
How?
Easy you will do it yourself. It gets so easy to spend money with checks and cards. The money just doesn’t “feel” real to you. Due to this you spend more and I mean everyone (including me) does it. When you put cash in your pocket it becomes material to you and hence each expenditure becomes more personal, more real and you judge it a bit harder. You start to realize there is an “end” in a very real sense to your spending power.
Long term you will benefit as well, it will be much harder for that sales guy to sell you on how easy financing the car, vacation, etc is going to be. You mind will tune in on “real money” and such antics will cease to be effective. You will insist on control simply because money will always be a real and finite thing in your mind.
Always remember how you view, understand and think about money is more important then any other aspect of your financial success.
Filed under Personal & Home | Comment (1)